Late last week, the Caribbean Court of Justice (CCJ) heard a case involving Caye International Bank as the appellant and Rosemore International Corp as the respondent. Caye International Bank Limited is an international bank operating in Belize while Rosemore International Corp is a company registered in Panama and a customer of Caye Bank. This claim involves a dispute over the sum of US$175,000 which Caye Bank, transferred on April 23 2015 from Rosemore’s account without Rosemore’s authorisation and consent. The Court of Appeal of Belize upheld the trial judge’s decision that Caye Bank was liable to Rosemore for the unauthorised transfer. Caye Bank appeals this decision on the basis that it acted with reasonable care and complied with the terms of the Depository Agreement between Rosemore and itself. Representing Caye Bank is Queen Counsel Peter Knox along with Attorney Sheena Pitts. Knox established his client’s position.
QC, Peter Knox, Attorney, for Caye International Bank: “There are two parts in particular which the bank is criticised for in the judgements below and I just want to address those. The first is, it is said by both courts that Milstead & Waver should have observed the discrepancies in the signature. Secondly, it is said by both courts that the reference to the instruction that an email be sent to a gmail account rather than to the Rosemore International account should have amounted to a red flag and put the bank on inquiry. I do respect, Ms. Smith, that it is not obvious as a matter of common sense to the naked eye what the difference between what the signature on the transfer request was and the specimen signature at page 148 to 149 of the record and if you look at, if I can ask you simply to look at 148 and 149, I think there you will see the specimen signatures.”
Male Justice: “Mr. Knox? May I ask a question?”
QC, Peter Knox, Attorney, for Caye International Bank: “Of course. Of course.
Male Justice: “Would you agree with me that the part you’re discussing is a factual point as to whether there was discrepancy in the signature?”
QC, Peter Knox, Attorney, for Caye International Bank: “Your Honor, I certainly accept. We’re not seeking to go behind the handwriting expert evidence at all. We accept they were visible to the handwriting expert on carrying out an expert analysis differences. What we dispute, and we fiercely dispute if I may say, was that Milstead* & Waver should have spotted them. The criticism that is made of the bank is that there were observable differences that should have been made by the bank and my point is, whether or not there were differences, we don’t get behind that finding, they were not such that the bank itself should have observed them.”
Attorney Pricilla Banner appeared on behalf of Rosemore International Corp and argued her client’s position.
Priscilla Banner, Attorney for Rosemore International: “One of the things that strikes me is that there is an assumption in making the point that there can never be internal fraud in a bank itself, that fraud comes entirely from outside of the bank and I think starting from that assumption and I will show how His Honour Justice Anderson queried this issue and why that thinking is flawed. Now, if the court would recall how the issue started with the gmail, sorry, the transaction. This transaction did not start with a request through the Neteller account. What learned counsel is saying is that this email originated through the Neteller account and you must assume, to accept this argument, that the internal bank fraud is not possible. That is what we say and in this case, there was no evidence before the court that the claimant was the only one that could access that account. In fact, that was the very issue that was referenced by both the Court of Appeal and the Supreme Court. Namely, that there was no IT expert evidence available to suggest whether or not the bank system could have been compromised or Rosemore system had been compromised.”
Female Justice: “Ms. Banner, just before you go further. How is the conversation that you mentioned earlier, who is that impact on the case? How is it relevant?”
Priscilla Banner, Attorney for Rosemore International: “Well it is relevant because with respect to the conversation coming from this person, it all started with a conversation and then the communication as shown in the Neteller system is presented. So there is no evidence presented by Caye Bank which shows or which demonstrated what was said in that conversation. We do not know and cannot speculate, of course, what was said but, it is only to make the point that this communication between the bank and this third party did not commence by virtue of the system. It commenced through a conversation that was had with a call and then the communication continued through the Neteller system.”