By Cherie Gopie

In a re­cent de­ci­sion that un­der­scores the care­ful bal­anc­ing act be­tween con­tract en­force­ment and ju­di­cial dis­cre­tion, the High Court of Trinidad and To­ba­go ruled that post-judg­ment in­ter­est on a loan debt should be capped at the statu­to­ry rate of 5 per cent, notwith­stand­ing the con­trac­tu­al pro­vi­sion for a high­er rate. The rul­ing has mean­ing­ful im­pli­ca­tions for banks and lenders nav­i­gat­ing long-term loan en­force­ment strate­gies and in­ter­est re­cov­ery frame­works.

Jus­tice Frank Seep­er­sad de­liv­ered the judg­ment on Ju­ly 9, 2025, in First Cit­i­zens Bank Lim­it­ed v Ni­ka Ma­li­ka Wil­son (CV2025-01254). The case in­volved a bor­row­er who de­fault­ed on a loan agree­ment ex­e­cut­ed in Au­gust 2023, which ex­plic­it­ly pro­vid­ed for in­ter­est at 10.25 per cent “be­fore as well as af­ter judg­ment.” Fol­low­ing the bor­row­er’s ad­mis­sion of li­a­bil­i­ty, the Court en­tered judg­ment for $157,986.47. The re­main­ing is­sue was the ap­plic­a­ble rate of post-judg­ment in­ter­est.

While the bank sought to en­force the con­trac­tu­al rate af­ter judg­ment, Jus­tice Seep­er­sad ap­plied Sec­tion 13 of the Reme­dies of Cred­i­tors Act, which es­tab­lish­es a statu­to­ry rate of 5 per cent, and re­lied on Sec­tion 25 of the Supreme Court of Ju­di­ca­ture Act (SC­JA) and Rule 12.8(2) of the Civ­il Pro­ceed­ings Rules (CPR) to re­in­force the prin­ci­ple that the award­ing of post-judg­ment in­ter­est is a mat­ter re­served for the Court.

The Court em­pha­sised that a judg­ment, once reg­is­tered, is not meant to be treat­ed as a com­mer­cial as­set. It must safe­guard its process­es from mis­use. Al­low­ing post-judg­ment in­ter­est to ac­crue on the to­tal amount claimed could en­cour­age the judg­ment cred­i­tor to view the judg­ment as an in­vest­ment, po­ten­tial­ly let­ting it sit for years while in­ter­est ac­cu­mu­lates, with­out tak­ing ac­tion to en­force it.

“This Court will not per­mit its judg­ment to be used as a prod­uct of com­mer­cial in­vest­ment,” Seep­er­sad J stat­ed, and high­light­ed the po­ten­tial for abuse if high con­trac­tu­al rates are al­lowed to ac­crue un­mod­er­at­ed over the 12-year en­force­ment win­dow.

The judge ac­knowl­edged that while the loan agree­ment did con­tain a post-judg­ment in­ter­est clause, such pro­vi­sions can­not over­ride the Court’s statu­to­ry dis­cre­tion. He em­pha­sised the im­por­tance of as­sess­ing in­ter­est awards in light of pre­vail­ing eco­nom­ic con­di­tions and the in­di­vid­ual cir­cum­stances of the debtor, who in this case was un­rep­re­sent­ed, un­em­ployed, and in ill health.

In sup­port of his con­clu­sion, the Court cit­ed the UK House of Lords rul­ing in Di­rec­tor Gen­er­al of Fair Trad­ing v First Na­tion­al Bank plc [2001] UKHL 52. In that case, the Lords ac­cept­ed that while par­ties may con­tract for post-judg­ment in­ter­est, such terms are not im­mune from fair­ness as­sess­ments un­der con­sumer pro­tec­tion reg­u­la­tions. The court dis­tin­guished be­tween the en­force­abil­i­ty of such claus­es and the role of ju­di­cial dis­cre­tion in en­sur­ing fair and eq­ui­table out­comes. The Court adopt­ed the broad­er prin­ci­ple that en­force­ment must not un­du­ly bur­den bor­row­ers or trans­form judg­ments in­to fi­nan­cial in­stru­ments.

The judge al­so cit­ed lo­cal prece­dent from The Roy­al Bank of Trinidad and To­ba­go v DEF SEC Tech­nolo­gies Ltd, which rec­og­nized that con­tract­ed in­ter­est can sur­vive judg­ment, but reaf­firmed that it does not au­to­mat­i­cal­ly dis­place ju­di­cial dis­cre­tion.

This rul­ing is a time­ly re­minder to banks and lenders that while well-draft­ed loan agree­ments are crit­i­cal, en­force­ment mech­a­nisms must op­er­ate with­in statu­to­ry and eq­ui­table lim­its. The de­ci­sion reaf­firms that post-judg­ment in­ter­est is not au­to­mat­ic, even where ex­press­ly agreed, and that courts re­tain a su­per­vi­so­ry role in cal­i­brat­ing en­force­ment to re­flect cur­rent mar­ket re­al­i­ties and le­gal bound­aries.

In­sti­tu­tions would be well ad­vised to re­view the struc­ture and lan­guage of their en­force­ment claus­es, par­tic­u­lar­ly re­gard­ing in­ter­est ac­cru­al post-judg­ment. While this case in­volved unique cir­cum­stances, a per­ceived vul­ner­a­ble bor­row­er and an ad­mit­ted debt, it clar­i­fies how courts may ap­proach the in­ter­ac­tion be­tween con­trac­tu­al terms and statu­to­ry dis­cre­tion.

A broad­er le­gal con­text

The Court’s ap­proach aligns with wider le­gal prin­ci­ples that favour eq­ui­table en­force­ment over rigid ad­her­ence to con­trac­tu­al terms. In the UK, the Law Com­mis­sion’s 2004 re­port on Pre-Judg­ment In­ter­est on Debts and Dam­ages sim­i­lar­ly crit­i­cized ar­bi­trary or out­dat­ed (then) in­ter­est rates and em­pha­sized the im­por­tance of fair com­pen­sa­tion rather than pun­ish­ing debtors, par­tic­u­lar­ly those fac­ing fi­nan­cial hard­ship.

Though fo­cused on pre-judg­ment in­ter­est, that re­port echoed the same ju­di­cial con­cern raised in this mat­ter that in­ter­est pro­vi­sions should re­flect cur­rent fi­nan­cial re­al­i­ties and be ap­plied in a man­ner that bal­ances the in­ter­ests of cred­i­tors and debtors.

Im­pli­ca­tions for the lend­ing in­sti­tu­tions

This rul­ing should prompt fi­nan­cial in­sti­tu­tions to re-ex­am­ine their loan doc­u­men­ta­tion, par­tic­u­lar­ly claus­es re­lat­ing to post-judg­ment in­ter­est. While con­tract­ed rates may re­main en­force­able pre-judg­ment, the court may ap­ply close scruti­ny where en­force­ment ex­tends be­yond the judg­ment date, es­pe­cial­ly in cas­es in­volv­ing per­ceived vul­ner­a­ble bor­row­ers or pro­longed en­force­ment time­lines.

Cherie Gopie is a part­ner at M. Hamel-Smith & Co. She can be reached at mhs@trinidad­law.com.

Dis­claimer: This col­umn con­tains gen­er­al in­for­ma­tion on le­gal top­ics and does not con­sti­tute le­gal ad­vice.