Royal Bank of Scotland Plc v Carlyle [2010] ScotCS CSOH_3 (13 January 2010)

Royal Bank of Scotland Plc v Carlyle [2010] ScotCS CSOH_3 (13 January 2010)

The Bank, through its representative, gave an oral assurance to the defender that development funding would be provided, intending the defender to rely on it in entering the loan agreements. The defender did so rely, and the Bank's subsequent refusal to provide the funding constituted a breach of a collateral warranty. The Bank is liable for damages for breach of this collateral contract.

Citation
[2010] ScotCS CSOH_3
Parties
Pursuer: Royal Bank of Scotland Plc; Defender: William Derek Carlyle
Jurisdiction
Scotland
Judgment Date
13 January 2010
Procedural Posture
Commercial Action (claim and Counterclaim) / Judgment After Proof for Answer
Outcome
Judgment for the defender on the counterclaim; Bank found in breach of collateral warranty.
Legal Topics
Collateral Warranty, Oral Assurances, Personal Bar (estoppel), Breach of Contract, Damages, Loan Agreements
Contract Law Banking Law Collateral Warranty Oral Assurances Personal Bar (estoppel) Breach of Contract Damages Loan Agreements

Case Brief

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Parties

Royal Bank of Scotland Plc

Pursuer

William Derek Carlyle

Defender

Procedural Posture

Commercial Action (claim and Counterclaim) / Judgment After Proof for Answer

Legal Issues

  1. 1 Whether the Bank gave a binding collateral warranty to provide development funding for Plot 5.
  2. 2 Whether the Bank is personally barred (estopped) from seeking repayment of the loan due to its assurances.
  3. 3 Whether the defender is entitled to damages for breach of collateral warranty.

Ratio Decidendi

The Bank, through its representative, gave an oral assurance to the defender that development funding would be provided, intending the defender to rely on it in entering the loan agreements. The defender did so rely, and the Bank's subsequent refusal to provide the funding constituted a breach of a collateral warranty. The Bank is liable for damages for breach of this collateral contract.

Court Disposition

Judgment for the defender on the counterclaim; Bank found in breach of collateral warranty.

Orders

  • Defender entitled to damages for breach of collateral warranty (quantum to be determined).
  • Bank's claim for repayment of the loan dismissed pending resolution of damages.