Royal Bank of Ireland Ltd v O'Rourke

CourtSupreme Court
Judgment Date01 January 1963
Date01 January 1963

Supreme Court.

Royal Bank of Ireland, Limited v. O'Rourke.

Bank - Claim against defendant as indorser of cheque - Cheque drawn on one bank cashed in another bank - Cheque dishonoured - Defendant not customer of bank - Cheque cashed on 20th May, 1959, sent for clearance by plaintiff bank on 21st May, 1959 - Dishonoured and unpaid cheque received by plaintiff bank on 23rd May, 1959 - Notice of dishonour given to defendant on next weekday, 25th May, 1959 - Whether notice of dishonour given within reasonable time - Whether cheque presented for payment by plaintiff bank within a reasonable time - Time at which cheque presented for payment - Demand in writing by plaintiff bank for repayment of the amount of cheque by defendant - Bills of Exchange Act, 1882 (45 & 46Vict., c. 61), ss. 45, 46, 47, 48, 49, 92.

Practice - Procedure - Summary summons issued for amount of dishonoured cheque - Averment of notice of dishonour omitted from indorsement of claim - Proceedings discontinued - Fresh summons issued for same claim - Whether res judicata.

Summary Summons.

The plaintiffs, the Royal Bank of Ireland Ltd., brought an action against the defendant, Isobel P. O'Rourke, as indorser of a cheque, drawn by Shanahan's Stamp Auctions, Ltd., on the National Bank Ltd., College Green, Dublin, in favour of the defendant, for the sum of £344 5s. 0d., and which had been dishonoured.

The further facts have been summarised in the head note and appear more fully from the judgment of Lavery J. (post, at p. 170).

From the above judgment the plaintiff Bank appealed to the Supreme Court (1).

The grounds of the appeal were 1, "that the learned Judge misdirected himself in law and in fact in finding that the cheque referred to in the special endorsement of claim on the summary summons herein and drawn by Shanahan's Stamp Auctions Ltd. on the National Bank Ltd. in favour of the defendant was not presented for payment to the said Bank by the plaintiffs until the 22nd day of May 1959;"

"2, That the learned Judge misdirected himself in law and in fact in finding that the said cheque was not presented for payment by the plaintiffs within a reasonable time within the meaning of s. 45 of the Bills of Exchange Act 1882;

"3, That is was not reasonably possible for the plaintiffs to present the said cheque for payment at any earlier time than that at which it was presented";

4, That the learned Judge failed to have due regard to the nature of the said cheque or to the usage of the banking trade or business in regard to the presentment of cheques for payment or to the facts of this case."

The plaintiff Bank sued the defendant for the sum of £344 5s. 0d. The claim was brought against the defendant as indorser of a cheque for that amount, drawn on the National Bank Ltd., College Green, Dublin, by Shanahan's Stamp Auctions Ltd., in favour of the defendant who cashed it in the Dun Laoghaire branch of the plaintiff Bank. When the cheque was presented for payment by the plaintiffs it was dishonoured by the National Bank Ltd. The plaintiffs brought a summons against the defendant for the amount of the cheque, which summons omitted to aver notice of dishonour of the cheque, and the summons was by consent struck out, the plaintiff Bank paying a measured sum for costs to the defendant. The plaintiff Bank then brought another summons and the defendant pleadedres judicata; the defendant also pleaded that the cheque was not presented for payment by the plaintiff Bank to the National Bank Ltd. within a reasonable time and, accordingly, that the defendant had no liability as indorser of the cheque. By way of further defence the defendant pleaded that notice of dishonour was not given to her in reasonable time by the plaintiff Bank.

The cheque, which was dated 15th May, 1959, was cashed by the Dun Laoghaire branch of the plaintiff Bank for the defendant on Wednesday, the 20th May, 1959. The defendant was not a customer of the Bank but was identified and then was paid. Following the practice of the Bank the cheques of this branch (as of all other Dublin branches) were brought to the head office of the Bank on the following day, Thursday, the 21st May, 1959, and on the same morning the representative of the plaintiff Bank brought all cheques for clearing (including the cheque the subject-matter of these proceedings) to the central clearing office of the banks in the Bank of Ireland, College Green.

The cheques, together with others drawn on the National Bank, was handed over to the representative of that Bank at approximately 10.30 a.m. The Dun Laoghaire branch of the plaintiff Bank received the cheque by post on Saturday morning, 23rd May, 1959, unpaid and bearing the indorsement, "Effects not cleared. 22.5.59." It was not denied that that was a dishonouring of the cheque. On the morning of Monday, the 25th May, 1959, the plaintiff Bank informed the defendant by telephone of the dishonouring of the cheque and later requested her by letter to repay to them the amount paid on the cheque. This the defendant refused to do and raised the defences already mentioned.

Held by the Supreme Court, affirming Murnaghan J., that the defence of res judicata was not available to the defendant as the previous proceedings had been struck out by consent and there had been no trial of the issue raised in the proceedings.

Held further by the Supreme Court (reversing Murnaghan J.) that the provisions of s. 49, sub-s. 12, of the Bills of Exchange Act, 1882, had been complied with by the plaintiff Bank who had become aware of the dishonour of the cheque on Saturday, the 23rd May, 1959, and had given notice to the defendant on the 25th May, 1959. By reason of the provisions of s. 92 of the Act, the intervening Sunday was to be excluded in the computation of time for the purpose of giving notice of the dishonouring.

Held further by the Supreme Court (reversing Murnaghan J.) that the handing over of the cheque to the representative of the National Bank Ltd. in the clearing office was a presentment for payment and accordingly the cheque had been presented for payment within a reasonably time as required by the provisions of s. 45 of the Bills of Exchange Act, 1882.

Cur. adv. vult.

Murnaghan J.:—

This is a claim brought by way of summary summons against the defendant as the indorser of a cheque for £344 5s. 0d. which, on being presented by the plaintiff Bank for payment, was dishonoured.

It so happened that the plaintiff Bank brought earlier proceedings by another summary summons based on the same cause of action, in which an order was made by the Master on the 1st July, 1959, the relevant terms of which are as follows:—". . . the solicitor for the plaintiffs stating that a necessary averment had been omitted from the indorsement of claim thereon . . . By consent it is ordered that the said summons be struck out with costs. . . ."

Mr. Lynch as his first point on behalf of the defendant submitted that the plaintiff Bank was estopped from maintaining the present proceedings by reason of the former summons and the order thereon. To succeed on this submission it would be necessary to show that some issue was determined in the earlier proceedings, and that substantially the same issue arose for determination in the present ones. It is clear from the Master's order that he did not determine any issue, and despite the form of his order, that what the Master in fact did was to allow the plaintiff Bank to discontinue the proceedings then before him. On this view there is no question of estoppel based on res judicata.

In support of the Bank's claim the manager and acting cashier of the Dun Laoghaire branch of the plaintiff Bank made affidavits, from which it appeared that the defendant, who had not an account with the plaintiff Bank, on Wednesday, the 20th May, 1959, at its Dun Laoghaire branch, cashed a cheque for £344 5s. 0d., dated the 15th May, 1959, drawn by Shanahan's Stamp Auctions Ltd. on the National Bank Ltd., payable to the defendant, and endorsed by her. The said manager in his affidavit deposed that "on the said 20th day of May 1959 the plaintiffs presented said cheque to the National Bank Ltd. for payment,"while the said acting cashier in his affidavit deposed that "The said cheque was duly . . . presented to the National Bank Limited, College Green, for payment in the ordinary course."

In the course of the argument it seemed to me that I should be informed of the practice as to the presentment of cheques for payment and I gave the plaintiff Bank the opportunity, which was availed of, to file further affidavits, one by the assistant general manager of the Bank of Ireland, who is also chairman (when present) of the Dublin Banks Clearing Committee, and the other by the manager of the Foster Place branch of the plaintiff Bank.

From the former affidavit I learned that the practice at present in operation in the banks in Dublin and its vicinity is that where a cheque is drawn on a bank (hereinafter described as "the paying bank") and cashed by the payee in another bank (hereinafter described as "the collecting bank"), the collecting bank sends the cheque by post to the clearing department in its head office, which it should reach the following morning. The representatives of the clearing departments of the various banks meet in the clearing department of the Bank of Ireland each morning at 10.30 a.m. and exchange their cheques. The various clearing departments then send the cheques drawn on their various branches to the paying bank. If not paid, the cheque is sent by post dishonoured to the collecting bank. Prior to 1957, in a case where the paying bank having received the cheque from its clearing department decided not to pay it, the cheque had to be returned to the collecting bank by the first post after the close of business on the day of receipt. In 1957...

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