THE HIGH COURT
			Record No. 1992  No. 3121P
IN THE MATTER OF C.H. (IRELAND) INC. (IN LIQUIDATION) AND 
IN THE MATTER OF THE COMPANIES ACTS 1963 - 1990 
BETWEEN 
C.H. (IRELAND) INC. (IN LIQUIDATION)
			APPLICANT
AND
CREDIT SUISSE CANADA
			RESPONDENT

JUDGMENT of Mr. Justice McCracken delivered the 12th day of  December 1997. 

	In this judgment I will refer to certain companies in the following manner:-

C.H. (Ireland) Inc. (the Applicant) as "CHI".
Castor Holdings Limited as "Castor".
C.H. Investments. (New Brunswick) Inc. as "CHNB"
Credit Suisse as "CSZ".
Credit Suisse Canada (the Respondent) as "CSC".

THESE PROCEEDINGS
	CHI is in compulsory liquidation and Mr. Tom Grace was appointed Liquidator by order of the Court on 25th May, 1992.  By further Order made on 4th August, 1994 the Liquidator was given leave to institute such proceedings as he might be advised by Counsel against CSZ and CSC in Ireland or elsewhere as he may be advised in respect of or arising out of any alleged breach of Section 60 of the Companies Act, 1963.
	Pursuant to this leave, the Liquidator applied by way of Notice of Motion dated 30th January, 1995 for certain declarations in relation to both CSZ and CSC.  Proceedings were brought by both CSZ and CSC to stay the said proceedings and by order dated 2nd February, 1996 the proceedings were stayed as against CSZ, but not as against CSC.  As the proceedings are now only for declarations as against CSC, there is little point in setting out the reliefs sought in the Notice of Motion, which related to both banks.  
	It was agreed that the proceedings be heard on oral evidence, and therefore I propose to ignore the affidavits that were originally filed.  

THE PARTIES
	CSZ is a bank organised under Swiss law and having its headquarters in Zurich in Switzerland. 
	CSC is a bank incorporated in Canada which operates as a wholesale bank which deals primarily in wholesale loans to other banks, insurance companies and corporate bodies.  The transactions it conducts are on a very large scale, and the average transaction size is in the range of Canadian $25 million - Canadian $50 million.  It is a wholly owned subsidiary of CSZ.
	Castor is a company incorporated in Canada having its head office in Montreal, which had been a customer of CSC since the early 1980s.  It was primarily a finance company, providing first, second and third mortgages largely in relation to commercial real estate, and was funded by a number of banks and investors, including CSC.  Castor also had a number of subsidiary companies in several countries outside Canada.  
	CHNB was a company incorporated in New Brunswick in Canada and was effectively a wholly owned subsidiary of Castor.  Its involvement in the present transaction was largely as a conduit between Castor and CHI.
	CHI was a company incorporated in this jurisdiction and was in effect a wholly owned subsidiary of CHNB.  It was again involved in financing the purchase of properties, largely in the United States of America 

The transactions alleged by the liquidator
	Before going into the detailed documentation, and the evidence which was given on behalf of the parties, I think it would assist to set out in broad terms the transactions which are alleged to have taken place between the parties, and which have given rise to these proceedings.  These transactions all took place within the space of a few days in December 1989.  They can be briefly described as follows:-

1.	CSC made a loan of Stg. £18.8 million to Castor.  This was to be secured by what was called a payment obligation by CSZ.
2.	Castor used the Stg. £18.8 million to subscribe for shares in CHNB.
3.	CHNB used the Stg. £18.8 million to subscribe for shares in CHI.
4.	CHI deposited the Stg. £18.8 million with CSZ, indemnified CSZ against any liability on foot of its payment obligation to CSC and pledged the deposited monies as security.
5.	CSZ executed a payment obligation in favour of CSC, which was in effect a guarantee of the repayment of the loan made by CSC to Castor.

	It is alleged by the liquidator that the monies paid by CHNB to CHI as a subscription for shares in CHI were deposited by CHI effectively as the ultimate security for the monies advanced by CSC to Castor, and that this is a breach of Section 60 of the Companies Act, 1963.

The relevant statutory provisions
	Section 60(1) of the Companies Act, 1963 reads:-

	"Subject to sub-sections (2), (12) and (13), it shall not be lawful for a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or, where the company is a subsidiary company in its holding company."

	Section 60(14) provides:-

	"Any transaction in breach of this Section shall be voidable at the instance of the company against any person (whether a party to the transaction or not) who had notice of the facts which constitute such breach."

	As the meaning of the word "transaction" is to some extent in issue, it may also be relevant to consider the use of that word in other subsections of Section 60.  These subsections provide a mechanism whereby, under certain circumstance, a company may in fact give financial assistance towards the purchase of its own shares.  In relation to these procedures, the word "transaction" is used in three subsections.  
	Section 60(4) provides that:-

	"The Statutory Declaration shall state ....
	(d)	that the declarants have made a full enquiry into the affairs of the company and that, having done so, they have formed the opinion that the company, having carried out the transaction whereby such assistance is to be given, will be able to pay its debts in full as they become due."

	Section 60(5) provides:-

	"Any director of a company making the statutory declaration without having reasonable grounds for the opinion that the company having carried out the transaction whereby such assistance is to be given will be able to pay its debts in full as they become due, shall be liable to imprisonment for a period not exceeding six months or to a fine not exceeding £500 or to both:  and if the company is wound up within the period of twelve months after the making of the statutory declaration and its debts are not paid or provided for in full within the period of twelve months after the commencement of the winding up, it shall be presumed until the contrary is shown that the director did not have reasonable grounds for his opinion."

	Section 60(7) provides:-

	"Unless all of the members of the company entitled to vote at general meetings of the company vote in favour of the special resolution, the transaction whereby such assistance is to be given shall not be carried out before the expiry of thirty days after such special resolution has been passed or, if an application under subsection (8) is made, until such application has been disposed of by the Court."

Guarantee of 12th August, 1991
	In addition to the circular transactions referred to above, the liquidator also submits that a guarantee of 12th August, 1991 given by CHI to, inter alia, both CSZ and CSC constitutes a breach of Section 60.  This document guarantees all liabilities of Castor to either of the banks in very wide terms, and would undoubtedly cover the liability of Castor to repay the Stg. £18.8 million advanced to it by CSC.

THE LOAN FROM CSC TO CASTOR
	It would appear that this loan arose out of proposals made by Castor to CSC, probably in November 1989.  I do not have evidence of any details of these proposals or of the discussions which took place at that time.  However, it is clear that there was some kind of agreement in principle that a loan would be made, subject to the approval of CSZ.  On 
11th December, 1989 a meeting took place in Zurich between officials of CSZ and 
Mr. Stolzenberg, the President and Chief Executive Officer of Castor.  While I am not concerned with the position of CSZ, I am concerned with the knowledge of CSC of this transaction, and in this regard a memorandum of this meeting sent by CSZ to CSC is of very considerable importance.  The relevant portions of the memorandum are:-

	"Mr. Stolzenberg's visit was related to the planned C $35 million five year term loan to Castor Holdings Limited, proposed by CSC Toronto."  

	The following points were clarified:- 

	Name of the new Irish subsidiary: C.H. (Ireland) Inc.
	Term of the facility: five years.
	Roll over period:  six months.

	According to Mr. Stolzenberg's instruction, the borrowing entity has to be 100% owned subsidiary of Castor Holdings Limited, the name of which he will be telling us this afternoon.

	The transaction should be closed by Friday, December 15th, 1989.

	Mr. Stolzenberg hands over the specimen signatures and form A both duly signed.  He had received the blank forms from Department Br.

	He then signs the authorisation to arrange the fiduciary deposits for the account of  C.H. (Ireland) Inc., the order for and the liability under the payment obligation, as well as he countersigns the text of the payment obligation."
	Prior to this meeting, Mr. McFarland, who gave evidence on behalf of CSC and was the official in Toronto with primary responsibility for the account of the Castor companies, had put forward a proposal to the Toronto Credit Committee in relation to this loan on 5th December, 1989. This proposal is under certain standard headings and was approved by the Toronto Credit Committee on 7th December, 1989, and subsequently approved by CSZ on 14th December, 1989.  The approved proposal is headed "credit authorisation" and is for C $35 million as a five year secured term loan.  The relevant extracts from the credit authorisation are as follows:-

	"PURPOSE:  
	generate funding for domestic and international operations.  Castor will pledge cash collateral with CS Zurich in turn for the payment obligation which will secure this facility.
	COLLATERAL:  
	payment obligation from CS Zurich in the principal amount of C $35 million maturing December 31st 1994.
	SOURCE OF REPAYMENT:
	Re-financing/other credit resources/payment obligation.
	RISK:
	CS Zurich.
	LOAN DOCUMENTATION:
	Loan agreement.  Payment obligation from CS Zurich for C $35 million.

	RECOMMENDATION:
	Approval is recommended based upon the following...principal fully secured by a payment obligation from CS Zurich.  Castor financially capable to cover all interests costs."

	For some reason, presumably at the request of castor, on 14th December, 1989 it was decided that, instead of advancing a loan in Canadian dollars, CSC would advance the loan in sterling.  A new credit authorisation and proposal was drawn up, and submitted by Mr. McFarland on 14th December, 1989, which was approved by the Toronto Credit Committee of CSC on 19th December, 1989, and ultimately approved by CS Zurich, very much after the event, on 30th January, 1990.  The terms of this credit authorisation differ slightly from the earlier credit authorisation for the Canadian dollars, and is for a 
Stg. £19 million committed term loan, stated to be previously C $35 million.  This was stated in evidence by Mr. McFarland to be an amendment of the earlier credit authorisation, but one which nevertheless required new approval because it was in a foreign currency.  The relevant extracts from the sterling authorisation are:-

	""PURPOSE:  
	generate funding for domestic and international operations.  
	COLLATERAL:  
	payment obligation from CS Zurich in the principal amount at all times equal to the amount of our advance.
	SOURCE OF REPAYMENT:
	Re-financing/other credit resources/payment obligation.

	RISK:
	CS Zurich (Castor Holdings for the interest).
	LOAN DOCUMENTATION:
	Loan agreement.  Payment obligation from CS Zurich..
	RECOMMENDATION:
	Amendment is recommended.  Facility remains fully secured by payment obligation with Castor financially capable to cover all interests charges."

	It should be noted that neither of these documents makes any mention of CHNB or CHI, although the dollar authorisation refers to Castor pledging cash collateral with CSZ for the payment obligation.  The sterling authorisation makes no mention of this, but it was clearly known by CSC that the payment obligation was going to be backed by a cash deposit.
	On 15th December, 1989 CSC issued a facility letter to Castor for a loan of up to Stg. £19 million expressed to be for general and corporate purposes.  A security was again stated to be a payment obligation issued by CSZ and it was a condition precedent to the facility that there be final approval by CSZ to the transaction.  The terms of the facility letter were signed and accepted by Mr. Stolzenberg on behalf of Castor on 15th December, 1989.
	On 19th December, 1989 CSZ issued to CSC what is described as a payment obligation.  It takes the form of a letter, the relevant portions of which are:-

	"Reference is made to the credit facilities which you are granting to Castor Holdings Limited.  At the request of one of our clients we hereby irrevocably undertake to pay you on your first demand, waiving all rights of objection and defence, any amount up to a maximum of £18,800,000 .... upon receipt of your written or tested telex confirmation that the amount claimed has fallen due."

	If one goes back to the memorandum of the meeting on 11th December, 1989 in Zurich, in which it is recorded that Mr. Stolzenberg signed, inter alia, the order for and the liability under the payment obligation, I think it is quite clear that the client referred to in the payment obligation as having requested its issuance was in fact Mr. Stolzenberg, and the only question is the identity of the company which he was representing.  Unfortunately, the documents which he signed remained in Zurich, and have not been put in evidence, and I think it is fair to say that they were almost certainly never seen by CSC.  However, it seems to me as a matter of probability that, while he may have considered himself as acting for the entire Castor Group, nevertheless, in signing the order for and liability under the payment obligation he was in fact acting for CHI, as this document was tied in with the arrangement of fiduciary deposits. for the account of CHI.
	Following the receipt of the payment obligation from CSZ, CSC credited the account of Castor with the Stg. £18,800,000 with a value date of 20th December, 1989.  Thus the transaction between CSC and Castor was put in place.

THE PROGRESS OF THE MONIES
	While the monies were nominally credited to the account of Castor with value 20th December, 1989, the same sum was debited to Castor's account with value on the same date.  CSC had already received two documents, both dated 15th December, 1989, which were directions to them in relation to these monies.  Both documents were signed by 
Mr. Stolzenberg.   
	The first document was a direction from Castor to effect a transfer of 
Stg. £18,800,000 to CHNB's account with CSC with a value date of 19th December, 1989, although ultimately the transfer took place with a value date of 20th December, 1989.  It is of considerable significance that the relevant portion of the letter ended with the words "reference:  capital subscription".  The second letter, signed by Mr. Stolzenberg on behalf of CHNB, directed CSC to make a transfer, clearly on the basis that the instructions in the first letter had been complied with, and therefore the monies were now in an account of CHNB.  The transfer directed by the second letter was to pay the Stg. £18,800,000 to CHI's account with CSZ.  The value date is again supposed to be 19th December, 1989 and was in fact 
20th December, 1989, but more importantly this letter also contained the phrase "reference:  capital subscription".
	Interestingly, an internal document of CSC apparently known as an internal loan booking ticket, on which the loan transaction was recorded, would appear to combine all these various transactions.  It records the loan of the monies and that it is a new advance, and then records that there is to be a transfer value 20th December, 1989 of the monies to CSZ for the account of CHI, with the account number given.  It is further stated that this is done by order of CHNB.  The reality is, therefore, that while there may have been nominal cancelling 
credit and debit entries in the accounts of both Castor and CHNB with CSC, the monies being lent were in fact transferred directly to CSZ for the account of CHI.

THE RELATIONSHIP BETWEEN CHI AND CSZ
	Although the monies were advanced by CSC, it seems clear that the details of the entire financial arrangements were hammered out in Zurich between Mr. Stolzenberg and officials of CSZ.  This was confirmed by the evidence of Mr. McFarland, who stated that Castor's principal relationship was with CSZ, and that generally in such circumstances CSC were told what they needed to be told by CSZ , but nothing more.  I think it is clear, so far as  it is relevant, that CSC were at all times acting by order of the direction of, or subject to the approval of CSZ in their relations with the entire Castor Group, and in particular with CHI.  I should add that, on the documents and evidence before me, it appears almost certain that CSZ were fully aware of all aspects of the financial arrangements before the loan was advanced by CSC.  
	On 29th December, 1989 CHI executed a deed of pledge in favour of CSZ whereby it pledged in favour of CSZ all monies which it might have on account with CSZ to cover all claims which CSZ might have against CHI.  In my view this document makes it quite clear what was meant by "fiduciary deposit" in the earlier document and was executed as confirmation that CSZ could have recourse to the monies deposited with it by CHI.

THE GUARANTEE OF 12TH AUGUST, 1991
	In the middle of 1991 CSZ and CSC became somewhat concerned as to the position of the Castor Group of companies, and in order to try to protect themselves they took a guarantee from each of the companies in the Castor Group which guaranteed in very wide terms the indebtedness of Castor to, inter alia, CSZ and CSC.  The guarantee given by CHI was dated 12th August, 1991, and was again signed by Mr. Stolzenberg.  It is not necessary to go into details, as it does not make any specific mention of the loan of Stg. £18.8 million with which this case is concerned.  I accept that it was not entered into by specific reference to that loan, but by way of a general security for all advances which had been made to Castor.

CALLING IN THE DEBT
	In February 1992 it became clear that Castor and its subsidiaries were in very serious financial difficulties.  Again, the initiative for action came from CSZ, and on 
27th February, 1992 CSC received a detailed memorandum from CSZ setting out various steps that were to be taken in relation to a large number of advances made to the various Castor companies.  That document contained a specific reference to the Stg. £18.8 million loan as follows:-

	"Step 4
	4.1	Terminate fiduciary deposit with CS Paris (value March 18th 1992)
	4.2	Repay loan at CS Toronto against release of guarantee issued by CSZ.
	4,3	Transfer accrued interest (after deduction of fiduciary           commission) to CS Toronto to cover debit interests accrued.
	Client C.H. (Ireland) Inc. Dublin (GBP 18,8 mio)
	Debit GBP account number 0835 -24123 - 82 - 700
	Credit GBP Account Number CS Toronto
	Value March 18th 1992."

	This Action arose because on 25th February, 1992 Castor had sought the protection of the Quebec Superior Court under the Companies Creditors Arrangement Act, 1985, which was a step which gave rise to an immediate liability on the part of Castor to repay the loan to CSC.  Accordingly, immediately on receipt of the memorandum, on 
27th February, 1992, CSC sent a fax to Castor formally demanding the entire monies due, and on the same date also made a formal demand to CSZ for the sum of Stg. £18.8 million under the payment obligation from CSZ.  I do not think it is necessary to go into the details of the payments that were made, it is sufficient to say that CSC were reimbursed by CSZ, and CSZ in turn reimbursed itself from the monies deposited with it by way of fiduciary deposit by CHI.  This money had in fact been put on deposit in the Paris branch of Credit Suisse, but it is argued that there was no formal proof that the monies deposited with CSZ were in fact redeposited with Credit Suisse in Paris, or that CSZ reimbursed themselves from that source.  I accept that there is no such formal proof, but I am quite satisfied that as a matter of probability I am entitled to infer from the matters which were proved that CSZ repaid itself out of the monies which it had originally received from CSC, via CHNB and CHI.  

DID CHI GIVE FINANCIAL ASSISTANCE WITHIN SECTION 60?
	In Charterhouse Investment Trust Limited and Others -v- Tempest Diesels Limited (1986) BCLC 1 Hoffman J. considered what amounted to financial assistance within the meaning of the equivalent United Kingdom section.  At page 10 he said:-

	"There is no definition of giving financial assistance in the Section, although some examples are given.  The words have no technical meaning and their frame of reference is in my judgement the language of ordinary commerce.  One must examine the commercial realities of the transaction and decide whether it can properly be described as the giving of financial assistance by the company, bearing in mind that the section is a penal one and should not be strained to cover transactions which are not fairly within it.

	The Belmont case shows that the sale of an asset by a company at a fair value can properly be described as giving financial assistance if the effect is to provide the purchaser of its shares with the cash needed to pay for them.  It does not matter that the company's balance sheet is undisturbed in the sense that the cash paid out is replaced by an asset of equal value.  In the case of a loan by a company to a credit worthy purchaser of its shares, the balance sheet is equally undisturbed but the loan plainly constitutes giving financial assistance.  It follows that if the only or main purpose of such a transaction is to enable the purchaser to buy the shares, the section is contravened."

	I think it is quite clear that the only or main purpose of CHI depositing monies with CSZ was to ensure that CSC, effectively on the direction of  CSZ, would advance monies to Castor and then to CHNB to enable it to purchase the shares in CHI.  In my view this was clearly the giving of financial assistance within the meaning of Section 60.  I believe that, had the deposit not been made, no monies would have been advanced by CSC to Castor and through it to CHNB, and therefore CHNB would have been unable to purchase the shares in CHI.
	On the other hand, I do not think that the only or main purpose of the guarantee of 12th August, 1991 was to give financial assistance for the purchase of shares.  This was a guarantee given in relation to the very considerable indebtedness of the Castor Group to the Credit Suisse Group, and was one of a series of guarantees given by all the subsidiaries of Castor.  I believe its principal purpose was to try to ensure continued financial support for the entire Castor Group, which had very large borrowings from the Credit Suisse banks.

WHAT IS THE TRANSACTION ATTACKED?
	Section 60(14) of the Companies Act, 1963 refers to "any transaction in breach of this Section" .  Mr. Fitzsimons, on behalf of the the Respondent, urges that the transaction referred to must be the entire transaction, that is the entire circular transaction including the advance of  the monies by CSC to Castor and the subscription by Castor for shares in CHNB.  I do not think this can be correct if one looks at the use of the word "the transaction" throughout the Section.  A transaction in breach of the Section must be one which is in breach of subsection (1), which is the giving of financial assistance for the purpose of or in connection with the purchase or subscription of shares.  Furthermore, it must be a transaction whereby the company gives the financial assistance.  Furthermore, the use of the word "transaction" in the subsections dealing with the making of a declaration by the directors refers in both subsections (4) and (5) to "the company having carried out the transaction whereby such assistance is to be given".  In my view the only transaction which can be attacked under subsection (14) is a transaction directly involving the company.  In this case, the relevant transaction is the depositing of the monies by or at the direction of the company with CSZ, and the consideration for that deposit, namely the giving of the payment obligation by CSZ to CSC.  That is the transaction that assisted CHNB to acquire the shares in CHI by assuring that the finance was being made available by CSC.  However, the making available of that finance is not, in my view, part of the transaction to which subsection (14) refers.

NOTICE
	A transaction is only voidable under subsection 14 against any person who had notice of the facts which constitute the breach of Section 60.  The onus is on the Liquidator to prove that CSC had such notice.  However, while the onus is undoubtedly on the Liquidator, and while it has been said that this is a penal section, the fact remains that I still only have to decide this question as a matter of probability.  
	This whole question of notice was considered by the Supreme Court in Bank of Ireland Finance Limited -v- Rockfield Limited (1979) IR 21.  At page 37 Kenny J. said:-

	"The notice referred to in subsection 14 of Section 60 is actual notice and not constructive notice.  As there has been considerable confusion as to the meaning of the terms 'actual notice' and 'imputed notice' and 'constructive notice' - a confusion which has been pointed out by many judges and text book writers - I wish to say that I use the term 'actual notice' as meaning in this case that the plaintiff bank, or any of its officials, had been informed, either verbally or in writing, that part of the advance was to be applied in the purchase of shares in the defendant company, or that they knew facts from which they must have inferred that part of the advance was to be applied for this purpose."

	He then applied these principles to the case before him at page 38 where he said:-

	"In the puzzling passage in the trial Judges judgment, he refers to a person failing to accept information available to him or failing to make the enquiries normal in his line of business; but these are the criteria of constructive notice.  What he seems to be saying is that constructive notice becomes actual notice at some undefined point.  This is incorrect; it is blurring the distinction between actual notice and constructive notice.  There is nothing in this case which indicates that the plaintiffs or any of their officials knew that any part of the advance was to be applied to the purchase of shares in the defendant company, and what they did know does not lead to a conclusion that they must have inferred that the money was to be applied for the purchase of shares in the defendant company."
	In this case CSC knew the following:-

1.	That the monies they were advancing to Castor were going to be paid on to CHNB to acquire shares in CHI.  They had this knowledge primarily from the payment instructions given to them by both Castor and CHNB.  In two letters both dated 15th December, 1989 and both signed by Mr. Stolzenberg CSC was asked, firstly by Castor to pay the monies to CHNB's account and secondly by CHNB to pay the monies to CHI's account with CSZ.  In both cases the words "reference:  capital subscription" were contained.  I think the only reasonable meaning of those instructions were, in the first case that Castor, being the borrowers, were in fact directing the monies to be paid on to their subsidiary, CHNB, as a capital subscription, that is as a subscription for capital in CHNB, and secondly that CHNB were further directing that the monies be paid on to CHI as a capital subscription, that is a subscription for capital in CHI.  In my view this is actual notice that the monies were going to be used to enable CHNB to acquire shares in CHI, and it is further actual notice that the monies were ultimately going to be paid to CSZ.

2.	That CHI were going to make a fiduciary deposit with CSZ.  The memorandum of 12th December, 1989 makes this quite clear, and also makes it quite clear that the deposit to be made by CHI was related to the advance by CSC to Castor.  Thus they knew that the advance was to be made for the purchase of shares in CHI and that CHI was depositing monies by way of a      fiduciary deposit.  From these facts I think that CSC must have known that the payment of the monies, which they paid directly to CSZ, was in fact the           fiduciary deposit referred to in the memorandum of 12th December, 1989.

3.	That the fiduciary deposit was to be security for the payment obligation or guarantee by CSZ to CSC.  It is clear from the credit authorisation for the Canadian $35 million, which was simply amended by the subsequent authorisation for the sterling loan, that Castor would pledge cash collateral with CSZ for the payment obligation by CSZ to secure the loan.  If one reads that in conjunction with the memorandum of 12th December, 1989 from CSZ, which refers to Mr. Stolzenberg signing the order for and the liability under the payment obligation, CSC must have known that the monies being paid into CSZ were in fact being paid as security for the payment obligation which they took from CSZ.

4.	That the payment obligation or guarantee by CSZ to CSC was to cover the monies being advanced.  This of course is quite clear from the document itself, and I think CSC also had actual notice that this was the payment obligation which had been requested by CHI and was being guaranteed by the deposit of the monies by CHI with CSZ.

	In my view, therefore, CSC had actual notice, in the sense that that phrase is explained in the Rockfield case, that the monies they were advancing were going to be ultimately used by CHNB to acquire shares in CHI, and that those monies were being secured by a payment obligation or guarantee by CSZ which was countersecured by the deposit of the same monies by CHI with CSZ.  
	As probably the most important link, or perhaps as it would be put by CSC as the weak link, in this argument, was the reference to capital subscription in the payment directions, I should comment on this further.   The evidence of Mr. McFarland was that as far as he was concerned this was simply a note put into the request by Castor and by CHNB respectively for the purpose of giving information to their auditors, and that it was of no relevance to CSC.  However, even if one accepts that that was what Mr. McFarland thought at the time, that does not take away from the fact that it is a clear statement of fact which directly informed CSC that the money was going to be used to subscribe for shares.  I can appreciate that Mr. McFarland may not have thought this was of any relevance, as of course I fully accept that Mr. McFarland was totally unaware of the provisions of Section 60 of the Companies Act, 1963.  However, what Section 60(14) relates to is a person having notice of the facts which constitute the breach of Section 60.  It does not require that the person who had notice of the facts also had notice that it was in law a breach of Section 60, or indeed that such person was aware of the existence of Section 60.  I am quite satisfied that CSC had notice of the facts which constituted the breach, and no doubt had they been aware of the provisions of Section 60, they would have been aware that there was a breach of that Section.

AGAINST WHOM IS THE TRANSACTION AVOIDED?
	Under subsection (14) it is avoided against any person who had notice of the facts which constituted a breach.  However, I fully accept Mr. Fitzsimons' argument that I cannot make an order declaring a transaction void as against a person or body who is not a party to these proceedings.  In particular, while I have no real doubt but that CSZ were aware of all the facts, I cannot make an order against them, as these proceedings have been stayed against them.  I can in fact only make an order as against CSC declaring void the transaction, which in my view is the deposit of the monies by CHI with CSZ as security, and the consideration for that deposit, which was the giving of the payment obligation by CSZ to CSC.  Accordingly, I will make the relevant declaration as against CSC and with regard to that transaction only.  I am not sure what practical effect this will have, but that is a matter for the parties to consider, possibly elsewhere.