Clydesdale Bank Public Company v. Black [2002] ScotCS 130 (10th May, 2002)

Clydesdale Bank Public Company v. Black [2002] ScotCS 130 (10th May, 2002)

The appeal was refused because the pursuers (bank) complied with the requirements of good faith and proper banking practice as understood in Scotland at the time of the transaction. The guarantee document contained clear warnings and advice to seek independent legal advice, satisfying the duty to warn and advise as set out in Smith v Bank of Scotland. The more onerous English requirements from O'Brien and Etridge (No. 2) were not imported into Scots law. There were insufficient relevant averments that the pursuers breached their duty of good faith, even if undue influence by the husband were established.

Citation
[2001] UKHL 44
Parties
Pursuer and Respondent: Clydesdale Bank Public Limited Company; Defender and Appellant: Mrs. Catherine Mary Black
Jurisdiction
Scotland
Procedural Posture
Appeal / Inner House, Court of Session (extra Division)
Outcome
Appeal refused
Legal Topics
Guarantees and Indemnities, Undue Influence, Good Faith in Contract, Standard Security, Constructive Notice, Independent Legal Advice
Banking Law Contract Law Family Law Guarantees and Indemnities Undue Influence Good Faith in Contract Standard Security Constructive Notice +1 more

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Parties

Clydesdale Bank Public Limited Company

Pursuer and Respondent

Mrs. Catherine Mary Black

Defender and Appellant

Procedural Posture

Appeal / Inner House, Court of Session (extra Division)

Legal Issues

  1. 1 Whether the guarantee signed by the defender was impetrated by undue influence and should be set aside
  2. 2 Whether the creditor (bank) took sufficient steps to act in good faith and avoid constructive notice of undue influence under Scots law

Ratio Decidendi

The appeal was refused because the pursuers (bank) complied with the requirements of good faith and proper banking practice as understood in Scotland at the time of the transaction. The guarantee document contained clear warnings and advice to seek independent legal advice, satisfying the duty to warn and advise as set out in Smith v Bank of Scotland. The more onerous English requirements from O'Brien and Etridge (No. 2) were not imported into Scots law. There were insufficient relevant averments that the pursuers breached their duty of good faith, even if undue influence by the husband were established.

Court Disposition

Appeal refused

Orders

  • Decree in favour of the pursuers (Clydesdale Bank Public Limited Company) affirmed
  • Guarantee and standard security enforceable against the defender (Mrs. Catherine Mary Black)