THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND v. BRIAN MORTON [2000] ScotSC 9 (18th April, 2000)

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND v. BRIAN MORTON [2000] ScotSC 9 (18th April, 2000)

The appellant's pleadings, though sparse, give sufficient notice of a case that the Bank's failure to obtain a first ranking security—if proved to be a voluntary act or omission causing prejudice—could entitle the appellant to a pro tanto reduction in liability under the guarantee. The contract of guarantee does not clearly exclude liability for such acts or omissions. A proof before answer is justified to establish the facts.

Citation
[2000] ScotSC 9
Parties
Pursuer and Respondent: The Governor and Company of the Bank of Ireland; Defender and Appellant: Brian Morton
Jurisdiction
Scotland
Procedural Posture
Appeal / Interlocutory Appeal Against Refusal to Allow Proof Before Answer
Outcome
Appeal allowed; interlocutor of the Sheriff recalled; proof before answer allowed; cause remitted for proof; respondents found liable in expenses of appeal and debate; employment of counsel sanctioned.
Legal Topics
Guarantee Enforcement, Ranking of Securities, Cautionary Obligations, Negligence in Perfection of Security, Release of Guarantor Due to Creditor's Acts or Omissions
Banking Law Contract Law Guarantee Law Scottish Law Guarantee Enforcement Ranking of Securities Cautionary Obligations Negligence in Perfection of Security +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 9 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

The Governor and Company of the Bank of Ireland

Pursuer and Respondent

Brian Morton

Defender and Appellant

Procedural Posture

Appeal / Interlocutory Appeal Against Refusal to Allow Proof Before Answer

Legal Issues

  1. 1 Whether the Bank owed a duty to the guarantor to obtain a first ranking security over Hazelburn
  2. 2 Whether the Bank's failure to perfect security prejudiced the guarantor and entitled him to a reduction in liability
  3. 3 Whether the contract of guarantee excluded liability for the Bank's negligence or failure to perfect security

Ratio Decidendi

The appellant's pleadings, though sparse, give sufficient notice of a case that the Bank's failure to obtain a first ranking security—if proved to be a voluntary act or omission causing prejudice—could entitle the appellant to a pro tanto reduction in liability under the guarantee. The contract of guarantee does not clearly exclude liability for such acts or omissions. A proof before answer is justified to establish the facts.

Court Disposition

Appeal allowed; interlocutor of the Sheriff recalled; proof before answer allowed; cause remitted for proof; respondents found liable in expenses of appeal and debate; employment of counsel sanctioned.

Orders

  • Recall of Sheriff's interlocutor dated 8 December 1999
  • Allow parties a proof before answer of their respective averments