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107
Mr Stone, HKD
From:
Paul Fifoot
Legal Advisers
Date:
15 November 1990
CLAUSE XXVI OF THE ROYAL INSTRUCTIONS
1.
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06
I cannot go along with Mr Willis's argument as set out in the memorandum attached to Mr Mo's letter, and my reasons are derived from the particular case which he cites, United Dominions Trust v. Kirkwood [1966] 1 All E R 968. In that case Lord Denning M R set out what he referred to as the characteristics of modern bankers the matters set out in paragraph 4 of Mr Willis's memorandum - but, having done so, he stated that "a recital of usual characteristics is not equivalent to a definition" and he eventually concluded that the institution in question, although it did not exhibit those modern characteristics, was nevertheless to be treated as a banker because it was long accepted as a banker. Furthermore, in his judgment Lord Denning referred to a number of cases decided earlier in this century which held that the then essential characteristics of the business of banking was the collection of money by receiving deposits on loan repayable when and as expressly or impliably agreed upon and the utilisation of the money so collected by lending it again.
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2.
Clause XXVI of the Royal Instructions has, as Mr Willis points out, been in existence for a considerable time the original of the current Royal Instructions were first introduced in 1917. In considering that Clause I find it difficult to disregard what was accepted at the time of its introduction as at least one generally accepted description of banking business. It would seem, therefore, that a banking association in the Royal Instructions must extend to include institutions such as deposit-taking companies as described in Mr Mo's letter.
3.
Perhaps, though it is not necessary to pass this on to Hong Kong, this is just as well. Two private bills relating to banks in recent years needed a second look in the FCO.
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5PFABI
Paul Fifoot