The Judicial Committee of the Privy Council Decisions

 


Suisse Security Bank & Trust Ltd v. Governor of the Central Bank of the Bahamas (Bahamas) [2006] UKPC 11 (13 March 2006)

Privy Council Appeal No 66 of 2004

Suisse Security Bank & Trust Limited Appellant

v.

Julian Francis

(in the capacity of Governor of the Central Bank

of the Bahamas) Respondent

FROM

THE COURT OF APPEAL OF

THE BAHAMAS

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL

Delivered the 13th March 2006

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Present at the hearing:-

Lord Hope of Craighead

Lord Walker of Gestingthorpe

Lord Carswell

Lord Brown of Eaton-under-Heywood

Lord Mance

[Delivered by Lord Mance]

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1. This is an appeal from the order of the Court of Appeal of the Bahamas (Ganpatsingh, Churaman and Osadebay JJA) dated 29^th June 2004, whereby the Court of Appeal, for reasons given in a subsequent written judgment dated 8^th November 2004, dismissed an appeal from the judgment given by Davis J on 25^th April 2003, which in turn dismissed an appeal by the appellant, Suisse Security Bank and Trust Limited ("SSBT") from the decision of the respondent, the Governor at the relevant times of the Central Bank of the Bahamas, revoking the appellant's licence to carry on banking and trust business within the Commonwealth of the Bahamas.
2. SSBT's licence was granted on 20^th July 1993 pursuant to s.4 of the Banks and Trust Companies Regulation Act (Chapter 287). The Governor on 5^th March 2001 gave notice that he was of the opinion that the licence should be revoked on the ground that SSBT was carrying on its business in a manner detrimental to the public interest and to the interests of its depositors and other creditors, and further purported pursuant to s.14(2) of that Act to suspend the licence immediately and to invite SSBT to submit on or by 15^th March 2001 a written statement of an objection to the proposed revocation of its licence. Also on 5^th March 2001, the Governor appointed Mr Raymond Winder as receiver of SSBT pursuant to s.14(1)(f) of the Act. On 2^nd April 2001, the Governor purported, pursuant to s.14(1)(a) of the Act to revoke SSBT's licence. On 19^th April 2001 an appeal to the Supreme Court was lodged in the name of SSBT under s.22(1) of the Act, seeking to reverse the Governor's decision revoking the licence and to obtain its restoration "nunc pro tunc" on the ground that he "acted ultra vires and without requisite jurisdiction having regard to the provisions" of the Act.
3. The relevant provisions of the Act are as follows:

"3. (1) No banking business shall be carried on from within the Bahamas whether or not such business is carried on in The Bahamas except by a person who is in possession of a valid licence granted by the Governor authorising him to carry on such business.

. . .

14. (1) The Governor may -

(a) by order, revoke the licence of a licensee -

(i) if, in the opinion of the Govenor, the licensee is carrying on its business in a manner detrimental to the public interest or to the interests of its depositors or other creditors or is either in The Bahamas or elsewhere contravening the provisions of this or any other Act or of any order or regulations made under this Act, or any term or condition subject to which the licence was issued,

(ii) if the licensee has ceased to carry on banking business or trust business, or

(iii) if the licensee becomes bankrupt or goes into liquidation or is wound up or otherwise dissolved,

and he shall subsequently advise the Minister of his decision;

(b) apply to the Supreme Court for an order compelling the licensee to comply with the direction, cease the contravention or to do anything required to be done where the licensee -

(i) is contravening or has failed to comply with a direction of the Governor.

(ii) is contravening the Act, or

(iii) has omitted to do anything under the Act that is required to be done by the bank or trust company;

(c) impose, amend or vary conditions upon the licence;

. . .

(f) at the expense of the licensee, appoint a receiver to assume control of the licensee's affairs in the interest of creditors who will have all the powers of a receiver under the Companied Act, 1992; and

(g) require such action to be taken by the licensee as the Governor considers necessary.

(2) Whenever the Governor is of the opinion that any action under subsection (1)(a)(i) and (b) should be taken against a licensee, he may forthwith suspend the licence of such licensee and before taking such action the Governor shall give that licensee notice in writing of his intention so to do setting out in such notice the grounds on which he proposes to act and shall afford the licensee within such time as may be specified therein, not being less than seven days, an opportunity of submitting to him a written statement of objection to such action, and thereafter the Governor shall advise the licensee of his decision.

(3) Whenever the Govenor shall suspend a licence under subsection (2) he may cause notice of such suspension to be published in the Gazette.

(4) Any suspension of a licence under subsection (2) shall be for a period of ninety days, or until the Governor takes action under subsection (1)(a)(i) or (b) or until the Governor notifies the licensee that the suspension is removed, whichever period is the shorter.

(5) Where the Governor suspends or revokes a licence under this section, he may apply to the Supreme Court for an order that the licensee be forthwith wound up by the court in which case the provisions of the Companies Act, 1992 relating to the winding up of a company by the court shall, mutatis mutandis, apply.

. . .

22. (1) An appeal shall lie to the Supreme Court from any decision of the Governor -

(a) revoking a licence under section 4(6), section 7(5) or section 14;

(b) withdrawing any approval under section 7(4);

(c) requiring a licensee to take certain steps which the Governor may specify under section 14.

. . .

(6) The Supreme Court may adjourn the hearing of the appeal and may upon hearing thereof confirm, reverse, vary or modify the decision of the Governor or remit the matter with the opinion of the Supreme Court thereon to the Governor.

(7) An appeal against a decision of the Governor shall not have the effect of suspending the execution of such decision."

Under s.17 of the Court of Appeal Act, an appeal from the Supreme Court acting in its appellate jurisdiction lies on a matter of law.

4. The issues pursued before Davis J and the Court of Appeal were substantially more extensive. But the submissions pursued before the Board fall under only three heads, which can be summarised as follows:

(i) By suspending, then revoking SSBT's licence, the Governor acted in breach of an interlocutory injunction granted by Longley J on 2^nd March 2001 in separate judicial review proceedings commenced by SSTB against the Governor on 22^nd February 2001.

(ii) The Governor, in breach of principles of procedural fairness, failed to give notice to SSBT prior to or on 5^th March 2001 that he was minded to suspend its licence on the grounds on which he actually suspended it on that date, together with an opportunity to respond before he took any such step.

(iii) The Governor, in breach of principles of procedural fairness and/or of the terms of s.14(2), revoked SSBT's licence on 2^nd April 2001 on grounds different from, or additional to, those of which he had given notice on 5^th March 2001, without giving SSBT an opportunity to respond to such new grounds, and/or in circumstances in which he did not regard the grounds of which he had given notice on 5^th March 2001 as justifying such revocation.

5. Their Lordships make some preliminary observations. First, s.22(1) of the Act confers a right of appeal against a decision of the Governor revoking a licence, but not against a decision suspending a licence (although that could no doubt, in appropriate circumstances, be subject to judicial review). It is, therefore, open to question how far on an appeal under s.22(1), a court or the Board can consider the validity of a purported suspension. This was not however a point argued before the Board, and it can for the moment be left on one side. Mr Pannick QC in fact limited the relief sought, in the event that the appellant only succeeded in its second and/or third submissions, to an order remitting the matter to the present Governor for further consideration, with the suspension remaining in place for the time being. Only in the event of success in his first submission, did he continue to seek an order setting aside the suspension. Second, and in any event, suspension of a licence under s.14(2) is a matter for the Governor's discretion (cf the words "may forthwith suspend"), rather than a pre-condition or necessary concomitant of a notice of intention to act under s.14(1)(a)(i) or (b). The relevance of the second submission to any challenge to the revocation of the licence is therefore also open to question on this ground. Third, the present proceedings (begun on 19^th or 20^th April 2001) and the appeals in them have been pursued in the name of SSBT, although Mr Winder was appointed and acted from 5^th March 2001 as SSBT's receiver and as from 9^th April 2001 by order of Allen J as its provisional liquidator. There has never been any order setting aside either appointment .In the light of the second Court appointment in particular, no-one other than Mr Winder can on the face of it have had authority to act on SSBT's behalf. At an interlocutory hearing before Davis J on 15^th July 2002, junior counsel (Mr Gomez) then acting for the appellant told the judge that "Mr Harachji is the mover and shaker of the appellants and in real terms he is the appellant". Mr Harachji was and is the principal shareholder and chairman of the board of SSBT. The Court of Appeal thus described the appeal before it as "a further appeal by the principal shareholder", and Mr Blair QC told the Board that the Governor was content to continue on that basis.

The facts in detail

6. In order to consider the appellant's three submissions, a more detailed account of the facts is necessary. During the second half of 2000 and early 2001 the Central Bank in correspondence and meetings insisted to SSBT that SSBT should as quickly as possible attract a significant institutional shareholder, that it should maintain a ratio of deposits to capital of 5 to 1 and that SSBT should commission a special audit of its debit card activities. On this appeal it is the requirement to maintain the 5 to 1 ratio that is particularly relevant.
7. The ratio was the first "prudential norm", to which SSBT was to adhere, stated in the Central Bank's letter dated 6^th May 1993 preceding the issue of the licence on 20^th July 1993. At the Central Bank's insistence, SSBT's solicitors wrote on 16^th December 1993 confirming that "it is understood and it has been accepted by the shareholders that deposits may not exceed five (5) times the capital".
8. As at 30^th September 1999 SSBT's audited accounts showed shareholders funds of $5,891,280 (made up of $3,000,000 share capital and $2,891,280 retained earnings). In a note headed "Contingency", they disclosed a United States judgment (in fact in the US District Court for the Middle District of Florida), and stated that SSBT was appealing, but that it had paid $1.6 million (the judgment amount plus accrued interest) into a trust account and that "The Bank's principal shareholder has committed to underwrite any potential loss resulting from this matter". The note was repeated in the annual accounts as at 30^th September 2000, signed off on 2^nd February 2001.
9. In July 2000 the Central Bank sought explanations regarding SSBT's apparently increased profitability shown by its quarterly return as at 31^st March 2000 and a Visa debit card operation, about which it had not previously been informed and of which it feared use might be made by criminal elements for money-laundering. At a meeting between the Governor and Mr Harachji on 21^st August 2000, the Governor also objected to the SSBT's ownership being in the hands of a single family, to the extent of 77.5% of its share capital, and urged the introduction of a significant institutional shareholder, which Mr Harachji refused. In a confirmatory letter dated 24^th August 2000 the Central Bank called on SSBT to find such a shareholder in any event within six months, and added that, until this occurred, it preferred that third party liabilities should not exceed the $27.3 million shown as at 30^th June 2000 in SSBT's most recent quarterly report. It also confirmed its concern about SSBT's Visa operation. By an apparently crossing letter, SSBT wrote giving explanations for its apparent recent growth in profitability and of precautions taken in respect of its Visa operation.
10. SSBT submitted a business plan on 31^st August 2000 which it said showed that SSBT "intends to remain within the 5:1 deposit to capital ratio which the bank has been subject to since the year of licensing back in 1993". The Central Bank replied on 12^th September 2000 noting that SSBT "will not expand its deposit business beyond $30 million (within the prescribed framework of 5:1 deposit to capital ratio) pending introduction of creditable institutional stakeholders, acceptable to the Central Bank". Despite this, SSBT soon exceeded the ratio. Its accounts as at 30^th September 2000 show deposits totalling $31,577,662 against shareholder equity of $6,308,335. They also show cash and cash equivalents "on hand and due from banks" in the sum of $22.7 million, "held at brokers" in the sum of $3.66 million and "in Visa accounts held at brokers" in the sum of $5.43 million. They make no disclosure of any related party transactions.
11. On 28^th September 2000 the United States District Court for the Southern District of New York made an attachment order in the sum of $3 million in respect of an account held by SSBT with Tucker Anthony, New York brokers. The order was confirmed on 14^th November 2000 on an application by SSBT to vacate it, with the judge concluding that the claimant, J. V. W. Investments Ltd. ("JVW") "has met its burden of proving that it is likely to prevail on the merits". The attachment order was, it seems, met by SSBT pledging $3 million of its assets with Tucker Anthony as collateral for the issue by The Insurance Company of Pennsylvania of a surety bond in that amount.
12. The attachment order was not disclosed by SSBT, but came to the Central Bank's attention. The Central Bank was also informed (it may be by SSBT) that SSBT had exceeded the deposits to capital ratio. During the course of meetings on 29^th November 2000 and 7^th, 13^th and/or 14^th December 2000 these matters were raised by the Central Bank with Mr Lunn of SSBT (who had until not long before been employed by the Central Bank). On 7^th December 2000, the Governor "expressed his disappointment in the bank's failure to respect The Central Bank's directive with regard to our prudential limit of $30 million placed on customer deposits and other funding activities, even though Mr Harachji had agreed to this limit" and cautioned Mr Lunn "that it is a very dangerous strategy to violate limits placed on the bank" and that "this clearly indicates as a complete failure to monitor our limit placed on the bank".
13. As to the New York attachment order, the Governor said that he found "it quite surprising that [SSBT] did not inform The Central Bank of this matter which involved an amount representing 30% of its capital", and emphasised that the Central Bank "would want to be informed of any development which negatively affects the bank". He added that an institutional investor must be found within the six month time limit set by letter of 24^th August 2000. He concluded by advising Mr Lunn that the issues mentioned were very important to the Central Bank, and that SSBT was under a very close watch. He also advised him "not to lose focus as to the management of the assets of the bank" and "to ensure that he is able to exercise responsibility for managing the accounts of the bank and know where the bank's assets are". This was prescient, but unavailing, as subsequent events show.
14. On 13^th and/or 14^th December 2000 the Central Bank asked SSBT for information about the New York proceedings and asked Deloitte & Touche when they could undertake the proposed special audit of SSBT's Visa operation, which proved to be only in January 2001. The operation had currently been suspended, but around $10 million was still held on deposit for around 500 debit card customers. On 21^st December 2000 SSBT wrote seeking to assure the Central Bank regarding the New York proceedings, and on 22^nd December 2000 the Central Bank wrote requiring immediate discontinuance of SSBT's debit card operations.
15. On 29^th December 2000 Mr Lunn wrote a lengthy letter challenging the Central Bank's attitude regarding the special audit and the requirement to discontinue the debit card operation. He categorised this as "ultra vires, lacking of due process and also a means of destabilising the bank's financial position, ultimately jeopardising the bank's safety and soundness" – an evident precursor of the later judicial review application. On 16^th January 2001 the Central Bank wrote seeking confirmation that debit card operations were being discontinued and a report on progress in introducing an institutional investor. Mr Lunn replied referring to his letter dated 29^th December 2000 and as regards a new institutional investor to another letter dated 9^th January 2001. On 2^nd February 2001 Mr Lunn submitted a quarterly return as at 31^st December 2001 indicating that SSBT had (a) deposits of £28.48 million against shareholder funds of $6.335 million, (b) cash, notes and coins totalling $27.144 million and investments in securities totalling $7.676 million, and (c) no "related party loans and advances".
16. Early on 23^rd February 2001 SSBT postponed a meeting with the Central Bank, scheduled for that morning. On the same day, its auditors faxed to the Central Bank a letter dated 19^th December 2000 from SSBT's New York lawyers, Millbank, Tweed, Hadley & McCloy LLP ("Millbank Tweed"). The Governor's affidavit sworn in these proceedings on 21^st February 2002 states that the Central Bank did not regard the letter as providing the information necessary to evaluate the risk posed by the New York proceedings.
17. Also on 23^rd February 2001 and without prior notice, SSBT issued its proceedings for judicial review, supported by a Statement filed pursuant to RSC Order 53 and affidavits sworn by Mr Lunn and Mr Harachji. The Statement sought

"… an application for judicial review in the form of declarations as follows:

"Declarations

1. That the licence issued to the Applicant dated the 20th day of July, A.D., 1993 and signed by the Minister is unconditional, Chapter 285 and 287 excepted.

2. That the licence issued to the Applicant dated the 20th day of July, A.D., 1993 and signed by the Minister is unrestricted, Chapter 285 and 287 excepted.

3. That the provision of Debit Card Services by the Applicant is banking business within the meaning of the Bank and Trust Companies Regulation Act.

4. That the provision of Visa Account services by the Applicant is banking business within the meaning of the Bank and Trust Companies Regulation.

5. That the 'direction' by Igbal Singh, the Central Bank's Manager, Bank Supervisor Department, contained in letter dated 24th August, A.D., 2000, whereby the Applicant was called upon 'to seek to attract significant institutional shareholder, particularly from the banking field, acceptable to the Central Bank . . . within the shortest possible time frame, but in any event within the next six months' is made in excess of or without jurisdiction.

6. That the imposition/restriction on the Applicant's ability to provide new banking business as contained in letters by the said Igbel Singh and Beth D. Stuart, dated 24th August 2000 and 22nd December, 2000, respectively, is made without or in excess of jurisdiction.

7. That the Central Bank's 'directive' contained in its letter dated the 1st December and the 22nd December, 2000 under the hand of the said Beth Stuart that a special audit of the Applicant's 'debit card accounts' be undertaken and that the accounting firm of Deloitte & Touche be used to conduct such an audit for is made in excess of or without jurisdiction.

8. That the Central Bank's 'condition' contained in letter dated the 6th day of May, 1993 that the Applicant maintain a ratio of banking business (i.e. liability to third parties) to capital of 5 to 1 is made in excess of without jurisdiction.

9. That the 'direction' stated in the letter dated the 24th August, A.D., 2000 and more particularly described at paragraph 5 herein is inconsistent with or in contravention of Article 24 of the Constitution of The Bahamas.

THAT in the event the Declaration sought in to items 1 thru 9 are made orders as follows:

Orders

1. That the Applicant is not compelled or obliged to discontinue or cease or suspend its Debit Card Operations.

2. That the Applicant is not compelled or obliged to discontinue or cease or suspend its Visa Card account operations.

3. That the Applicant is not compelled or obliged to comply with the 'directive' of Igbal Singh to seek to attract a significant institutional shareholder, particularly from the banking field, acceptable to the Central Bank.

4. That the Applicant is not compelled or obliged to not increase its customer deposit and other funding activity to pre-June 30th, 2000 level.

5. That the Applicant is not compelled or obliged to engage the services of the accounting firm of Deloitte & Touche to conduct the audit of its 'debit card accounts.'

6. That the Applicant is not compelled or obliged to maintain a ratio of banking business (i.e. liability to third parties) to capital of 5 to 1.

(ii) FURTHER or in the alternative that all necessary and consequential directions be given.

(ii) AND FURTHER or in the alternative an application for judicial review in the form of an Order for Prohibition directed to the Governor of the Central Bank of The Bahamas ('the Governor') prohibiting the said Governor from suspending, restricting or in any way adversely dealing with the Applicant's licence or the activities of the Applicant for failure to comply with the questioned directions until after the hearing of the Originating Notice of Motion or further order."

18. The two affidavits in support were brief affidavits producing limited correspondence. Mr Lunn's affidavit dealt only with the history regarding the introduction of an institutional investor and SSBT's debit card activity, producing the correspondence exchanged on these subjects from September 2000 to January 2001. Mr Harachji produced SSBT's licence and the letter dated 6^th May 1993 and dealt otherwise in relation to the Central Bank solely with the introduction of an institutional investor, referring to the meeting of 21^st August and producing the letter of 24^th August 2000.
19. SSBT also issued a summons, described as ex parte, seeking an interlocutory injunction restraining the Central Bank "from suspending, revoking or in anyway dealing with the licence and/or operations of the Applicant for the reasons set out in the Statement filed herein until the trial of this action or until further order". Both parties then appeared on Tuesday, 27^th February 2001 before Longley J. According to the Governor's affidavit, the Central Bank, which had not yet had the opportunity to file any evidence, expressed its concern that, should a temporary injunction be granted, its terms should not prevent the Bank continuing effectively to regulate SSBT. The judge adjourned the application to give the parties time to see if they could reach an accommodation.
20. Two meetings took place on Thursday, 1^st March 2001. At the second, the Central Bank raised with Mr Lunn its continuing concerns about the freezing of the $1.6 million in the Florida proceedings and the $3 million in the New York proceedings. Mr Lunn responded that SSBT was covered in respect of the $3 million attached in New York by an insurance policy of 23^rd August 2000, but did not produce it. (When eventually located and made available to the Central Bank on 30^th March 2001 by Mr Winder as receiver, it proved to be a Directors and Officers Insurance Policy, which would not cover SSBT's direct financial loss arising from the proceedings or attachment.) There was discussion about the provision of collateral by Mr Harachji to secure his "commitment" recorded in the accounts in respect of the $1.6 million frozen in Florida. The Central Bank requested SSBT's formal authorisation addressed to Millbank Tweed to release all information required by the Central Bank relating to the New York proceedings. The Central Bank said that it would give directions in writing in relation to the two United States law suits.
21. On 2^nd March 2001, Mr Lunn wrote asking as "a most urgent matter … within the hour" for the Central Bank's directions regarding the two law suits. The Central Bank replied by letter dated 2^nd March 2001, received, at least according to Mr Lunn's affidavit of 31^st January 2002, at 3.00 p.m. on 2^nd March 2001 and reading:

"Re: Provisions with Respect to Blocked Assets.

Further to our meeting of the 1st instant, we wish to confirm, as discussed with you and your legal and accounting advisors, the Bank's urgent requirement of the following:

(a) US$1.6 million litigation:

Evidence of Suisse Security Bank & Trust Ltd. having received collateral - satisfactory to The Central Bank - in support of the 'commitment' by the bank's principal shareholder to 'underwrite any potential loss resulting from this matter' [see note (9) to September 30, 2000 audited Financial Statements].

(b) US$3 million litigation/JVW Investments Ltd.:

Formal authorization by Suisse Security Bank & Trust Ltd., addressed to the bank's U.S. attorneys, Millbank, Tweed, Hadley & McCloy LLP, New York, and any other counsel or advisors to Suisse Security who may hold details of this transaction, to release all required information relating to this dispute to The Central Bank of The Bahamas, and/or its attorneys Hogan & Hartson [the Central Bank's Washington attorneys] …., and to fully inform The Central Bank of any details requested in this regard.

…..

As we would need to immediately proceed with our assessment of (b), and to satisfy ourselves with regard to (a), as agreed with you, we look forward to receiving your responses to the above later today, if at all possible, and in any event by Monday morning, March 5. ….."

To this Mr Lunn replied immediately - but non-communicatively or, as the Court of Appeal put it, adversarially - advising that the Bank's letter had been "referred to our legal advisers, who are actively preparing a reply".

22. Also on 2^nd March 2001 counsel for both parties attended again before Longley J. An injunction was granted (in more limited terms than the summons) restraining the Central Bank "from suspending or revoking the licence of the Applicant for the reasons set out in the Statement filed herein until the trial of this action or until further order".
23. Although a reply (in unhelpful terms) was prepared dated 5^th March 2001 to the Central Bank's letter of 2^nd March 2001, Mr Lunn did not sign or send it. Not having received any substantive reply, Mr Singh of the Central Bank at midday on Monday, 5^th March 2001 wrote reciting the terms of the letter of 2^nd March, and enclosing the following notice signed by the Governor:

"It is hereby notified that the Governor is of the opinion that the banking and trust licence granted on 20th July 1993 to Suisse Security Bank & Trust Limited should be revoked on the ground that the licensee is carrying on its business in a manner detrimental to the public interest and to the interests of its depositors and other creditors.

It is further notified that the Governor, pursuant to Section 14(2) and 14(4) of The Banks and Trust Companies Regulation Act, 2000, hereby suspends the said banking and trust licence of Suisse Security Bank & Trust Limited.

The Suspension Order results from the inability of the said bank, at this time, to formally fulfil certain prudential requirements and satisfy The Central Bank of The Bahamas as to its affairs.

Suisse Security Bank & Trust Limited is hereby invited to submit to the Governor of The Central Bank of The Bahamas on or before the 15th March A.D., 2001, a written statement of any objection it may have to the proposed revocation of its licence.

Given at Nassau this 5th day of March, A.D., 2001."

24. On Friday, 9^th March 2001 Lockhart & Munroe, attorneys purporting to represent SSBT, wrote to the Governor saying:

"…..

Please be further advised that we are in receipt of a letter from Mr. Iqbal Singh and Notice of Suspension, under your hand dated the 5th March, 2001 and have been asked to respond thereto.

In this regard we ask that you respond on an urgent basis, providing our client with the particulars as to the 'prudential requirements' which our client have failed formally to fulfil. We are also asking that you advise, with full particulars, of the 'affairs' of Suisse Security Bank & Trust of which you have not been satisfied at this time.

As you can appreciate our client cannot make proper representation to you unless it is known the particulars of the 'prudential' norms and the 'affairs' of which you require to be addressed."

The Governor responded on 12^th March 2001, referring to the Central Bank's letter dated 5^th March. On 15^th March 2001 Lockhart & Munroe wrote saying that the collateral for the $1.6 million frozen in Florida "has been 'a letter of comfort' offered by the principal shareholder, Mr Harachji" and "accepted by the auditors and the [Central] Bank in the prior year". Their Lordships observe that this response failed palpably to meet the Bank's first requirement. Even the suggested letter of comfort has never been produced or found.

25. With regard to the $3 million, Lockhart & Munroe said that they were instructed that Millbank Tweed had been instructed "to provide the Central Bank and/or its attorneys with whatever information they may require" with respect to the New York litigation, that they were further advised that SSBT had insurance to cover any loss which might result therefrom, and that:

"We have been instructed to advise that by this letter the Bank is hereby authorized to make whatever enquiries of Messrs. Millbank, Tweed, Hadley & McCloy LLP that it deems necessary with respect to the litigation surrounding the $3.0 million."

These assurances have proved equally insubstantial. However in their light Mr Singh of the Central Bank wrote on 19^th March 2001 to Millbank Tweed requesting that all information relative to the litigation be forwarded to it and/or its Washington attornies. On 21^st March 2001 Mr Singh wrote to Lockhart & Munroe asking for a copy of the letter of comfort, and requiring as acceptable collateral either a freely available and irrevocable deposit of $3 million with a prime Bahamian banking institution or an equivalent guarantee from such an institution, within 5 working days.

26. On 21^st March 2001 Millbank Tweed wrote to the Central Bank saying that compliance with its letter of 19^th March would require it to breach its ethical duties of confidentiality to SSBT, but that, consistent with the limited consent provided by Lockhart & Munroe's letter dated 15^th March 2001 to the Central Bank making "enquiries" of Millbank Tweed, they "would be pleased to answer your questions regarding the status of the Litigation".
27. On 23^rd March 2001 Lockhart & Munroe wrote to Mr Singh saying that only the Governor (and not Mr Singh) might have jurisdiction to direct the provision of collateral, and that its provision would anyway amount to banking business which was not permissible in view of the order of suspension., but also asking without prejudice what would be the Central Bank's intent if its requirements were satisfied. On 26^th March 2001 Lockhart & Munroe wrote to Millbank Tweed a letter copied to the Central Bank's Washington lawyers, stating:

"It is our client's express instructions that you may disclose to the Inspector of Bank and Trust Companies your considered opinion as to the need to make provision relative to the litigation in which you act for the above captioned bank.

We would request that you confirm that the documents concerned in the aforesaid litigation are matters of public record available to inspection by the public including the attorneys of the Central Bank of The Bahamas."

Their Lordships interpose that this was very far from meeting the Central Banks' second expressed requirement set out in its letters of 2^nd and 5^th March 2001.

28. On 30^th March 2001 the Central Bank received from Mr Winder a copy of what was, as Mr Singh at once noted, a Directors and Officers insurance policy, as well as a letter dated 28^th February 2001 prepared for signature – but not signed - by Mr Harachji and addressed to SSBT's auditors to inform them that "in my capacity of principal shareholder as the bank, I commit to underwrite any potential loss resulting from" the Florida judgment, and to "confirm that this same commitment was given to our previous external auditors". This was very far from meeting the Bank's first requirement.
29. During the course of March 2001 Mr Winder made considerable efforts to secure SSBT's assets, to obtain the cooperation of Mr Harachji, Mr Lunn and other employees of the SSBT, and to access SSBT's computer systems. His first report dated 9^th March 2001 reported the discovery that SSBT's course of business had involved instructing its clients to transfer funds due to SSBT to bank accounts held by two quite separate companies (each with "Suisse Security" in its name) at Barclays Bank plc, Bahamas and UBS Geneva. He had already ascertained that the first such company was owned not by SSBT but by Mr Harachji, with the result that Barclays Bank had refused to freeze its account. UBS had refused to note the appointment of any foreign receiver, until recognised by the Swiss court, or to provide any information. Mr Winder's attempts to obtain the cooperation of Mr Harachji, Mr Lunn and other officers and staff met with silence or non-cooperation. He was thus unable to access relevant data or to confirm SSBT's cash and investment balances. On 30^th March 2001 he reported this position in two letters to the Central Bank. He attached a schedule of "cash and investment balances that are presently under my control". These balances totalled only $5.485 million, compared with a total of $27.14 million shown both in SSBT's quarterly report as at 31^st December 2000, and in an internal print-out which Mr Winder located purporting to show the position as at 31^st January 2001. The principal differences related to sums of $8.4 million and $11 million purporting to be held as at 31^st January 2001 by SSBT in the accounts at Barclays Bank and UBS.
30. On 2^nd April 2001 the Central Bank made its order revoking SSBT's licence, and on 5^th April 2001 it petitioned for the winding up of SSBT, by petition stating as follows:

"13. By letter dated 15th March, 2001, the Company through its attorneys Lockhart & Munroe stated its objection to the revocation of its licence.

14. Your Petitioner, having taken into consideration, the statement of objection of the Company, determined that the licence of the Company should be revoked.

15. The determination of your Petitioner to revoke the licence of the Company is based on the following events:

(1) It came to the attention of your Petitioner and The Central Bank of The Bahamas (hereinafter referred to as 'the Bank') by means of the report of the Company's external auditors, Ernst & Young for the year ending September 30th, 1999, that during 1999, the Company had filed a Notice of Appeal in connection with a judgment entered against it as a co-defendant, along with a former customer, in litigation in the United States. According to the auditor's report, the company, in order to prevent the accrual of further interest charges, paid approximately US$1,600,000 (the amount of the judgment plus accrued interest), into a trust account subsequent to the end of the year. The Company failed to report this matter, at or near the time of its occurrence, to the Bank.

(2) Officers of the Company represented to the Bank that a Letter of Comfort had been issued by the principal shareholder Mohammad Harajchi in respect of the said sum of US$1,600,000 expressing his intent to underwrite any loss of the said sum. However, the Company has not provided to the Bank any such Letter of Comfort.

(3) The Company has failed, despite requests by your Petitioner and the Bank, to furnish evidence that it has in place collateral satisfactory to the Bank that would protect the company in the event of loss of the amount in question.

(4) On or about 14th November, 2000, District Judge Sweet of the United States District Court for the Southern District of New York confirmed his preliminary Order attaching $3,000,000.00 of the Company's assets in an account at the brokerage firm Tucker Anthony in New York in an action to which the Company was made a third party defendant, viz., Correspondent Services Corporation v J.V.W. Investments Ltd., et al and Suisse Security Bank & Trust Ltd. No. 99 CTV, 8934 (RWS).

(5) The Company did not inform the Bank of the Existence of this Order attaching the Company's assets until inquiries were made by your Petitioner and other officers of the Bank at a meeting between the Bank and the representatives of the Company on or about 7th December, 2000.

(6) The said sum of $3,000,000 represents approximately 47 per cent of the Company's capital.

(7) Despite requests for your Petitioner and the Bank for current information on the status of this action, the Company has failed and/or refused to provide the same. The Company has asserted that the risk presented by the potential loss of the $3,000,000 is covered by an insurance policy issues on 23rd August 2000. The Receiver has provided your Petitioner with a copy of the said policy, however, it has not been established to the satisfaction of your Petitioner that the said policy would provide the Company with protection against the loss of the amount in question.

(8) According to the prescribed unaudited quarterly financial statements of the Company as at 31st December 2000, the Company had a total capital position of $6,300,000 comprising a share capital of $3,000,000 and retained earnings of $3,300,000. If the total sum of $4,600,000 involved in the litigation in the United States Courts is deducted from the aggregate capital position, the Company will be left with the residual capital corpus of $1,700,000, placing it in a highly vulnerable position, given its liabilities.

(9) The Receiver was unable to provide your Petitioner with a financial statement as at a recent date owing to the non-co-operation of the management and other concerned staff of the company.

(10) The Receiver produced his first Report dated 9th March 2001 and indicated therein that he requires the co-operation of the Company's employees in order to gain access to the Company's computer system for the purpose of taking control of all of the Company's assets.

(11) By letter dated 30th March, 2001, together with attachments thereto, the Receiver indicated to the Inspector of Banks & Trust Companies, inter alia, the continued failure of the company to co-operate with him.

(12) In a letter dated 30th March 2001, the Receiver confirmed that as of the 5th March 2001, he was able to locate cash and investment assets of the Company totalling only $5,845,000. This is in contrast to the latest prescribed quarterly report received from the Company as at 30th December 2000, that the Company owns cash and investments on-balance sheet aggregating $34,820,000.

16. Based on the position which the Receiver has been able to establish at this time, there is no evidence that the Company is viable; nor is there evidence which supports a decision to allow it to continue its operations.

17. In view of the foregoing your Petitioner has concluded that no further confidence can be placed in the ability of the principals of the Company to responsibly oversee the affairs of the Company, nor can confidence be placed in the competence and reliability of Senior Management of the Company.

18. For the reasons set out in paragraph 15 hereof, your Petitioner revoked the licence of the Company by issuance of an Order of Revocation dated 2nd April 2001. The said Revocation Order is designated Statutory Instrument No. 55 of 2001.

Analysis

31. With this lengthy account of the history, their Lordships turn to address the appellant's three submissions. The first is that the suspension, followed by the revocation, took place in breach of an interlocutory injunction granted by Longley J on 2^nd March 2001. The Board has no hesitation in rejecting this submission. Mr Pannick submitted that any concern which the Central Bank had regarding the sums frozen in the Florida and New York proceedings necessarily involved concern that SSBT was not maintaining or would not maintain a ratio of 5 to 1 between third party deposits and capital. The Board observes that the freezing of assets in the two law suits would not of itself affect that ratio. Capital remains capital, even if frozen. SSBT's accounts had disclosed the freezing of the $1.6 million as at 30^th September in 1999 and 2000, without anyone suggesting that this affected the ratio. The dispute about the ratio to which the injunction related related solely to SSBT's tendency and wish to expand its deposit business above the ceiling of around $30 million which existed because its capital was around $6 million. When referring to the ratio, the affidavits and Statement were directed only to that issue. The freezing in the United States of assets totalling $4.6 million had arisen and been addressed as a distinct topic between the Central Bank and SSBT. The Central Bank's concern, once it learned that $4.6 million was frozen, was not about the risks inherent in over-exposure of SSBT's existing capital, but about the risks of loss of SSBT's existing capital. This was a different and more fundamental concern, in origin and nature, even though of course, if SSBT's existing capital were to be substantially lost, then the ratio would necessarily also be exceeded, unless deposits were drastically reduced. A bank with a capital of only $1.6 million (only just in excess of SSBT's initial capital of $1.5 million) is a quite different creature from a bank with $6 million. The difference between the Central Bank's concerns about the ratio and about the frozen assets is also apparent in the differences in its requirements. It merely required compliance with the ratio. But it required collateral and sought information to reassure itself about the frozen assets.
32. The injunction granted must be read in the context of the supporting affidavits, and it was expressly limited to suspension and revocation "for the reasons set out in the Statement". It is, in their Lordships' view, clear that the injunction was simply addressing the issue raised by SSBT as to whether it was obliged to keep its deposits within a limit of five times capital (put at that time at around $6 million) in accordance with a prudential norm set at the start of SSBT's licence.
33. Although the Bank had made clear its concern about the frozen assets, it may be that as at 23^rd February 2001 SSBT did not perceive that concern as giving rise to any immediate threat of suspension. But there may be other reasons why SSBT did not seek any injunction in that respect; and there is certainly every indication that SSBT realised that the injunction did not cover it. Even after 1^st March 2001, when it was apparent that the Central Bank wanted immediate progress to resolve the concern, the judicial review proceedings were pursued in the same terms as issued. Nothing was said or done to expand their ambit. The injunction granted on 2^nd March was limited by reference to the original Statement. Mr Lunn in his letter dated 2^nd March 2001 continued to treat the Central Bank's concerns and directions relating to the frozen assets as a separate issue. No case was made in the period between 5^th March and 2^nd April 2001 that the suspension involved any breach of the injunction. The most that was said (in a skeleton argument of 14^th March 2001 in answer to an application by the Central Bank to set aside the injunction) was that "either the suspension ….. was for one of the reasons set out in the Statement ….. or it was for some independent reason". The appeal lodged on 20^th April 2001 against the revocation of SSBT's licence did not allege any breach of the injunction. Only in grounds lodged on 4^th February 2002 was this first formally asserted. Their Lordships note in passing that they have been told that, for some unexplained and on its face inexplicable reason, no judicial decision was ever given after the hearing of the application to discharge the injunction. But that is presently irrelevant, if, as their Lordships conclude, the injunction never precluded suspension or revocation on the grounds of which the Central Bank gave notice on 5th March 2001.
34. Their Lordships turn to the appellant's second submission, that the Governor failed in breach of principles of procedural fairness to give notice to SSBT prior to or on 5^th March 2001 that he was minded to suspend its licence on the grounds on which he actually suspended it, together with an opportunity to respond before any such step was taken. Mr Pannick accepts that there is no obligation expressed or implied in the language of s.14(2) to give any such notice. The words "before taking such action" refer not to suspension, but to "any action under subsection (1)(a)(i) and (b)". He also accepts that procedural fairness could not require a notice in every case. But, he submits, that does not mean that there may not, as a matter of procedural fairness in particular circumstances, be a duty to give notice of an intention to suspend and an opportunity to respond before any suspension. Here he submits there was no urgency calling for any immediate suspension, and the Central Bank cannot have been motivated by a desire to avoid a run on SSBT or any other adverse consequence of giving notice, because the existing judicial review proceedings must already have put the public on notice of problems relating to SSBT.
35. Mr Pannick relies on Lord Bingham of Cornhill's statement in R (West) v. Parole Board [2005] UKH 1; 1 WLR 350 at paragraph 29 to the effect that "the maxim expressio unius exclusio alterius can rarely, if ever, be enough to exclude the common law rules of natural justice". In that case, the relevant statutory provision expressly provided for oral hearings in some classes of case. These did not include the class of case under consideration before the House of Lords where oral hearings were permitted, but not required. Mr Blair points out that the case related to different statutory language in a different context. Here the statute expressly provides that the Governor, if of a certain opinion, "may forthwith suspend the licence", and the reason for such a provision is, he submits, readily understandable in the present regulatory context, and precludes invocation of the rules of natural justice to require prior notice. He refers to the Board's decision in Century National Bank Ltd. v. Davies[1998] AC 628 under provisions of s.25 and Part D of the Banking Act of Jamaica, which authorised the Minister of Finance, in relation to a bank which was or appeared likely to become unable to meet its obligations or in relation to which he had reasonable cause to believe that certain other conditions applied, to "serve a notice, announcing his intention of temporarily managing the bank from such date and time as may be specified in the notice". Lord Steyn delivering the Board's opinion said (at p 638D-G):

"Paragraph 1(1) of Part D provides for a 'notice, announcing his intention of temporarily managing the bank from such date and time as may be specified.' As a matter of ordinary language this provision does not seem to contemplate a requirement of prior notice. This impression is reinforced by the express provisions requiring prior notice in the case of Part C (cease and desist orders) and in the case of Part E (suspension or revocation of licence). But, if, contrary to their Lordships' view, it is assumed that the language is capable of letting in more than one meaning, the contextual scene removes any doubt. A prior notice of any intention to assume temporary management may cause grave problems. Would it be appropriate for the directors who are given prior notice of the minister's intension to continue to accept deposits or honour cheques? The directors would be in a most invidious position in regard to carrying on the operations of the bank. The risk of advance notice of the minister's intention leaking out, once it is communicated to the bank, must also be substantial. Such a leak would be headline news in Jamaica. It would tend to alarm depositors. It might very well lead to a run on the bank. Confidence is the lifeblood of banking. A run on a bank may not only finally destroy any prospect of reconstruction of a bank but it may have systemic consequences in the sense of adversely affecting the banking sector as a whole and thus the national economy. Finally, there is the risk that directors or other insiders, who have been responsible for unsound practices, may destroy incriminating records. The context therefore supports their Lordships' view that paragraph 1 of Part D does not require prior notice."

36. Their Lordships consider that similar considerations govern the present case. The wording of the present statutory power is even clearer than in Century National Bank Ltd. v. Davies. It is also significant that the present statutory provision does not permit any appeal against a decision to suspend. The Governor must be able to act quickly, in view of the various risks that may materialise in a situation where, before he can act at all, he must already be of the opinion that the bank's business is being carried on in a manner detrimental to the interests of the public or of depositors or other creditors or in a situation like that under s.14(1)(b) where he must be of the opinion that the bank is contravening one of his directions or the Act itself. To require notice and an opportunity for objections in such a situation would be bound in almost every case to lead to arguments and delay. Meanwhile the bank's existing management would be in charge and have the continued opportunity – indeed what the less scrupulous might see as a last chance - to act to its detriment. In the present case, the Governor had, in their Lordships' view, ample justification for considering that he had to act at once. Further, the prevarication and non-cooperation that the Central Bank and Mr Winder as receiver experienced after the suspension confirm the delay that would probably have followed if prior notice had been given. As it is, the suspension and receivership meant that there was at least the possibility that Mr Winder could locate and lay hands on SSBT's assets. Unfortunately, both the Barclays Bank and the UBS assets appear in the event to have eluded him – the former being transferred out of the Bahamas on instructions unknown to a destination unknown in late April 2001.
37. It follows from what has already been said that, in the Board's view, the Governor was entitled to suspend SSBT's licence, as he did, forthwith on 5^th March 2001. But their Lordships would add this. The matter comes before the courts on a statutory appeal against the revocation of SSBT's licence as provided by s.22(1). On such an appeal, it is open to the court under s.22(6) to "confirm, reverse or modify the decision of the Governor or remit the matter with the opinion of the court thereon to the Governor". In the Century National Bank case, the provision for appeal against to the minister's decision allowed the court on such an appeal to "make such order as it thinks fit". The Board said that it was "plainly competent for a bank to contend on such an appeal that the notice [in that case, appointing a temporary manager] was invalid for procedural or substantive reasons" (p.637A). It does not follow that every procedural defect has to be treated as invalidating such a notice. First, there may be cases where it is clear that, though there was some procedural unfairness, the same outcome would have been inevitable, even if there had not been. Such cases are likely to be rare, but the history, before and after the actual suspension, means in their Lordships' view that this would have been one, even if they had concluded that there was some procedural unfairness. Second, the appeal provided by s.22 is against the decision to revoke the licence, although (as the Board has already observed) the issue of the validity of the suspension has been argued before the Board without objection. It remains the position that s.14(2) did not oblige the Governor to suspend SSBT's licence when he gave notice of his intention to revoke it. Even if the suspension was itself in breach of procedural fairness and falls as a result to be treated as invalid, their Lordships cannot see any basis on which that would or should affect the subsequent revocation of SSBT's licence on 2^nd April 2001.
38. Their Lordships turn to the third submission on which Mr Pannick spent most time and placed most emphasis. This is that the Governor, in breach of principles of procedural fairness and/or of the terms of s.14(2), decided to revoke SSBT's licence on grounds different from, or additional to, those of which he had given notice on 5^th March 2001, without giving SSBT an opportunity to respond to such new grounds, and/or in circumstances in which he did not regard the grounds of which he had given notice on 5^th March 2001 as justifying such revocation. This submission arises from the terms of the petition for winding up set out in paragraph 29 above and on the terms of the Governor's affidavit sworn on 21^st February 2002. In the affidavit the Governor said inter alia this in relation to his decision to suspend on 1^st March 2001:

"39. The danger I saw was that this was an institution three quarters of whose capital was frozen by the courts in the United States. I saw no sign that the management and the owners appreciated the gravity of the situation. This state of affairs pointed in my mind to an institution which was badly run and represented a threat to depositors and to the good name of our financial system. The situation could not, in my opinion, go on. I should stress that I did not come to this opinion lightly. I fully recognized the serious nature of the step being taken, not least as regards SSBT's forty or so employees, but I was and remain firmly of the opinion that this was the correct course. I would have been prepared to reconsider that view following suspension had our concerns as regards the frozen money been addressed but they were not. Instead the Receiver was continuously obstructed in carrying out his duties."

The Governor recounted the course of communications in March and went on:

"46. In paragraph 51 of his affidavit, Mr Lunn purports to give an explanation of this matter. He states that the Receiver's liability to assess SSBT's financial status was due to him having terminated SSBT's employees' contracts of employment. He also says that the comparison with the figures as at 30th December was 'practically worthless.' He omits to mention that the explanation is entirely different. In his first report dated 9th March 2001, the Receiver makes mention of accounts at Barclays Bank in the Bahamas in the name of Suisse Security Investments Inc ('SSI'), and at UBS in Switzerland in the name of Suisse Security Holders Ltd. ('SSH'). He refers to the fact that these accounts appear to hold funds of SSBT's clients. It is now clear that balances which should have been in the name of SSBT, were in fact in the names of these two companies. The companies were both International Business Companies (IBCS). Though their names include the words 'Suisse Security', they were not owned by SSBT, but by the principals of SSBT. This is a grave and unacceptable matter. One result is that the Receiver (and later Provisional Liquidator appointed by the Court) has never been able to access these accounts. He was in due course obliged to apply for an injunction in attempt to freeze the money, but it transpired that the money in the Barclays accounts had been transferred out of the jurisdiction sometime late in April 2001. Neither the money in the UBS accounts nor the money in the Barclays accounts has yet been recovered …

47. The Receiver's inability to locate more than a small amount of SSBT's cash and investment assets, coming on top of the other matters referred to above, led me to conclude that the public interest, and the interests of the depositors and other creditors, required that SSBT's licence be revoked. This had been a very real prospect at the time of the suspension in early March, but the events of that money underlined the problems that had earlier emerged. In reaching that conclusion, I took full account of SSBT's statement of objections of 15th March 2001, but it did not change my mind. Accordingly, the licence was revoked on 2nd April 2001 by Order pursuant to section 14(1)(a)(i) of the Act …

48. My reasons for revocation are summarised in paragraph 15 of the winding-up petition verified by myself on affidavit on 5th April 2001… . I hereby confirm that this paragraph accurately summarises my reasoning. I also confirm the view expressed in paragraphs 16 and 17 of the winding-up petition. Based on the position which the Receiver had been able to establish, there was no evidence that SSBT was viable. I do not believe that it was viable. Nor was there any evidence which supported a decision to allow it to continue its operations. In view of what had happened, I concluded that no further confidence could be placed in the competence and reliability of the SSBT's senior management."

39. Mr Pannick submits that the petition and affidavit show that the Governor, when revoking the licence on 2^nd April 2001, relied on significant matters additional to those of which notice had been given by his letters of 2^nd and 5^th March 2001, and that his decision to revoke was in such circumstances in breach of, and outside the scope of the power conferred by, s.14(2) and so invalid. S.14(2) requires notice of the grounds on which the Governor proposes to act, and an opportunity to object in their light. It is, Mr Pannick submits, implicit that the Governor cannot act on grounds in respect of which he has not given such a notice and such an opportunity.
40. In considering this submission, their Lordships accept that notice of "the grounds on which he proposes to act" requires more than a bare statement of the opinion that, for example, the licensee is carrying on its business in a manner detrimental to the interest of the public or of its depositors or creditors, or has contravened a Governor's direction or the Act, so as to bring the situation within the language of s.14(1)(a)(i) or (b). The whole of s.14(2) is predicated on the fact that the Governor is of the opinion that action should be taken under s.14(1)(a)(i) or (b). To enable any meaningful objection by the licensee to such action, the notice must inform the licensee, even if only in broad terms, of the gist of the considerations leading the Governor to the view that such action should be taken.
41. Here the only considerations of which the Governor in his letter of 5^th March 2001 gave such notice related to the two amounts frozen in the United States. They were directed to SSBT's failure to meet or to respond to the Central Bank's two requirements, about which SSBT had been informed by the meeting on 1^st March and the Central Bank's letter dated 2^nd March 2001. In Mr Pannick's submission the Governor's actual decision on 2^nd April 2001 was based not on those considerations alone, but on those and other significant considerations of which no notice had been given. Mr Pannick accepts that the Governor could legitimately take into account any continuing failure or obstruction by SSBT in relation to the two requirements, of which the notice was given. But he relies on the fact that the petition for winding up and the Governor's affidavit identify other considerations, of which there had been no prior notice. They relate to the more general non-cooperation by SSBT management and staff which meant that the receiver could not provide a financial statement, and the receiver's letter dated 30^th March 2001 reporting that he could only locate cash and investment assets totalling $5,835,000 compared with cash and investment assets reportedly totalling $34,820,000 as at 30^th December 2000.
42. The petition in paragraph 18 says that it was "for the reasons set out in paragraph 15" - which included all these considerations - that the Governor revoked SSBT's licence on 2^nd April 2001. The Governor in paragraph 47 of his affidavit says that it was "the Receiver's inability to locate more than a small amount of SSBT's assets, coming on top of the other matters referred to above, led me to conclude" that such revocation was required" and that such revocation had been "a very real prospect at the time of suspension in early March, but the events of that month underlined the problems that had earlier emerged". In paragraph 48 the Governor also confirms that his reasons for revocation were summarised in paragraph 15 of the petition, which, he says, accurately summarised his reasoning.
43. In relation to this submission, their Lordships would observe, first, that the Governor could not, under s.14(2), have given the notice of 5^th March 2001 unless he was then already "of the opinion that … action should be taken" under s.14(1)(a)(i) or (b). In this case, the Governor had s.14(1)(a)(i) in mind, since his notice stated his opinion that SSBT was "carrying on its business in a manner detrimental to the public interest and the interests of its depositors and other creditors". In paragraph 39 of his affidavit the Governor added that he was as at 5^th March 2001 of the opinion that the situation "could not … go on". He said that he "would have been prepared to reconsider" his view following suspension "had our concerns as regards the frozen money been addressed but they were not. Instead the Receiver was continuously obstructed in carrying out his duties". Their Lordships are satisfied that that represents the reality of the situation. Even if there had not been the receiver's reports of more general non-cooperation by SSBT management and employees and of inability to locate assets, nothing occurring after 5^th March 2001 could possibly have satisfied the two urgent requirements which had led to the Central Bank's notice and the suspension of SSBT's licence on that date. Rather, the continuing non-cooperation and obstruction by SSBT's management and staff in relation to those two requirements could only have confirmed the Governor's opinion that SSBT's licence must be revoked. Any suspension could under s.14(4) only last for a maximum of 90 days, so that the Governor had within that period either to lift the suspension or to take action under s.14(1)(a)(i). Even if the receiver's reports of the problem in locating assets and of general non-cooperation were instrumental in the precise timing of the actual decision of 2^nd April 2001, it appears clear that nothing had happened or would conceivably have happened to do anything other than confirm the Governor's opinion that SSBT's licence should be revoked on the basis alone of the two considerations identified in the Central Bank's letter dated 5^th March 2001. In reading paragraph 47 of the Governor's affidavit, their Lordships also note that it was sworn nearly a year after the relevant events, and that some of "the other matters referred to above" (included in the preceding paragraph 46) are matters which had not occurred and could not have influenced the Governor's thinking as at 2^nd April 2001.
44. In Reg. v. Broadcasting Complaints Commission, Ex p. Owen [1985] 1 QB 1153, at p.1177A-B, May LJ said this:

"Where the reasons given by a statutory body for taking or not taking a particular course of action are not mixed and can clearly be disentangled, but where the court is quite satisfied that even though one reason may be bad in law, nevertheless the statutory body would have reached precisely the same decision on the other valid reasons, then this court will not interfere by way of judicial review. In such a case, looked at realistically and with justice, such a decision of such a body ought not to be disturbed."

Their Lordships consider that the present situation is a fortiori. First, the Governor had already to be of the relevant opinion on the basis of the two notified considerations as at 5^th March 2001, in order to issue the notice he then did. There is no reason to question his statement in the notice that he was of that opinion, and it is supported by paragraph 39 of his affidavit. The additional considerations which had come to light by 2^nd April 2001 can only have confirmed his opinion, but that does not mean that they were critical to it.

45. Second, their Lordships are concerned not with an application for judicial review, but an appeal to the Supreme Court, which, even if it set aside the Governor's decision, did not automatically have to remit the matter for his reconsideration. Even under the more confined language of s.27 of the former United Kingdom Banking Act of 1987, the appeal provided to the Banking Appeal Tribunal was more extensive than an application for judicial review - see Shah v. Bank of England [1994] 3 Bank LR 205, 212-3 per Vinelott J - although, as Vinelott J went on to confirm, the Tribunal would under s.27 be expected to give the policies and approach of the Bank of England very considerable weight, and it was not its function to substitute its own decision for the Bank's as to the steps which needed to be taken in the discharge of the Bank's duty of regulating the conduct of banking.
46. Here, the Court is under s.22(6) given a more generally expressed power to confirm, reverse, vary or modify the Governor's decision or to remit the matter with its opinion to the Governor. Indeed, before Davis J it was one of the submissions of counsel for the present appellant that the Act gives "an unrestricted right of appeal and permits the Court to substitute its own opinion for that of the Governor after making its own evaluation of the evidence and of the inference to be drawn from the primary facts found, giving due weight to the decision of the Governor" (Davis J, judgment Part I Volume 1 p.92). Of course, the Court will ordinarily give very great weight to any decision reached by the Governor as the banking regulator of The Bahamas, and this may make it appropriate to remit, rather than to substitute its own decision. But, in the present case it can in their Lordships' view safely be concluded that, even if additional considerations had never arisen before his decision had to be taken, the Governor would have maintained and acted on the opinion that he had already formed as at 5^th March 2001 that SSBT's licence should be revoked.
47. Their Lordships would make some further observations. To this day, there has been no explanation for or attempt to justify the situation which began to emerge in March 2001 and which further information after 2^nd April 2001 has shown to be extraordinary. The two similarly named companies into whose accounts SSBT, in the course of its business, arranged for its assets to be deposited, were owned and controlled not by SSBT, but by its principal shareholder, Mr Harachji. Neither of them was itself a bank. SSBT was, as Davis J rightly said, "clearly in breach of section 3(1) of the Banks and Trust Companies Regulation Act 2000 and put those deposits beyond the reach of the regulatory authorities". SSBT's audited accounts and its most recent quarterly reports to the Central Bank were evidently erroneous. SSBT did not have "cash on hand and in banks" in the sums stated. Its deposits into similarly named companies owned by its controlling shareholder were not disclosed as related party transactions. The disappearance in April 2001 from the Bahamas of the funds with Barclays Bank and the inability to confirm the existence or location of the funds deposited with UBS in Switzerland are astonishing. It is wholly unconvincing for the appellant to submit that, if an additional notice had been given under s.14(2) relying on problems relating to the location of SSBT's cash and investment assets, then "much could have been said in response". Mr Harachji's silence and non-cooperation speak volumes already. Whatever the appellant may say regarding prior events, Mr Winder was on 9^th April 2001 appointed as provisional liquidator by Allen J by an order which has never been set aside and continues in force. There can be no real doubt that, however many notices under s.14(2) might be given, the outcome would have been and be the same – a decision by the Governor to revoke SSBT's licence. The state of affairs disclosed by the evidence before their Lordships makes it inconceivable that SSBT could be allowed to continue as an operating bank.
48. In consequence, their Lordships see no basis on which to set aside or remit the Governor's decision to revoke SSBT's licence, and reject the appellant's third submission.
49. Their Lordships will therefore humbly advise Her Majesty that this appeal be dismissed. The parties have 14 days in which to make submissions in writing on costs in the light of this opinion.