O'Meara Food Products Ltd v Agricultural Development Bank of Trinidad and Tobago
| Jurisdiction | UK Non-devolved |
| Judge | Lord Walker of Gestingthorpe |
| Judgment Date | 28 February 2005 |
| Neutral Citation | [2005] UKPC 6 |
| Date | 28 February 2005 |
| Court | Privy Council |
| Docket Number | Appeal No. 21 of 2004 |
[2005] UKPC 6
Privy Council
Present at the hearing:-
Lord Hoffmann
Lord Hope of Craighead
Lord Scott of Foscote
Lord Walker of Gestingthorpe
Baroness Hale of Richmond
[Delivered by Lord Walker of Gestingthorpe]
The Agricultural Development Bank of Trinidad and Tobago ("the Bank"), the respondent in this appeal, is a statutory body incorporated by the Agricultural Development Bank Act 1968 (Ch 79:07). The Bank loaned $2,030,000 to the first appellant O'Meara Food Products Ltd ("O'Meara") repayable in one year with annual interest at the rate of 12%. The loan was secured by an instrument of charge dated 18 August 1994, the security being plant and equipment used in O'Meara's fish-processing business. The second and third appellants, Marie Kavanagh and Sharif Mohammed, joined in the charge as sureties.
O'Meara defaulted on the loan and the sureties failed to discharge it when called on to do so. The Bank sought summary judgment on their covenants against all three appellants and Tam J gave summary judgment against them on 3 May 2002. The Court of Appeal (Jones, Kangaloo and John JJA) dismissed their appeal on 31 July 2003, except that the judge's order was varied on a point not material to this appeal. The appellants now appeal to the Board.
The main issue in the appeal is whether the instrument of charge dated 18 August 1994 was ineffective as being outside the Bank's statutory powers. Both courts below held that the charge was within the Bank's powers. The Court of Appeal also considered (but did not find it necessary to rule on) a fall-back submission made by the Bank, that the appellants could not in any event set up the Bank's alleged lack of authority as a defence. The same submission is included, again very much as a fall-back position, in the Bank's written submissions to the Board.
The main issue calls for the examination of the provisions of the Act, and of the Rules and Regulations made under sections 27, 33 and 49 of the Act. Part III of the Act ("Business of Bank, Deposits, Loans etc"), comprising sections 34 to 47, contains most of the relevant provisions. Section 34(b) gives the Bank power to make or underwrite loans for the development of agriculture and commercial fishing. Sections 35 and 42 are both in wide terms with some overlap between them. Section 35 provides as follows:
"Loans which the Bank may make shall be on such terms and conditions and for such periods as the Board [of Directors of the Bank] may consider appropriate."
Section 42 (as amended by section 7(1) of the Agricultural Development Bank (Amendment) Act 1989) provides as follows:
"(1) Every loan shall be made within such limits as may be prescribed and shall be made subject to such security as the Board may think sufficient.
(2) Every loan shall bear interest at such rate as the Minister, on the advice of the Board, determines.
(3) Every loan, together with interest thereon, shall be repayable within such period as may be prescribed or fixed by the Board, as the case may be."
Sandwiched between these two general provisions are a number of specific provisions (all, so...
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