The Gazette 1974

much as in effect it gave no reasons for the Bank's

intention to impose conditions. "I think it cannot be

thought that it is in compliance with the requirements

of the section to say the Bank intends to impose condi-

tions because the Bank has decided these are the con-

ditions to impose, and that is, I think, a fair paraphrase

of the letter of January 31."

Imposition of conditions further deferred because direc-

tor's association with another company with liabili-

ties of £ 1 million was inacurately stated

Mr. Justice O'Keeffe said that the Bank, instead of

imposing the conditions, issued a new notification on

February 29 indicating its intention to impose similar

conditions but coming into effect on a later date—

April 6, 1972, and stating its reasons for imposing the

conditions in the interest of orderly and proper regula-

tion of banking, were that inquiries of a confidential

nature which the Bank had considered it prudent to

make in England arising out of Mr. Bates association

with Howarth of Burnley had provided substantial

grounds for doubts regarding Mr. Bates' suitability to

carry on banking business. The letter finished up : "Any

representations by your bank, objecting to the imposi-

tion of these conditions by the board, must be supported

by an unqualified testimonial of Mr. Bates' suitability

from a bank director, or chairman or chief executive of

one of the London clearing banks. Any such representa-

tions in writing to be made within 21 days of receipt

of this letter."

Mr. Justice O'Keeffe went on : "Let me say at once

that if the question at issue were Mr. Bates' suitability

to be a director of a banking concern, the Central Bank

might well have been doubtful about this suitability.

One of the requirements of the Central Bank when a

licence is being applied for was that a curriculum vitae

of each of the directors should be supplied and a curri-

culum vitae for Mr. Bates was supplied and when the

attention of the Bank was directed to his association

with the firm of Howarth of Burnley in January, 1972,

it was found that his curriculum vitae omitted to men-

tion his association with this firm over a period of years,

this being a firm which had, admittedly after he had

ceased to be a director o rshareholder, got into finan-

cial trouble to the tune of around about £1,000,000."

Mr. Justice O'Keeffe said he thought the Governor

of the Central Bank was, not unnaturally concerned

with the fact that Mr. Bates' curriculum vitae had

made no mention of his association with this concern

and he thought anybody in the position of the Governor

could hardly fail to be concerned about this omission.

While it was not for him (judge) to say whether the

circumstances of the downfall of Howarth of Burnley

were such as to warrant the drawing of an inference

from them that Mr. Bates was not a suitable person to

be a director of a bank—and certainly gave scope to

the directors of the Central Bank to form their own

conclusions to that effect. "Therefore, let me say that

any decision that I arrive at is not arrived at on the

basis that Mr. Bates is necessarily a suitable person to

be a director of a banking company or that it would

be proper that the ownership of the plaintiff company

should be unrestricted as to its composition.

Imposition of conditions not lawful because Central

Bank did not notify plaintiff that he could make

representations within 21 days

"But notwithstanding what I have said, I consider

that the imposition of conditions was not a lawful

imposition of conditions at all." The grounds were that

the letter of February 29, 1972, indicating the intention

of the Central Bank to impose these conditions did

give the reasons why the Bank intended to impose them.

This was in part compliance with the requirements of

sub-section 3, section tf) but this sub-section expressly

required the Bank to notify the holder of a licence that

the holder might, within 21 days after the date of giving

the notification, make representations in writing to

the Bank in relation to the imposition of conditions,

and this was clearly the requirement, that the Bank

should notify the holder of a licence, of his unqualified

right to make representations within the period of 21

days. What the Bank did in this case was to say that

any representations must be supported by an unqualified ^

testimonial as to Mr. Bates' suitability to be a bank

director, from the chairman or chief executive of one

of the London clearing banks. This was a condition

limiting the right to make representations which was

clearly not authorised by statute and to his (judge's)

mind it vitiated entirely any suggestion that the last

sentence of the letter, "Any such representation should

be made in writing within 21 days of receipt of this

letter," could be regarded as a compliance with the part

of the sub-section which required the Bank to notify the

holder o fa licence that representations might be made

within 21 days.

Mr. Justice O'Keeffe said that this notice, having

gone out in that form, the decision to impose the con-

ditions was made on March 30. The letter notifying the

imposition of the conditions was sent by hand to the

plaintiff company on that date. The conditions were to

be effective on and from April 6.

Letter notifying imposition of conditions unreasonable,

as having been sent on Holy Thursday, plaintiffs

had not time to comply

"March 30th was Holy Thursday and most business

concerns would be closed down on Friday, Saturday,

Sunday and Monday, and the effective period allowed

to the bank in which to arrange not merely for the

resignation of Mr. Bates as a director but for the trans-

fer of 90% of its capital out of the ownership of Irish

Trust Group Ltd. into the ownership of some other

person was such that the Central Bank's own legal

adviser expressed the view that it would be unreasonable

toexpect compliance with the conditions by the date

mentioned. I think it would, and I think that no

person empowered to impose conditions could properly

impose conditions which would be unreasonable to ex-

pect to be complied with. For these reasons it seems to

me that the imposition of the conditions was entirely

unwarranted. I am inclined to doubt whether, even

if it were warranted, the Governor alone could impose

the conditions since the conditions must be such as

to be conditions which in the opinion of the Bank are ,

calculated to promote the orderly and proper regula-

tion of banking.

Accordingly he thought the plaintiffs were entitled to

the declaration that the conditions had not been validly

imposed and that they hold the licence without

any

such conditions.

He allowed costs of the action, including discovery ,

and gave liberty to apply on the question of damages-

He granted a stay in the usual form on the question

of costs.

(Irish Trust Bank Ltd. v. Iridi Central Bank-"

O'Keeffe, P.—unreported—November 1973).