Republic Bank to pay out $1M

Madame Justice Judith Jones delivered her 20-page judgment recently in which she ordered that interest be paid on the money dating back to June 29, 1981.

Dorado filed a writ in the Port-of-Spain High Court seeking the return of three sums —$200,152.54, $464,710.64, and $50,245.78, along with interest. Jones agreed and ordered that the bank repay Dorado $514,956.42, along with the interest and half of the costs incurred in fighting the court battle. The total figure would amount to $1 million.

Dorado operated two accounts at the bank’s Park Street branch — an operating account, and an escrow account for accommodating deposits from the sale of apartments developed by the company.

There were two directors of Dorado — Sarin Sanchez and his wife Judy, and they were the only signatories to the accounts. On August 29, 1979, Dorado owed Chase Manhattan Bank $191,571.72 plus interest at the rate of 12 percent per annum.

Three months later, Chase Manhattan Bank began legal action against Dorado. A manager at Republic Bank enclosed a cheque in the sum of $200,150.54 made payable to Chase Manhattan Bank in full settlement of Dorado’s debt to that bank. On June 29, 1981, $778,128.34 was paid to Republic Bank by a firm of lawyers representing monies received from the sale of apartments. Instead of putting the money into the operating account, the bank deposited $465,710.64 into the joint account of Sarin and Judy Sanchez. The bank also deposited $50,245.78 in the account of Judy Sanchez. It was not until July 30, 1998, that Dorado made a formal demand to the bank for the repayment of all the monies together with interest dating back to June 1981. When that failed, Dorado filed the writ in 1999.

But attorneys for the bank contended that Dorado’s claim was statute barred because it was filed more than four years after the alleged breaches. Justice Jones said she was of the opinion that while the company’s claims, which dated back to 1979 and 1981, were statute barred, the company was entitled to the return of its money that ought to have been standing in its account at the time of the demand in 1998. This, she added, was not statute barred and it remained an issue for the court to decide. In her judgment, Justice Jones said Dorado ought to have had the money credited to its account on July 29, 1981.

"Subject to particular banking arrangements, the customer of a bank is entitled to require payment to him by the bank of the full balance credited to his account. It is, in my view obvious that the bank cannot, without the customer’s authority or unless there is an obligation imposed on the bank by due process of law, unilaterally choose to pay money to a creditor of the customer and then reduce the credit balance in the customer’s account by debiting the amount of the payment," the judge added.

Attorney Farid Scoon appeared for Dorado Ltd.