GOVERNMENT lawyers have filed an application for leave to appeal against a ruling by the local appellate court two weeks ago that the Century National Bank had illegally compounded interest on loans made to hotelier John Sinclair’s companies — Negril Holdings and Negril Investments Limited.

The application, which is seeking to raise matters of great public importance relating to the methods that banks use to compound interest, was filed last Wednesday.

It’s almost a foregone conclusion that it will be granted since, in addition to raising legal issues that are undoubtedly of great concern to the public, the case meets the other qualifying prerequisites for appeals to the United Kingdom Privy Council — it involves a sum of over J$1,000.

In fact, the legal battle that Sinclair started with the bank in 1992, four years before the Government took it over under an initiative to sort out several failed financial institutions that had gone bust, involves well over $70 million.

Two Fridays ago, local appellate court judges Paul Harrison and Ransford Langrin ruled that the bank, and by extension the government, should repay Sinclair at a rate of 52 per cent per annum.

Part of their rational was that Don Crawford, the bank’s managing director, who was booted out by Finance Minister Omar Davies, even as the bank teetered on the brink of bankruptcy, had taken advantage of the special relationship he had with Sinclair.

Their decision nullified that of Justice Henderson Downer, who in a brutally frank analysis of the matter, defined both Sinclair and Crawford, as imprudent.

“Sinclair over borrowed and nearly ruined his companies… Crawford lent beyond the bank’s capacity and so ruined the bank… this is the substance of the case dressed in the guise of a special relationship,” he said in his contribution to the over-200 page judgement.

When the case goes before the English judges, the government’s lawyers will cite the several cases cited by Justice Dower in an effort to support their contention that CNB had the right to compound and vary the interest rates it applied to the monies that Sinclair borrowed via overdraft accounts with the bank.