Bank Of Scotland v Dunedin Property Investment Company Ltd [1999] ScotCS 139 (8 June 1999)

Bank Of Scotland v Dunedin Property Investment Company Ltd [1999] ScotCS 139 (8 June 1999)

Reimbursement of breakage costs was part of the price for early redemption under Condition 3 of the Loan Stock Deed. The defenders' refusal to acknowledge liability for breakage costs at the redemption date constituted incomplete performance, entitling the pursuers to refuse redemption and continue charging interest until full performance was tendered. There was no basis for implying a term in the Interim Agreement entitling the pursuers to interest on the principal sums from 7 March 1997; interest runs only from the date of citation.

Citation
[1999] ScotCS 139
Parties
Pursuer: The Governor and Company of the Bank of Scotland; Defender: Dunedin Property Investment Company Limited
Jurisdiction
Scotland
Judgment Date
08 June 1999
Procedural Posture
Civil / Judgment After Debate on Legal Issues
Outcome
Judgment for the pursuers in respect of entitlement to interest on the loan from 17 April 1996 to 7 March 1997; interest on principal sums runs only from date of citation.
Legal Topics
Loan Agreements, Early Redemption, Interest Entitlement, Implied Contractual Terms, Breakage Costs
Contract Law Banking Law Loan Agreements Early Redemption Interest Entitlement Implied Contractual Terms Breakage Costs

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Parties

The Governor and Company of the Bank of Scotland

Pursuer

Dunedin Property Investment Company Limited

Defender

Procedural Posture

Civil / Judgment After Debate on Legal Issues

Legal Issues

  1. 1 Whether the defenders were obliged to reimburse breakage costs as a condition of early redemption of loan stock
  2. 2 Whether the pursuers are entitled to interest on the loan from 17 April 1996 to 7 March 1997
  3. 3 Whether interest on the principal sums sued for runs from 7 March 1997 or only from the date of citation

Ratio Decidendi

Reimbursement of breakage costs was part of the price for early redemption under Condition 3 of the Loan Stock Deed. The defenders' refusal to acknowledge liability for breakage costs at the redemption date constituted incomplete performance, entitling the pursuers to refuse redemption and continue charging interest until full performance was tendered. There was no basis for implying a term in the Interim Agreement entitling the pursuers to interest on the principal sums from 7 March 1997; interest runs only from the date of citation.

Court Disposition

Judgment for the pursuers in respect of entitlement to interest on the loan from 17 April 1996 to 7 March 1997; interest on principal sums runs only from date of citation.

Orders

  • Pursuers entitled to payment of interest on the loan from 17 April 1996 to 7 March 1997, subject to confirmation of amount.
  • Interest on principal sums to run from date of citation until payment.