Sagicor Bank Jamaica Ltd v YP Seaton and Others

JurisdictionUK Non-devolved
JudgeLord Hodge,Lord Kitchin,Lord Burrows,Lord Stephens,Lady Rose
Judgment Date08 December 2022
Neutral Citation[2022] UKPC 48
Docket NumberPrivy Council Appeal No 0003 of 2021,Michaelmas Term
CourtPrivy Council
Sagicor Bank Jamaica Ltd
YP Seaton and others
(Appellants) (Jamaica)

[2022] UKPC 48


Lord Hodge

Lord Kitchin

Lord Burrows

Lord Stephens

Lady Rose

Michaelmas Term

Privy Council Appeal No 0003 of 2021

From the Court of Appeal of Jamaica


Richard Salter KC

Ivana Daskalova

(Instructed by DAC Beachcroft LLP (London))


B St Michael Hylton KC

Kevin O Powell

Sundiata J Gibbs

(Instructed by Myers Fletcher & Gordon (London))


(1) YP Seaton

(2) Earthcrane Haulage Ltd

(3) YP Seaton & Associates Ltd

Lord Hodge (with whom Lord Kitchin, Lord Burrows, Lord Stephens and Lady Rose agree):


This appeal is concerned with a dispute between Sagicor Bank Jamaica Ltd (“Sagicor”) and Mr Y. P. Seaton, who is a substantial businessman in Jamaica. The dispute was initially as to whether Sagicor's predecessor, Eagle commercial Bank Ltd (“Eagle”), was entitled to freeze foreign currency accounts held in his name and to debit accounts of Mr Seaton and of two appellant companies in his control for a sum of JM$15,254,583.69, of which JM$9,200,000 was debited from the foreign currency accounts in his name. In this judgment, where the context permits, the Board for the sake of simplicity refers to Eagle, its successor entities and Sagicor as “the Bank”. The Bank raised legal proceedings seeking a ruling that it had been entitled to take the money from its customers' accounts. There was an extensive and complex trial before Sykes J, who held that the Bank was not entitled to do so. That ruling is not now challenged. In the same proceedings Mr Seaton sought a remedy for the Bank's breach of contract.


The issue on this appeal is to identify the remedy to which Mr 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.


Again, for the sake of simplicity, where the context permits the Board will refer to Mr Seaton and his companies as “the Seaton parties”.

1. Factual background

The events which have given rise to this dispute occurred approximately 30 years ago and the parties have faced significant difficulties in assembling evidence as to what occurred because Eagle failed as an enterprise and Sagicor as its successor has not to date been able to find all the relevant bank records.


In summary, Mr Seaton operated five foreign currency bank accounts, including a certificate of deposit, which he used for the business ventures of the Seaton parties. The dispute between the Seaton parties and the Bank arose in connection with banking arrangements which facilitated payments by the Jamaica Commodity Trading Company Ltd (“JCTC”), a statutory body responsible for the importation of products into Jamaica, under contracts for the purchase of milk powder from a Belgian supplier, Prolacto SA. After the termination of the milk powder contracts in 1991, JCTC demanded that the Bank return to it balances which it claimed it had deposited with the Bank. The Bank settled the claims by paying JCTC JM$32.5 million and then sought to recover from the Seaton parties the sums it had paid to JCTC. The Bank did so by debiting JM$15,254,583.69 from the Seaton parties' accounts on 16 October 1992 and at a date prior to 6 August 1993 the Bank froze the five foreign currency accounts which Mr Seaton held at the Bank.


Mr Seaton's foreign currency accounts (held in his personal name) were in US dollars. The balances on the four accounts as at 7 May 1992 were:

In addition Mr Seaton held a certificate of deposit 301900809 (CD) on which he claims a balance as at 5 December 1993 of US$65,880. 22. It is not now in dispute that monies taken from the foreign currency accounts amounted to JM$9,200,000 at the exchange rates prevailing in 1992. Sykes J in his judgment recorded that the Bank accepted that US$369,190.62 had been taken from one foreign currency account and US$9,173.50 from another. It is also not in dispute that Mr Seaton withdrew certain funds from the foreign currency accounts in about 1996 after the Bank unfroze those accounts.










The Bank commenced proceedings on 6 August 1993 in which it claimed payment of certain sums and a declaration that it had been entitled to debit the sum of JM$15,254,583.69 from the Seaton parties' accounts. Mr Seaton commenced proceedings against the Bank by writ of summons dated 26 August 1993 in which he claimed (i) repayment of the balances held by the Bank on the foreign currency accounts and accrued interest, and/or (ii) an account of the sums due to him on the foreign currency accounts. The claims of the parties were consolidated by order dated 9 February 1995. By order and judgment dated 10 November 2009 Mangatal J struck out certain paragraphs of Mr Seaton's witness statement.


After certain adjournments, a trial of the consolidated claims took place before Sykes J over 15 days on various dates between September 2011 and September 2013. By a judgment dated 17 March 2014 [2014] JMSC Civ 34 Sykes J dismissed the Bank's claim. Sykes J ordered (i) the Bank to repay JM$15,254,583.69 with interest from 16 October 1992 to date, and (ii) an account to be taken of the dealings between Mr Seaton and the Bank in respect of the foreign currency accounts to determine what sums, if any, were payable to Mr Seaton. In a subsequent judgment dated 24 September 2014 [2014] JMSC Civ 139 Sykes J held that compound interest should be paid on the foreign currency accounts at the rate of 27.3% per year from 1992 until 2014 as an award of simple interest would not compensate Mr Seaton for the loss of the use of the money. The rate of 27.3% appears to have been the average interest rate over the period for borrowing money in Jamaican currency. Sykes J held that the measure of Mr Seaton's loss was the difference between the interest to which he was contractually entitled to receive on the foreign currency accounts and compound interest at the rate of 27.3%. He therefore ordered that the account be carried out on the basis that compound interest at the rate of 27.3% was applicable to the foreign currency accounts.


The Bank appealed the orders of Sykes J. In a judgment dated 31 July 2018 the Court of Appeal [2018] JMSC Civ 23 allowed the Bank's appeal and in an order on the same date set aside Sykes J's order for payment. The Court of Appeal substituted an order that the Bank should repay JM$9,200,000 as that was the sum which it had been proved that the Bank had withdrawn from Mr Seaton's foreign currency accounts, and Mr Seaton's claim did not extend to money that had been deducted from accounts held in the names of the other Seaton parties. The Court of Appeal ordered further that simple interest at the rate of 27.3% be paid on that sum, and that simple interest be paid on any sums found due on the accounting exercise at a rate to be agreed between the parties or determined by the court at the conclusion of the accounting.


The Seaton parties appeal to the Board with the permission of the Court of Appeal by order dated 26 October 2020. Before the Board, Mr Seaton did not pursue his claim for the monies deducted from accounts in the names of Seaton parties other than himself, that is for the difference between JM$15,254,583.69 and JM$9,200,000.

2. The parties' submissions

In a carefully structured submission Mr Richard Salter KC, who represents the Seaton parties, argues that Mr Seaton is entitled to be compensated for the breach of contract by the Bank under four headings. Those headings are: (i) the money which the Bank wrongfully withdrew from the accounts, (ii) compound interest at the contractual rates on the withdrawn money from 16 October 1992 until the date when the Bank repaid the money in 2019, (iii) a claim for the loss of use of the withdrawn funds, and (iv) a claim for the loss of use of the money in the foreign currency accounts in the period in which they were wrongfully frozen.


Mr Salter submits that claims (i) and (ii) involve the reconstitution of the bank accounts as if there had been no breach of contract. He submits that claims (iii) and (iv) should be quantified by awarding compound interest on the relevant sums, which would be ascertained by the accounting exercise. If the Board were to award compound interest on the withdrawn sums at the specified borrowing rate as damages under claim (iii), Mr Salter accepts that Mr Seaton would not receive that sum in addition to the contractual interest under claim (ii) as that would involve double compensation. He submits that the entitlement under claim (iii) is therefore for the differential between the contractual interest due under claim (ii) and the compound interest at the borrowing rate calculated under claim (iii). In support of claims (iii) and (iv) Mr Salter relies on the judgment of the House of Lords in Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners (“ Sempra Metals”) [2007] UKHL 34; [2008] 1 AC 561 and more recent first instance judgments which the Board discusses below.


Mr B. St Michael Hylton KC for the Bank submits in relation to claims (iii) and (iv) that the authorities do not support the rule for which Mr Salter advocates and that Mr Seaton had not pleaded or proved a sufficient case to entitle him to such interest as damages for breach of contract. In relation to claims (i) and (ii) he acknowledges that, as a general rule, the appropriate remedy for a bank's breach of contract by the withdrawal of funds or the failure to pay contractual interest to its customer on deposited sums is to reconstitute the account so that it complies with the customer's contractual entitlement.


Mr Hylton also argues that the parties had settled the claim for the...

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