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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Tulsk Co-Operative v. Ulster Bank [1983] IEHC 2 (13 May 1983) URL: http://www.bailii.org/ie/cases/IEHC/1983/2.html |
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no. 3555P
Between
Plaintiffs
Defendant
Judgment of Gannon J. delivered the 13th day of May 1983
This is a claim by a livestock mart company as customers of the defendant bank for loss sustained which they allege is attributable to the negligence of the bank in failing to co1lect prompt payment on cheques payable to the plaintiffs and in wrongfully reassuring them as to the financial stability of the drawer of the cheques who was also a customer of the defendant bank and with whom the plaintiffs had substantial and significant business dealings. On the evening of Wednesday the 17th December, 1980 the manager of the branch of the defendant bank by phone in formed the plaintiffs manager that outstanding cheques drawn by the plaintiffs on their account with the defendant bank at its Castlerea branch would not be paid on presentation and that cheques drawn in favour of the plaintiffs as payees given to the defendant bank at that branch for collection wore being dishonoured and would be returned unpaid. This phone call was in confirmation of a letter of the same date 17th December, 1980 from the defendant tothe plaintiffs. The phone call was made on the evening preceding a special meeting to be held by the committee of the plaintiffs mart on Thursday the 18th December, 1980 which the bank manager had previously been invited to attend. The decision of the committee to hold such meeting with the bank manager in attendance had been taken on Monday the 15th December, 1980 on which date the plaintiffs had not received a letter dated the 11th December, 1980 from the bank manager. The plaintiffs had held the weekly cattle mart on Saturday the 13th December and the weekly sheep mart on Tuesday the l6th December, 1980. The amount in value of the then outstanding cheques drawn by the plaintiffs on their account with the bank was £118,590.43. The plaintiffs number one account was overdrawn to an amount in excess of £100,000.00 with the consent of the bank manager although the authorised secured overdraft facility was valued at £51,000.00. The consent to the excess overdrawing on the account was given because of the extent of business being conducted with the plaintiffs by A. J. Towey who was another customer of the defendant bank. The amount in value of the cheques for collection in favour of the plaintiffs of which notice of dishonour was received by the defendant bank on the 17th December, 19S0 was £163,204.43 being cheques which had been drawn by A. J. Towey upon
an account in £IR on the Silloth branch of the National Westminster Bank. Those cheques related to purchases made at the plaintiffs' cattle marts by or on behalf of A. J. Towey trading as A.J. Towey and Company (Exports) between the 11th October, 1980 and the 29th November, 1980. At the weekly cattle marts held on the 6th and 13th December, 1980 A. J. Towey had also purchased cattle, and had been allowed credit, to the value of £49,162.00 for which no cheques had been received from him. A further weekly cattle mart had been arranged for Saturday the 20th December, 1980 and. the decision whether to hold it or not was of great importance to the plaintiffs. Thursday the 18th December and Friday the 19th December were spent by the plaintiffs' manager and committee in urgent efforts to obtain payments from A. J. Towey and to secure their own creditworthiness with the defendant bank. The partially successful negotiations continued into Saturday the 20th December and an arrangement with the Strokestown branch of the Bank of' Ireland made possible the holding of the cattle mart on that Saturday on the basis that all purchase money received would be paid into an account there and from there all payments would be made to sellers at the mart. At that mart there were forty-four sellers, as compared with one hundred and twenty-four the previous week, there were a hundred
and sixteen beasts sold (as compared with four hundred and seventeen the previous week) of a gross value of £30,119.00 as compared with £125,433.50 on the 13th December, 1980.
No further cattle or sheep sales have been held since and the mart has been closed. When A. J. Towey paid to the plaintiffs a sum of £100,511.15 of the amount due by him on the 5th January, 1981 he remained indebted to the plaintiffs for a balance of a further £122,961.70. The plaintiffs then were indebted to the defendant bank in the sum of £51,000.00 or thereabouts which was secured by the title deeds of the mart property and, with accrued interest thereon, the amount of the plaintiffs debit balance with the defendant bank now is over £72,500.00. The plaintiffs have an unsatisfied judgment against A.J. Towey for £150,342.97. The decision of the plaintiffs to close the mart and discontinue their business of cattle and sheep sales was a serious decision of grave responsibility. No formal evidence of the taking of that decision or of the reasons expressed or discussed at the time of making the decision was given on the hearing of this action. It was stated in evidence and agreed by the representatives of the defendant that the business of A. J. Towey with the mart made up a very substantialpart of the business done by the mart, because he bought large numbers of cattle weekly both for dead meat trade done through a factory at Ballaghaderreen and for live export for which E.E.C. subsidised payments were available and this participation by A.J. Towey at the mart attracted a number of sellers and boosted prices. At the end of 1980 A.J. Towey ceased doing business, closed the meat factory, and left owing debts to the plaintiffs, to a number of farmers, and to other marts. The defendant bank declined to allow the plaintiffs exceed the overdraft limit of £51,000.00 for which they held security and the plaintiffs had no resources upon which they could draw to pay some one hundred and fifty or so sellers to the mart to whom they were indebted consequent upon the dishonour by the defendant bank of the plaintiffs cheques. The losses which the plaintiffs attribute to the liability of the defendant as alleged in this action are the value of the cheques payable to them upon which A.J. Towey has made default, loss of estimated profits from the mart business had it continued for two years, cost of interest on their overdraft for the last year of trading and the subsequent two years, the standing overhead expenses of maintaining the mart, the estimated cost of re-establishing the mart property for use, and the estimated expense of reopening the mart and recommencing cattle
and sheep sales. They seek to recover from the defendants in the alternative the amount of the unpaid judgment against Andrew J. Towey for £150,342.97 and the sums of £118,598.43 in respect of their cheque2 to sellers dishonoured by the bank, the sum of £72,575.00 in respect of their own indebtedness to the bank and the sum of £6,592-00 in respect of bank interest and charges and deposit interest lost in the last year of trading
The defendant bank denies that any of the alleged losses are attributable to any fault on the part of the bank or to any delay in collection of payments on the cheques received from the plaintiffs or to any statements by the bank concerning the creditworthiness of A.J. Towey. The bank say they kept the plaintiffs informed of all information received by the defendants from the bank at Silloth upon which A.J. Towey drew cheques in £IR. The bank also claims that whatever losses the plaintiffs sustained are attributable to the failure of the businesses of A.J. Towey and the want of care on the plaintiffs' part in giving excessive credit to him and in permitting excessive delay in the clearing of his £IR cheques Although the relation of customer and banker between the parties warrants the founding of the claim in part on contract and the allegedbreach of contract the essential issues in dispute are subject to the law relating to negligence The plaintiffs' claim is founded more upon alleged failures on the defendant's part to measure up to the duties and standards of care appropriate to the purported performance of the contractual obligations rather than on alleged, failures to perform in accordance with the express or implied contractual terms. The nature of the duties which the law imposes depends upon the circumstances of the relationships between the parties and the harm loss or detriment to either party which would reasonably be foreseeable from such circumstances and relationships.
The plaintiffs, to whom I have referred in plural terms, constitute a limited company whose initial capital was subscribed by a number of farmers mostly from the Castlerea area of Roscommon the business of which is the provision of mart facilities for sellers and buyers of sheep and cattle. I will refer to the plaintiffs as "the Mart". The Mart commenced operations in 1974 and is conducted by a committee who employ Mr. Benny Mulrennan as mart manager. The book-keeping system in use by the Mart was arranged by Mr. Suttak Khoyia the chartered accountant assistant to Mr. John Murphy accountant of Longford and the same staff comprising Catherine Callery and Marie Cummins have been keeping the accountsand records of the Mart since January 1975. The accounting year commence on the 1st February in each year and ends on the following 31st January. The Mart held cattle sales on Saturday of each week and sheep sales on Tuesday of each week, the earnings of the Mart being derived from small commissions charged to sellers and buyers. The money collected from buyers at the cattle mart was paid into the defendant bank (to which I shall refer as "the Bank") at its Castlerea branch on the following Monday. Accommodation was afforded to the Bank in the mart premises for a sub-office which was open for business on the Tuesday of each week. The Mart had a number one account at the bank into which receipts from buyers were paid and out of which expenses were paid and from which money received on behalf of sellers was transferred to a second or clients account. Cattle were bought and sold at the mart mostly in small lots seldom exceeding six at a time, but of the buyers there were a few notable exceptions. Prior to 1979 a few dealers who purchased for export were regular attenders. One of these, who was held in high esteem by all involved in the cattle trade, and who died in July l979 was the father of A.J Towey. The latter, who had been living in England, commenced doing business at the mart about November 1979 and in December 1979 opened a factory at Ballaghaderreen for the slaughter of
cattle and the export of dead meat. Cattle sold on the hoof in the live trade were paid for normally either by cash or by cheque at the time or within one week of purchase. The purchase money for cattle sold for slaughter was not normally paid whether by cash or cheque (frequently postdated) until a lapse of two weeks from the date of delivery. Following the opening of the factory at Ba1laghaderreen the numbers of cattle brought to and sold at the mart increased substantially.
A.J. Towey soon became a buyer of large numbers of cattle for slaughter at his factory and through agents or himself bought large numbers of cattle also for export. His payments for purchase of cattle were made by cheques drawn upon a branch at Silloth in the North West of England of the National Westminster Bank payable in £IR. This unusual circumstance gave rise to delays in collection, and his cheques almost invariably were crossed "A/C payee only". Irish cheques drawn on an Irish bank for payment in £IR were normally cleared in a matter of a couple of days and the amounts could be credited to the account of the payee promptly. But the amounts of cheques drawn for payment in £IR upon an account in an English or any other foreign bank could not be credited to the payee's account until the payment had been collected on presentation at the paying bank on which drawn and the £IR amounttransferred to the payee's account. The delays in clearing and crediting payments of £IR to the Mart account on cheques drawn by A.J. Towey on the Silloth branch of the National Westminster Bank were seldom less than ten days and mostly exceeded twenty-one days. As the amounts of A.J. Towey's purchases were usually very large the Mart found its account being overdrawn and liable to bank Interest during such periods of delay because the Mart had to pay the sellers within one week of the purchase. According to the evidence of the manager of the defendant's bank at Castlerea from Spring of 1980 onwards there were occasions when the Mart account was over-drawn as a consequence of its dealings with A.J. Towey in which if they did not have his business they would have been able to put money on interest bearing deposit with the bank. The effect of the extensive dealings of the Mart with A.J. Towey after the opening of the factory in Ballaghaderreen is reflected in the figures from the Mart's accounts given in evidence by Mr. John Murphy the accountant and by his two book-keepers Mrs. Cummins and. Mrs. Callery. For the year 1976 (that i8 year ending 31st January, 1977) the balance sheet of the Mart showed a profit of £7353.00 and included a debit item of £2,464.00 for bank interest and charges and a credit item of £1,528.00 for deposit interest earned. For 1977 the profit had decreased
to £5,653.OO the bank interest and charges had also decreased to £1,061.00 and the deposit interest had increased. to £1,802.00. For 1978 the profit shown on the balance sheet was only £521.00 and the bank interest and earned was £1,098.00. The balance sheet showed a loss of £3,693.00 for the year 1979 which was attributed to an overall drop in the value in the sale of cattle and to the opening of a new mart that year in Castlerea. Although the bank interest and charges had risen to £1,425.00 the deposit interest earned had also increased to £2,001.00. For the year 1980 the year's loss was reduced to £1,051.00 but the debit for bank intere8t and charges rose to £6,592.00 and no deposit interest was earned. The value of the gross sales of cattle for each of the 1ast three years was recorded as follows:
For 1978 £2,565,047.00;
For 1979 £2,389,348.00;
For 1980 £3,072,052.00.The 1979 figure included mart sales at which A.J. Towey attended in December, 1979 and January, 1980, and the 1980 figure did not include any cattle or sheep sales between the 20th December, 1980 and the 31st January, 1981.
A.J. Towey was getting from the mart a voluntary credit corresponding to the delay in obtaining cheques from him and an involuntary credit corresponding to the excess of delay between lodging cheques for collection and receiving payment after presentation. All cheques were lodged by the Mart's manager at the Bank's Castlerea branch with the manager of which a regular constant verbal correspondence developed. The Mart's manager kept the bank manager fully informed of the nature and extent of the Mart's business and of its business with A.J. Towey. The fact of and the effect of the delays in clearing A.J. Towey's Silloth cheques became a topic of conversation between them before it reached the stage of being a cause of anxious concern. In the early stages the only aspect of concern indicated by the bank manager was the costs to the Mart of the Bank's interest charges on overdrawn accounts. For the Mart's manager however the fact of the delays gave rise to concern about the creditworthiness of A.J. Towey and an element of doubt as to his ability to pay. The bank manager knew and understood that the nature of A.J. Towey's banking account necessarily involved more delay than would be required for £IR cheques drawn on a bank in Ireland, and also knew what period of delay might be considered reasonable. The
Mart's manager to whom the cause of delay was explained knew nothing of what period of delay might be in excess of reasonable. In June 1980 the bank manager wrote to the Mart's manager (whom he was meeting every week) informing him that the overdrawn balance in the Mart's client's (sellers) account due to allowing credit to buyers was being transferred to the office (number one) account thus keeping the clients' account in credit to avoid breach of the Auctioneers and House Agents Act 1967. He referred to the costing of such credit and indicated that his letter was prompted by a communication from the Bank's regional office. No reply was sent, nor was one required, and the matter does not have reference made to it in the minutes of the Mart's committee meetings in June or July. The summer months are a slack season in the cattle trade which becomes progressively more active from the end of August. The Mart's manager said he mentioned to his committee the matter of the delay in payments on A.J. Towey's cheques and they told him to enquire from the bank manager as to the creditworthiness of A.J. Towey. It is common case that from about that time onwards the Mart's manager made regular frequent enquiry of the bank manager not only as to how to reduce the delay but in particular about the credit standing of A.J. Towey. The bank manager on his part made direct enquiries
of the Silloth branch of the National Westminster Bank upon which A.J. Towey's cheques were drawn for payment in £IR and gave to the main manager the result of these enquiries. The information given by the bank manager to the mart manager which he said he had received from Silloth was that A.J. Towey's payments were slow but sure, that A.J. Towey was one hundred per cent safe, that he had vast assets in England, that the delay was due to illness of staff at the Silloth branch and to shortage of staff at that branch of the National Westminster Bank. The bank manager wrote to the mart manager a letter of the 27th August, 1980 expressing the bank's concern on "the question of extending 'credit facilities' to certain dealers in times of high interest rates". The letter also said "while accepting the value of such dealers to any cattle mart, the question of interest costs should be weighed against the overall advantage gained". This matter had in fact been discussed verbally between the bank manager and the mart manager who had expressed the view that what had been lost in bank interest had come back in extra commission from the boosted cattle sales. They had also discussed possible alternative methods of getting quicker payments on the cheques either by some method of shortening the transmission of cheques to Silloth or getting A.J. Towey to
transfer the account to an Irish bank. A. J. Towey had told the mart manager the delay in the cheques was a matter for the bank and the information from the bank manager appeared to confirm this. No further letter was sent by the bank manager to the mart until the 11th December, 1980. However, that letter had not been received by the mart when they held a committee meeting on Monday the 15th December, 1980 in the minutes of which is the following record:
"Our mart manager was asked if there was any progress made with Andrew Towey concerning his account with the mart. He informed the meeting that Mr. Towey was in England at pre8ent and it was believed that he was changing his account to an Irish bank. He said that Towey's cheques for over £220,000.00 had not been cleared. It was noted that the delay of four to six weeks, the time it had taken to clear Towey's cheques, had cost the mart £7,000.00 already by way of interest charges. Paddy Dowd said we would have to recover this money. Vin Lavin said that; from information he had it was our bank we should be after as six weeks was far too long to have to wait for a bank to clear cheques. Vin Lavin then proposed that we hold another meeting on Thursday 18th December at 7p.m. and ask the bank manager to attend and
"explain why it was taking so long to clear these cheques. This was seconded by Tom King. Richard Scott asked Benny if he knew when Towey was returning from England. He said he should be back on Tuesday and he would see him about the account."From the end of August the trade in cattle was becoming progressively heavier and to all appearances there was no end to the numbers of cattle A.J. Towey wanted. Purchases were made by him and on his behalf by his sister Denise and other agents, but all payments were made with cheques for £IR drawn on the account at the Silloth branch of the National Westminster Bank. Some farmers who were buyers at the mart presented in payment cheques they had previously, as sel1ers, received from A.J. Towey drawn on the same account and these were accepted, when endorsed by the payee, by the mart. Because A.J. Towey was attending other marts also he was not always available to give payments when cattle were purchased on his behalf. Both the mart and the bank kept separate records of cheques drawn on the Silloth branch of the National Westminster Bank on A.J. Towey's account as to when dated, when received and when payment was made. The mart also kept records of the numbers of cattle purchased and in what lots, on what dates, and for what prices in relation to purchases by or on behalf of A.J. Towey. An analysis of the mart's
records shows the following course of purchases of cattle by or on behalf of A.J. Towey at marts between August and December 1980 in respect of which cheques were drawn by A.J. Towey on his £IR account at the Silloth branch of' the National Westminster Bank.
On the 2nd September, 1980 the mart had received four cheques of a total value of £68,214.00 in respect of purchases of cattle at four marts held in the month of August. Two of these cheques were pastdated, one for the 8th September and the other for the 15th September, but because of the delay in clearing cheques it was expected they would be in date by the time of presentation for payment at Silloth. One of those cheques for £23,901.00 dated the lst September, 1980 was paid, on the 16th September and the other three were paid on the 24th September. During the period while payment on these cheques was awaited A. J. Towey purchased at the weekly marks in September large numbers of cattle but without giving cheques in payment until the 7th October, l980. His purchases were:On the 30th August 29 cattle at the price of £13,783.00;
On the 6th September 23 cattle at the price of £12,008.00;
On the 13th September 53 cattle at the price of £24,192.00;
On the 20th September 62 cattle at the price of £27,921.00;
On the 27th September 28 cattle at the price of £14,933.00;
And on the 4th October 18 cattle at the price of £5,757.00.In payment for these purchases totalling £98,594.00 A.J. Towey gave six cheques on the 7th October bearing dates 6th October, 9th October, 10th October, 13th October, 20th October and 25th October. Payment of a total sum of £55,740.00 was received by the mart on the 5th November on the four of earliest dates, and of £42,854.00 was received by the mart on the 17th November on the two dated 20th October and 25th October. During the period while payment was awaited on the cheques given on the 7th October A.J. Towey or his representatives attended marts at which he made the following purchases
11th October 40 cattle at the price of £19,733.00;
18th October 40 cattle at the price of £20,836.00;
25th October 49 cattle at the price of £27,709.00;
(lst November)(8th November) 52 cattle at the price of £20,399.He gave four cheques drawn on his Silloth £ Irish account on the 11th November dated and for amounts as fol1ows:
Cheque No. 004022 dated 29th October, 1980 for £19,733.00;
Cheque No. 004023 dated 18th November, 1980 for £27,709.00;
Cheque No. 004024 dated 22nd November, 1980 for £20,836.00;
Cheque No. 004025 dated 30th November, 1980 for £20,392.00.On the 15th November he purchased 83 cattle of total value £32,754.00 for which he did not make payment until the 2nd December when he gave cheque no. 004135 which he postdated 10th December. When payment was received on the 17th November of £42,854.00 A.J. Towey was indebted, to the mart in the sum of £121,424.00 for the purchase of 264 cattle in respect of which four cheques had been received and of these three were postdated. On the 22nd November he purchased 74 cattle at a price of £30,279.00 for which he gave on the 2nd December cheque no. 004136 postdated the 15th December. On the 29th November he purchased 22 cattle at the price of £11,700.00 for which he gave on the 5th December cheque no. 003692 dated the 2nd December. He also made purchases at the mart of the 6th December of 76 cattle at a price of £28,730.00 and, at the mart of the 13th December he made purchases of 55 cattle at a price of £20,432.00 but for neither of these purchases did he make any payments. Thus four cheques given on the 11th November and the three given in December were dishonoured and verbal notice of dishonour was received by the mart by phone on the evening of the 17th December, 1980. During the period from the end of August the mart committee were gravely concerned not only at the loss of interest on their overdrawn
account but particularly at the risk that A.J. Towey might not be able to meet his liabilities to them. They were faced with the difficult decision as to whether or not to deny A.J. Towey the facility of credit recognised as the privilege customarily accorded to a very big buyer. To do so without the agreement of A.J. Towey would probably destroy the goodwill enjoyed by the mart among cattle traders as well as losing them the substantial business associated with the meat factory and Towey's exports. To achieve agreement with A.J. Towey for the restriction of credit to him they would have to have source information of facts sufficient to justify their approach to A.J. Towey. They did in fact approach him on the matter with complaint of the excessive delay in getting payment on his cheques to be told by him that the delay was due entirely to the bank. On the information they had from the bank in response to frequently repeated enquiries that payment was one hundred per cent sure and the delay was due solely to staffing difficulties at the Silloth branch of the National Westminster Bank the mart couldn't prudently or as a practical business decision deprive A.J. Towey of the credit facilities they had afforded him. It is clear that the mart depended on the information they obtained from the bank and that the bank must have been and was aware of the importance to the mart of the
information conveyed to them by the bank and that the mart was dependent upon that information for the purpose of their decision on the matter of giving and continuing to give credit facilities to A.J. Towey. That such decision had to be made was put before the mart by the bank and was discussed, by the bank manager with the mart manager.
But in addition to that decision the mart also considered whether or not it was financially safe for them to continue to do business with A.J. Towey. That is evident from their repented and continued enquires of the bank as to the creditworthiness and financial stability of A.J. Towey. A business enquiry as to the creditworthiness of a trader or customer is normally made by and through banks. It is a type of enquiry the bank would expect to receive and to respond to whether in relation to a customer of another bank or of one of its own branches. The course of business between the mart and A.J. Towey as it progressed between August and December, 1980 was known to the bank not only from the information conveyed by the manager of the mart weekly but also from the banks own records of the dealings of their customer, the mart. The course of that business was such that the reality of and the importance to the mart of its, concern about the creditworthiness of A.J. Towey must have been and in fact was known to the bank. It is clear that the martdepended upon the information they obtained from the Bank, and, that the Bank must have been and was aware of the importance to the Mart of such information as the Bank would give, and of' the dependence of the Mart upon the Bank's enquiry and the response thereto.
That a decision had to be made by the Mart as to whether to incur and to continue to incur a financial risk in doing business with A.J. Towey occurred to the Mart, was under constant consideration by the Mart, but was never taken as a decision. The evidence clearly shows that the decision was not taken because the Mart was dissuaded by the Bank from believing that it was necessary to do so. The information given by the Bank to the Mart was that there was no risk. The assurance given by the Bank to the Mart that A.J. Towey was financially sound was given repeatedly in the period between August and December 1980. The only communications to the Mart were from the bank manager, Mr. Bredin, to the mart manager, Mr. Mulrennan. The evidence of the mart manager was that he was constantly enquiring about the creditworthiness of A.J. Towey and was told that there was no need to worry, his cheques were slow but sure to be paid, that A.J. Towey was a hundred per cent sound and had vast assets, that he had six hundred acres in England and land around Dublin and a house in Dalkey. He also said "Mr. Bredin always told me what advicehe gave us was what he got from Silloth". The explanation for the delay in payment on the cheques given by the bank manager to the mart manager was stated. by Mr. Mulrennan as "towards the end of October or early November Mr. Bredin told me the reason for delay in paying on the cheques was shortage of staff at Silloth, the under-manager was out sick and the manager had to deal with it personally and was very busy. There was no need to worry, the cheques were slow but sure. I understood that was the information he had from Silloth". The evidence of the bank manager was that he had recommended A.J. Towey to the Mart as creditworthy. He said "Mulrennan was continuously enquiring about whether A.J. Towey was sound as well as asking about speeding up the cheques and reducing delays. I assured him that the information I had got was that A.J. Towey was slow but sure and that was coming from the manager himself (at Silloth) and even if there was delay the cheques were sure to be paid. I just said to Mulrennan what Silloth said to me.
Silloth never conveyed any doubt to me about the stability of A.J. Towey".
The witnesses for the Bank included in addition to the branch manager Mr. Bredin, the regional advances controller Mr. Geelan, the manager of the O'Connoll Street, Dublin branch Mr. Leyden, and the manager and assistant manager of the overseas department at College Green, Mr. Hannon and Miss Irwin. As to the Mart's complaint that the Bank was negligent in failing to obtain prompt payment on cheques of A.J. Towey presented by the Mart the procedure for clearing the cheques drawn for payment on £IR upon an account abroad was explained. It would not be practicable to have at the branch at Silloth of the National Westminster Bank a sufficient quantity from time to time of Irish currency to enable cheques for large amounts to be cashed as and when presented for payment at the branch where the account was. The source of supply of Irish currency to maintain such anaccount had to be earnings or income or payments received in Ireland and transmitted from Ireland to the foreign (National Westminster) Bank with the approval of the Central Bank. Such funding of the £IR account of A.J. Towey at the Silloth branch of the National Westminster Bank was arranged by the payment into an account maintained by A.J. Towey at the O'Connell Street, Dublin branch of the bank of payments to him or his order of £IR which were then transferred by the Overseas Department of the bank at College Green to the head office at Threadneedle Street, London, of the National Westminster Bank for payment into a £IR account maintained to fund the account of A.J. Towey at the Silloth branch of the National Westminster Bank. It follows that the state of the £IR account at Silloth of A.J. Towey in so far as it was required to be in credit to meet cheques drawn upon it was dependent upon the transmission by the bank to the National Westminster Bank of £IR from the account of A.J. Towey at the O'Connell Street, Dublin branch of the bank. The evidence of Mr. Geelan, who had been a manager of the O'Connell Street, Dublin branch before taking the responsibility of regional advances controller was that in response to the special request; of A.J. Towey all warrants for payments in £IR in respect of beef put into Intervention or cattle exported
for which M.C.A.'s were received were cleared the day of receipt. There were no delays, he said, at the O'Connell Street branch in transferring through the Overseas Department at College Green £IR the National Westminster Bank account. Mr. Hannon the manager of Overseas Department explained that all transfers of £IR from the Dublin office of the bank to the National Westminster Bank for the Silloth account went through his department. The monthly figures for transfers from the O'Connell Street branch of the bank of the Overseas Department, College Green for transmission to the Silloth account of A.J. Towey were given by Mr. Leyden as follows:
For August, 1980 - £165,342.01:
For September, 1980 - £279,971.00;
For October, 1980 - £785,731 .55;
For November, 1980 - £616,898.52; and
For December, 1980 - £171,158.11.While the bank had control and knowledge of the funding of the £IR account of A.J. Towey at the Silloth branch of the Nationa1 Westminster Bank the bank would not necessarily know the total drawings which were being made from time to time on that £IR account by A.J. Towey as many of the cheques drawn on that account were presented for collection
and payment to other banks. Mr. Kelly assistant manager of the Overseas Department of the Bank of Ireland gave evidence that between the months of November, 1979 to December, 1980 inclusive his department had sent nine hundred and eighty cheques "of this format" for collection, whereas Mr. Hannon's department of the defendant bank had sent for collection at Silloth four hundred and twenty cheques in the same period.
The clearing of cheques presented for payment in currency of this country because of the facility of the bank's clearing house system would not take more than a couple of days, and notice of dishonour would have to be given within twenty-four hours of presentation to the bank upon which drawn. There is no clearing system here or In England to deal with an account in £IR - a foreign currency - in an English bank. Special provision has to be made to provide a source of funding with £IR currency the account in the English bank upon which drawings in that currency are made. The process of collecting payment in such circumstances involves the delays inevitable in transmitting the cheque and information. The branch to which the cheque is presented by the payee sends the cheque, usually by courier, to the Overseas Department of the bank with covering letter
to the bank upon which drawn with instruction as to how payment is required and requesting advice if the cheque is not being honoured. When the cheque in £IR is received at Silloth (the paying branch) if the account is in funds that branch so informs the head office in London who then authorise the bank in Dublin to debit the account in £IR held by the National Westminster with the bank in Dublin. Mr. Hannon expressed the opinion that if everything was going smoothly payment should have been received. within ten to twelve days. Mr. Dowling the lecturer in banking at U.C.D. considered that payment could be received in six days if every step was taken quickly but even if slowly it should have been received in ten days. He also stated that the payee presenting a cheque in Castlerea would not know sufficient about the banking system and practices to know whether a ten day delay or a three week delay of payment was reasonable. In the course of cross-examination he said the only reason he could think for making payments in Ireland with cheques drawn upon a £IR account in Silloth was to postpone the time of payment. Mr. Geelin said he had known of such a course being adopted for such a purpose but did not say that A.J. Towey had deliberately done so. The evidence of Mr. Bredin the manager at Castlerea, of Mr. Hannon the manager of the overseas department, and
of Miss Irwin the assistant manager of the overseas department was that the delays in getting payment of A.J. Towey cheques drawn on the £IR account at Silloth was a cause of continuous concern and repeated enquiries for explanations. The mart manager was continuously enquiring from the bank branch manager about the delays in clearing and obtaining payments on A.J. Towey's cheques. Mr. Bredin was continually on the phone about A.J. Towey's cheques pressing for payment, according to Miss Irwin of the overseas department, and she was frequently making enquiry of the Silloth branch of the National Westminster Bank in addition to sending the formal bank's printed form of reminder known as "tracer". This type of formal reminder is usually sent after about two weeks from the date when the cheque has been sent for collection and payment and a second tracer might be sent after a further two weeks. But whether such formal reminder would be appropriate and adequate would depend upon whether the delay seemed reasonable and whether there was any circumstance to cause the collecting bank to be on the alert; to a risk of non-payment. The evidence of Mr. Dowling and of all the bank's officials was that the length of delays in clearing A.J. Towey's cheques were so long as to give rise to concern and to continuous but unsuccessful efforts to shorten them, and that the explanation given
by the Silloth office of shortage of staff was unsatisfactory. The circumstances of the protracted period of unsuccessful efforts to shorten the time for clearing these cheques and of the admittedly unsatisfactory explanations given by the Silloth office together with the continuously expressed anxiety of the mart about the creditworthiness of A.J. Towey, even if there were nothing more known to the bank, wou1d suffice to put the bank on the alert to suspect that the delay was due to awaiting receipt of funds, and to press the paying bank for immediate payment or explanation for dishonour. But there was much more known to the bank.
When Mr. Geelin the regional advances controller was manager of the O'Connell Street Dublin branch where A.J. Towey had an account from which the Silloth £IR account was funded he had an interview with A.J. Towey In January, 1980. This related to the possibility of A.J. Towey transferring to the Ulster Bank in Ireland the account held at Silloth with a view to obtaining advances to facilitate the purchase of the meat factory. At that time A.J. Towey had a contract to purchase the seat factory for £600,000.00 having paid a deposit thereon of £80,000.00 and a liability to pay the balance of £520,000.00 in November, 1980. At that time A.J. Towey also had overdrawing authority from the NationalWestminster Bank at the Silloth branch to the extent of £1,000,000.00 sterling for which the security given was his land in England and. Scotland of an estimated value of £17 million sterling together with charges on one hundred and forty one acres of land in County Dublin. A.J. Towey proposed selling his lands in England and Scotland for the purpose of clearing his liabilities to the National Westminster Bank and to provide funds to discharge the balance due for the purchase of the factory and to provide working capital. A.J. Towey's interest in the lands in County Dublin was subject to a condition that he continued in the cattle trade business. Mr. Bredin the bank manager at Castlerea said that A.J. Towey had approached him in January, 1980 for overdraft or loan facilities to complete the purchase of the factory. Mr. Bredin was aware of the overdraft facilities and security arrangements A.J. Towey had with the Silloth branch of the National Westminster Bank. Mr. Bredin said he was involved in the negotiations to get A.J. Towey an account with the Ulster Bank Finance and suggested that he first dispose of the United Kingdom assets. These negotiations were unsuccessful. In April or May 1980 A.J. Towey informed him that the Silloth branch of the National Westminster Bank "showed reluctance to respond to his request for further advances". In July, 1980 A.J. Towey informed Mr. Bredin he proposed
selling lands at Stirling in Scotland. The United Kingdom lands were never sold and the purchase of the factory was never completed. Both Mr. Geelan the regional advance controller and Mr. Bredin the bank manager at Castlerea, the only person in direct communication with the mart, had the same information as to A.J. Towey's commitments and assets and proposals for disposing of assets to meet his commitments, and, the significance of the time factor and the volume of monies going through his accounts.
Letters which passed between the Silloth branch of the National Westminster Bank and the Castlerea branch of the bank and between the regional advances branch, the overseas branch, and the Castlerea branch of the bank between July and the 2nd December, 1980 disclose that the bank was aware of and concerned about the financial difficulties of A.J. Towey, that he was short of working capital, that he was endeavouring unsuccessfully to sell assets charged as security for indebtedness, that the delays in meeting payments on cheques presented at Silloth were due to "difficulties in funding the account". In his letter of the 16th September, 1980 to Mr. Geelan the regional advances controller Mr. Hannon the manager of the overseas department stated "not until Mr. Towey's financial situation is improved shall we enjoy anygreat improvement in the situation". He was referring to enquiries about the delays in the payments on cheques from A.J. Towey and had said in an earlier paragraph "I learned from the branch that A.J. Towey was experiencing grave difficulties in funding the account, something which National Westminster Bank Limited's letter would appear to substantiate, and. that this situation contributed in the main to the delays experienced. It was outlined to me at that time that an improvement was expected in A.J. Towey's financial affairs and that as a result of' this we could look forward to receiving proceeds much more swiftly". In his letter of the 30th September, 1980 to the branch manager at Castlerea Mr. Geelan passed on the information he had received from the overseas branch in a letter in which he stated "we are advised from National Westminster Bank Limited, Silloth that A.J. Towey was experiencing great difficulties in funding the account and that this was the main reason for the delays experienced in receiving payment. It was further stated that an improvement was expected in A.J. Towey's financial affairs and that as a result of this proceeds may be expected more swiftly". On the 3rd October, 1980, one month before A.J. Towey's liability for £520,000.00 balance on the purchase of the factory was to be discharged, Mr. Bredin sent to the manager at the
Silloth branch of the National Westminster Bank a formal confidential enquiry as to A.J. Towey's credit for £500,000.00 on an unsecured basis. The reply given in confidence by the Silloth manager on a printed form disclaiming bank's responsibility and disclaiming credit reference and stressing the confidence and dated the 15th October was "on the financial information presently before us, customer continues to be good for his normal trade debts which would include your figures as in relation to the high turnover on the account, they are reasonable. However we would always advise caution when looking at such large unsecured figures as there is no doubt that a trade risk is always present especially in the present economic climate. Your customer must take this into account. So we do advise caution. Finally, it will be helpful to point out that within one month we expect this connection to be strengthened as we are expecting to receive conclusive evidence that a limited company has been formed. This would have the effect of introducing directors of substantial means. (£500,000.00 in the way of business on an unsecured basis)". No further communications between the branches of the bank or between the bank and Silloth relative to A.J. Towey's known financial risks in the period between the 16th October and the 3rd December were disclosed in evidence. During this period, as known
to the bank, A.J. Towey had to meet a capital commitment of £520,000.00, and was incurring progressively increasing liabilities for purchases of cattle with contrived credit periods for payment to a total outstanding of over £200,000.00 and was indebted to a secured creditor, the National Westminster Bank, to the amount of £1,000,000.00 sterling, and had failed in attempts to realise any of the charged assets as a step believed necessary to improve his financial position. Mr. Bredin said that when he wrote on the 3rd December to the manager at Silloth be had suspicions that all was not going well but he did not convey his suspicions to the mart manager. In his letter to Silloth of the 3rd December Mr. Bredin stated "being a member of the Nat. West group, we are naturally anxious to ensure that no customer of the Ulster Bank is at risk by dealing with your client". And also "should you detect any deterioration in Mr. Towey's financial situation, I would be much obliged if you could acquaint either Mr. Leaden, director, or myself of the situation". I do not overlook the fact that A.J. Towey, referred to as "your client", was also a client of the bank and was funding the Silloth account from an account at the O'Connell Street, Dublin branch of the bank. At that time seven cheques drawn on A.J. Towey's Silloth account had been sent with instructions "telex if
unpaid on receipt" in respect of four cheques sent on the 11th November, 1980 and "if unpaid on first presentation please advise the office immediately by telephone" in respect of three others. The returned cheques bear no stamp or mark indicating any date of receipt or presentation at Silloth. Mr. Bredin said that he did not tell the mart manager prior to the 9th December that he had any suspicions nor disclosure to him the nature of the enquiries he was making, nor why, nor the nature of the replies he was receiving. It was his evidence that until he wrote his letter of the 11th December, 1980, which was not received by the mart until the 15th December, 1980, he had given no inkling or warning that matters were any different than what he had been conveying all along to the enquiries by the mart manager about A.J. Towey's creditworthiness, mainly that he had been told by Silloth that payment wag slow but sure and that A.J. Towey was sound.
In every case in which a claim for damages is founded in negligence it is essential to examine the circumstances which bring the parties into relation with each other and in which the risks of reasonably foreseeable harm can be identified, and the extent to which each or either has control of the circumstances, with a view to determining what duty of care, if any, may exist, the nature and extent of the duty, andwhether and to what extent there may have been a breach of duty of care to which the damage complained of can properly be attributed. There are many types of relationships created by circumstances which lend themselves to easy classification with identifiable duties as in cases where the parties have entered into contracts or formal agreements, or where informal or fiduciary relations exist, or there may be circumstances of social encounter such as invitor and invitee, or casual encounter or physical proximity such as road traffic conditions But it is demonstrable from consideration of the judgments of Walsh J., in Purtill .v. Athlone U,D.C. 1968 I.R. 205 and. of the opinions expressed in the House of Lords in Hedley Byrne v. Heller and Co. Limited 1964 AC 465 that liability in negligence for damages is not derived solely from identifiable classifications of relationships but may derive from whatever relationships, however variable, the existing circumstances may import with the duty of care they demand. In his judgment in Purtill .v. Athlone U.D.C. Walsh J. says at page 211 of the report
"the liability, if established, is therefore one which arose by virtue of the proximity of the parties and. it would be the same wherever the parties might find themselves, provided their
"proximity to each other was the same. In other words the liability is not based upon any special relationship such as occupier and invitee, or licensee or even trespasser, but simply upon proximity".Further on in the same report Walsh J. says at page 212:
"The duty to those in proximity is not based on any implied term of an invitation or a licence, or upon any warranty for safety which might be thought to be inherent in any such invitation or licence. Rather it is based upon the duty that one man has to those in proximity to him to take reasonable care that they are not injured by his acts. What amounts to sufficient care must vary necessarily with the circumstances, the nature of the danger and the age and knowledge of the portion likely to be injured."
In Hedley Byrne and Co. Limited .v. Heller and Partners Limited 1964 AC 465 Lord Reid in the course of his opinion says at page 486:
"A reasonable man, knowing that he was being trusted or that his skill and judgment were being relied on, would, I think, have three courses open to him. He could keep silent or decline to give the information or advice sought: or he could give an answer with
"a clear qualification that he accepted no responsibility for it or that it was given without that reflection or inquiry which a careful answer would require: or he could simply answer without any such qualification. If he chooses to adopt the last course he must, I think, be held to have accepted some responsibility for his answer being given carefully, or to have accepted a relationship with the inquirer which requires him to exercise such care as the circumstances require".At page 502 of the report Lord Morris of Borth-y-Gest says:
"My Lords, I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice, or allows
"his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."Lord Devlin is reported at page 528 as saying:
"I think, therefore, that there is ample authority to justify your Lordships is saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton .v. Lord Ashburton 1914 AC 932 at 972 are "equivalent to contract", that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or
"adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not. It may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form."I have set out in great detail the facts which I find proved of the circumstances as they appeared to and were believed by the mart to be and as they appeared to and were believed by the bank to be. From these I infer that the mart sought and obtained from the bank the service of presenting for payment to the bank upon which were drawn cheques payable to the mart and of obtaining such payment with a promptitude suited to the nature of the business being carried on by the mart as known to the bank. This is a type of service special to the banking service but which in the circumstances of this case required more diligence and care than mere routine banking procedures. In my opinion whether the length of delay in clearing a cheque is reasonable or not must be measured by the nature and requirements of the business in which the cheque is used to effect payment as known or made known to
the banker and not merely by the conveniences of the Bank's staff or banking practices which are related primarily to the administration of the business of the bankers. For a business involving buying and selling cattle with a through-put of approximately four hundred beasts per week and an annual turnover in value in excess of £2,000,000.00 a delay of three weeks to clear an "income" cheque on a sale to meet "expense" payments on purchases could not be reasonable. The Mart was entirely dependent on the Bank in relation to the obtaining of payment on the £IR cheques drawn by A.J. Towey on the Silloth account. The Bank in my view failed in the duty to the Mart which the circumstances created of obtaining prompt payment on the seven cheques which were dishonoured and on the cheques for the immediately preceding months.
The nature of the relationship between the Bank and the Mart, the nature of the business of the Mart and its dependence on the services of the Bank, the nature of the financial commitments and the decisions in relation thereto of the Mart, the nature of the Bank's knowledge of and involvement with the Mart's financial commitments and decisions, all of which are disclosed by the evidence I have outlined, imposed on the Bank a duty of care to the Mart beyond that of a simple banker arid customer relationship. The fact that there was the contractualrelationship between the Mart and the Bank of customer and banker does not limit the duty owed to the Mart by the Bank if there are, as in this case manifestly there were, in the general relationship many other factors from which the law will impute a duty of care to avoid harm on what has come to be called "the neighbour principle".
The circumstances as proved, as I have outlined, also created a relationship between the Mart and the Bank in which special information and advice of a confidential nature concerning the financial position of a mutual customer was required by the Mart from the Bank. The nature of the information required by the Mart was known to the Bank and the reason why it was required by the Mart was known to the Bank, and the fact that the Mart was dependent upon having the information truly and timely conveyed to them was known to the Bank. The means of acquiring the information which the Mart needed was within the control of the Bank who would have been more skilled than the Mart in assessing correctly the quality of the information, and who would have been more skilled than the Mart in recognising the nature and extent of the financial risks involved. In my opinion the circumstances were such that the Bank was under a duty to the Mart to investigate actively and fully so far as banks resources made possible the financial standing of A.J. Towey, to make anhonest and financially skilful assessment of the business risks if any for the Mart involved in any trading with A.J, Towey, and to make honest but discreet disclosure of the information obtained to the Mart sufficient to enable the Mart to make their own business decision. If there was a failure of that duty the Bank may be held liable in tort for whatever loss and damage to the Mart from such failure was reasonably foreseeable arid followed substantially from it. The Bank failed in my view in their duty to the Mart which the circumstances created of obtaining and giving to the Mart in reasonable time a true and competent assessment of the financial position of their mutual customer. All the information conveyed by the Bank to the Mart in response to enquiries about the creditworthiness of A.J. Towey were expressed in terms which conveyed that the source of information was the Silloth branch of the National Westminster Bank. In my opinion this did not convey either a disclaimer of responsibility for the accuracy of the information nor a qualification on the Bank's responsibility for it. For the Mart it was contended that this reference to the Silloth branch conveyed a comforting assurance to the Mart as if it was the best source of information as to the financial stability of A.J. Towey. In my opinion, having regard to the circumstances of the wide general relationship between the Bank and the Mart as disclosed
the evidence, the making enquiry only of the manager of the Silloth branch of the National Westminster Bank did not fulfil the duty to the Mart imposed on the Bank. In the circumstances of such general relationship the repeated insistence of quotations of the information from Silloth implied that no other or better information was obtainable or had been obtained. The evidence offered by the Bank discloses that other and better information was obtainable and had been obtained and was known to the bank manager, who was the only representative of the Bank in communication with the Mart. The facts as I have found them also support the inferences that the Bank wrongfully in the circumstances misled the Mart into the belief that the only information available to the Bank came from the manager of the Silloth branch of the National Westminster Bank, that that was the best source of information, and that the information received from Silloth was a true assessment upon which the Mart could rely. The evidence further supports the inference that the Bank could have and should have but did not advise the Mart before the end of October, 1980 that A.J. Towey was then faced with an almost insoluble financial crisis. The Bank's information to the Mart up to the 15th December, 1980 as to A.J. Towey's creditworthiness was a comforting reassurance which conveyed that there was no risk in relation to A.J. Towey's ability to honour the
outstanding unpaid cheques. In giving the information which the bank did give in the manner in which it was given in reply to the constantly repeated enquiring about the creditworthiness of A.J. Towey the bank failed in the duty of care to the mart which the law imposes in the circumstances which existed and the relationship between them.
If these failures of duty on the part of the bank resulted in harmful consequences to the mart which were reasonably foreseeable to a person in the position of the 'bank it follows that the bank are liable in damages for actionable negligence. The evidence clearly shows that both parties recognised as a consequence of the delay in payment of A.J. Towey's cheques that the mart would incur liability for bank interest on monies advanced by the bank to enable payments to be made to sellers, and that the mart would probably be at the loss of accruing interest on money in credit on deposit account. The evidence clearly shows that if the mart incurred liabilities beyond the permitted overdrawing facilities because of the failure to receive payments from substantial buyers, such as A.J. Towey or John Molihan, the bank would not honour cheques in favour of buyers drawn by the mart. For so long as the mart believed there was no risk that payment would not be made on A.J. Towey's cheques they were faced with the difficult decision,which was dependent upon human factors such as A.J. Towey's reputation and that of his father in the trade as well as financial factors, namely whether to accept the loss of bank interest rather than the loss of A.J Towey's business and the goodwill of other cattle traders. But if the mart had had a true assessment of A.J. Towey's financial position in October/November, 1980 they then could have arranged to have funds to meet all their own cheques for payments due to sellers whether or not it involved the loss of A.J. Towey's business. Having regard to the amounts transmitted through the defendants overseas department from the O'Connell Street branch to fund the Silloth account in the months of October and November, 1980 it would seem that the mart would probably have been able to ensure prompt payment by A.J. Towey on foot of his cheques even at the expense of failing to retain his business. However there was no duty on the bank to the Mart to keep the Ballaghaderreen factory open or to keep A.J. Towey in business and it would seem that whatever loss the mart sustained by reason of these being now gone cannot be attributable to the wrongful act of the bank or to be taken into account on an assessment of damages. In the course of his part of the argument Mr. Mills correctly identified the nature of the damage done to the mart which he described as the loss of the mart's
credibility with its customers, they being farmers and cattle traders other than A.J. Towey. The most substantial reasonably foreseeable harm done to the mart by the bank when it dishonoured the mart's cheques to buyers was that it undermined the confidence and goodwill of the farmers and cattle traders for many of whom these cheques prima facie were negotiable instruments for other business. The branch manager Mr. Bredin expected that these cheques would be coming in at the rate of £30,000.00 per day for some time after the closing of the mart's account, the total being close to £120,000.00. In my view the closing of the mart and the resulting financial losses were reasonably foreseeable damage attributable to the negligence as alleged of the bank.
In the matter of assessing the damages to which the plaintiffs are entitled it seems to me that the fair amount to be awarded for the cost of restoring the mart to operational working conditions having regard to the evidence is £16,000.00 and in respect of the reopening expenses necessary to recover the lost goodwill of farmers and cattle traders I estimate at £5,000.00. The annual expenses described as "standing overheads" relating to the retention of the mart property over which the bank has a charge which would have been met from theannual income of the Mart are also recoverable as damages and I estimate these at £4,800.00. The foregoing three items of financial loss are attributable to the wrongful act of the Bank in failing to honour the cheques of the Mart in the circumstances which were created by the negligence of the Bank itself. The Mart was also deprived of earned income by the failure to obtain payment on cheques of A.J. Towey in respect of which they were compelled to take proceedings and incurred costs thereon which have proved entirely unfruitful and. consequently the Mart is entitled to an award of the amount of the unexecuted judgment £150,192.72 and costs £150.25 being a total of £150,342.97. The Mart in my opinion cannot be awarded by way of damages loss of profits identifiable with and dependent upon the continuance in business of A.J. Towey or of the meat factory. I am not satisfied that the Mart would have earned profits capable of estimation for the two year period which would have elapsed following the departure of A.J. Towey and. the closing of the meat factory. The Mart's claim for loss of interest on deposit accounts must be disallowed because the Mart made a decision to accept that loss which they considered was being offset by the advantage of increased, business and commissions therefrom which were brought by business of A.J. Towey. The Bank in my opinion
cannot derive a profit from their own wrongdoing and consequently cannot recover interest from the Mart for the period when the Mart by reason of the wrongful failure of the bank in its duty to the Mart was deprived of the use of its capital assets upon which the Bank hold a charge. Consequently I am of opinion that the Bank interest accrued on the Mart overdraft account since the 7th October, 1980 must be disallowed to the defendant and to off-set this the total amount of such accrued interest must be included in this award and on the figures before me would appear at present to be £21,270.00. The evidence does not show that if the Bank had not failed in the duties alleged the Mart would have redeemed their overdraft liability to the Bank and consequently I do not think the Mart can recover in damages the amount at which their permitted secured overdraft stood at the 7th October, 1980, whether it was £50,000.00 or £51,305.00.
In the result there must be judgment for the plaintiffs and an award subject to checking of Bank interest accrued on the plaintiffs overdraft of a sum of £197,412.72.