Privy Council opines on when interest can be awarded as damages
16 December 2022

16 December 2022
In its decision in Sagicor Bank Jamaica Ltd -v- YP Seaton and others [2022] UKPC 48, the Judicial Committee of the Privy Council considered an appeal by Mr Seaton and his companies (together, the SPs) in relation to various damages claims (including for compound interest for various types of damages (including for compound interest). These pertained to losses suffered by Mr Seaton/the SPs as a result of contractual breaches committed by Sagicor, previously "Eagle Commercial Bank Ltd" (the Bank), some 30 years ago. The breaches consisted of the Bank (i) debiting funds from accounts held by the SPs in October 1992; and, sometime between then and August 1993, (ii) freezing certain of the SPs' foreign currency accounts.
The Supreme Court of Jamaica (SCJ) found the debiting of the accounts at (i) to be unlawful in a Judgment in March 2014, and ordered the Bank to repay the debited sums to the SPs (with interest). As for the foreign currency accounts at (ii), an assessment of accounts was made in respect of the dealings between the SPs and the Bank, and the SCJ made a subsequent order requiring the Bank to pay to the SPs compound interest on the foreign currency accounts. The Bank appealed and the Jamaica Court of Appeal made a substituted order, which Mr Seaton then appealed to the Privy Counsel.
The issue on the appeal was: "to identify the remedy to which Mr Seaton [was] 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".
Mr Seaton claimed to be compensated for the breach of contract by the Bank (i) for the money which the Bank wrongfully withdrew from the accounts; (ii) compound interest at the contractual rates on the withdrawn money from 16 October 1992 until the date when the Bank repaid the money in 2019; (iii) for the loss of use of the withdrawn funds; and (iv) for the loss of use of the money in the foreign currency accounts in the period in which they were wrongfully frozen. The Court held it could give effect to the claim for repayment of the sums due on Mr Seaton’s accounts as a claim in debt (a) by requiring the reconstitution of the foreign currency bank accounts as if the money had not been withdrawn from them; (b) by adding interest to the principal sums that were or that should have been in the bank accounts at the applicable contractual rates for the relevant period; and (c) by applying the accrued interest to the bank accounts on a monthly basis, as provided for in the contracts between Mr Seaton and the Bank.
Mr Seaton’s (iii) and (iv) claims were for damages for breach of contract, which in turn were a claim for the loss of use of the withdrawn funds and a claim for the loss of use of the money in the foreign currency accounts in the period in which they were wrongfully frozen. These were "more problematic".
Lord Hodge set out his views (with which the other judges agreed) from which we identified the following key take-aways:
The Privy Council concluded that Mr Seaton was able to claim interest (i) on the debited funds; and (ii) on the frozen foreign currency funds "at the contractual rates…for the periods in which they remained or should have remained in [his] accounts"; but his claims for loss of use of (i) the debited funds; and (ii) any sums residing in the foreign currency accounts, failed.
Authors: David Capps and Melissa Sibley
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