Dunvale Investments Ltd v Burness Paul & Williamsons Llp [2015] ScotCS CSOH_32 (26 March 2015)

Dunvale Investments Ltd v Burness Paul & Williamsons Llp [2015] ScotCS CSOH_32 (26 March 2015)

The defenders were negligent in failing to alert the pursuer to the risk that drawing down the loan without granting security over Osborne Street would adversely affect the loan-to-value calculation and risk breach of the covenant. This omission deprived the pursuer of the opportunity to avoid the breach and the...

Source-derived case information.

Citation
[2015] ScotCS CSOH_32
Parties
Pursuer: Dunvale Investments Ltd; Defenders: Burness Paull & Williamsons LLP
Jurisdiction
Scotland
Judgment Date
26 March 2015
Procedural Posture
Civil Professional Negligence / Proof Before Answer on Liability (quantum Agreed)
Outcome
Pursuer succeeds; defenders found liable in negligence.
Legal Topics
Solicitor's Duty of Care, Loan to Value Covenants, Breach of Contract, Causation of Loss, Standard of Care (hunter V Hanley)
Professional Negligence Contract Law Banking and Finance Solicitor's Duty of Care Loan to Value Covenants Breach of Contract Causation of Loss Standard of Care (hunter V Hanley)

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Parties

Dunvale Investments Ltd

Pursuer

Burness Paull & Williamsons LLP

Defenders

Procedural Posture

Civil Professional Negligence / Proof Before Answer on Liability (quantum Agreed)

Legal Issues

  1. 1 Whether the defenders (solicitors) were negligent in failing to advise the pursuer regarding the absence of security over Osborne Street site and the resulting risk of breach of loan-to-value covenants.
  2. 2 Whether the defenders were negligent in failing to advise or act to remedy the breach when called by the bank.

Ratio Decidendi

The defenders were negligent in failing to alert the pursuer to the risk that drawing down the loan without granting security over Osborne Street would adversely affect the loan-to-value calculation and risk breach of the covenant. This omission deprived the pursuer of the opportunity to avoid the breach and the resulting loss. The defenders' conduct fell below the standard of care expected of ordinarily competent solicitors in these circumstances.

Court Disposition

Pursuer succeeds; defenders found liable in negligence.

Orders

  • Decree for payment of £2,716,842 to the pursuer.