BANK OF INDIA v. BHAGWANDAS KEWALERAM MURJANI AND OTHERS

CACV000084/1989

	1989, Nos. 84, 85 & 94
	(Civil)

 

Headnote

    Order 14. Observations upon the onus out upon a defendant and the approach to the issue of credibility.

IN THE COURT OF APPEAL	1989, No. 84
	(Civil)

BETWEEN

	BANK OF INDIA	Plaintiff (Respondent)
	AND
	BHAGWANDAS KEWALERAM MURJANI	1st Defendant
	LAWFUL (HOLDINGS) LIMITED	2nd Defendant
	in its capacity as trustee OF the BKM 1981 Trust
	MURJANI LIMITED	3rd Defendant
	(formerly known as MURJANI INTERNATIONAL LIMITED)
	LUCKY PIERRE LIMITED	4th Defendant
	MURJANI INDUSTRIES (HK) LIMITED	5th Defendant
	MURJANI NACAU LIMITED	6th Defendant
	MURJANI DESIGNS LIMITED	7th Defendant
		(Appellants)

---------

	1989, No. 85
	(Civil)

BETWEEN

	BANK OF INDIA	Plaintiff
		(Respondent)
	AND
	MURJANI INDUSTRIES (HK) LIMITED	1st Defendant
	MURJANI BHAGWANDAS MURJANI	2nd Defendant
		(Appellants)

---------

	1989, No. 94
	(Civil)

BETWEEN

	BANK OF INDIA	Plaintiff
	AND
	BHAGWANDAS KEWALRAM MURJANI	1st Defendant
	LAWFUL (HOLDINGS) LIMITED	2nd Defendant
	in its capacity as trustee of the BKM 1981 Trust
	MURJANI LIMITED	3rd Defendant
	(formerly known as MURJANI INTERNATIONAL LIMITED)	(Appellant)
	LUCKY PIERRE LIMITED	4th Defendant
	MURJANI INDUSTRIES (HK) LIMITED	5th Defendant
	MURJANI MACAU LIMITED	6th Defendant
	MURJANI DESIGNS LIMITED	7th Defendant

------------------

Coram: Hon Con, V-P, Clough & Hunter, JJA

Date of Hearing: 8 December 1989

Date of Judgment: 11 December 1989

 

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J U D G M E N T

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Hunter, JA :

1. We have before us three appeals which turn on the same questions. The first, which is Appeal No. 85, arises out of action No. 1045 of 1989 commenced by writ on 25th February. In that action the plaintiff, Bank of India, sued two parties, Murjani Industries (HK) Ltd, which it described as its customer and principal debtor, and secondly an individual, Mr M.B. Murjani. As against the customer it claimed the repayment of something over US$10 million in respect of banking facilities provided; as against Mr Murjani the claim was as guarantor under a guarantee dated November 1985. On 27th April Barnett J gave leave for the entry of summary judgment against both defendants. The company is now in liquidation. The second defendant appeals.

2. The second appeal is Appeal No. 84. That arises out of action No. 1404 of 1989 started by writ dated 15th March 1989. This named 7 defendants. They were Mr B.K. Murjani, the first defendant; a company called Lawful (Holdings) Ltd as the 2nd; Murjani Ltd, the 3rd; Lucky Pierre Ltd, the 4th; Murjani Industries (HK) Ltd, the customer again, as 5th defendant; Murjani Macau Ltd, the 6th defendant; and Murjani Designs Ltd, the 7th defendant. They were all sued as guarantors. The first four guarantees were dated November 1985, the last three August 1986. Also on 27th April Barnett J gave leave for summary judgment to be signed. Of those defendants nos 1, 2, 4, 6 and 7 appeal. For some reason the case against the 3rd defendant did not come before Barnett J upon that date. It carne be ore him on 29th May. He made a similar order, and that has produced Appeal No. 94. They all raise the question, whether the judge should have entered summary judgments against the guarantor defendants; the company is not an appellant, being in liquidation.

3. The main facts are not in dispute. Back in 1985, banking facilities were provided by the Bank to the customer, Murjani Industries Ltd, to an increased limit then of US$14 million. Those facilities were provided on the security of two properties put up by the personal defendants, and a number of guarantees given then, and added to the following year.

4. By early 1988 the Bank was anxious about these facilities. It wanted to reduce the overdraft limit to 10 million in order to accord with recommendations from the Reserve Bank of India which the Bank had adopted. Conversely the personal defendants were anxious to secure the release of these two properties. In September and October the Bank in fact released the properties against a payment of US$3.8 million. That transaction I will have to look at sore closely.

5. Discussions followed about interest and repayments. They ceased on 2nd February 1989 effectively when the group produced a financial statement which showed a parlous financial position. In this the group paid that it was in no position to wake any proposals for payment, and as far as interest was concerned it wanted both a moratorium and a waiver. That was quite unacceptable to this Bank. On 13th February it called in the monies as against all the defendants, and as I have indicated the writs were issued on 25th February and 15th March.

6. I have mentioned those dates particularly because the defence basically accepts all the figures but goes to time. It is said that all the money mould have teen demandable and repayable in April 1989. But it was not, repayable until April. This is because of an agreement made on the telephone between Hong Kong and Bombay, in August 1989 between Mr M.B. Murjani on behalf of all the defendants and Mr Bhavnani, who is described as the General Manager international at Head Office, that there should be a moratorium on all capital repayments until 1st April 1989. It was a very simple agreement. It was not a restructuring agreement. This was simply an agreement to give time with a view to restructuring proposals being discussed and put forward by the group, and particularly by the customer defendant, of repayment proposals commencing in April 1989.

7. That was the defence which the judge considered. His approach was this. He examined all the evidence which bore upon this agreement especially Mr Murjani's affirmations and the contemporary documents. He directed himself in accordance with the dictum of Ackner LJ in Bangue de Paris v de Naray [1984] 1 Lloyds Rep p 23: -

"(i) it is of course trite law that O.14 proceedings are not decided by weighing the two affidavits.

(ii) it is also trite that the were assertion in an affidavit of a given situation which is to be the basis of a defence does not, ipso facto, provide leave to defend;

(iii) the Court must look at the whole situation and ask itself whether the defendant has satisfied the Court that there is a fair or reasonable probability of the defendant's having a real or bona fide defence" (The added numbers are my own),

8. Having recited all the material evidence and that direction to himself, the judge's conclusion was: -

"In my judgment, the agreement is transparently a concoction. I am not satisfied that there is a fair or reasonable probability of the defendants having a real or bona fide defence. Put another way, I find there are no triable issues and that there must be judgment for the plaintiff".

9. That conclusion is challenged root and branch by the appellants. On the facts it is put basically on two grounds. First, this was a misdirection. The judge was wrong to apply Ackner LJ, who himself was wrong. Secondly, it is said that there was no sufficient conflict between the affirmation of Mr Murjani and the contemporary documents to justify the judge reaching the conclusion in the language which he expressed.

10. I deal first with the suggestion that Ackner LJ was wrong and indeed out of step on the English authorities. I personally have considerable doubts whether this point is open to the appellants in this court, because in an earlier unreported decision in Chung Khiaw Bank v Interading Manufacturing (HK) Ltd & Others which is Appeal No. 6 of 1987, this court seems to me to have approved the Ackner LJ test. It is an embarrassing position for me. It was an appeal from me at first instance. I had applied the Ackner LJ test. The court of appeal went along with that approach. Having regard to that embarrassment I am quite happy to assume that the pot is open for further consideration by this court, because speaking for myself I am quite satisfied that Ackner LJ was right.

11. As I have indicated I have split his dictum into three parts, each with its own number. I have done that for this reason. Mr Thomas for the appellant accepts propositions (i) and (ii). His challenge is directed to (iii). The acceptance or what is said at (ii) seems to me to be absolutely crucial to this position. It is an acceptance that the mere assertion of fact in an affidavit does not necessarily give leave to defend. It is important to my mind to notice here the fairly obvious proposition that O 14 r 3 puts an onus upon a defendant. The onus is upon the defendant "to satisfy the court with respect to the claim ... that there is an issue or question in dispute which ought to be tried". It might be described as a threshold onus upon a defendant to show that there is a triable issue in the case. That onus can only be satisfied on the balance of probabilities, and this is the only way in which a court can consider it. This explains some of the language Ackner LJ used which is particularly criticised. In approaching that question all the court can possibly do is to consider all circumstances, to put the affirmation in its context, and to consider whether that threshold onus is discharged in that context.

12. That it seems to me is all the court was saying in de Naray. It was in fact an exceptional case in one respect. There the conversation asserted in the affidavit, which token at face value would have amounted to a defence at least of misrepresentation, had no contemporary context to put against it. But what the court took into consideration was later evidence which bore heavily upon the credibility of the deponents.

13. The much more usual course under O 14 is where the court is in a position to test the credibility of an affidavit or affirmation against contemporary documents. I am indebted to my brother Clough JA for drawing my attention to a decision of Beldam J in Bremar Holdings Ltd v de Roth, the Times Newspaper 22nd February 1984, where he deals expressly with this particular position. It was an appeal from a master. The master had granted conditional leave to defend upon the basis that one of the three points which had been raised by the defendant in his affidavit gave rise to a shadowy triable issue. Beldam J considered the three points. He said the first two were hopeless, and thought the third point was also insufficient to give rise to an arguable defence. But on the assumption that that conclusion was wrong, the report says: -

"Assuming that that was wrong, the plaintiffs' documentary evidence cast such doubt upon the validity of the defendant's documents arid affidavit statements in support of the third suggested defence, that his Lordship found the affidavit incredible, or almost incredible, by reason of its inherent implausibility or inconsistency with the documents.

Even had his Lordship not been of the opinion that no defence was disclosed, he would have held that the affidavit statements were not sufficiently credible to raise an issue or question in dispute which ought to be tried.

The dividing line between a triable issue, albeit shadowy, from no issue, was a fine one which in every case was a matter of opinion based upon an assessment of the sufficiency of the facts alleged and the supporting evidence".

14. That I find a most useful and helpful description of this threshold onus in the context of conflicting documents. Substantially the same thing said by May LJ in a case noted in the Supplement to the White Book, from the Times Newspaper of 3rd August 1987, Famous Ltd v Ge Inn Ex Italia SRL: -

"As a matter of law the court does not have to treat every affidavit filed ill O 14 in proceedings as truthful and at face value even though every probability and circumstance might point to the, contrary".

15. Those three statements all point to the sane conclusion. They are all useful expressions in practice of the way in which the count should approach this threshold onus put upon defendants by the terms of O 14 r 3. I cannot accept that the language which Ackner LJ uses is in any way wrong or out of line with the English authorities. So that from my part I would reject the first challenge to the judge's approach.

16. I then turn to the challenge on the facts. It is important here at the outset to see the nature of the agreement which was asserted by Mr Murjani, starting in paragraph 8 of an affirmation sworn by him on 19th April 1989. Having referred to the loans, to the lending limits and to the desire to release these two properties, he says: -

"8. Mr Bhavnani said that the sum of US$3.8 million was required to reduce the outstandings to under US$10 million and it was arranged that this sum of money would be paid to the plaintiff for the release of the mortgages over the two properties in Hong Kong".

I note the word "arrange".

"9. Pursuant to this arrangement, on or about 16th August 1988 I agreed on the telephone with Mr Bhavnani that the liabilities of the 5th defendant would be converted to a long term repayment schedule starting in April 1989 with the precise details of the term of the repayment schedule to be agreed between the plaintiff and the 5th defendant. Irrespective of the fact that there were to be further negotiations and discussions as to precise details of the term of the repayment schedule, it was my firm agreement with Mr Bhavnani that the 5th defendant was not required to make any repayment in respect of principal outstanding until April 1989. In summary, it was therefore my agreement on behalf of the 5th defendant with Mr Bhavnani on behalf of the plaintiff that the 5th defendant would keep interest current, that the 5th defendant did not have to make any repayment of principal outstanding until April 1989 and that the 5th defendant could pay the plaintiff US$3.8 million so as to reduce outstandings to US$10 million".

Certain documents were then produced.

17. It should be seen that there are three elements to that agreement as expressed and that there is no express reference to the release of the properties as being part of the agreement.

18. The next paragraph goes on to deal with the valuation of the properties and ends up with this assertion: -

"Thus, the plaintiff received a sum in excess of the valuations to the properties in consideration of the arrangement reached between myself and Mr Bhavnani on or about 16th August 1989".

It is plain that the draftsman is concerned about consideration. This was one proposition which was hinted at there, and not since relied upon or pressed. Another is the proposition which one finds spelt out in paragraph 13 which might be described as a consideration substitute, a form of estoppel, which again has not been pressed.

19. This affirmation was added to on 20th April 1989 where in a supplemental affirmation one finds: -

"2. I make this affirmation to clarify that the agreement I reached with Mr Bhavnani on behalf of the plaintiff on or about 16th August 1988 as referred to in paragraph 9 of my previous affirmation, was of course reached by me not only in my capacity as a director of tire 5th defendant oh its behalf but also on benalf of the other defendants to this action (with the exception of the 2nd defendant) as I was at the material time duly authorised generally to represent those companies".

As he was a guarantor in tire other action he then picks up his position in the next paragraph: -

"3. In particular the agreement which I reached with Mr Bhavnani was equally applicable to myself (who is sued in the other action) and my father (who is the first defendant in that action) in respect of the guarantees which we had given to the plaintiff ..."

The agreement was reformulated by Mr Rodway in argument before the trial judge in this way. It is set out in the judgment like this: -

"That agreement, as Mr Rodway has described, has four limbs. First, that the principal outstanding was to be reduced from some US$13 million to US$10 million. Second, that US$0.8 million would be paid for outstanding interest. Third, the current interest would be paid on demand and finally, upon such payments being made, repayment to the principal would begin in April 1989 and the plaintiff would make no claim for principal until then".

That reformulation was expressly adopted in argument by Mr Thomas, who further added that the consideration for the moratorium was the payment of the US$0.8 million.

20. That is the agreement asserted before the court. This release of the properties against a payment of US$3.8 million was fairy fully documented at the time. It is important, I think, to see the way in which this matter is put in the affirmations and in the argument. It can be seen that there is no suggestion that it was a term of the agreement, that the properties were to be released. Is this a viable proposition?

21. Secondly, in the search for consideration it is being suggested that it is possible to split the sum of US$3.8 million into some payment in the reduction of the borrowing, and another payment for outstanding interest, to enable consideration to be produced in support of some other terms, apart from the release of the properties.

22. I turn now to those contemporary documents to see how far this can credibly be asserted. The first of the documents appears to be a telex sent by Mr M.B. Murjani to Mr Bhavnani. It is dated 16th August which is the day on which the agreement is said to have been made.

"I would appreciate your advising your Hong Kong office of our agreement, resulting in the release of assets after our payment of US$3.8 million".

The assets are not identified there, but plainly can be seen to be the properties. The agreement is said only to embrace the release of the properties against the payment of US$3.8 million.

23. The next document is an internal telex dated 23rd August from Bombay to Hong Kong. It invites Hong Kong to do some calculations and concludes that: -

"This exercise is being carried out to examine whether the figure so arrived at is greater or less than the amount or US$3.8 million which Mr Murjani has offered to pay if we agree to release the properties".

It would suggest that there had been discussions but that the author was not aware at that point of having made any agreement. It does not appear that that calculation is in fact ever done.

24. The ultimate answer of Bombay first appears in a fax of 9th September from Bank of India, Hong Kong to Murjani Industries where it says that the head office has agreed: -

"for the release of the mortgaged properties only subject to the following conditions:-

(A) Murjanis pay original advance plus interest or US$3.8 million whichever is the higher;

(B) They agree to keep interest payment current;

(C) They submit a plan within a month supported by cash flows etc for repayment of remaining dues in the account".

That formulation was repeated several times in documents and not challenged or questioned by any body at the time. One formulation is to be found in a latter of 12th September written by the Bank again to the customer: -

"As advised to you over fax on 9th September 1988 our Head Office has authorised us to release the mortgaged properties in the account subject to following provisos: -

A) Murjanis pay original advance plus interest or US$3.8 million whichever is the higher

B) They agree to keep interest payment current

C) They submit a plan within a month supported by cash flows etc for repayment of remaining dues in the account

Head office has further advised in their telex of 10th September 1988 that the question of reactivating of reduced limit can be discussed only after the entire overdues in the account are cleared".

25. There is further repetition after receipt of communication from car Murjani's father talking again about the payment of the 3.8 million, in a letter dated 28th September: -

"3. We would appreciate a letter from you undertaking to make the interest current soon thereafter which should be followed by the letter with cash flow as aforesaid".

It is necessary only to refer to one other letter which is dated 29th October from the Bank to Murjani Industries. It complains in effect of delay. The last paragraph ends: -

"Since a month has practically passed since, we conveyed Head Office sanction we should be receiving your letter of undertaking to keep the interest current and proposal for repayment along with the cash flow statement".

Thereafter there is no issue but that 3.8 million was paid and the the properties were released.

26. It seems to me that a number of things emerge from that documentation. First, the attempted formulation of this agreement without reference to the properties is totally unreal. The agreement was for the release of the properties. This is demonstrated beyond a peradventure secondly, the consideration for the release of those properties as the documents show was either a calculation or 3.8 million whichever was the higher. 3.8 million proved to be the figure. That was the consideration for the release of these properties. There is no way in which that sum can be split artificially into 3 million and 0.8 million. Putting the matter slightly differently; in those circumstances there is is no room for any other term, and certainly no room for any other term which can be supported by the consideration of this 0.8 million.

27. The vital first step in this agreement, which as its proponents must have been aware, cads to formulate it in a way which demonstrated consideration for this moratorium, fails. This is the heart of the agreement as asserted. An investigation of the documents seems to me to demonstrate that it has no heart.

28. I turn then to the third limb in Mr Rodway's summary of the agreement which is the undertaking to make the interest current. I have already referred to the requests for a letter to that effect. There was no answer; no letter coming back saying that a letter was unnecessary, we have already promised. Equally there was no answer to the effect that this letter confirms our promise. As from 12th September, all the documents and the whole of the defendant's conduct, (and since the contract was said to have peen made on behalf of all the defendants they can be put as a group in that way) were consistent and consistent only with the premise that there had been no remise to pay interest, and that the defendants were still in a position to bargain about interest because that is exactly what they did.

29. Not a dollar was paid by way of interest. When the proposals for restructuring eventually surfaced in November, the first proposal in a letter dated 15th November 1988 to the Bank from Murjani Industries offers an interest package which would have had the effect of making the interest current by the 31st March. When the document produced on 2nd February is looked at, one finds that the fourth proposal is "a moratorium on interest payments which should be waived on an ongoing basis".

30. Mr Murjani now complains through his counsel that his oath is being insufficiently regarded. He says: -

"I have sworn to an agreement. I am an honourable man and in effect you cannot ignore my oath".

The short answer to that is this. When you look at what these defendants did, it is beyond question that no honourable person, who had made such an agreement as is now asserted, could behave in the way that they behaved. It seems to me impossible for Mr Murjani to complain now, if a court chooses to test his veracity and nonour against the undoubted touchstone of what he did, as against what he now seeks to assert. It seems to me that the third element, as defined by Mr Rodway in this agreement likewise is shown to have no credibility.

31. As far as the fourth element, which is the moratorium itself, there is less glaring inconsistency between the agreement asserted and the documents, because not surprisingly the repayment schedule put forward in the letter of 15th November was to start in April, not in fact on 1st April but 30th April 1989. But there area number of problems about this aspect of the agreement also.

32. First, I have already read the requests made by the Bank at the time for figures within a month supported by cash flows. This is precisely the way one would expect any dank to behave. It would want figures; it would want cash flows, before considering any restructuring proposals. It is very remarkable for a bank to grant a moratorium in advance and then to say please now give me the figures which might have led to the moratorium. It is putting the cart before the horse. Secondly there are problems arising in relation to this moratorium by what was said in the memorandum of 2nd February. That contains this statement: -

"The Group finds itself unable to formulate proposals for cash repayments at this point of time".

I am unable to see how that could be other than a repudiation of the contract which is now being alleged to have been made in August, which as to give time for proposals to be formulated commencing with repayments in April. Again, I have great difficulty in saying how that could be honourably asserted without explanation or reference to this earlier agreement. I am unable to know what credibility one is meant to give to a passage in Mr Murjani's first affidavit in paragraph 2 when he says: -

"I do not deny admitting that the 5th defendant was liable to the plaintiff (this is on a date in February) ... but I categorically deny admitting that the liabilities were then due and owing ... "

How he explained this conundrum to his listeners does not appear.

33. The most obvious problem to my mind, arising out of this simple agreement, stems from Mr Murjani's personal conduct in the prohibition proceedings taken against him on the day the first writ was issued. At that time he was desperately anxious to leave Hong Kong. This defence was ideal for his purposes. It was not a defence to the claim. It was a defence as to time. It was a defence that this money is not owing now: "You cannot claim it until April and by that time I will have left Hong Kong". Of course it would have given him exactly what he was after.

34. What to my mind is quite incredible is what happened in those proceedings. First, this defence was never raised at all. Secondly, when in the course of argument before this court on 21st and 22nd March 1989, the question of the defence was raised, what happened was (I am reading from the judgment of the court I gave the following day): -

"Thirdly it is suggested there is a defence of restructuring. This was only sketched in outline".

I then refer to the document which I am pretty certain on recollection was the letter of 12th September; point out the problem of reconciling that letter with any such existing agreement; and suggest this restructuring defence looks very difficult to maintain in the light of the contemporary documents. That was true. No restructuring defence is now being advanced at all.

35. What emerges from this is that this very simple defence of a moratorium to the purposes of future restructuring, cannot have been revealed by Mr Murjani to his legal advisers up to 22nd March, but we find it being sworn to in an affirmation dated 19th April. I find that position totally incredible.

36. Any one of those particular features would be fatal to this agreement. Putting them altogether, for my part, I can see no grounds for criticising the judge's conclusion at all on that aspect to the case.

37. I turn then to the second limb of t his appeal which raises the question of trustees and trust sorrowing. When a trustee carries on business and enters into commercial contracts, it seems to me that he does so in one or other two ways. The first and normal way is that he enters into the contract and incurs personal liability for it, regardless of whether he does so in his own name or whether at the same time as he does so, he describes himself as a trustee. If he simply does that and no more, he is personally liable. The second way in which he may enter into a contract is specifically as a trustee with limited liability. In order to achieve that position the contract has to include express provision which excludes any personal liability, asserts that the liability is only as trustee, and limits the liability which the trustee incurs to trust assets in his possession at the material date. If authority is needed for those propositions, it is to se found in Muir v City of Glasgow Bank [1879] 4 App Cas 337, particularly per Lord Penzance at p 368.

38. If applied to the particular position of banks, the first type of the contract is almost universal, whether or not the trustee enters into a contract in his own name or in circumstances where he reveals to the banker that it is a trust account. The revelation to the banker that this is a trust account has no impact or limitation upon the customer's personal liability; but it may have the consequence of enlarging the bank's liability and of rendering the bank liable to the beneficiaries in certain circumstances. The second type of contract, where the trustee enters into a contract strictly as a trustee is personally unknown to me in the context of banking. It is repughant to most banking contracts and would certainly be repughant to tire contract for, the banking facilities hare. This may explain why one looks in vain in the textbooks on Banking for any reference to Muir v City of Glasgow Bank.

39. We have here an illustration of both aspects of this problem. The second defendant guarantor, Lawful (Holdings), is, I understand, a well-known trustee company. It entered into the guarantee of 11th November 1985 not simply describing itself as trustee of a particular named trust out subject to an annexure thereto which contains these words: -

"... our liability whether joint or several or both to the Bank or their successors in title or assigns hereunder is qua trustee only and is limited to such of the property assets and income contained in the trust fund of the Trust as shall be in our hands as trustees of the Trust from time to time so that in no circumstances shall any personal liability attach upon us ....".

This is an example of the sort of special terms which bring about the particular trustee position.

40. The point was totally overlooked in the court below. It was overlooked until a very late stage on this appeal, when an application was made to amend the notice of appeal to ask that the present unqualified judgment which has been entered against this defendant, Lawful (Holdings), be suitably qualified to comply with this proviso, with the addition of orders directing the necessary accounts and enquiries. It is quite sufficient to say that the point has been properly conceded by the Bank as being necessary having regard to this qualification. There is no reason to doubt that had this point been taken in the court below the same would have happened there too. I need say no more about that aspect of the case.

41. The second point is contentious. What is sought to be advanced here is a purely procedural defence in the name of the guarantors but not in the name of the customer company. It sought to say that Murjani Industries is being sued in a representative capacity as trustee and that the various documents do not sufficiently comply with the requirements, inter alia, of O 6 r 3(1)(b) where a defendant is being sued in a representative capacity. There is in my judgment nothing in this at all. It is not suggeseted that Murjani Industries entered into these contracts as a trustee only. It is not suggested that this customer enjoys any trustee defence. If it does not enjoy any trustee defence, it seems to me plain that it is not being sued in a representative capacity at all only as a customer.

42. The whole problem stems from the fact that for reasons which totally escape me, this company adopted for itself the description that it was conducting, its business as "trustee of Murjani Industries Unit Trust". Having adopted this trade description, this business name as was suggested in argument, not surprisingly the Bank followed suit. All the banking documents sent to the company are headed in this form; and all the guarantees are headed in this form. This is the second time this court has tried to get to the bottom of this problem and with no greater success. How any trust deed can be drawn which authorises the company to behave in the way it did in this case, is completely mystifying. We were unable to get any information about the nature of this trust. The trust deed has never been produced.

43. Even if this is a genuine trust relationship, and not simply a fiscal label which may or may not have any meaning at all, this is no more than a company describing itself as trustees. It is no more than a description or misdescription. The company remains a customer of the Bank. The relationship gave rise to the usual debtor and creditor relationship between banker and customer and to no more. In my judgment the judge was totally correct, when he said these words were simply descriptive of the customer "in its own right and not trustee". For those reasons this point fails. For myself save for the agreed adjustment necessary to the judgment entered against lawful (Holding) Ltd, this appeal fails and should be dismissed.

Cons, V-P :

44. I agree with my Lord that the three appeals should be dismissed. I add a few words of my own merely with regard to an idea which seems to lie behind a great anal of the argument advanced to us.

45. I respectfully agree with the way in which my Lord has analysed the correct approach to O 14 proceedings. I would only like to emphasise that I am unable to accept a suggestion that a defendant who is refused to leave to defend in such proceedings has in some way been condemned unheard. The order does not so that. The defendant has a full opportunity to put before the court, as much evidence as he wishes whether from himself or from others. That is normally done as is in the present instance, by affidavit or affirmation. What O 14 does do then, is to say that the defendant shall have no further opportunity unless he satisfies the court by that initial evidence that there is an issue or question in dispute which ought to be tried. It is to as noted that unlike criminal proceedings there is a positive burden thus placed upon the defendant. It is he who has to show that such an issue or question does arise.

46. The question may be one of either law or fact. In the present instance what is suggested is a question of fact - the existence of a particular agreement. As I see it, the basic decision of the judge Below was that on tae evidence which was put before him, the suggested agreement just could not have bean made. For my part, I respectfully feel, that to describe the assertion that it had in fact been made as a "transparent concoction" was perhaps unnecessary and unjustified. But as my Lord has illustrated, the judge's actual decision was undoubtedly correct.

Clough, JA :

47. I agree that these appeals should be dismissed for the reasons given by my Lord Hunter.

Representation:

M. Thomas, QC, R. Faulkner (M/s Johnson, Stokes & Master) for Appellants//Defendants

R. Tang, QC, B. Barlow (M/s Wilkinson & Grist for Respondent/Plaintiff