Union Bank of Jamaica Ltd v. Dalton Yap (Jamaica)  UKPC 26 (28 May 2002)
Privy Council Appeal No. 17 of 2001
Union Bank of Jamaica Limited Appellant
Dalton Yap Respondent
THE COURT OF APPEAL OF JAMAICA
JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 28th May 2002
Present at the hearing:-
Lord Rodger of Earlsferry
Sir Denis Henry
[Delivered by Lord Rodger of Earlsferry]
“He shone, if one accepts the various evaluations that were done of him by the managing directors and the Board; and there is no reason not to accept them. He went on various courses as his experience broadened. Technology is his forte. He has a diploma in electronic engineering from the Radio College, Canada. When he entered banking in 1982 he did so as an executive trainee in the computers department as a member of a task force to implement a computerised banking system at Citibank.”
“The appellate court, either because the reasons given by the trial Judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court.”
As Lord Shaw of Dunfermline observed in the earlier case of Clarke v Edinburgh and District Tramways Co 1919 SC (HL) 35, 37, the appeal court cannot interfere unless it can come to the clear conclusion that the first instance judge was “plainly wrong”. In the present case, in the light of the criticisms advanced by Miss Phillips QC on behalf of Mr Yap, the Court of Appeal in effect concluded that the trial judge had failed to take proper advantage of having seen and heard the witnesses and had, for that reason, gone wrong. They accordingly allowed the appeal.
“Since Mr. Dalton Yap is out of office today, please arrange for the following merchant accounts to be immediately terminated:-
Universal Bancard Systems
It is extremely important that the above-mentioned accounts are closed as requested by letter received from Joseph Dawson, Vice President – Visa International.
Attached is a copy of the letter for your perusal.”
The memorandum was copied to the defendant, to Mr Scott and to a Mrs Jasmine Chin.
“As a matter of fact, although the Bank stopped processing VISA transactions on July 5, 1993, we requested a second merchant account on July 8, 1993 and said account was made available to us without any mention that transactions being submitted were not being processed.”
“Based on the evidence given by the defendant on pages 368 to 370 of the record of the notes of evidence, I find that the account for LMP Marketing, though closed on the 6th July, 1993, was reopened about two days later. The defendant, I find, sought to avoid providing answers in relation to this reopening while he was being searchingly cross-examined by Mr Hylton. In my judgment the defendant was the person who gave the instructions for the reopening.
There is absolutely no doubt that the defendant was, at the time of the reopening of this account, fully aware of the implications of this act. He knew of the likelihood of loss to the plaintiff thereby.”
In the light of the evidence their Lordships have difficulty with the trial judge’s conclusion that Mr Yap “reopened” the account. The defendant’s evidence relating to Mr Reaume’s letter was to the effect that the original LMP Marketing account had not been reopened: what had happened was that a second account had been opened. That evidence was not challenged and seems to be consistent with the terms of the letter. On the other hand, what material difference, if any, there would be between opening a new account and reopening an existing account was not explored in evidence. Interestingly, during the cross-examination of the defendant on Mr Reaume’s letter, the judge himself did not appear to think that it was being suggested to the defendant that he himself had opened the second account. When asked about it, the defendant said that he did not know under what circumstances the second account was opened.
“The reopening of LMP Marketing was not the only activity of the defendant in this regard after the closure of the accounts on the 6th July, 1993. Another significant act was his opening of Worldwide Marketing Ltd. At the stage at which this account was opened, there is no doubt that the defendant knew that such an act was inimical to the interests of the plaintiff. VISA had given instructions for the closure of all such accounts, pointing to possible fraudulent dealings. Furthermore, the July 6 memorandum from Marketing to Operations was in effect. Most damaging perhaps is the fact that Worldwide Marketing Ltd involved persons who had been connected with the already closed accounts. The opening of this account clearly violated VISA’s regulations as well as the plaintiff’s now known policy.”
The judge continued:
“In my judgment, the reopening of LMP Marketing and the opening of Worldwide Marketing constituted a breach of the defendant’s contract of employment with the plaintiff. This was clear defiance of the plaintiff’s policy. It follows that the defendant is liable for the losses sustained by the plaintiff from this breach. In the case of Worldwide Marketing Ltd., he is liable for the loss recorded at page 507 of Ex. 2, that is, US$106,226.04.”
“With reference to our meeting of July 19, the proposal put forward by Worldwide Marketing appears to be an attractive source of new business and one which could utilize the capabilities of our credit card technology.
Although the processing agent, Ciebrand is apparently a company of unquestionable integrity, the fact that they are dealing with WMM does not add any value to our comfort level of risk.
I think the potential for considerable exposure exist given the 180 day charge back potential time span. The risk factor of the amount of lodgments of such a period has to be weighed against the potential processing fee income. I think that we should look even beyond a mercantile report and seek a bank guarantee through standby letter of credit for the full amount of all potential risk.”
The memorandum was copied to Mr Scott. A date stamp on the copy produced in evidence suggests that the memorandum was received in the operations department on 22 July. There is a manuscript note on that copy in Mr Yap’s handwriting addressed to “George” and signed “Dalton”:
“I agree with the standby LC and we should put this in motion and contact WWM for this.”
Another date stamp suggests that the copy with the defendant’s note was received in the marketing department for Mr Lumsden on 30 July and was presumably written by the defendant shortly before he went on holiday on 27 July.