The Gazette 1974

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-" 1 O'Keeffe, P.—unreported—November 1973). > 20

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