Shields v The Central Bank of Ireland

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Ms. Justice Faherty
• Judgment Date: 26 October 2022
• Neutral Citation: [2022] IECA 241
• Docket Number: Record Number: 2020/250

Between/

Lawrence Shields

Applicant/Appellant

and

The Central Bank of Ireland

Respondent

[2022] IECA 241

Whelan J.

Faherty J.

Haughton J.

Record Number: 2020/250

THE COURT OF APPEAL

Banking – Banknotes – Exchange of damaged banknotes – Withholding of banknotes on basis of intentional damage – Appeal against order striking out proceedings as moot

Facts: The appellant had applied to the respondent seeking to exchange €4,950 in damaged banknotes. The appellant claimed the banknotes had been damaged by fire accidentally, but the respondent had concluded the damage was deliberate and therefore the banknotes would be withheld. The appellant had applied for leave to seek judicial review, which was granted in 2018. Following further testing, the respondent had decided to exchange the banknotes and sought to have the proceedings discontinued. The High Court had held that the proceedings were now moot and struck them out. The appellant now sought to challenge that strike out.

Held by the Court, that the appeal would be dismissed. The Court was satisfied that the Judge had correctly determined that the proceedings were moot, as the banknotes had been exchanged as the appellant had initially sought. Costs would be awarded to the respondent.

Appeal dismissed.

NO REDACTION REQUIRED

Judgment of Ms. Justice Faherty delivered on the 26 ^th day of October 2022

1 . This is Mr. Shield's (hereinafter “the appellant”) appeal against the Order of the High Court (Barr J.) of 16 November 2020 striking out his proceedings as having become moot. The Order was made on foot of an application brought by the Central Bank of Ireland (hereinafter “the respondent”) for a declaration that the proceedings were moot together with an order striking out the proceedings. In the alternative, the respondent sought an order dismissing the proceedings on the grounds that they were bound to fail.

2 . In the event, in a judgment delivered on 15 October 2020 Barr J. (“the Judge”) determined that the proceedings were moot. Before setting out the basis upon which the Judge reached his determination, it is apposite to set out the background to the proceedings.

3 . On 19 February 2019, the appellant submitted an application form to the respondent seeking the exchange of banknotes to the value of €4,950. The amount involved was made up of 51 x €50 notes and 12 x €200 notes which were in a damaged condition. The application was sent via the Bank of Ireland and was received by the respondent on 21 March 2019. In his application form the applicant said that all the banknotes were in an envelope that had been put into a fire and that the notes were retrieved from the fire. At the foot of the form, the following declaration was made and signed by the appellant:

• • He was entitled to submit the damaged euro notes for exchange;

• • The damaged currency was not deliberately mutilated, soiled or damaged;

• • The damaged currency did not originate from any illegal activity;

• • All information provided was accurate;

• • The appellant was aware that the respondent might forward details of the application, including copies of ID received, to other authorities such as An Garda Síochána and/or the Revenue Commissioners;

• • The appellant understood the requirements in relation to exchange of damaged euro notes as set out in the application form.

4 . By letter of 5 April 2019 (“the First Decision”), the respondent informed the appellant that it had been determined that the banknotes had been intentionally damaged and that they were being withheld by the respondent so as to avoid the return of the notes into circulation. The appellant was advised that the respondent had reached its decision “following assessment, testing and analysis of the banknotes in accordance with Decision of the ECB of 19 April 2013 on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes” (hereinafter “the ECB Decision”).

5 . There followed a series of correspondence between the appellant's solicitors, J.T. Flynn & Co, and the respondent and later with the respondent's solicitors, McCann Fitzgerald, commencing with a letter of 24 April 2019 from J.T. Flynn & Co. which stated that the notes submitted were lawfully within the possession of the appellant, that proper protocol had been followed and that a valid provable reason had been provided for the minor damage to the banknotes. It was further stated that theft had been committed by the respondent pursuant to the Criminal Justice (Theft and Fraud Offences) Act 2001 and that the decision of 5 April 2019 had created such a stressful and outrageous shock and unlawful accusation that the appellant had had to consult his doctor. The respondent was called upon to immediately refund the appellant and an account number was provided for this purpose. The respondent was further informed that the writer had received instructions to seek a mandatory injunction compelling the refund of the money.

6 . On 3 May 2019, the respondent advised that the appellant's letter was receiving consideration and he was requested not to take any further steps at that time.

7 . On 14 May 2019, the respondent wrote to the appellant's solicitors advising that the damage to the banknotes was consistent with their “having been immersed in a chemical, (acid or similar), resulting in…alteration of the condition of the surface of the banknote, attack of a chemical nature (strong acid type) on the edges of the banknote”. The respondent repeated its assertion that it had reason to believe that the notes had been intentionally damaged. The letter went on to state:

“Should your client wish to furnish the Bank with further information/submissions in relation to the damage to the bank notes, however, the Bank will give any such submission due consideration and will reconsider its decision not to exchange the notes in accordance with Article 3(3)(a) of the decision”.

8 . The appellant, however, did not provide any such information in correspondence sent by his solicitors on 16 May 2019, his solicitors asserting only that the contents of the respondent's letter were “incredible”. In the absence of the respondent having furnished them with a copy of its report, they requested the immediate return of the banknotes so that the appellant could embark on his own forensic analysis.

9 . By letter dated 17 May 2019, the respondent repeated its assertion that there was sufficient reason to believe that the notes “have been chemically treated”. It further stated:

“Should you opt to make a further submission to the Bank, you may wish to include, in particular, details of the source of the banknotes and any explanation of the findings of chemical damage. We would advise that you should also provide additional information about the circumstances leading to your assertion that the notes were put into a fire.

In light of the Central Bank's obligations as a National Central Bank under the Decision, we are unable to release samples of the bank notes to you, but we will send the notes for further analysis to an external accredited laboratory. We will reassess the decision not to exchange the damaged banknotes to your client in light of all the information that is available — including your client's original submission and anything further you may wish to furnish to us, as well as the results of the Bank's own analysis and the independent testing in accordance with the Decision.”

10 . By email of 18 May 2019, the appellant's solicitors repeated their request for a copy of the respondent's report and went on to state:

“Our client has complied with all requirements and has completed the declarations when submitting the fire damaged notes to his bank on 19 February 2019.

In view of the fact that there are now allegations being [advanced] that some type of criminality is involved, together with the refusal to return the banknotes to enable us to have conducted a forensic analysis beggars belief and is an absolute infringement of our client['s] constitutional rights and Article 6 of the European Convention on Human Rights.

Please be advised that the bank notes are our client's property.

We now call upon you to return our client's property.

Failing the return of the said property by 5pm on the 21 May 2019 our instructions are to seek mandatory relief without further notice.”

11 . On 21 May 2019, the respondent's solicitors, McCann Fitzgerald, wrote to the appellant's solicitors noting, inter alia, that no submissions had been made to the respondent's request of 17 May 2019. They wrote again on 23 May 2019 noting the 18 May 2019 correspondence from J.T. Flynn & Co.

12 . On 10 June 2019, J.T. Flynn & Co replied to the letter of 21 May 2019. While the letter is long and detailed, it did not engage, by way of any explanation or submission, in respect of the respondent's invitation of 16 May 2019 to the appellant to provide “any details of the source of the bank notes, any explanation of the findings of chemical damage”, as noted by the respondent's solicitors in their reply of 14 June 2019. This reply went on to state:

“You have been invited [to make submissions] on a number of occasions now and rather than addressing this issue your client has simply relied on the declaration he provided in the application form which was submitted with the damaged euro bank notes for exchange.”

The letter also confirmed that a sample of the banknotes had been sent for further analysis to a laboratory accredited by the ECB.

13 . The appellant's solicitors responded on 16 July 2019, again making complaint that the respondent had failed to advise the appellant of the name and address of the independent laboratory and the type of tests intended to be carried out and had failed to provide him with a sample of the banknotes for him to have the notes independently assessed. The letter also advised that...