Ross v Bank Intercontinental Ltd

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Kerr and Henry, JJ. A.)
• Judgment Date: 11 December 1990
• Date: 11 December 1990
• Court: Court of Appeal (Cayman Islands)

Court of Appeal

(Zacca, P., Kerr and Henry, JJ. A.)

ROSS

and

BANK INTERCONTINENTAL LIMITED

R.D. Alberga, Q.C. and A. Turner for the appellant;

R. Henriques, Q.C. and D. Bannon for the respondent.

Cases cited:

(1) Chasemore v. TurnerELR(1875), L.R. 10 Q.B. 500, dicta of Denham J. applied.

(2) Cooper v. Kendall, [1909] 1 K.B. 405, dicta of Buckley, L.J. applied.

(3) Spencer v. Hemmerde, [1922] 2 A.C. 507, followed.

Legislation construed:

Limitation of Actions Law (Laws of the Cayman Islands, 1963, cap. 86), s.46: The relevant terms of this section are set out at page 131, line 24 – page 132, line 14.

Banking-deposits-repayment-limitation of actions-bank”s unqualified acknowledgment during limitation period of liability to repay deposit makes depositor”s action for recovery not statute barred by Limitation of Actions Law (cap. 86), s.46-acknowledgment not qualified by statements that repayment ‘immediately as sums become available’ and bank to send report on ‘present position and future plans’

The appellant brought an action against the respondent bank in the Grand Court for the recovery of a debt.

The appellant held funds on deposit with the respondent. In August 1983 on the maturity of the account, the appellant requested repayment of the sum due to him. The respondent refused the request and soon after lost its licence when it was suspended from operating.

In 1985 the appellant”s attorneys wrote to the respondent seeking to ascertain (a) the amount then standing to the appellant”s credit; (b) the current rate of interest and other relevant matters affecting the deposit; and (c) the respondent”s plans in relation to its liability to the appellant. The respondent replied indicating (a) the sum on account; (b) that deposits were no longer accruing interest but that all deposit”s had been placed on demand so that depositors might be paid ‘immediately as sums become available’; and (c) that it was about to send a report to all depositors outlining the ‘bank”s present position and future plans.’

In October 1989, more than six years after his original request, the appellant brought an action against the respondent for recovery of the

debt due. The respondent claimed that the action was statute barred by virtue of the Limitation of Actions Law (cap. 86), s.46 which applied the 1623 English Statute of Limitations imposing a six-year period of limitation on such actions. This issue was tried as a preliminary issue and the Grand Court (Malone, C.J.) held that the respondent”s letter in reply to the appellant”s request did not contain an acknowledgement of debt such as would take the case out of the Statute of Limitations. The six-year limitation period therefore applied and the action was statute barred.

On appeal, the appellant submitted, inter alia, that (a) the respondent”s letter contained an unqualified and unconditional promise to pay him and in indicating how it intended to act in relation to all its depositors it was merely asking for more time to pay; and (b) the report to which the letter referred was made up only of recommendations and proposals as to how the assets of the bank should or could be realized and did not attach any conditions to the payment of the debt which was acknowledged in the letter.

The respondent submitted in reply that the report to which its letter referred was an integral part of the information the letter was intended to convey and in which the conditions for payment were set out, thus making conditional any promise to pay the appellant which might be inferred from the letter itself.

Held, allowing the appeal:

The appellant was entitled to proceed with his action to recover his deposit even though it was more than six years since he became entitled to its repayment. The respondent”s letter to him clearly contained an acknowledgment of the debt from which a promise to pay would be inferred since there were no other statements which effectively repudiated the obligation or qualified it in such a way as to impose a condition which the appellant would then have to prove had been satisfied. The additional information supplied in the letter that the respondent would be paying out deposits ‘immediately as sums become available’ and that the appellant would be sent a report ‘outlining the bank”s present position and future plans’ did not amount to conditions for the payment of the debt but were merely an indication that the respondent would need more time to discharge its obligations; and the report itself did no more than set out proposals and recommendations as to how the respondent”s assets could or should be realized. Accordingly, since the respondent had made an unqualified and unconditional promise to pay, the appellant”s action was not statute barred by s.46 of the Limitation of Actions Law (cap. 86) (page 136, line 34 – page 137, line 18).

10	ZACCA, P., delivering the judgment of the court: The
appellant was the holder of a deposit account in the amount of
US$330,097.88 with the respondent bank. The maturity date for
this account was August 24th, 1983. In a letter dated August
23rd, 1983 the bank was requested to break the deposit and to
15	repay the sums on deposit. The bank refused this request and lost
its licence when it was suspended on August 26th, 1983. A sum of
US$50,000 was subsequently paid by the bank. It is not in dispute
that the sum of US$314,832.70 was owed by the bank to the
appellant as of June 1st, 1984.
20	On June 10th, 1985 Mr. David Ritch, Attorney-at-Law, wrote
a letter to the bank on behalf of the appellant. The letter was in
the following terms:
‘Re: Hunter & Hunter/Truman Bodden & Co.
Escrow Account-Ross (No. 1)
25	We refer you to this account and correspondence hand-
delivered to you on August 23rd, 1983 at 4.27 p.m. from
Hunter & Hunter and Truman Bodden & Co. when I was
associated with the former of the two firms.
As you probably know, I have now established my own
30	practice and this firm has the conduct of this matter on behalf
of Mr. Ross.
The litigation between Mr. B. Ross, Mr. Arch and Miss
Elwin has now been settled upon terms agreed between the
parties and a consent order filed in court. For your
35	information a copy of that order is enclosed.
As you will see, under the terms thereof Mr. Ross is now
absolutely entitled to receive all the funds standing to the
credit of account No. 1.
From the files in my possession, our client”s account with
40	you as at August 28th, 1983 showed the sum of US$344,830.19
on deposit with interest accruing at 9 1/8%. Subsequent to

that date, a payment of approximately US$50,000.00 from
that account was paid out of both firms. The balance has
remained with your bank, presumably on interest-bearing
account.
5	Almost two years have elapsed since then and our client is
concerned as to the likelihood of losing this rather substan-
tial sum of money. We are of course aware of the Mareva
injunction and the bank”s other difficulties.
We write to ascertain the following:
10	(1) The amount now standing to the credit of account
No. 1 (Ross);
(2) The current rate of interest and other relevant
matters (e.g. term) of the deposit;
(3) More importantly, what are the bank”s plans in
15	relation to this liability to our client.
Please respond within 14 days.’
The bank replied in a letter dated June 26th, 1985. The letter
reads as follows:
‘Re: Escrow Account-Ross (No. 1)
20	We acknowledge receipt of and thank you for your letter
of June 10th, 1985. We are grateful to receive a copy of the
consent order filed in court and we understand that under the
terms thereof Mr. Ross is now entitled to receive all the
funds standing to the credit of the said account.
25	With regard to your specific enquiries we reply as follows:
(1) Our records indicate that the account stands at
US$314,832.70 as of June 1st, 1984. We have used this date

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