GEORGE DUNBAR & SONS (BUILDINGS) Ltd against SALIM DATOO [2015] ScotSC 59 (02 September 2015)

GEORGE DUNBAR & SONS (BUILDINGS) Ltd against SALIM DATOO [2015] ScotSC 59 (02 September 2015)

The interest rate clause was ambiguous; applying principles of contractual interpretation and business common sense, the court held that the rate was 4% per annum, not per day, and interest accrues daily at that annual rate from the commencement date until payment.

Citation
[2015] ScotSC 59
Parties
Pursuer: GEORGE DUNBAR & SONS (BUILDERS) LIMITED; Defender: SALIM DATOO
Jurisdiction
Scotland
Judgment Date
02 September 2015
Procedural Posture
Civil / Judgment After Proof (trial)
Outcome
Decree for pursuers for payment of interest only at 4% per annum from 23 December 2013 until payment; expenses awarded to pursuers up to 26 March 2015 and to defender thereafter.
Legal Topics
Loan Agreements, Interpretation of Contracts, Interest Rates, Ambiguity in Contract Terms
Contract Law Commercial Law Loan Agreements Interpretation of Contracts Interest Rates Ambiguity in Contract Terms

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Parties

GEORGE DUNBAR & SONS (BUILDERS) LIMITED

Pursuer

SALIM DATOO

Defender

Procedural Posture

Civil / Judgment After Proof (trial)

Legal Issues

  1. 1 Whether the applicable rate of interest on the loan is 4% per day or 4% per annum
  2. 2 How to interpret ambiguous interest rate clauses in a loan agreement

Ratio Decidendi

The interest rate clause was ambiguous; applying principles of contractual interpretation and business common sense, the court held that the rate was 4% per annum, not per day, and interest accrues daily at that annual rate from the commencement date until payment.

Court Disposition

Decree for pursuers for payment of interest only at 4% per annum from 23 December 2013 until payment; expenses awarded to pursuers up to 26 March 2015 and to defender thereafter.

Orders

  • Decree for interest only on £15,000 at 4% per annum from 23 December 2013 until payment
  • Pursuers entitled to expenses up to and including 26 March 2015