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Are you asking whether you can sue the parent here in the UK for the acts of its subsidiary in Malaysia?
Yes. The bank have responded asking the court to strike out claim on the basis it is a separate legal entity
Yes, okay. I expect that is right on the Bank's part. A subsidiary is a seperate legal entity and is distinct in law.
Normally, you would not be able to sue a parent in this way for something the subsidiary has done/not done.
The only real exception to that is fraud - where the structure has been put into place as an instrument of fraud. In your case, I would expect that's highly unlikely to be the case.
Is there no responsibility at all on their part?
No. The better avenue would have been to report it to the financial ombudsman service, as technically, he doesn't have to follow the law to the letter and could look past this, although I doubt he would actually do that.
In this case, I suspect the Malay Bank have been subject to fraudulent withdrawals and I asked them to evidence the signatures on the relevant transactions. This they have been unable to do, citing time elapsed (2001) as the reason for not being able to revisit their archives.
When I say fraud, I mean that the whole parent/subsid structure itsemf (not the day to day actions of them) must be set up to be fraudulent in some way.
I dont think you'll get very far with arguing fraud for the purposes of making the parent company liable.
does the Financial Ombusdman have any jurisdiction on this case then? I was under the impression that this was only relevant to UK transactions?
It is only relevenat to UK companies etc., but I was simply saying you would have more prospect of getting him to take it on rather than the court. The Court is ALWAYS more strict than the ombudsman. In all honesty, I think the bank is right in its application based on the malaysian bank being a different company and that you're likely to end up being struck out.
Sorry, I know that wasn't what you wanted to hear.
Hmmm ... it's just that it doesn't seem right somhow. Would you comment on this re Chandler v Cape PLC " ...
This case shows that the so-called 'corporate veil' cannot be relied upon to shelter UK incorporated parent companies from the liabilities and actions of their subsidiaries (wherever they are based) and group companies should take adequate measures now to protect themselves against the substantial risks they may face ... "
Yes, that's the example case I was thinking about - it's authority for the fact that companies cannot set up to avoid losses caused where the subsid is a sham/a fascade. The Court of Appeal found that they subsid was a sham/a fascde in Adams, and that's why I made the comments I did. I doubt banks would set themselves us as a mere fascade, there will (I expect) be proper legitimate commercial reasons for establishing subsid abroad - no doubt due to different regulation of financial services if nothing else.
OK ... it seems my recourse is perhaps a final appeal to common sense to the bank to accept a degree of responsibility and a compromise payment. The claim was for £3k, what do you think?
I think you're conclusion is probably right I'm afraid to say .... and there is always a nuisance value in any claim they have to deal with, and I expect that's your biggest advantage in that it will cost them something to deal with this case anyway, even if they will win it!
OK ... last question. If I was to pursue with and then beyond the MCOL system (which I'm sure you know is the online small claims process) is there the potential for me to end up incurring more costs if the bank defend?
Yes, there is a possiblity you could be ordered to pay costs because the court can order costs be paid if a claim is "misconceived".
Yours might be ....
The Courts VERY RARELY exercise this power, even though many lawyers will tell you they ought to exercise it much more!
There are never any guarantees in the courts and the small claims system is no different. That said, if you were struck out immediately after/as they filed their defence, I would seriously doubt you would end up paying costs.
It's a possibility, but the courts hardly use their powers in small claims style claims like this.
I'm afraid the truth is it's a bit of a gamble, but I would say the odds are very much in your favour that you will not be ordered to pay any costs.
Okey doke,. Thanks for your help ....
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