Privy Council rules Sagicor’s predecessor, Eagle Commercial Bank was wrong in its action 30 years ago

Durrant Pate/Contributor

Jamaican construction mogul, YP Seaton has just won his long running multi-million case against Sagicor at the UK Privy Council.

The Privy Council today ruled in favour of Seaton and the two appellant companies in his control Earthcrane Haulage Limited and Y.P. Seaton & Associates Limited. The panel of five British Law Lords comprising Lord Hodge, Lord Kitchin, Lord Burrows, Lord Stephens and Lady Rose has allowed the appeal in part.

The appeal is limited to the reconstitution of the relevant sums deducted from Seaton’s banking accounts held at Eagle Commercial Bank in October 1992. Eagle is the predecessor to Sagicor Bank. The Privy Council has invited the disputing parties to make submissions in relation to costs within 21 days after their receipt of this advice.

Seaton and his companies took the case to the Privy Council asking the highest court of Jamaica to find that the Local Court of Appeal erred in (1) finding that the appellants (Seaton and companies) were due repayment of J$9,200,000 rather than J$15,254,583.69, (2) not awarding compound interest on that sum, and (3) not ordering account to be taken of the bank accounts from which the wrongful debits were made on the basis that those accounts accrued compound interest.

Facts of the case

On October 16, 1992, Eagle debited J$15,254,583.69 from accounts held by the appellants with the bank. Later, on a date prior to August 6, 1993, the bank froze certain foreign currency accounts held there by Seaton.

Both actions were taken by the bank in relation to a dispute that had arisen between the Jamaica Commodity Trading Company (JCTC), a statutory body responsible for importing certain products into Jamaica, and a Belgian supplier, Prolacto SA.

The appellants were Prolacto’s agent and responsible for converting payments made by the JCTC in Jamaican dollar US dollars for remittance to Prolacto. The Supreme Court of Jamaica held that the debits above were unlawful and ordered an account to be taken of the frozen foreign currency accounts.

However, the Court of Appeal allowed the appeal in part, including reducing the amount payable and substituting the award of compound interest for simple interest. The Court of Appeal granted permission to Seaton and company appeal to the Privy Council on October 26, 2020.

In his 22-page judgement, Lord Hodge wrote that the bank raised legal proceedings seeking a ruling that it had been entitled to take the money from its customers’ accounts noting that there was an extensive and complex trial before Justice Sykes, who held that the bank was not entitled to do so.

Identifying remedy for Seaton

This ruling is not now challenged, the law lords explain but in the same proceedings Seaton sought a remedy for the bank’s breach of contract and therefore the issue on this appeal is to identify the remedy to which Seaton is entitled to restore him to the position he would have been in if the bank had not breached its contracts with him by freezing and debiting the bank accounts.

According to the privy council ruling, “the Board is satisfied that the simplest means of giving effect to Mr. Seaton’s contractual entitlements is to set aside the order for payment of J$9.2 million and to reconstitute the accounts in US dollars from 7 May 1992 in an accounting to be performed by the registrar. The accounting should include interest on the sums in the reconstituted accounts at the contractual rates which applied or should have applied on those accounts.”

In so far as there is no reliable direct evidence as to the rates which the bank was contractually bound to pay on the sums on those accounts, “the parties have agreed that the accounting should deem the contractual interest rate to be the average annual interest rates for foreign currency time deposit accounts (i.e. the rates for call and up to one-month time deposits) as published by the Bank of Jamaica.”

The interest payable is to be compounded with monthly rests since it appears from the bank statements which were before the Board that that is how interest was credited to sums held in these accounts.