Bibby Factors LTD v Bank of Scotland Plc (Sheriff Court Civil) [2026] SCEDIN 9 (12 January 2026)

Bibby Factors LTD v Bank of Scotland Plc (Sheriff Court Civil) [2026] SCEDIN 9 (12 January 2026)

Where a bank receives clear notice that funds in a customer's account are subject to a trust in favour of a third party, the bank's obligation to pay out on the customer's instructions is suspended, and the bank may incur fiduciary obligations to the beneficiary. The pursuer's averments and notice were sufficient to...

Source-derived case information.

Citation
[2026] SCEDIN 9
Parties
Pursuer: Bibby Factors Limited; Defender: Bank of Scotland Plc
Jurisdiction
Scotland
Judgment Date
12 January 2026
Procedural Posture
Civil / Debate on Relevancy and Specification, Interlocutory Judgment
Outcome
Defender's first and second pleas in law repelled; action appointed to proof; case management hearing to be fixed.
Legal Topics
Fiduciary Duties of Banks, Notice of Trust, Factoring Agreements, Knowing Receipt, Dishonest Assistance, Mandate and Payment Instructions
Banking Law Trusts Law Commercial Law Fiduciary Duties of Banks Notice of Trust Factoring Agreements Knowing Receipt Dishonest Assistance +1 more

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Parties

Bibby Factors Limited

Pursuer

Bank of Scotland Plc

Defender

Procedural Posture

Civil / Debate on Relevancy and Specification, Interlocutory Judgment

Legal Issues

  1. 1 Whether a bank owes fiduciary duties to a third party (factor) upon notice of a trust over funds in a customer's account
  2. 2 Whether the pursuer's averments are sufficient to instruct a case that the defender was on notice about the trust and liable for payments out of the account

Ratio Decidendi

Where a bank receives clear notice that funds in a customer's account are subject to a trust in favour of a third party, the bank's obligation to pay out on the customer's instructions is suspended, and the bank may incur fiduciary obligations to the beneficiary. The pursuer's averments and notice were sufficient to put the defender on enquiry, making the action relevant and specific. Proof is required on whether the defender could have suspended payment.

Court Disposition

Defender's first and second pleas in law repelled; action appointed to proof; case management hearing to be fixed.

Orders

  • Repel defender's first and second pleas in law
  • Appoint action to proof