Bank of Montserrat v Owen Rooney

• Jurisdiction: Montserrat
• Court: Court of Appeal (Montserrat)
• Judge: Farara, J.A.
• Judgment Date: 18 September 2025
• Neutral Citation: MS 2025 CA 4
• Year: 2025
• Docket Number: MNIHCVAP2023/0001

Bank of Montserrat

and

Owen Rooney

Ellis, J.A.; Ward, J.A.; Farara, J.A. [Ag.]

MNIHCVAP2023/0001

Court of Appeal

This appeal challenges the decision of the learned judge to dismiss with no order as to costs the appellant bank's claim against the respondent for recovery of the outstanding principal and accrued interest of an alleged loan of EC$40,920.57 made to the respondent on or about 6th January 1993. The bank's claim, filed some 16 years later, on 30th July 2009, was for payment of EC$76,232.27 consisting of a balance of principal of EC$23,199.00 and outstanding interest at the rate of 12% per annum of EC$52,801.23. It was pleaded that on or about 6th January 1993 the bank lent the respondent the sum of EC$40,920.57, which he had not repaid. The bank also pleaded and relied on a demand letter dated 24th February 2009 issued by its solicitor, Mr. David Brandt to the respondent (then residing overseas) via his then local lawyer, Mr. Hogarth Sergeant, demanding repayment of the alleged loan debt and, most importantly, an alleged acknowledgement of the said loan debt by the respondent via email sent on 27th February 2009 to the then manager of the bank.

In his defence to the claim filed on 6th July 2010, the respondent, as defendant, admitted that he had ‘received a loan from the [bank], however, he denied receiving the bank's letter dated 24th February 2009 or any letter at all. The respondent also denied that he had ‘acknowledged the debt by email on the 27th February 2009 since no claim was made by the [bank] within the period of time that the debt became due and payable.’ His defence also relied on the expiration of the statutory limitation period, the bank's prolonged and inordinate delay in demanding payment and bringing a claim which led him to think that it did not intend to make the claim brought, and thus he acted on this belief to his prejudice.

The sole witness for the bank at the trial was its then manager, Mr. Michael Joseph, who provided a witness statement dated and filed on 25th May 2018. At paragraph 11 of his witness statement Mr. Joseph attested that the loan debt owed by the respondent to the bank as of 19th April 2018 was EC$115,103.92 with interest continuing to run on that sum at 12% per annum until payment or judgment. Mr. Joseph had also provided in the proceedings below an affidavit filed on 12th June 2018 in which he attested that he was not the manager of the bank when it had entered into the loan agreement with the respondent. He also explained that the volcanic eruption in Montserrat had destroyed the buildings in the capital of Plymouth where the bank's premises was situated at the time, and because of the various moving of the bank's offices thereafter and the length of time which had elapsed, the loan agreement between the bank and the respondent could not be found, despite extensive searches having been made to find it.

In support of its claim for repayment of the “overdraft facility” of EC$23,000.00 made in 1993 plus accrued interest, the bank produced and tendered into evidence the following documents: (i) a copy of a print-out of what purports to be the bank's record of the respondent's loan account from June 1993 to April 2018; (ii) a copy of what purports to be the bank's ‘Loan Activity Statement Serviced Loan’ dated 6/12/18 for Loan No: 206503527 in the name of the respondent; (iii) the Brandt demand letter dated 24th February 2009; (iv) the respondent's email dated 27th February 2009 (the alleged acknowledgement of the loan debt); and (v) a copy of the valuation by Mr. Keith Thomas of the respondent's land registered as Block 13/15 Parcel 82-over which the bank held a caution as collateral for the said loan debt. The respondent filed no witness statement either from himself or of any other person and neither did he or anyone on his behalf gave evidence at the trial. However, he actively participated, albeit by remote means, during the trial itself, including cross-examining Mr. Joseph, responding to questions from the trial judge, and making oral submissions.

Prior to the trial, a master had ordered on 28th January 2011 that the claim be referred to court sponsored mediation. At this time the respondent was living abroad. However, he was then represented by attorney Hogarth Sergeant. The latter, on 16th February 2011, along with Attorney Brandt met with the mediator and signed a mediation agreement providing for the respondent to pay the sum of EC$70,000.00 plus legal costs of EC$14,000.00 and accruing interest at 4% per annum in settlement of the bank's claim in the proceedings below. On 1st April 2011 the mediation agreement was ordered by the master to take effect. However, no payment having been made by the respondent pursuant to the mediation agreement, he later agreed with Attorney Brandt to pay the agreed sums thereunder at the rate of EC$2,500.00 per month. It is apparent from the trial that the respondent made a part payment of EC$5,000.00 between August and October 2012 on account of the mediation debt. These payments were made by Attorneys Allen Markham & Co. to the bank purportedly on behalf of the respondent. It is these payments which were the subject of the judge's findings at paragraph 10 of the judgment, which were challenged by the bank in ground 3 of its notice of appeal but later not pursued. However, on 16th March 2018 the learned judge set aside the mediation agreement, and his reasons for doing so were set forth in a written judgment dated 18th March 2018.

The learned judge dismissed the claim on four bases; (i) the claim is statute barred; (ii) the respondent's email correspondence to the bank on 27th February 2009 in response to a demand letter dated 24th February 2009 from the bank's then lawyer, David Brandt demanding payment of the alleged loan debt and accrued interest to date, did not amount in law to an acknowledgement of the said loan debt the subject of the claim for the purposes of sections 22 and 23 of the Limitation Act; (iii) likewise, the payment of EC$5,000.00 made by the respondent to the bank between August and October 2012 did not amount in law to an acknowledgement of the loan debt the subject of the claim; and (iv) the bank had, in any event, failed to prove, on a balance of probability, that the alleged loan debt actually existed.

The bank appealed the judge's dismissal of its claim on five grounds, however the issues for determination on appeal were condensed into (i) whether the respondent's email to the bank on 27th February 2009 was an acknowledgement in law of the loan debt claimed in these proceedings by the bank; (ii) whether the learned judge erred when at paragraph 5(g) of the judgment he referred to certain matters which the respondent had alluded to in oral argument, about the existence of a different loan for EC$30,000.00 when the respondent had not pleaded such loan in his defence, and had not given evidence at the trial; and (iii) whether the bank had discharged its legal and evidential burden of proving the debt claimed.

Held: Dismissing the appeal and ordering each party to bear their own cost of the appeal, that:

• 1. It is the document itself and what is stated therein which must be read and construed as a whole by the court in determining whether what is stated therein amounts to an acknowledgement of the debt and the maker's liability to pay or repay the claim to the creditor. It is only such a finding which engages the provisions of section 22 (4) of the Limitation Act, “the Act” as an acknowledgement reviving and resetting the commencement of the prescribed limitation period applicable to a claim. Further as a matter of principle even where some evidence is given at trial (whether admissible or not) as to what the alleged debtor's “intention” was when he/she crafted and sent the document being assessed as to whether it constitutes a sufficient acknowledgement of the claim for the purposes of the Act, such evidence would be of little, if any, evidential value and should not be taken into account in determining whether the document was a sufficient acknowledgement. This is because post facto parol evidence of the maker of the document's intention or intentions when sending it to the creditor is irrelevant to any consideration of whether the document itself, read as a whole, amounted to a sufficient acknowledgement of the debt claimed.

  Section 22(4) of the Limitation Act, Laws of Montserrat CAP 2.12 applied; LJR Interiors Ltd v. Cooper Construction Ltd [2023] E.W.H.C. 3339 (TCC) considered; Deutsche Trustee Company Ltd v. Bangkok Land (Cayman Islands) Ltd and another company [2019] E.W.H.C. 657 (Comm) applied, Bradford & Bingley plc v. Rashid (FC) [2006] U.K.H.L. 37 applied; Dungate v. Dungate [1965] 1 W.L.R. 1477 applied.

• 2. The respondent contended that his email sent 27th February 2009 could not be considered a valid acknowledgment of the debt because the Brandt demand letter lacked key loan details such as the year, original amount, term, and repayment terms. However, the Brandt demand letter did include specific identifiers like the loan number and the fact that it had been agreed for the bank to place a caution on the respondent's land Block 13/15 Parcel 88, St. Peter's Registration Section to secure its repayment. The said letter also gave the current balance at EC$23,199.05 and the rate of interest being 12% per annum. Notably the respondent never claimed to have another loan with those same characteristics, nor did he deny the existence of the loan in question. Instead, his defence focused on the delay in bringing the claim, implicitly acknowledging the loan's existence. This pleading rather than being a denial of the existence of this loan claimed seems premised on the very existence of the said loan and the cause of action which it is contended was statute barred. Furthermore, his 2009 email explicitly admitted to owing the bank and promised...