Recovery Partners GP Limited & Anor. v Irakli Rukhadze & Ors.
[2023] EWCA Civ 305
National Commercial Bank Jamaica Ltd v NCB Staff Association (Jamaica)
20 February 2024
[2024] UKPC 2
Privy Council
A bank and its employees disagreed about how to share profits. The court decided the agreement meant including profits from all parts of the company, even those partly owned by others. The employees also got interest on the money they were owed from the time it should have been paid.
Key Facts
- •National Commercial Bank Jamaica Ltd (the Bank) and the NCB Staff Association (the Association) had a profit-sharing scheme.
- •The scheme's contractual effect was not disputed.
- •A dispute arose over the interpretation of clause 2 regarding profit calculation in the financial year ending 30 September 2002.
- •The Bank argued that profits attributable to minority interests in subsidiaries should be deducted before calculating profit share.
- •The Association argued that the 'consolidated profits before tax' referred to the pre-tax profit line item in the group accounts, including minority interests.
- •The Bank had made payments under the scheme in several years prior to 2002.
- •The Association initiated legal proceedings in 2006.
- •Sykes J found for the Association at first instance.
Legal Principles
Modern approach to contract interpretation: ascertain the objective meaning of language used, considering the contract as a whole and the factual background known to parties at or before the contract date (excluding prior negotiations). Weight is given to implications of rival meanings, considering business common sense.
Prenn v Simmonds [1971] 1 WLR 1381, Rainy Sky SA v Kookmin Bank [2011] UKSC 50, Arnold v Britton [2015] UKSC 36, Wood v Capita Insurance Services Ltd [2017] UKSC 24
Post-contractual events and actions are irrelevant to contract interpretation; the court considers facts and circumstances at the time of contracting.
Various cases cited in the judgement
Appellate court restraint in overturning concurrent findings of fact, especially on questions of law.
Watt v Watt [1947] AC 484, Industrial Chemical Co (Ja) Ltd v Ellis (1986) 23 JLR 35, Beacon Insurance Co Ltd v Maharaj Bookstore Ltd [2014] UKPC 21, Ronald Chang and another v Frances Rockwood et al [2013] JMCA Civ 40
Court's discretion to award interest on debts or damages; considers the period of time money was withheld.
Section 48(g) of the Judicature (Supreme Court) Act and section 3 of the Law Reform (Miscellaneous Provisions) Act, British Caribbean Insurance Co Ltd v Delbert Perrier (1996) 33 JLR 119
Outcomes
Appeal dismissed.
The Court of Appeal's interpretation of the profit-sharing scheme clause was correct. 'Consolidated profits before tax' properly refers to the pre-tax profit line in the consolidated accounts, including minority interests. Post-contractual conduct was irrelevant to interpretation. The judge's discretion to award interest from October 2002 was appropriate.
Interest awarded from October 2002.
The court has discretion to award interest on withheld funds, even if not explicitly stated in the initial claim, particularly where the claimant sought 'such further relief as the court deemed fit'.
New declarations to be drafted.
The original declarations granted were deemed to be too numerous and unnecessarily complex and will be replaced with more succinct declarations.
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