Balkanbank v Taher
| Jurisdiction | Ireland |
| Judge | O'Flaherty J.,[NEM DISS],Hamilton C.J. |
| Judgment Date | 19 January 1995 |
| Neutral Citation | 1995 WJSC-SC 144,1994 WJSC-SC 2060 |
| Docket Number | 155/92 |
| Court | Supreme Court |
| Date | 19 January 1995 |
1994 WJSC-SC 2060
THE SUPREME COURT
O'Flaherty J.
Egan J.
Denham J.
AND
Citations:
RSC O.58 r6
FOSS V HARBOTTLE 1843 2 HARE 461
BALKANBANK V TAHER & ORS UNREP BLAYNEY 12.2.92 1992/1/18
EIRE CONTINENTAL TRADING COMPANY LTD V CLONMEL FOODS LTD 1955 IR 170
CARROLL V MCMANUS UNREP O'DALAIGH 15.4.64
BANK OF IRELAND V BREEN UNREP SUPREME 17.6.87
MOORE V AG 1930 IR 560
BALKANBANK V TAHER 1994 TLR 91
Synopsis:
PRACTICE
Appeal
Notice - Amendment - Reasons - Adequacy - Test applicable - Scope of appeal - Enlargement - Necessity to enlarge scope of appeal arose after service of notice of appeal - Appeal brought within time limit - Rules of the Superior Courts, 1986, order 58, rr. 2, 6 - (155/92 - Supreme Court - 19/5/94)
|Balkan Bank v. Taher|
Judgment of O'Flaherty J. delivered the19th of May, 1994 [NEM DISS]
This is an application brought on behalf of the above-named defendants/ applicants for an order pursuant to the provisions of Order 58 r.6 of the Rules of Superior Courts to amend the notice of appeal that has been delivered in this case by adding certain parties and expanding the existing grounds. For the purpose of this application it is necessary only to set forth a very brief history of this litigation. No finding on any aspect of the merits of this litigation - of even the most tentative nature - will be made.
In the course of 1990 a credit facility had been arranged for Balkan International Limited with American Express Bank in Vienna in the sum of US$7,000,000. Balkan International Limited drew down under this facility in circumstances which led to the dispute between the parties and which led to Balkanbank commencing proceedings in the High Court on the 3rd October, 1990 claiming certain monies as well as damages for fraud against the first defendant, Naser Taher, Taher Investments Limited, (now Via Holdings Limited), Taher Meats (Ireland) Limited and Balkan International Limited. The disputé arose out of a joint venture agreement between Balkanbank and Taher Investments Limited. This latter company was, it appears, controlled by the Taher family including Naser Taher. Balkan International Limited was a joint venture company.
On the same day, Balkanbank obtained a Mareva injunction against each of the defendants in the Irish action limited to assets within this jurisdiction and on the 8th October, following, Balkanbank obtained a worldwide Mareva injunction from the High Court in London. This was granted by Waller J.
In due course, the case came on for hearing before the High Court (Blayney J.) during the months of April May, 1991. Balkanbank claimed that Naser Taher and Kevin McGrath, applicants herein, had improperly and without authority caused Balkan International Limited to draw down under its facility with American Express and divert the bulk of the $7,000,000 to Naser Taher and others and sought injunctive relief, accounts and orders for repayment and damages for breach of duty, breach of trust and fraud. Balkan International Limited counterclaimed for declaratory relief relating to an agreement between it and Balkanbank whereby Balkanbank agreed to transfer to Balkan International Limited shares in a company called Air Via Ltd. a Bulgarian company.
Blayney J. delivered his reserved judgment on the 12th Feburary, 1992 and the order of the Court of the 14th February, 1992 set forth that the plaintiff's claim for fraud and breach of duty be dismissed and that the counterclaim by Balkan International Limited be dismissed.
The order then went on to provide
IT WAS ORDERED that the plaintiff's claim be treated as a derivative action and based on the relevant exception to the rule in Foss .v. Harbottle the plaintiff to be at liberty to deliver an amended statement of claim accordingly and brought on behalf of the plaintiff and on behalf of all shareholders of the 5th named defendant
And the matter being adjourned for further mention being the court on the 13th day of February
On the 13th day of February 1992 the statement of claim being amended by the addition of the following paragraph
"7.(b) The plaintiff in these proceedings advances its claim on its own behalf and on behalf of all shareholders of the fifth named defendant in respect of all claims against the defendants material to the wrongful disposal of the sum of US$7,000,000 by the defendant and/or any compensation of their number and will rely upon the exception to the rule in Foss .v. Harbottle to support its claim in such capacity."
And the matter having been further adjourned for mention on this day in the presence of Counsel for the parties
(1) that pending further order the monies lodged in a bank account (being the sums of 4,144,110 dollars and 150,000 Irish punts) in the name of Murray Sweeney Solicitors together with accrued interest be lodged into two bank accounts to be opened at Banque Nationale De Paris in the name of Balkan International Limited
(2) That until further order no withdrawals to be made from either of the said accounts referred to at (1) by the fifth named defendant
(3) That the 1st, 2nd and 3rd defendant to account to Balkan International Limited for the sum of 1,271,49 dollars
(4) That the plaintiff do account to Balkan International Limited for the sum of 750,000 dollars
(5) That the accounts referred to at 3 and 4 above be presented on or before the 16th day of March 1992 - with liberty to the parties to apply regarding to whom the said accounts are to be presented
(6) That the mareva injunction granted in these proceedings be discharged
(7) That the fifth named defendant (Balkan International Limited) do pay to the plaintiff the costs of the counterclaim when taxed and ascertained on the basis of a six day hearing
(8) That no order for costs be made in respect of the plaintiff or of the defendants of the hearing herein
(9) That the defendants do recover from the plaintiff the costs of discovery (the final Motion for Discovery) when the taxed and ascertained
(10) That the defendants be at liberty to serve a Notice of Motion seeking an enquiry as to damages
It appears that after the judgment, according to an affidavit sworn by Mr. Taher, a meeting of the board of directors of Balkan International Limited was called for the 30th April, 1992 for the purpose of authorising the bringing of an appeal against the dismissal of the counterclaim. An appeal was lodged relating to the dismissal of the counterclaim exclusively.
On behalf of the applicants it was submitted before us that Blayney J. was in error in holding that there had been a "fraud on the minority" with in one of the exceptions to the rule in Foss .v. Harbottle. However, this did not appear material to the defendants at the time because what they were required to do was to account for certain monies. They were not required to pay over any sum of money.
It will be recalled that US$7,000,000 had been drawn down and the order obtained against certain of the defendants was that they account to Balkan International Limited for the sum of US$1,271,494 being a portion of the line of credit drawn down. The principle balance of the US$7,000,000 had already been accounted for in the form of a cash balance of about US$4,200,000 which had been placed on deposit. So, the advice given by the defendants' then counsel was that there should not be an appeal in relation to that finding.
By order of the High Court (Blayney J.) of the 2nd June 1992 Mr. Tom Grace of the firm Craig Gardiner Chartered Accountants was appointed official liquidator of Balkan International Limited. This came about as a result of a petition brought by Balkanbank as creditor of the company.
It appears that just as Blayney J. had ordered an inquiry as to damages in order to determine what injury had been sustained by defendants/ applicants on foot of the undertaking given when the Mareva injunction was granted a parallel order was made in the High Court in England, apparently by consent. To take up the narrative, from the affidavit of Mr. Naser Taher of the 8th March 1994 - he deposed as follows:
5. I say that on Friday the 25th February 1994 at a hearing before the High Court Commercial Court in England before Mr. Justice Clarke, Balkanbank advanced the contention, through its counsel, Mr. Tomlinson QC, that the said order for the inquiry as to damages in England (which had been made by consent as aforesaid) left it open to Balkanbank to argue that the undertaking as to damages given to the English Court should not be enforced. Mr. Tomlinson QC went on to say that it should not be enforced because Mr. Justice Blayney had held that the deponent herein, Mr. McGrath and Via Holdings Limited must account for the sum of US$1,271,494 referred to in the proposed amended Notice of Appeal herein. Following this, I say that further consideration has been given to whether or not Mr. Justice Blayney was correct in holding that the payment of this sum by Balkan International Limited (now in liquidation) out of the US$7,000,000 would have been a fraud on the minority.
6. I say that it is now desired to argue a point of law on what constitutes a fraud on the minority. I say and believe that the point is also of central importance to the contention now raised by Mr. Tomlinson QC. In particular, if the judgment of Mr. Justice Blayney is in error, then Mr. Tomlinson's point must fail. I say that the claims advanced by the defendant/applicants herein in England in the said inquiry as to damages run to many tens of millions of pounds. This point...
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