Royal Bank of Scotland Plc v Carlyle [2013] ScotCS CSIH_75 (12 September 2013)

Royal Bank of Scotland Plc v Carlyle [2013] ScotCS CSIH_75 (12 September 2013)

No legally binding collateral warranty or obligation to provide development funding arose from the alleged oral assurance; the parties' course of dealing and subsequent written agreements demonstrate that any such obligation required written contract specifying essential terms. The oral statements did not objectively amount to a binding commitment, and the written agreements superseded any prior assurances.

Citation
[2013] ScotCS CSIH_75
Parties
Pursuer and Reclaimer: Royal Bank of Scotland Plc; Defender and Respondent: William Derek Carlyle
Jurisdiction
Scotland
Judgment Date
12 September 2013
Procedural Posture
Commercial Action (loan Recovery and Counterclaim for Damages) / Appeal (reclaiming Motion) From Commercial Judge's Decision
Outcome
Appeal allowed; commercial judge's decision reversed; defender's counterclaim dismissed; decree granted in favour of the bank for repayment of the loans.
Legal Topics
Collateral Warranty, Formation of Contract, Oral Assurances, Loan Agreements, Objective Test for Contract Formation, Written Versus Oral Agreements
Contract Law Banking Law Collateral Warranty Formation of Contract Oral Assurances Loan Agreements Objective Test for Contract Formation Written Versus Oral Agreements

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Parties

Royal Bank of Scotland Plc

Pursuer and Reclaimer

William Derek Carlyle

Defender and Respondent

Procedural Posture

Commercial Action (loan Recovery and Counterclaim for Damages) / Appeal (reclaiming Motion) From Commercial Judge's Decision

Legal Issues

  1. 1 Whether an oral assurance by the bank's employee constituted a legally binding collateral warranty to provide development funding
  2. 2 Whether the commercial judge erred in finding such a collateral warranty existed and was breached
  3. 3 Whether the written agreements superseded any prior oral assurances

Ratio Decidendi

No legally binding collateral warranty or obligation to provide development funding arose from the alleged oral assurance; the parties' course of dealing and subsequent written agreements demonstrate that any such obligation required written contract specifying essential terms. The oral statements did not objectively amount to a binding commitment, and the written agreements superseded any prior assurances.

Court Disposition

Appeal allowed; commercial judge's decision reversed; defender's counterclaim dismissed; decree granted in favour of the bank for repayment of the loans.

Orders

  • Recall of the commercial judge's interlocutor of 10 May 2010
  • Dismissal of the defender's counterclaim for damages