National Commercial Bank Jamaica Ltd v NCB Staff Association (Jamaica)

Contractual interpretation is an objective, unitary exercise directed to the meaning of the language read as a whole in its contemporaneous factual setting. Business common sense may assist where rival meanings arise, but cannot justify departing from natural language merely because a bargain proves disadvantageous. Post-contract conduct is not relevant to interpretation. A contractual reference to consolidated profits before tax may identify the corresponding line in group accounts, including profits of majority-owned subsidiaries, unless the contract clearly provides otherwise. A requirement that auditors agree the calculation may give them an arithmetical checking role, not a veto. In a fixed-date claim, imperfect pleading of interest does not necessarily prevent an award from the date the cause of action arose where the court has statutory discretion and the defendant had notice without relevant prejudice.

The NCB Staff Association claimed declarations and payment under a profit-sharing scheme contained in a 1980 staff circular, which had been incorporated into the Bank’s employees’ contracts. Sykes J upheld the claim in [2017] JMSC Comm 19 and awarded simple interest from 1 October 2002 in [2017] JMSC Comm 30. The Court of Appeal of Jamaica upheld the construction of the scheme and the interest award in [2020] JMCA Civ 27. The Bank appealed on the meaning of consolidated profits before tax, the role of the auditors, and whether interest could run from 2002 despite the wording of the fixed-date claim form. The Board also declined to consider the good-faith issue, which did not properly arise.

1. Appeal dismissed. The Board would advise His Majesty accordingly. The declarations were to be reformulated for simplicity, including a declaration identifying the circular and its amendments as governing the scheme and confirming its contractual effect, together with a declaration in terms of declaration 8. The costs declaration was to remain unchanged.
2. Contractual interpretation. The Board applied the modern approach stated since Prenn v Simmonds [1971] 1 WLR 1381 and developed in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, Arnold v Britton [2015] UKSC 36 and Wood v Capita Insurance Services Ltd [2017] UKSC 24. The task was to ascertain the objective meaning of the chosen language in its contractual and contemporaneous factual context. The parties’ subsequent conduct was irrelevant.
3. Profit calculation. The phrase consolidated profits before tax referred to the profit-before-tax line in the Bank’s consolidated accounts, including the results of majority-owned subsidiaries. The contract did not require deduction of profits attributable to minority interests. Such a deduction would also require identifying and adding back the associated tax, which was not disclosed in the accounts. The published line offered transparency and simplicity, and the circular contained no careful definition supporting the Bank’s construction.
4. Auditors. The words as agreed by the auditors gave the auditors an arithmetical checking role. They did not confer a power of veto. The scheme contemplated payment before completion of the annual audit, which supported that interpretation.
5. Interest. The court had discretion under section 48(g) of the Judicature (Supreme Court) Act and section 3 of the Law Reform (Miscellaneous Provisions) Act to award interest for the period between accrual of the cause of action and judgment. The interest request fixed the rate at the date of judgment and did not confine the starting date to judgment. Although the fixed-date claim did not comply fully with Civil Procedure Rules rules 8.7(3) and 8.8, the defect was not fundamental. The Bank had notice of the claim and suffered no relevant prejudice. The appeal against interest therefore failed.
6. The Board noted that the rejection of compound interest had been correct, but that issue was not the subject of the appeal. The parties were invited to submit the proposed order and submissions on appeal costs within four weeks.

• Privy Council — In [2024] UKPC 2, the appeal was dismissed. The declarations were to be reformulated.
• Court of Appeal of Jamaica — In [2020] JMCA Civ 27, the court upheld the construction of the profit-sharing scheme and the award of interest from October 2002.
• Supreme Court of Jamaica — Sykes J upheld the contractual claim in [2017] JMSC Comm 19 and awarded simple interest in [2017] JMSC Comm 30.