First Citizens Bank Ltd v Shepboys Ltd and Sheppard

• Jurisdiction: Trinidad & Tobago
• Court: Court of Appeal (Trinidad and Tobago)
• Judge: Mendonca, J.A.
• Judgment Date: 10 March 2015
• Neutral Citation: TT 2015 CA 8
• Docket Number: Civil Appeal P231 of 2011
• Date: 10 March 2015

Court of Appeal

Mendonca, J.A.; Rajnauth-Lee, J.A.; Moosai, J.A.

Civil Appeal P231 of 2011

First Citizens Bank Limited

and

Shepboys Limited and Sheppard

Appearances:

For the appellant Mr. P. Deonarine

For the respondent Ms. M. Brown

Civil practice and procedure - Pleadings — Whether the appellant's claim against the respondent was statute — barred — Whether the judge correctly concluded that the appellant could not rely on its reply because the facts pleaded in the reply should have been pleaded in the statement of case.

I agree with the judgment of Mendonca J.A. and have nothing to add.

M. Rajnauth-Lee, Justice of Appeal

I too agree.

P. Moosai

Justice of Appeal

Mendonca, J.A.

1 This is an appeal from the decision of the case management judge that First Citizens Bank Limited the claimant/appellant (the claimant), cannot proceed with its claim against the respondent, David Sheppard (the respondent), because it is statute-barred.

2 The claimant carries on the business of banking in this jurisdiction. The first defendant, Shepboys Limited, and the respondent are its customers. In these proceedings, which were commenced on August 23rd 2010, the claimant claims against Shepboys Limited moneys dues in respect of an overdraft facility granted by the claimant to Shepboys Limited and the balance due on a promissory note made by Shepboys Limited in favour of the claimant. As against the respondent the claimant claims the moneys due to it from Shepboys Limited under a guarantee given by the respondent in favour of the claimant for advances made by the claimant to Shepboys Limited.

3 As appears from the statement of case and the documents annexed thereto, by letter of offer dated May 21St 2002 (the terms of which were accepted by Shepboys Limited) it was agreed that the claimant would grant to Shepboy Limited an overdraft facility in the amount of $30,000 and a loan in the sum of $200,000 repayable by monthly installments. One of the conditions for making the advances available to Shepboy Limited was that the respondent would provide a personal guarantee for the advances to Shepboys Limited to the extent of $230,000.

4 It was a further condition of the loan, that Dean Sheppard would also provide a guarantee to the extent of $230,000.

5 Pursuant to the letter of offer the claimant made available to Shepboys Limited the overdraft facility and granted the loan. By promissory note dated June 7th 2002 Shepboys Limited promised to pay to the claimant the sum of $ 80,000 (being the loan of $200,000 together with interest) by sixty consecutive monthly installments with effect from June 30th 2002.

6 By an undated guarantee (which was stamped on June 10th 2002) the respondent, in consideration of the claimant, inter alia, granting or continuing loans and advances to Shepboys Limited, guaranteed to pay to the claimant “on demand all money which is now or shall at any time or times after this date be due or owing or payable” to the claimant from Shepboys Limited “provided that the total sum recoverable from [the respondent] under this guarantee shall not exceed $230,000”.

7 It is not disputed between the parties that Dean Sheppard also provided a guarantee pursuant to the terms of the letter of offer. It is also not disputed that his contract of guarantee is separate and apart from that of the respondent. The terms of the guarantee of Dean Sheppard are the same as those of the respondent.

8 The claimant avers that the first defendant defaulted in payments due under both the overdraft facility and the installment loan. By letter dated June 3rd 2009 the claimant called upon Shepboys Limited and the respondent to settle the outstanding balances but they failed and/or neglected to do so. The claimant therefore claims the unpaid balances on the overdraft facility and the promissory note, which it is alleged is $57,660.73 and $95,883.29 respectively. Interest is also claimed on these sums.

9 Shepboys Limited failed to file a defence and was not represented at the hearing of this appeal and has taken no part in it.

10 The respondent, however, filed a defence. He avers, inter alia, that the cause of action against him accrued on or before January 18th 2005 when the claimant made a formal demand under the guarantee calling on him to liquidate the indebtedness of Shepboys Limited. In those circumstances he contends that the claimant's claim became statute-barred since January 18th 2009 pursuant to the provisions of the Limitation of Certain Actions Act (the Limitation Act).

11 The claimant filed a reply. The reply was filed pursuant to the permission of the case management judge granted on November 19th 2010. In the reply the claimant admitted that a demand was made on the respondent under the guarantee by letter dated January 18th 2005. The claimant, however, alleged that after the demand, payments were made towards the indebtedness of Shepboys Limited. The claimant set out the payments alleged to have been made. They were allegedly made on various dates between May 2” 2005 and February 27th 2009. Annexed to the reply are several receipts said to be evidencing the payments. In those circumstances the claimant contended that the cause of action accrued on the date of the last payment and not before. As the last payment was made in 2009 and these proceedings began in 2010, it was the claimant's contention that the action is not time barred.

12 The case management judge elected to deal with the limitation point as a preliminary issue and consequently heard arguments from the parties as to whether the action was timed barred. There was no evidence from any of the parties and the issue was dealt with on the pleadings.

13 It was common ground between the parties that this claim would be barred after the expiration of four years from the date on which the cause of action accrued. This is by virtue of section 3 (1)(a) of the Limitation Act which provides as follows:

• “3(1) The following actions shall not be brought after the expiration of four years from the date on which the cause of action accrued, that is to say-

  • (a) actions founded on contract (other than a contract made by deed) on quasi-contract or in tort”.

The claimant's cause of action against the respondent was clearly founded on a contract of guarantee which is not by deed, and is therefore within section 3(1)(a).

14 It was also not in dispute that the cause of action accrued on January 18th 2005. This was because the moneys due under the contract of guarantee became payable on demand and by letter dated January 18th 2005, the claimant demanded payment from the respondent of the moneys due to it under the contract of guarantee.

15 In view of the above this action would become time barred on January 18th 2009 and could not be brought unless there was a reason to extend or postpone the limitation period. Counsel for the claimant submitted before the Judge that there was such a reason and this can be found in section 12(2) of the Limitation Act. This section provides:

“Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof the right shall be deemed to have accrued on and not before the date of the acknowledgement or payment.”

Counsel contended that as payments were made to the indebtedness of Shepboys Limited as set out in the claimant's reply, the cause of action accrued afresh on the date of the last payment. As that payment was made on February 27th 2009 and the proceedings were commenced on August 23' 1 2010 it followed that the action was not timed barred.

16 Counsel for the respondent submitted before the judge that the claimant could not rely on the matters pleaded in the reply to assert that the claim was commenced within the limitation period as they had to be set out in the claimant's statement of case.

17 The judge agreed with the respondent. She concluded that the matters pleaded in the claimant's reply should have been pleaded in the statement of case since ‘the information was central to the claim set forth by the [claimant] that the Defendants defaulted on their loan payments”. The judge stated (at para 31):

“[31] 1 determined that the Claimant, in its Reply, sought to raise for the first time material facts, i.e., the acknowledgement of the debt and the supporting documentation, which should have been pleaded in the Statement of Case. As such, the Statement of Case was in breach of PART 8.6 of the [Civil Proceedings Rules, 1998] for failure to set out all the relevant facts and documentation upon which the Claimant would rely in proving its case. Therefore, the [respondent] was entitled to raise a Defence of limitation based on the facts contained in the Statement of Case”.

Rule 8.6 of the Civil Proceedings Rules, 1998 (the CPR) is as follows:

• “8.6 (1) The claimant must include on the claim form or in his statement of case a short statement of all the facts on which he relies.

• (2) The claim form or the statement of case must identify or annex a copy of any document which the claimant considers necessary to his case. “

As the matters that were pleaded in the reply should have been pleaded in the statement of case pursuant to rule 8.6 of the CPR, the Judge was of the opinion that the claimant could not rely on the facts contained therein. There was in essence no answer to the defence of limitation raised by the defendant. As time began to run from the date of the demand on the respondent in January 2005 the Judge concluded that the action against the respondent was statute barred.

18 The claimant has appealed. Counsel for the claimant has argued that the Limitation Act provides a procedural bar to the bringing of...