Gibraltar: Court of Appeal Ruling - Jyske Bank (Gibraltar) Limited

Last Updated: 15 January 2018
Article by Christian Rocca and James Montado

The Court of Appeal has handed down judgment in an appeal relating to the civil case brought against Jyske Bank (Gibraltar) Limited by the representatives of certain clients of the collapsed law firm Marrache & Co.

The Bank was ultimately successful in its appeal and the Court of Appeal set aside the order made against the Bank by Mr Justice Jack at first instance and ordered a re-trial of the matter.
The appeal is significant in that it is one of the few examples where an appellate court has interfered with findings of fact made by a trial judge.  

Background

In May 2017, after a 12-day trial, Mr Justice Jack made an order against the Bank for what the judge found to be its dishonest assistance in fraudulent breaches of trust and its knowing receipt of part of the fruits of those breaches. The case came down to one issue of fact: did Mr Bishop (an account manager at the Bank) know or suspect, at any time between 2003 and 2009, that the brothers were stealing money from their clients or were stealing money from one client to pay another? The judge found he did but the Bank subsequently appealed that decision.  

The Appeal

In its appeal, the Bank argued against the Judge's findings of dishonesty against the account manager. The Court of Appeal recognised that that such challenges are difficult to sustain, for reasons given in judgments of high authority, but that they can succeed where an appellant can identify material errors of approach by the trial judge.  

Whilst it was accepted that the determination of the account manager's honesty or dishonesty was exclusively a matter for the judge, the Bank criticised the judge's approach of ignoring both the Bank's expert evidence as to banking practice, and the evidence from other bankers as to what the Bank expected of its account managers when it came to  monitoring client accounts. At trial, the Bank's expert and other banking practice evidence had been consistent with the account manager's own evidence as to his approach when dealing with instructions received from the firm in relation to its various client accounts.  

The Court of Appeal found that the judge ought to have taken Jyske's expert and other banking practice evidence into account, in particular the evidence as to how an account manager such as Mr Bishop would have been expected to process instructions from a solicitor affecting their own client account. The Court of Appeal determined that the account manager was not to be judged by reference to the understanding and experience of a lawyer with the sort specialist experience the judge had, but was instead to be judged by reference to the understanding and experience of a reasonable banker. It concluded that the judge's refusal to have regard to the expert and other banking evidence adduced by the Bank was wrong and amounted to a material error by the judge.  

The Bank also challenged the very serious findings of dishonesty made against the account manager by the judge. The Court of Appeal found that, in addition to the judge's refusal to have regard to the expert and other banking practice evidence, the judge also made some material errors in his approach to the fact-finding exercise. The Court of Appeal stated that in making certain findings of dishonesty against the account manager, the judge was not only making findings for which there were no justification, he was overlooking the principle that a judge should not make such a finding against a party or a witness when the case for asserted dishonesty has not been squarely put to him in cross-examination.  The significance of these flaws in the judge's findings of dishonesty in relation to the client accounts and the bonds (issues relied upon to show dishonesty) was that they undermined two of the material building blocks upon which the judge relied in forming his view that Mr Bishop was not a witness whose evidence could be trusted.  

They also found that in making that finding, the judge did not stand back with sufficient objectivity and ask himself whether it really was more probable than not that Mr Bishop was acting dishonestly. The combined effect of the judge's errors, namely his treatment of the expert and other banking evidence and the errors in his findings of fact, raised sufficiently serious questions as to the soundness of his ultimate finding.

Conclusions

The Court of Appeal concluded that the judge's findings in relation to the client accounts were unfair; the judge's finding of perjury by Mr Bishop was unjustified; the judge's finding of deliberate dishonesty by Mr Bishop in relation to two bonds was unjustified, wrong, and seriously so.  

Accordingly, the Court of Appeal allowed the Bank's appeal and set aside the Order of Mr Justice Jack and ordered a re-trial of the matter.  

Legal Team

Christian Rocca and James Montado of ISOLAS LLP represented the Bank together with Jonathan Brettler and David Foxton QC

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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