Dick v Clydesdale Bank Plc
| Jurisdiction | Scotland |
| Judgment Date | 23 May 1991 |
| Date | 23 May 1991 |
| Docket Number | No. 40. |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION.
Lord Morison.
Heritable property and conveyancingRights in securityStandard securityHeritable creditor exercising power of sale of security subjectsWhether creditor under duty to pay due regard to interest of debtor and ensure best price realisedWhether creditor entitled to sell at time of his choosingWhether debtor's averments of loss relevant in absence of averment that better price could in fact have been realised at time of saleConveyancing and Feudal Reform (Scotland) Act 1970 (cap. 35), sec. 25.1
The pursuer was the heritable proprietor of two pieces of ground one of which was used for commercial purposes, the other being agricultural land. The defenders exercised their rights as creditors in a standard security granted by the pursuer over both pieces of ground by exposing the subjects for sale in the open market. Professional advisers were employed to perform this task. An offer was received and accepted by the defenders. The pursuer brought an action of damages, averring that the defenders had, despite a letter sent by him shortly before the sale, failed to instruct their advisers that the agricultural land ought to be marketed by reference to its development value. They had accordingly breached a duty under the 1970 Act and at common law to realise the best price, and he had sustained loss as a result. The defenders argued that in the absence of any criticism of the competence of the professional advisers employed in the sale, and of any suggestion that there was a serious blunder on their part, indicating a failure to sell at the best price, the pursuer's averments were irrelevant. The Lord Ordinary (Morison) allowed a proof before answer and the defenders reclaimed to the Inner House.
Held (rev. judgment of Lord Morison), (1) that the pursuer's averments on the development value of the land raised issues about the extent of the defender's responsibility in regard to the giving of instructions to their professional advisers, which could not be sufficiently answered merely by pointing to the fact that professional advisers were employed, the defenders being under a duty to pay due regard to the interest of their debtor; but (2) that a creditor was entitled to sell at a time of his choosing and the pursuer's failure to aver that there was someone in the market who would have been willing to pay an enhanced price if the development value had been advertised, or that that enhanced price was in fact capable of being obtained at the relevant time, was fatal to the relevancy of his case; and reclaiming motion allowed but action dismissed.
Per Lord Cowie, observing that he would have been prepared to go further than the majority of the court and say that if a creditor in a standard security employed competent agents to market the subjects, he could be said to have failed in his statutory and common law duties to obtain the best possible price only if the agents had, to his knowledge, made a serious blunder resulting in a large diminution in the price realised.
Robert W. Dick brought an action of damages against Clydesdale Bank plc in respect of loss allegedly sustained as a result of their failure to sell part of the subjects secured by a standard security at its true or proper value. The loss was calculated by reference to the difference between the "hope" value, which included
a proportion of the net developable value, and the agricultural value of the land in questionThe relevant averments and pleas-in-law appear sufficiently from the opinions of the Lord Ordinary (Morison) and the Lord President (Hope).
The cause came before the Lord Ordinary (Morison) on procedure roll where the defenders submitted that it should be dismissed on the ground that the pursuer had failed relevantly to aver circumstances in which they could be held to be in breach of the statutory and common law duties founded upon.
At advising on 23rd May 1991,
LORD PRESIDENT (Hope).This action concerns the exercise by the defenders of their rights as the creditor in a standard security which the pursuer granted in 1981 over land of which he was the heritable proprietor. The land consisted of two pieces of ground on either side of the A709 Road from Lockerbie to Dumfries not far from Dumfries town centre. One piece, extending to 9.16 acres on the south side of the road, was used for commercial purposes. The other, extending to 39.04 acres on the north side of the road, was agricultural land. In 1984 the defenders sought to exercise their right to sell the subjects by exposing them for sale in the open market. Following their exposure and advertisement for sale an offer was received on or about 13th June 1984 which was accepted by the defenders. The pursuer's contention is that the land was sold for a sum which was below its true or proper value, and he claims damages from the defenders for the loss which he says he has sustained as a result. Although his averments are not entirely clear on this point and the arithmetic is confused, the claim appears to be directed only to...
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Ronald Evan Wilson V. Dunbar Bank Plc
...have paid more than was actually paid. Counsel referred in that regard to the Opinion of Lord President Hope in Dick v Clydesdale Bank plc 1991 SC 365. That case concerned the sale of agricultural land on the open market. The sale was criticised by the pursuer on the basis that the land had......
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Stuart Balfour Bisset And Mrs. Kay Bisset V. Standard Property Investment Plc
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