Neutral Citation Number: [2007] EWHC 2379 (Ch)
Case No: HC05C01853
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 19/10/2007

Before :

MR JUSTICE PETER SMITH
- - - - - - - - - - - - - - - - - - - - -
Between :

	Hill Street Services Company Limited	Claimant	
	- and -		
	 National Westminster Bank PLC 
- and -
 Burjor Mistry	Defendant/Part 20 Claimant 

Part 20 Defendant

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

Mr Sudhanshu  Swaroop (instructed by Morgan Walker) for the Claimant
Mr Jeremy Goldring (instructed by Travers Smith) for the Defendant
Mr Burjor Mistry Litigant in Person

Hearing dates: 2nd, 3rd, 4th, 5th & 8th October 2007
- - - - - - - - - - - - - - - - - - - - -
Judgment
Peter Smith J : 
INTRODUCTION
1.	This judgment arises out of the trial of this action.  The Claimant Hill Street Services Company Ltd (“Hill Street”) claims against the Defendant National Westminster Bank PLC (“Natwest”) the sum of £135,750 which it says was removed from its bank account with Natwest without any authority or approval.  
2.	Originally Hill Street in these proceedings sued Mr Burjor Jehangir Mistry (“Mr Mistry”).  He was the sole director and shareholder of Hill Street at all material times and (as appears below) was the sole authorised signatory on Hill Street’s account with Natwest.  The claim against Mr Mistry as originally formulated (see paragraph 10 of the Particulars of Claim) was on the basis that if he authorised the debiting of Hill Street’s account by Natwest he acted in breach of fiduciary duty because the debits were made for his own benefit not in the interest of the company and the misappropriation of its assets.
3.	Mr Mistry denied that he ever authorised any of the payments and maintained that denial throughout the trial.  
4.	In the light of that denial however Hill Street discontinued as against Mr Mistry on 21st July 2006.
5.	Natwest Bank however on 20th November 2006 brought a Part 20 claim against Mr Mistry on the basis that if it is found liable to Hill Street such sums are recoverable from him because either (i) such payments were made under a mistake of fact and/or (ii) Mr Mistry would have been unjustly enriched at the expense of Natwest.  Mr Mistry served a Defence to that Part 20 claim dated 27th April 2007.  The Defence is based on a contention that Natwest brought proceedings against him in the Telford County Court on 20th September 2004 claiming the amount then outstanding on his current and loan account.  Such proceedings were compromised by a Tomlin Order dated 11th May 2005 whereby Natwest agreed to settle that claim in the sum of £16,000.   Mr Mistry asserts that the claims brought against him by Natwest and settled by the Tomlin Order were settled by Natwest with full knowledge of Hill Street’s complaint and it cannot therefore be allowed to make a fresh claim for recovery of the sums that it is found liable to pay to Hill Street.
6.	In addition Mr Mistry applied on 15th January 2007 to set aside his joinder in the present proceedings as Part 20 Defendant because of the compromise under the Tomlin Order.  Deputy Master Jefferies dismissed that application on 23rd March 2007.  He concluded (see paragraph 5 of the judgment) that it was not an abuse to bring the present Part 20 Claim because of the Telford action and its compromise.  Mr Mistry did not appeal that decision.  Nevertheless it seems to me given Mr Mistry’s status as a litigant in person I do not think it appropriate to say that he is prevented from arguing that point at this trial and I allowed that point to be argued by him again.  
7.	The discontinuance as against Mr Mistry is somewhat surprising in my view.  Whatever the position as regards the mandate Mr Mistry plainly had no authority to authorise any transfers out of Hill Street’s account into his own bank account.  As the evidence deployed it was clear that he admitted to one of those transactions in any event.  Given the fact that he had no authority as regards the two investors behind his shareholding if he was found to have authorised it it would plainly be a breach of trust on his part.  Hill Street would then have a case either against Natwest on the basis that the transfers were not authorised or a case against Mr Mistry on the basis that he authorised the transfers but was not entitled as regards Hill Street so to do.  This was even more surprising when Mr Mistry referred to and then produced a hand written document which he had signed in October/November 2003.  This had never been disclosed prior to the trial.  It was addressed to Sterlite India Ltd (the backers of Hill Street) and in it Mr Mistry acknowledged that up to 31st October 2003 £86,000 had been transferred “in error” from Hill Street’s account to his account.  By the letter he undertook to repay the amount with interest as to £40,000 from the proceeds of sale of his house on 15th January 2004, £20,000 from funds to be transferred overseas from his father by the end of the year and a further £30,000 to be transferred by funds from his father overseas by 1st February 2004.  Given that the discontinuance of the proceedings against him is surprising.  Mr Mistry has not made any such payment.  
8.	Further the disclosure of this document called in to question the correspondence that passed between his solicitors and Natwest’s solicitors which led to the Tomlin Order.  In that correspondence he offered £5,000 initially (increased to £16,000) on the basis that he had various creditors and he intended to settle all of them equally on percentage terms.  This letter was not revealed nor the proposals to repay Hill Street in full.  Mr Mistry said in his evidence that he could not repay Natwest.  Further he was ordered by Deputy Master Jefferies to pay £4,500 to Natwest as the costs of his unsuccessful application.  He has not discharged that indebtedness either as he had no funds he said to make any such payment.
THE BANK ACCOUNTS
9.	Hill Street at all material times had an account with Natwest at its Berkley Square Branch (No 50385895).  Hill Street had no specific facilities for online or telephone banking.
10.	Mr Mistry held two accounts with Natwest at its Ealing Branch namely a current account no. 875807813 (his personal account) and a loan account no. 41543394.  He did not apparently set up the specific online or telephone banking facility on either account.  
OPENING OF HILL STREET ACCOUNT
11.	In the middle of 2001 a Mr Ashok Sancheti opened the Hill Street account and signed the mandate dated 19th July 2001.  That document is headed “Limited Company Mandate” and included an excerpt from a Meeting of the Directors of Hill Street on 19th July 2001 requesting Natwest to act as its banker.  In paragraph 1 a definition is given to the words “Instructions”.  It meant (inter alia):-
“(a) cheques or other orders for payment, bills accepted and promissory notes or negotiable instruments made drawn or given on the Account;
(b) instructions to countermand payment of cheques, bills of exchange or orders;
(h) instructions to withdraw deliver dispose of or deal with any property, documents or securities held in the name of the company; 
(j) any instruction request agreement undertaking or document necessary for the provision of any of the above purposes or otherwise for the provision of banking services or giving of information as between each of the bank and the company.”
12.	The mandate authorised Mr Sancheti to be the sole director.  On the authorised signatory sheet he became the only authorised signatory in the circumstances set out below.
13.	On 13th September 2001 Natwest wrote to Mr Sancheti querying the authorised signatory sheet and the mandate.  The mandate originally authorised any one director to sign but in addition to Mr Sancheti a Ms Rajagopalan was identified as an authorised signatory. However she was the company secretary so she had no authority to sign on the mandate.  This was clarified by striking out the authority to any director and replacing it solely with Mr Sancheti and removing Ms Rajagopalan from the status as an authorised signatory.  
14.	That letter has been relied upon by Mr Swaroop who appears for Hill Street as providing evidence which supports Hill Street’s contention that the authority was limited to written authority only.  The significance of that stance arises from the fact that Natwest contend that all of the disputed transfers were effected by an oral authority given by Mr Mistry.  The support is said to derive from the sentence “….the mandate states that all cheques, instructions etc are to be signed by any one director….” 
15.	In fact the mandate says no such thing.  There is nothing in the mandate which expressly requires any of the instructions therein to be made in writing.  I can see as a matter of prudence instructions are best evidenced in writing to avoid misunderstanding but I do not construe the mandate as being limited to written instructions only.  Equally the fact that an authorised signatory sheet was provided does not support Hill Street’s contention.  In my view it is clear that the authority’s signatory sheet is simply there to provide specimen signatures when such are required such as the signing of cheques.  I do not see how it can be elevated to making the authority a written one.
16.	I therefore reject Hill Street’s contention that in any event even if Natwest established that Mr Mistry gave oral authority to transfer the funds that such were unauthorised in any event.  
17.	Finally in this context I observe that Mr Mistry was at all material times the sole director and shareholder of Hill Street.  As such he would have implied authority as the sole director (cp a single director where there is more than one Rama v Proved Tin [1952] 2 QB 147).  As the sole member of the board Mr Mistry at that time would have authority to override any need to give written instructions just as he would have had authority to provide any written document or other authorisation.  This accords with the decision of Cooke J in HJ Symons v Barclays Bank [2003] EWHC 1249 (Comm) which was quite properly provided by Mr Swaroop in his closing submissions and the decision of the Privy Council in Morrell & Anr v Workers Savings and Loan Bank [2007] UK PC3 at paragraphs 8-10.  For the same reasons as in the present case if I am wrong on the construction of the authority I do not see why Mr Mistry could not have orally agreed a variation of those provisions.  He did that at least once as the evidence will show.
18.	The only other issue for determination by me is whether or not the transfers were effected by an oral authority given by Mr Mistry.
MR MISTRY’S AUTHORITY
19.	On 30th August 2002 Mr Sancheti was removed as the existing signatory and Mr Mistry was appointed in his place as a director.  The form states that on his appointment he was “to be added to the existing signatories authorised to give you Instructions in accordance with the mandate held by you covering, in particular, but without limit operations on the Company account”.  This change occurred as a result of Mr Sancheti transferring his shareholding to Mr Mistry on 16th August 2002 when he was also appointed as a director, Mr Sancheti resigning on 19th August 2002.  It is true that this document (like the mandate) does not expressly refer to non-written instructions.  However the instructions in my view are not to be limited for the same reason as I have already set out above to a written instruction.  
MR MISTRY’S ACCOUNT
20.	Nothing turns on the loan account; all the disputed payments were made in to his personal account.  Mr Mistry applied to open that account on 5th June 2001.  The account was called an Advantage Premier Account.  At the same time he obtained a charge card which had a monthly limit of £12,000.  The amount debited to the charge card was recovered by Natwest by debiting Mr Mistry’s current account at the end of each month.  His account had specific instructions dealing with fax or telephone communications.  They require (inter alia) the use of a code.  There is nothing to suggest that this procedure applied to Hill Street’s account.  
21.	On 16th January 2003 Mr Mistry applied for a loan of £10,000 which would lead to an aggregate of £20,000.  That was granted.  At all material times concerning the present dispute Mr Mistry’s account had an overdraft facility of £20,000 only.
22.	When Mr Mistry became the director of Hill Street Natwest linked the two accounts for the purposes of their computer records.  An example is the computer printout of 10th March 2003 which has the code R against Hill Street and code O against Mr Mistry.  The former means “other relationship” and O means “owner”.  Natwest (surprisingly in my view) does not enquire as to the correctness of transfers from a company account by a director to his own personal account.  
23.	This point does not arise in the present proceedings because there is no allegation against Natwest that they have participated in a breach of duty by Mr Mistry.  The only such allegation was the discontinued one as against Mr Mistry.
24.	Equally there is no allegation of negligence or negligent breach of contract as against Natwest.  That means that there is no claim that Natwest ought to scrutinise transactions between the company and the director’s private bank account.  Similarly whilst there was much debate about internal Natwest instructions concerning telephone transfers and transfers between associated persons and the tests to be applied and the documents required none of that in my view is relevant because there is no issue arising out of any failure on the part of Natwest to implement these procedures.  The procedures are designed to protect against bogus transfers and to establish a verification procedure.  Natwest’s defence is that Mr Mistry authorised them.  It is not suggested that it was a bogus person effecting the transfers.  That is self evident because such a fraudster would have no point in fraudulently transferring money out of Hill Street’s account into Mr Mistry’s.  Therefore this material in my view is not relevant to the issue of authorisation by Mr Mistry.
THE TRANSFERS
25.	Between 12th September 2003 and 13th November 2003 16 transfers were made from Hill Street’s account to Mr Mistry’s account.  The computer records of Natwest identify the employee who keyed in each transfer.  The majority of them were effected by Jason Comer.  Three were effected by Denise Edwards and one by Scott Webb.  A sum of £35,000 (transferred on 9 October 2003) was authorised both by Mr Comer and another bank official Harjit Rai.  According to Mr Comer’s witness statement 2 authorisations were required because the sum (£35,000) was in excess of £20,000.  Mr Rai did not give evidence before me but nothing in my view turns on that.  
26.	As I have said Natwest say that most of these were effected by Natwest after the relevant employee telephoned Mr Mistry and he authorised the payments.  In each case the justification for effecting the transfers was the same.  Special customers (of which Mr Mistry was one) are allocated to a Premium Account Manager who is assisted by a Premium Account Assistant.  In Mr Mistry’s case that was Mr Farley at the time in question.  The Premium Account Manager might have somewhere between 600-1000 customers for whom he is responsible.  That is a large number but of course it must be appreciated that not all customers’ requirements are the same.  The vast majority according to Natwest’s evidence (which I accept) required no special consideration.  The procedure for contact arises from the operation of what is called an Excess List.  The computer system at the bank identifies and prints out for the Account Manager and his assistants overnight the relevant customers where the accounts might exceed limits during the next working day.  The procedure is then for the relevant customer to be contacted to see what the customer will do about that i.e. transfer funds.  If no funds are available an application can be made to the credit committee for an extension of funds.  That decision is made by 12 noon so that it can if necessary be implemented by close of banking business that day.  It requires telephone contact to be made to the customers.  At first blush this seems a daunting exercise on a daily basis but Mr Comer’s evidence (paragraph 16) (which I accept) suggests that at the start of the month there might be 20-30 entries per day but they fall off later in the month when there could be as few as 5 or less.
27.	Mr Comer’s evidence was that he might keep annotations on the Excess List as to what would happen and effect the transfers when he was on the telephone or thereafter.  Natwest’s position is that the Excess Lists are not kept and I can see why that should be.  Equally Mr Farley gave evidence that he saw Mr Comer for example writing notes whilst on the telephone.  
28.	Natwest has not produced any document to substantiate the transactions other than the computer record recording the transfer and who effected it (by reference to an individual employee identification code).  There is therefore no contemporaneous record of any telephone conversations or how the transfers came to be effected.  
29.	Hill Street was extremely critical of this and described the bank’s practice as being a shambles.  This was exacerbated by the fact that Natwest had manuals for procedures but none of the employees who gave evidence before me had ever seen them let alone used them.  They relied upon their training at the start of their employment and informal “as you go” training as and when a computer system was updated.  This is unsatisfactory in my view.  Natwest goes to elaborate lengths properly to set out procedures for oral communications yet they appear not to be implemented.  In the bad old pre computerised days of course every telephone call would generally be logged on a customer’s client card.  That does not happen in a modern computer age but I have never understood why when people speak on the telephone and have access to the client’s computer records they do not simultaneously log a note of what is being said on the telephone.  There are no records in this case.  That is to Natwest’s disadvantage because it means that it has no documentary evidence of a primary nature to support its case.  In my view this is shambolic and unnecessary but the failure to follow self evidently sensible procedures of recording on a contemporaneous record the result of telephone conversations has no impact in this case.  Its lack of impact arises from the fact that there is no dispute as to a misunderstanding of any oral communications; the issue is as to whether or not they took place at all.
30.	That involves an assessment of Mr Mistry and the evidence of the bank officials separately.  Mr Mistry has always maintained that save in respect of one of the transactions he never authorised any of them.  The bank witnesses frankly acknowledge that they cannot recall specifically any of the conversations either.  Their evidence is one of reconstruction in the sense that they believe that they would not have effected any transfer without an oral authorisation.  
TELEPHONE CALLS
31.	Natwest contends all the authorisations were made on the telephone.  It disclosed a print off from its screens dated 4th September 2002 which gave Mr Mistry’s details.  It gave his employer phone number, a direct contact, a reference to a John Micallef and a mobile phone number.  After some delay Natwest produced  British Telecom’s records of outgoing calls from the Ealing branch from where it is said all of the calls were made (save the one authorised by Mr Webb).  That showed only two calls to these numbers one on 1st October 2003 and one on 17th November 2003.  On neither of those days was any transfer effected.  It follows that Natwest’s records show no calls at all to the numbers identified on this printout.  
32.	The absence of any record of the calls which Natwest contend must have been made to obtain the authorisation would at first sight be fatal to its Defence.  However there are a number of factors which in my view greatly reduce the prima facie significance of this absence.  
33.	First the print out for the telephone numbers is dated 4th September 2002.  It is not impossible that there was a later altered record covering 2003 and the events in question.  It is plain that Natwest did not keep many contemporaneous documents.  
34.	Second on giving his evidence Mr Comer added in to paragraph 17 of his witness statement the fact that Natwest also had a separate card index system for Premium Account customers.  Like many other documents in this case it was not available.  I am satisfied having seen Mr Comer in evidence that he was not inventing this and that the reality is that there was a separate informal record kept by him (and other Premium Account Managers and Advisors) to deal with their allocated customers on a regular basis.  I can well understand why that might not be retained as it would simply be an ad-hoc document dealing with particular requirements of different customers from time to time.  As I have already observed the vast majority of customers probably required no special attention.  Of itself I would be suspicious of this late amendment to his evidence but it is not a stand alone piece of evidence so I accept it.  
35.	The third and most significant point is the two transactions taking place on 16th September 2003 when £9,000 and £1,000 were transferred from Hill Street’s account in to Mr Mistry’s account.  The relevant employee identified from Natwest’s records was Denise Edwards.  She gave evidence before me.  Whilst she could not recall making any specific transfers to or from Mr Mistry’s account she acknowledges that the payments debiting Hill Street’s account were effected by her.  Mr Mistry in paragraph 4 of his witness statement of 25th April 2006 acknowledged that he did receive a call from a lady at Natwest during that period who informed him that he had in effect a not cleared cheque of £12,000 and sought a transfer of £10,000 from the Hill Street account.  On clearance of his cheque for £12,000 it was proposed that the Hill Street account would be re-credited. I do not see how this can be anyone other than Denise Edwards. In his evidence he said he assented to it (as opposed to authorising it) but that in my view is not a significant difference.  
36.	In my view this transaction is significant for a number of reasons.  
37.	First it shows Mr Mistry consenting to the Hill Street account being debited for the purpose of transferring money to his own personal account for his own personal use.  It is true the transfer was for a short period because the £10,000 was repaid two days later but that is beside the point.  It shows he was prepared to act in breach of his duties to Hill Street and furthermore contrary to his evidence was prepared to give an oral authority to transfer as between the accounts.  
38.	Second this telephone call is not revealed on the records either.  It follows therefore that either the records are incomplete (thus weakening their evidential value) or (more probably in my view) there were other telephone numbers on which Mr Mistry could be contacted and those details have now been lost.  There is of course no question of Natwest suppressing inconvenient pages of the telephone records because if the absent records (if they be absent) showed this telephone call they would have disclosed them.  They have already revealed the major damaging telephone records which show no record of telephone conversations for any of the transactions.
39.	Mr Mistry’s credibility was further undermined when the £25,000 credit posted on the same day to his account was examined.  It was put to him in cross examination that the £25,000 credit could only have been cheques.  If it was a cheque whilst it would have been posted to that account on that day as having been credited it could not be drawn against until it later cleared.  Further the crediting would only occur at the end of the business day.  The account on that day was £21,999.81 overdrawn so it could not meet the four cheques that were presented for payment that day.  Mr Mistry initially on cross examination suggested that this was part of a cash credit made by a Mr Neville Shroff.  
MR SHROFF
40.	I should say something about Mr Shroff.  Mr Mistry faced a fundamental difficulty in his case that he had to explain how he felt able to draw against the £135,000 removed from Hill Street’s account if he did not authorise it.  He gave various explanations for this.  First he said that his personal life was in turmoil at that time.  His businesses were under great financial strain, he was undergoing a divorce and he did not behave at his normal high professional level.  Thus he said he did not examine any of the Hill Street or his own personal bank accounts during these periods and therefore did not know that monies had come in to his account from the Hill Street account.  
41.	This of course requires as I have said an explanation from him as to where he thought all the this extra money was coming from over such a short period.  His evidence was entirely silent on this and his explanation appeared for the first time in paragraph B of his Points for Consideration which were provided to Natwest the day before the commencement of the trial.  In that document he stated that he was expecting £125,000 from Mr Shroff an investor in India and that these were to be transferred by him in tranches of £25,000.  One such transfer he said was the £25,000 credited to his account on 15th September 2003.  Apparently the balance was never received but he drew on his account because he believed that it had arrived when in fact the money had come from the Hill Street account.  
42.	His explanation for this late disclosure was that Mr Shroff was indulging in evading the Indian exchange control regulations.  The monies did not actually come from Mr Shroff; they came from a third party (Mr Mehta).  This was a transaction called a “Hawala”.  It is a well used method of evading exchange control regulations.  A person wishing to evade the regulations pays money to someone else within the relevant jurisdiction who has access to foreign monies.  That person then uses the foreign monies for the benefit of the national and thus achieves an export of monies for the benefit of the national contrary to the regulations.  No point about this illegality is taken by Natwest.  
43.	However upon this revelation Natwest obtained further documentation about the £25,000.  That documentation showed that there were two items both cheques one of £5,000 payable to Mr Mistry by Mr Khan who was apparently an investor in his companies and the other was a payment of £20,000 drawn on an account with HSBC. It was not cash.  Natwest also obtained information which showed that Mr Mistry was the person who paid in the two cheques.  Mr Mistry denied this as he effected to have no knowledge of the source of these payments.  Nevertheless the paying in slip which Natwest produced was generated using a PAN number.  This is a unique number (6759677314641767) on what was then a switch card issued in respect of Mr Mistry’s premium bank account.  The particular paying in slip therefore could only have been generated by the use of Mr Mistry’s own card.  Mr Mistry challenged the signature on the paying in slip but was unable to explain how the person paying in had possession of his card.  I conclude he paid the money in.
44.	This demonstrates in my mind uncontrovertibly a number of things.  First Mr Mistry had far more knowledge of what was being paid in to and out of his account than he would have me believe.  Second he had an active role in paying in these payments.  Third contrary to his primary evidence the payments were cheques and not cash.  I should observe that if the payments had been cash a time marking would have been shown on the bank statement and none was.  Fourth they support Ms Edwards in her evidence that there would have been no possibility of paying out against this £25,000 because it represented un-cleared effects.  Fifth it showed that Mr Mistry was prepared to use (albeit on a temporary basis) Hill Street monies for his own benefit.  Sixth as I have said above it shows that there was another telephonic mode of communication from Natwest to Mr Mistry which is unrecorded.
45.	This in my view severely undermines Mr Mistry’s credibility.
46.	Further Mr Sancheti’s evidence was that initially Mr Mistry told him that this payment which he authorised was itself unauthorised.  It is still listed in the claim for unauthorised transfers (although the £10,000 is credited in the calculation).  I should also observe that the initial claim made included the sum of £6,750 drawn on 5th September 2003 when Hill Street’s case was that this was actually an authorised payment.  Mr Mistry it is said had the authority of those behind Hill Street to draw it to be repaid back by him.  He issued his own cheque in return but it was dishonoured and to this day he has still not repaid that sum of £6,750.  It is another example of mistaken evidence on the part of Hill Street and Mr Mistry. 
47.	I do not accept Mr Mistry’s evidence about Mr Shroff.  It was not referred to before delivering his points for consideration.  I find his reason for that (namely the secrecy about the exchange control regulations) convenient but unconvincing.  I am firmly of the view having seen Mr Mistry that this was a last minute invention by him designed to fill what Natwest called a black hole in his evidence.  It was necessary for him to come up with an explanation as to how he thought he could possibly have such large sums in his account.  He has been aware of this potential dilemma whilst all this litigation has been in place yet chose to explain it only at the last minute without any supporting evidence for it and without giving Natwest any opportunity to evaluate it.  I find it incredible and I reject it.
FURTHER QUESTION MARKS OVER MR MISTRY’S EVIDENCE
48.	On 19th September 2003 £6,000 was transferred from Hill Street’s account to Mr Mistry’s account and the transfer was effected by Denise Edwards.  As at 18th September 2003 Mr Mistry’s account was overdrawn £17,797.81 and cheques totalling £8,000 were due to be paid out from the account on 19th September 2003.  Ms Edwards reconstruction (paragraph 13 of her witness statement) was that she would have spoken to Shaun Farley the Premium Account Manager and telephoned Mr Mistry that the account would exceed its limit by £5,097.81 and correspondingly received from Mr Mistry an instruction to transfer £6,000 from Hill Street to his account.
49.	Mr Mistry in paragraph K of his Points for Consideration challenged this.  He pointed out that he left London Heathrow at 6.00am on 19th September 2003 via an Alitalia flight which arrived in Bombay at 10.45pm that night.  At the trial he produced a copy of his passport which shows his entry in to Bombay on that date.  Thus he contended it would have been impossible for him to have been called during that period.  He also produced a print out showing the Alitalia flights.  Assuming the flight times have not changed since 2003 they show the 6.00am departure and an arrival in Milan at 9.00am (European time) followed by a departure from Milan at 10.30 European time.  It follows that Mr Mistry was on the ground in Milan between 8.00am and 9.30am UK time. This covers precisely the period where the Premium Account Managers and assistants are going to be covering the Excess List.  In my view Mr Mistry has not persuaded me on the balance of probabilities that it was impossible for him to be contacted by telephone on that date.  This evidence therefore does not undermine Ms Edwards’ view that she would have called him on that day.
50.	There are two further transactions which also significantly in my view count against Mr Mistry.
51.	First on 9th October 2003 £35,000 was transferred to Mr Mistry’s account.  The transfer was effected by Mr Comer and Mr Rai.  The day before Hill Street’s account received a credit of £194,994 raising its previous balance of £3,917.29.  As at 9th October 2003 Mr Mistry’s account was overdrawn £22,453.69 i.e. £2,453.69 over his limit.  There were a number of cheques to be presented that day totalling £9,250 (including a card debit).  The amount of the credit was far in excess of the funds required to bring Mr Mistry’s account into its overdraft limit.  In fact as a result of the credit the account went into surplus by £3,296.31.
52.	It is difficult to see why Natwest officials would transfer such a random (but large) sum to the credit of Mr Mistry’s account.  He attempted to suggest that it was a inputting error in that it might have been intended to transfer £3,500 but there is no logic in that as that would not meet the cheques that were going out of the account that day.  What is clear is that from that date (which was a Thursday) within the next week all the money had been taken out and the overdraft had risen to £19,692.69.  There was an additional transfer of £10,000 on 15th October 2003.  Some £26,000 was taken out in the next week.
53.	I reject Mr Mistry’s explanation.  I can see no reason why the Natwest officials would effect this transfer as I have said.  It seems to me to be plain that Mr Mistry effected a transfer of a large sum to cover drafts and debits which he was going to make in the next week.  This shows two things.  First it shows he was aware of the large credit to the Hill Street account and second he himself was authorising the transfers from the Hill Street account to his own account.  I can see no other explanation for this transfer and I find that this is good evidence showing that contrary to Mr Mistry’s contentions he had a positive role in effecting the transfers i.e. he authorised them.
54.	Another transfer which is significant is the sum of £5,000 transferred by Mr Webb on 21st October 2003.  Mr Webb unlike the other Natwest officials who gave evidence was not a Premium Account Manager or assistant.  Nor did he operate out of Mr Mistry’s Ealing branch.  At the time of the transfer he was Natwest’s Portman Square Bank Manager.  His evidence shows that he (as branch manager) would not have received an Excess List nor would Mr Mistry’s account have appeared on any Excess List for a Premium Manager or Premium Advisor at the Portman Square branch.  He would have no reason to contact Mr Mistry to arrange a transfer of funds in to his account.  On 20th October 2003 Mr Mistry’s account was overdrawn £19,992.69.  He ordered a draft for the next day (i.e. 21st October 2003) in the sum of £5,000.  He also issued a cheque on that date in the sum of £2,625.  Mr Webb was an impressive witness.  I found him to be careful and meticulous in his evidence and in his operation.  He cannot be criticised as to how he operated unlike the other Natwest officials who had direct responsibility for Mr Mistry’s account.  As regards Mr Webb Mr Mistry was of course a complete stranger.  He would have to collect the draft in person and he would have to identify himself.  The draft would only be issued if there were sufficient funds to meet it.  Mr Webb gave evidence to the effect that there would be written authority signed by Mr Mistry ordering the draft and authorising his account to be debited for the funds.  Unfortunately a search which I ordered to be made at the Portman Branch did not reveal such an authorisation although it revealed others for that period.  What Mr Webb does say is that the amount of the transfer required was £5,000.  Such a transfer exceeded the limit (by £1) that the transfer system would allow to transfer without authorisation.  He reconstructed the situation by supposing that as Branch Manager with authority that was the reason why he effected the transfer.  
55.	Mr Webb has no connection with Mr Mistry at all.  There is no reason to believe that he would spontaneously without authority effect a transfer from the Hill Street account and I accept that. The computer screen at the bank branch would show the connection between the two accounts.  Mr Mistry suggested that a transfer was not necessary initially pointing to the credit of £10,000 on that day.  However he was forced to accept that was a cheque payment (as there is no time marking on the payment).  It follows for the purposes of effecting transactions that day there would plainly be insufficient funds to pay the draft let alone meet the cheques.  I found Mr Webb credible.  The whole transaction can only be analysed on the basis of Mr Mistry ordering a bankers draft, attending the Portman Square branch on 21st October 2003 to collect it and on being told on arriving to collect it there were insufficient funds authorising a transfer of £5,000 from the Hill Street account.  Mr Webb would be in a position to do that because of course he has the necessary identification of Mr Mistry for the purpose of collecting the draft and his computer shows that the accounts are linked and that thus Mr Mistry has the authority to effect such a transfer.  I find the alternative suggestion that Mr Webb might have telephoned the Ealing branch and a bank official there spontaneously directing the transfer without any authority extremely improbable.
NATWEST’S EVIDENCE
56.	I have already commented on my view of Mr Webb’s evidence.  
57.	I found the evidence of all of the bank officials called by Natwest to be credible.  It is true that the evidence showed a method of dealing with transactions that was not acceptable (as I have set out above).  That does not affect the credibility of the bank officials.  Equally it is true that there were some inconsistencies in the evidence.  Thus for example there was a difference between Mr Farley and Mr Comer as to the extent to which he may have taken notes on post its and the like.  Mr Comer also thought at one stage in his evidence that he might have believed that there was a standing authority.  However his evidence then was that he would check monthly that the standing authority operated.  Against that if there was a standing authority there would have been no need for Denise Edwards to telephone when she plainly (and admittedly) did.  She could have simply used an existing standing authority to effect the transfers.  
58.	There was criticism of Natwest’s witnesses because of the non disclosure of earlier statements Mr Comer had made to bank officials when the complaint was first made.  I accept that those statements probably ought to have been disclosed.  However I do not accept that they show any inconsistency on the part of Mr Comer.  His evidence both in those and in his evidence in his witness statement and before me was that whilst he could not remember the actual transactions nothing would have been done without an authorisation.  I accept that evidence and the evidence of the other Natwest officials to the like effect unhesitatingly.
59.	Thus I am firmly of the view that the bank officials would not make a transfer without an authority.  There was no reason for them so to do.  All of them were firm in their belief that they would need some kind of authority and I accept that evidence.  
60.	It was suggested in the opening that the bank had an incentive because of set off rights.  That however is not credible because in real terms none of these transfers benefited the bank at all.  It is true that they were paid into an overdrawn account.  Had Natwest bank upon receipt of such payments terminated the overdraft facilities or called in its debt it might have achieved a benefit.  The reality however is that all of the payments were almost immediately disbursed out of Mr Mistry’s account for his personal benefit.  
61.	In accepting the bank’s explanation as to what happened I necessarily reject Mr Mistry’s evidence.  The sample transactions referred to above fatally destroy his credibility as a witness.  In addition the suggestion that the bank officials would act in the way it is contended is so inherently improbable as to be outside the realm of reasonable possibilities.  It also seems to me that by contrast to the bank officials Mr Mistry had every motive for effecting these transfers.  He had regularly exceeded his overdraft facilities in March and April  2003 but was able to obtain funds from third parties.  By September he needed fresh resources.  The amount of turnover through his account had grown rapidly.  In March and April the amounts paid out were £21,251 and £21,740 respectively.  In the period September – November the figures were £136,339, £142,432 and £93,223.  I have already rejected Mr Mistry’s contention that he had an expectation of funds coming from elsewhere.  Whatever his personal difficulties I reject his evidence that that meant that he did not look at the limits and the operation of the two accounts.  I should also observe that in addition Mr Mistry at this time was spending approximately £11,000 per month on his credit card.  After November 2003 there were no funds to repay this usage.  What happened after November was that Natwest debited the credit card drawings each month to Mr Mistry’s Premium Account despite the fact that such debiting exceeded his overdraft limit.  Therefore from 28th November 2003 to 27th February 2004 the overdraft ballooned from £24,799.67 to £61,425.29 i.e. an unauthorised excess of £40,000.  I accept Natwest’s evidence that during this period Mr Mistry’s account was monitored by a special department (as opposed to the Premium Account Managers).  This culminated in Mr Mistry converting this to a loan of some £65,000 which eliminated the overdraft.  This of course was the subject matter of the Telford action.
62.	All of this is consistent in my view with Mr Mistry having a financial crisis during this period and deciding to help himself to the monies.  I find on the balance of probabilities that is what happened for the reasons set out earlier in this judgment.
63.	I was referred to the decision of the House of Lords in Rhesa Shipping Co v Edmunds [1985] 1 WLR 948 where Lord Brandon (at 951) said this:-
“It is always open to a court, even after the kind of prolonged enquiry with a mass of expert evidence which took place in this case to conclude at the end of the day that the proximate cause of the ships loss even on the balance of probabilities remains in doubt with the consequence that the ship owners have failed to discharge the burden of proof which lay upon them”
64.	The burden of proof of establishing an authority was on Natwest.  As Lord Brandon also said: (at 956) a Judge at first instance before he finds that a particular event occurred has to be satisfied on the evidence that it is more likely to have occurred than not.  In the particular circumstances of the Rhesa Shipping case if a Judge concludes on a whole series of cogent grounds that the occurrence of such an event is extremely improbable a finding by him that it is nevertheless more likely to have occurred than not does not accord with common sense.
65.	I was also reminded of the need to take into account indirect or circumstantial evidence.  
66.	For the reasons that I have set out above I am satisfied on the balance of probabilities that none of the transfers would have been effected without instructions from Mr Mistry.  No other explanation in my view is credible.  I do not accept that Mr Mistry has any credible evidence that he received these large benefits, misunderstood the source of the large credits and drew large amounts of money on his account without even checking at all whether his account had funds to meet any such payments.  That in my view is incredible.
CONCLUSION
67.	I therefore conclude that on the balance of probabilities these payments were effected by Natwest with the authority of Mr Mistry so that Hill Street’s claim fails.
NATWEST’S SEPARATE CLAIM
68.	It is unnecessary for me to decide this given my conclusion on the main claim.  Natwest’s claim only arises if it loses to Hill Street.  It accepts in that eventuality its claim should be dismissed as against Mr Mistry.  
69.	Nevertheless I consider the three points raised by Mr Mistry.  
70.	First he suggests that the compromise of the Telford action was inclusive of this claim.  The settlement order which was (ultimately) in the Willesden County Court is dated 11th May 2005.  That is in Tomlin Order form and stays all proceedings on terms set forth in the schedule.  Mr Mistry acknowledges he is indebted to Natwest bank in the sum of £16,000 “which [Natwest] will accept in full and final settlement of claim no 4TF03186”.  It then provided for discharge of that debt by instalments.  Those proceedings were initiated in the Telford County Court on 20th September 2004.  The claim was for the balance on his Premium Account (£2,793.76) and the amount on his Loan Account (£65,025.02).  Whilst it is true that a claim had been intimated by Hill Street in respect of the transfers no proceedings had been issued and Natwest were still responding.  The Claim form was not issued in this action until 13th July 2005 i.e. after the compromise.  I do not accept that the compromise by the Tomlin Order compromised anything other than the claims on the Premium Account debt and the Loan Account.  I also observe that the correspondence leading to the Tomlin Order showed that Natwest took a commercial view based on what was stated to be Mr Mistry’s ability (or inability rather) to discharge all of his creditors: see for example his solicitor’s opening letter on this point on 21st January 2005 which had a £5,000 offer.  That was uplifted to £16,000 but the premise was the same namely this was all Mr Mistry could afford and no other creditors would be dealt with in any different way.  I have already observed that this was untrue because Mr Mistry had entered into different (and better) arrangements with Hill Street to discharge its claim in full.
71.	Natwest in my view simply took a commercial decision and reduced his liability by some 75%.  
72.	I raised on behalf of Mr Mistry the question of whether or not it would be an abuse of process for Natwest to raise this claim having settled the other action.  I do not accept that it would be an abuse.  It would be unjust in my view given my findings and the matters that were concealed from Natwest (i.e. the preferential treatment of Hill Street) if Natwest could not bring this claim.  It has accrued no benefit by these transactions and if contrary to my decision that the transactions were authorised (and thus repayable to Hill Street) it would be plainly unjust if Natwest could not make full recovery from Mr Mistry who has received the entirety of the benefit of the payments.  
73.	I do not accept it would be an abuse of process to bring this additional claim.
74.	It is no abuse because the Tomlin Order came into effect before the present proceedings were commenced.  Whilst the claim had been intimated it did not follow at the stage of the Tomlin Order that Natwest bank necessarily knew it had a claim that it would have to raise.  This is reinforced in my view by the nature of the proceedings originally commenced with their logical joining of Mr Mistry as a co-defendant.  
75.	I also raised the question as to whether or not there was a change of position defence.  This Mr Mistry has not pleaded but for the reasons set out in Natwest’s closing submissions I do not think it would be inequitable in all the circumstances to require Mr Mistry to make restitution to Natwest.  It is self evident in my view that if Mr Mistry knew about the payments he cannot have acted in good faith.  Mr Swaroop raised that as a potential fall back in his submissions but I reject it.  I cannot see how it can be argued that if Mr Mistry knew about the payments being made into his account from the Hill Street account that he did not thereby authorise the transactions.  Further the payments were not used to pay new obligations incurred by Mr Mistry in response to the receipt of the payments but were used to discharge obligations that had already been incurred by his companies and his accountancy business and were used to deal with a pre-existing financial crisis.  There is no evidence to show that Mr Mistry increased his level of outgoings as a result of the payments.  The evidence suggests he increased his discharge of obligations.  He always intended to make the payments and at best it can be on the basis that he believed that the money was from Mr Shroff (a point of course which I have rejected).  He has not therefore changed his position but merely altered the identity of those to whom the obligations were owed.  He expected on this case to owe the money to Mr Shroff.  I see no reason why instead he should not owe it to Natwest instead if that arises.
76.	Accordingly if this arose for consideration I would conclude that Natwest would be 	entitled to judgment on its Additional Claim. 
77.	I am grateful to Counsel and Mr Mistry for their assistance in the deployment of 	their 	respective cases.