Banco Ambrosiano S.P.A. v Ansbacher Company

• Jurisdiction: Ireland
• Judge: FINLAY C.J.,Henchy J.
• Judgment Date: 08 April 1987
• Neutral Citation: 1987 WJSC-SC 42
• Court: Supreme Court
• Date: 08 April 1987

BANCO AMBROSIANO SPA v. ANSBACHER & CO LTD & ORS

BETWEEN

BANCO AMBROSIANO SPA (IN COMPULSORY ADMINISTRATIVELIQUIDATION) LANFRANCO, GERINI, FELICE MARTINELLI AND FRANCOSPREAFICO

Plaintiffs/

Appellants

and

ANSBACHER & COMPANY LIMITED, BRUNO TASSAN DIN ANDABORFIELD LIMITED

Defendants/

Respondents

1987 WJSC-SC 42

Finlay C.J.

Henchy J.

Griffin J.

Hederman J.

McCarthy J.

171/86

THE SUPREME COURT

Synopsis:

EVIDENCE

Onus of proof

Fraud - Principles applicable - Standard of proof - Balance of probabilities - Normal standard in civil action - Appeal from decision of Hamilton P. (18/4/86) - (171/86 - Supreme Court - 8/4/87) - [1987] ILRM 687

|Banco Ambrosiano v. Ansbacher & Co.|

FRAUD

Evidence

Onus of proof - Principles applicable - Bank - Funds - Transfer - Appellate jurisdiction - Inference from facts proved or admitted - Evidence given before foreign tribunal - Standard of proof - Balance of probabilities - Court of trial decided that fraud was not proved - Appellate court drew different inferences from same facts - The defendants submitted that there should be a retrial of the issue of fraud - Held that justice required that the issue of fraud be determined at the hearing of the appeal - Held that the facts proved or admitted in the High Court established, on the balance of the probabilities, that the $30 million deposit held by the defendant bank in the name of the third defendant had been fraudulently misappropriated by the second defendant from the funds of the plaintiffs - Held that, as between the plaintiffs and the second and third defendants, the plaintiffs were entitled to recover the said deposit with the interest accrued thereon - Decision of the High Court (18/4/86) reversed - Held that the trial judge had been correct in admitting evidence of the testimony given by the second defendant to a foreign tribunal which had been established for the purpose of enquiring into alleged misappropriation of the plaintiffs" funds - Other claimants sought to prove ownership of the moneys so deposited - Rules of the Superior Courts, 1986, order 58, rr.1, 9 - (171/86 - Supreme Court - 8/4/87) - [1987] ILRM 687

|Banco Ambrosiano v. Ansbacher & Co.|

SUPREME COURT

Appeal

Jurisdiction - Retrial - Facts - Inferences - Fraud - Court of trial decided that plaintiffs had failed to prove fraud - Court drew different inferences from the facts proved or admitted in the High Court - Court refrained from directing a retrial - Held that th plaintiffs were entitled to a determination of the issue of fraud at the hearing of the appeal - Rules of the Superior Courts, 1986, orde 58, rr.1, 9 - (171/86 - Supreme Court - 8/4/87) - [1987] ILRM 687

|Banco Ambrosiano v. Ansbacher & Co.|

Citations:

GAIRLOCH 1899 2 IR 1

COGHLAN V CUMBERLAND 1898 1 CH 704

MONTGOMERY & CO LTD V WALLACE JAMES 1904 AC 73

MERSEY DOCKS & HARBOUR BOARD V PROCTER 1923 AC 345

NORTHERN BANK FINANCE V CHARLTON 1979 IR 149

KERR ON FRAUD & MISTAKE 7ED P669

BATER V BATER 1950 2 AER 458

BANCO AMBROSIANO S.P.A. V ANSBACHER & CO LTD 1987 ILRM 669

1 JUDGMENT delivered on the 8th day of April 1987by FINLAY C.J.[GRIFFIN HEDERMAN McCARTHY]

2 This is an appeal brought by the Plaintiffs against the dismiss of their claim in the High Court. The first-named Plaintiff (hereinafter referred to as Banco Ambrosiano) is an Italian Bank whose Central Offices are situated in Milan. It is subject to an order for compulsory administrative liquidation made under Italian law, and the second, third and fourth-named Plaintiffs are the liquidators of it appointed bythat order.

3 The first-named Defendant is a banking company carrying on business in the City of Dublin. The second-named Defendant (hereinafter referred to as Tassan Din) is a businessman residing in Italy; the third-named Defendant is a limited liability company wholly owned and controlled on the evidence by Tassan Din. The Plaintiff's claim, summarised, is for an order declaring that a sum in excess of 30 million US dollars deposited in June 1981 with the first-named Defendants in the name of the third-named Defendants is the property of Banco Ambrosiano and was misappropriated from it as a result of a fraud carried out by Tassan Din and others, and for an order that the said sum constitutes assets recoverable by the Plaintiffs for the benefit of the winding up of BancoAmbrosiano.

4 Banco Ambrosiano was up to 1982 one of the largest and most influential banking institutions in Italy. In addition to its central offices in Milan it had more than a hundred branches throughout Italy and employed more than4,000 persons. It was furthermore the head of a large group of companies, financial and otherwise, known though not formally incorporated, as the Banco Ambrosiano Group.

5 Through its shareholding in two companies within this group, namely, Banco Ambrosiano Holding SA, situate in Luxembourg, and La Centrale Finanziaria Generale SPA with its office in Milan (hereinafter referred to as La Centrale) it controlled the other companies in the group, many of which carried on business and were situated in Italy, and many of which were outside Italy. With particular reference to this case, it controlled a company known as Banco Ambrosiano Andino which was originally based in Lima, and another company known as Banco Ambrosiano Overseas Limited which was situated in Nassau.

6 One Roberto Calvi was President of the Board of Directors and Managing Director of Banco Ambrosiano and was President of many other of the companies within the group, was Vice-President of others and in effecton the evidence as found by the learned trial Judge, controlled all these companies.

7 Tassan Din was at all material times the General Manager of a very large public company it Italy known as Rizzoli Editore SPA. This company which had many and varied activities and objects, including in particular many associated with the publishing business, was a long-established family-owned company and was one of the biggest in the fields in which it operated in Italy prior to 1982. It would appear that in 1974 a decision was taken by the Rizzoli family to purchase a newspaper known as "Corriere della Sera" which was one of the most respected and influential newspapers circulating in Italy. The purchase of this newspaper involved the necessity for very substantial borrowing by the Rizzoli family and as part of the arrangements in connection with that borrowing 80 per cent of the shares in Rizzoli Editore was lodged by way of security with a Banco Credito Commerciale in Milan. There were provisions for aright to redeem these shares within a certain time and on certain payments. The balance of the shares remained vested in the Rizzolifamily.

8 In 1973 Tassan Din was employed by Rizzoli Editore as FinancialManager.

9 By 1977, if not before, Banco Ambrosiano had become effectively the banker to Rizzoli Editore which was heavily indebted to it. It then requested that two nominees should be appointed to the Board of Directors of Rizzoli Editore and that Tassan Din be appointed General Manager. After some time, and to an extent, under pressure, these requests were agreed to. From that time onwards, on the insistence of Calvi, all communications with regard to financial matters between Rizzoli Editore and Banco Ambrosiano were carried out by Tassan Din and Calvi, and Calvi refused to communicate on these matters, even with the nominees which he had previously appointed to the Board.

10 The necessary recapitalisation of Rizzoli Editore was eventually agreed in April 1981, and I will deallater in this judgment with the details of that agreement and with agreements which preceded it.

11 It is common case that at the end of April 1981 a sum of 80 million US dollars was paid out of Banco Ambrosiano and deposited in the associated bank in Nassau for the purpose of providing inter alia funds to achieve a payment of 30 million US dollars to Tassan Din personally. This was done apparently as an adjunct to the process of recapitalisation of Rizzoli Editore which was being carried out at the same time.

12 It is also common case that that sum together with interest which had accrued on it and less charges made for the management of it, was after being moved from various countries and through various financial institutions deposited in the name of Arborfield Limited in the Ansbacher Bank in Dublin in June of 1981.

13 The Plaintiffs assert that this transaction was dishonest and a fraud on Banco Ambrosiano. In support of that assertion they rely, amongst other things, on the fact that the payment was not made

14 (a) in consideration of the sale of shares in Rizzoli as Tassan Din alleges, or

15 (b) as remuneration for services to be performed by Tassan Din to the benefit of Banco Ambrosiano, or

16 (c) as a genuine reward or premium for services rendered by Tassan Din in the recapitalisation of Rizzoli Editore to the benefit of Banco Ambrosiano nor for any other lawful purpose.

17 It is part of the contention of the Plaintiffs in this appeal that their claim being framed in fraud, the first inquiry which the Court should make is as to whether fraud has been established in accordance with the appropriate onus of proof. If it has not, then the action fails. If it has been established, the second inquiry must be, they say, as to whether the proof of such fraud entitles the Plaintiffs to the relief which they seek.

18 At the hearing in the High Court the Plaintiffs called a number of witnesses and produced a considerablequantity of documentary evidence. In addition, they relied on officially recorded answers given by Tassan Din when he was under interrogation by Magistrates in Italy; on officially recorded answers given by Tassan Din in reply to persons conducting a parliamentary inquiry in Italy; on the answers given by Tassan Din to interrogatories served by the Plaintiffs in this action and on answers given by Tassan Din...