MK International Development Company Ltd (Plaintiffs)Respondents) v The Housing Bank (Defendants)Appellants)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MUSTILL,LORD JUSTICE STAUGHTON,LORD JUSTICE McCOWAN |
| Judgment Date | 21 December 1990 |
| Neutral Citation | [1990] EWHC J1221-1 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | 91/0400 |
| Date | 21 December 1990 |
[1990] EWHC J1221-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVSION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(SIR PETER PAIN, sitting as an additional Judge of the High Court)
Royal Courts of Justice.
Lord Justice Mustill (not present)
Lord Justice Staughton
Lord Justice McCowan
91/0400
MR. PAUL MENDELLE (instructed by Messrs. Crawfords Berwald) appeared on behalf of the (Plaintiffs) Respondents.
MR. STUART ISAACS (instructed by Messrs. Theodore Goddard) appeared on behalf of the (Defendants) Appellants.
On 23rd April 1985 a negotionable instrument signed by the Housing Bank as drawers in the sum of £50,965 was issued payable to "MK International Development Company Limited, or Bearer". The document was addressed to Arab Bank Limited in London. Upon presentation it was dishonoured, with the marking "Payment countermanded by order of drawers". On 3rd April 1987 the payees obtained leave ex parte from Master Grant to issue and serve a writ of summons on the Housing Bank out of the jurisdiction, claiming the principal amount of the instrument together with interest. On 28th March 1988 the Housing Bank sucessfully applied to Master Trench for an order setting aside the order of Master Grant, and the resulting service out of the jurisdiction. The payees appealed to Sir Peter Pain, sitting as an additional judge of the Queen's Bench Division. The appeal succeeded, and the order of Master Grant was restored. The Housing Bank now appeals to this court, seeking an order that the leave to issue and serve, and the service itself, should once again be set aside.
For convenience I will refer to the drawers and payees of the instrument as "the bank" and "MKI" respectively. There is some room for doubt as to the present nature of the instrument: whether it is a banker's draft drawn by the bank on itself, and hence open to be treated as a promissory note, or whether it is a sight draft, drawn by the bank on Arab Bank Limited. It makes no difference for present purposes, and the parties are content for the time being that we should proceed on the basis that the document is a cheque.
The history of events, as set out in the affidavit sworn on behalf of MKI, is as follows. The chairman of MKI is Mr. Paul Kyriakides. It is a Liberian company of which Mr. Kyriakides and his wife hold the entire share capital. They are also the holders of all the shares in Yarcastle Limited, a company registered in England.
A certain Sharif Zeid Hussein Bin Nasser is the nephew of His Majesty, the King of the Hashemite Kingdom of Jordan. For some months from November 1983 Zeid Bin Nasser was in London, and being in need of office space is alleged to have made an arrangement described in an affidavit of Mr. M J Egles, of MKI's solicitors, as follows:
"Firstly, while the King's nephew was resident in London from November 1983 to July 1984, the plaintiffs accommodated him at their offices and he agreed to reimburse the plaintiffs one-third of the office expenses of approximately £1,000 per month."
Not long after his arrival in Londowere issued to our Bankers to stopn Zeid Bin Nasser found himself short of money, and (so the plaintiffs contend) wished to demonstrate his impecuniosity to his former wife, so he prevailed on Mr. Kyriakides to lend him a cheque to the value of £5,000 drawn in his favour by Yarcastle. In fact Zeid Bin Nasser cashed the cheque, which he should not have done. On 24th December 1983 Mr. Kyriakides caused Yarcastle to draw a cheque for £32,000 in favour of Zeid Bin Nasser, this time by way of loan. In exchange Zeid Bin Nasser acknowledged receipt of the two sums, and also drew a post-dated cheque in favour of Mr. Kyriakides in the sum of £32,000. This was dishonoured on presentation.
The plaintiffs contend that Mr. Kyriakides made efforts to recover payment from Zeid Bin Nasser, but without success. Eventually on 18th March 1988 Mr. Kyriakides wrote directly to the king, under the letter heading of MKI. He set out the story which I have just summarised, and continued (in part) as follows:
"After waiting sixty-three weeks instead of three and having to listen to countless excuses I reached the sad conclusion that Sharif Zeid Bin Nasser seems to have no intention of returning me my money. I have taken the liberty of approaching Your Majesty with no other purpose than to beg of Your good offices to put some pressure on him in order to meet his commitment with me as any honest, responsible person should, but above all, like a member of Your Majesty's family should.
…
Your Majesty, as well as His Government, is held in great esteem all over the world but specially in the U.K. where among others, it is regarded as one of the most honourable and just. It is because of this reputation that I am writing this letter hoping Your Majesty might be able to take a moment of his valuable time in order to help me.
…
The acknowledgment will also stop me trying to reach Your Majesty by talking to common friends and acquaintances, as well as saving Sharif Zeid's reputation from unnecessary embarrassment."
On 17th April 1985 there was a reply addressed to Mr. Kyriakides, from Marwan S. Kasim, signing as Chief of the Royal Court and stating:
"I should like to take this opportunity to acknowledge receipt of your letter of 18 March, 1985 addressed to His Majesty King Hussein I.
In view of the contents of your letter I should like to inform you that the sum of Fifty Thousand, Nine Hundred and Sixty Five pounds has been transferred to you in London.
I should like to point out that by settling this outstanding amount the Royal Palace will in no way be held liable for any further debts that the concerned party may incur with you."
One week later Mr. Kasim wrote again to Mr. Kyriakides, this time enclosing a cheque for £50,965 "in settlement of the sum owed to you. This is the cheque sued upon. When the bank issued the instrument it debited the credit balance of the Royal House with the value thereof. As I have already said, the payee named was MKI, not Mr. Kyriakides himself. The cheque was duly presented for payment at the Arab Bank and dishonoured "by order of drawers".
Mr. Kyriakides at once wrote complaining to the Royal Court and after three months without reply to His Majesty the King direct. On 31st August 1985 the Secretary General of the Royal Court replied:
"…please be informed that we have no connection whatsoever with his business or personal affairs. We strongly urge you to resort to the judicial system in your country should you have any claim to make."
Further correspondence ended with the following letter from the Chief of the Royal Court:
"I refer to your letter relating to the cheque issued to your client, and would like to state that the said cheque was issued by mistake by the Finance Department in contravention of standing procedure.
Accordingly instructions were issued to our Bankers to stop payment when the error was brought to our attention."
Eventually, the plaintiffs issued a writ claiming the amount of the cheque from the Arab Bank and an application for leave to serve out of the jurisdiction was made on the following grounds:
"(i) The instrument was inchoate and incomplete until it was delivered to the plaintiffs in England, within Order 11, Rule 1(1) (d) (i).
(ii) The contract evidenced by or contained in the instrument was governed by English law, within Order 11, Rule 1(1) (d) (ii).
(iii) There was a breach of the contract within the jurisdiction when the cheque was not met on presentation at the Arab Bank in London, within Order 11, Rule 1(1) (e)."
On an affidavit to this effect Master Grant gave the plaintiffs leave to serve the writ on the Housing Bank outside the jurisdiction. The bank thereupon applied to set aside the order of Master Grant on the grounds that the plaintiffs gave no consideration for the cheque and hence had no cause of action, and also that in all the circumstances the case was not a proper one for service out of the jurisdiction. Master Trench acceded to this application and set aside the order of Master Grant. The plaintiffs appealed.
When the matter came before Sir Peter Pain on appeal from the master, he had before him, in addition to the undisputed facts recited above, an affidavit from the bank's solicitor to the following effect:
"…I am informed by Dr. Jamal Nasir, who has at all material times been King Hussein's legal adviser, and I verily believe, that Mr. Kyriakides' letter was received by His Majesty's accountant, who accepted at face value the truth of the allegations contained in it. Being concerned that King Hussein's name had been brought into the dispute, His Majesty's accountant on his own initiative arranged for the issue of a cheque for £50,965 payable to the Plaintiff, this being the entity on whose behalf Mr. Kyriakides had apparently written…As appears from that document, the instructions were issued on 22nd April 1985 to His Excellency the Governor of the Central Bank and copied to His Excellency the Managing Director of the Defendant.
Shortly after the issue of the cheque. His Highness Sharif Zeid Hussein himself made contact with King Hussein's personal staff, and stated categorically that he was not indebted to Mr. Kyriakides or MK International Development Company Limited. This assertion flatly contradicted the assertion upon which Mr. Kyriakides had begged King Hussein's assistance, and accordingly His Majesty's Accountant decided immediately to stop payment of the cheque for £50,965…They were issued on...
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