Royal Bank Scotland Plc v. Lyon & Anor [2004] ScotSC 47 (20 July 2004)

Royal Bank Scotland Plc v. Lyon & Anor [2004] ScotSC 47 (20 July 2004)

The letter of 25 March 1993, when read in the context of the guarantees, constituted a demand for payment under both guarantees. This triggered the commencement of the five-year prescriptive period under section 6 of the Prescription and Limitation (Scotland) Act 1973. As the action was not raised until more than five years later, the obligations under the guarantees were extinguished by prescription. The sheriff was correct to dismiss the action, and the appeal is refused.

Citation
[2004] ScotSC 47
Parties
Pursuer and Appellant: The Royal Bank of Scotland Plc; First Defender and Respondent: Kenneth Fraser Lyon; Second Defender and Respondent: Maureen Douglas Lyon
Jurisdiction
Scotland
Judgment Date
20 July 2004
Procedural Posture
Appeal (sheriff Principal) / Judgment on Appeal From Interlocutor of Sheriff
Outcome
Appeal refused; interlocutor of sheriff adhered to.
Legal Topics
Standard Security Enforcement, Guarantee Liability, Prescription and Limitation of Actions, Demand for Payment, Interpretation of Legal Correspondence
Property Law Banking Law Contract Law Civil Procedure Standard Security Enforcement Guarantee Liability Prescription and Limitation of Actions Demand for Payment +1 more

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Parties

The Royal Bank of Scotland Plc

Pursuer and Appellant

Kenneth Fraser Lyon

First Defender and Respondent

Maureen Douglas Lyon

Second Defender and Respondent

Procedural Posture

Appeal (sheriff Principal) / Judgment on Appeal From Interlocutor of Sheriff

Legal Issues

  1. 1 Whether the letter of 25 March 1993 constituted a demand for payment under two guarantees, thereby commencing the prescriptive period under the Prescription and Limitation (Scotland) Act 1973; whether the obligations under the guarantees were extinguished by prescription before the action was raised; whether the pursuers were entitled to warrant under section 24(1) of the Conveyancing and Feudal Reform (Scotland) Act 1970 based on default under the overdraft facility.

Ratio Decidendi

The letter of 25 March 1993, when read in the context of the guarantees, constituted a demand for payment under both guarantees. This triggered the commencement of the five-year prescriptive period under section 6 of the Prescription and Limitation (Scotland) Act 1973. As the action was not raised until more than five years later, the obligations under the guarantees were extinguished by prescription. The sheriff was correct to dismiss the action, and the appeal is refused.

Court Disposition

Appeal refused; interlocutor of sheriff adhered to.

Orders

  • Pursuers and appellants found liable to the first defender and respondent in the expenses of the appeal; account thereof to be taxed and reported.
  • By consent, no expenses due to or by the pursuers and appellants and the second defender and respondent in respect of the appeal.