Royal Bank of Scotland Plc v Wilson
| Jurisdiction | Scotland |
| Judge | LORD RODGER,LORD HOPE,LORD WALKER,LADY HALE,LORD CLARKE |
| Judgment Date | 24 November 2010 |
| Neutral Citation | [2010] UKSC 50 |
| Court | Supreme Court (Scotland) |
| Docket Number | No 4 |
| Date | 24 November 2010 |
[2010] UKSC 50
Lord Hope, Deputy President
Lord Rodger
Lord Walker
Lady Hale
Lord Clarke
and another
and another
Appellant
Alan A Summers QC
John P Robertson
(Instructed by Aitken Nairn WS)
Respondent
Rhoderick R McIlvride
John Paul Sheridan
(Instructed by Anderson Fyfe LLP)
The Facts
The appellants, Mr Francis John Wilson and his wife, Mrs Annette Wilson, are the proprietors of a house at 100 Dalum Grove, Loanhead, which is also now their home. On 12 July 1991 they granted a standard security over the house in favour of the respondent, the Royal Bank of Scotland ("the Bank"). The standard security was recorded in the Register of Sasines on 3 December of the same year.
The appellants, Mr John Patrick McCormack Wilson and Mrs Norma Wilson, are the proprietors of the neighbouring house at 98 Dalum Grove, Loanhead, which is also now their home. On 28 November 1991 they granted a standard security over the house in favour of the Bank. The standard security was recorded in the Register of Sasines on 4 December 1991. Since it is accepted that material circumstances in the two appeals are the same, for the sake of convenience, I shall concentrate on the appeal by Mr Francis John Wilson and Mrs Annette Wilson ("Mr and Mrs Wilson"), the result in which will be determinative of the appeal by Mr John McCormack Wilson and his wife.
The standard security granted by Mr and Mrs Wilson included the personal obligation in respect of which it was granted, in accordance with Form A in Schedule 2 to the Conveyancing and Feudal Reform (Scotland) Act 1970 ("the 1970 Act"). The personal obligation was in these terms:
"WE, FRANCIS JOHN WILSON and MRS ANNETTE WILSON, residing at Sixty Three Park Avenue, Loanhead, Midlothian (hereinafter referred to as 'the Obligant') hereby undertake to pay to THE ROYAL BANK OF SCOTLAND plc (hereinafter referred to as 'the Bank', which expression includes its successors and assignees whomsoever) on demand all sums of principal, interest and charges which are now and which may at any time hereafter become due to the Bank by the Obligant whether solely or jointly with any other person, corporation, firm or other body and whether as principal or surety…."
The deed went on to declare that the interest was to be "at the rate(s) agreed between the Bank and the Obligant or (failing such agreement) determined by the Bank and shall be payable at such dates as may be so agreed or determined by the Bank."
After further declarations, the deed continued: "For which sums … the said Francis John Wilson and Mrs Annette Wilson … hereby grant a Standard Security in favour of the Bank over" the house at Dalum Grove.
It is worth noting that the deed contained a declaration in terms of which the expression, "the Obligant", was to mean both the persons who granted the security "together and/or any one or more of them; and in all cases the obligations hereby undertaken by the Obligant shall bind all person(s) included in the expression 'the Obligant' and his, her or their executors and representatives whomsoever all jointly and severally without the necessity of discussing them in their order." It follows that Mr Wilson, as an individual, and Mrs Wilson, as an individual, were undertaking both a joint and a several obligation to pay the sums in question. In particular, Mrs Wilson was undertaking to pay any indebtedness of her husband to the Bank. I refer to the discussion by the House of Lords of a comparable term in AIB Group (UK) Ltd v Martin [2002] 1 WLR 94. But, in addition, together with her husband, Mrs Wilson was granting the standard security in respect of both her own indebtedness under the personal obligation and the indebtedness of her husband under that obligation.
By a partnership letter dated 8 October 1992 Mr Wilson, along with his brother and his son, became jointly and severally responsible to the Bank for the repayment of any indebtedness or liability of the firm of F J Wilson Associates, and interest and charges thereon. By a further partnership letter dated 15 October 1993 Mr Wilson, along with his brother, became jointly and severally responsible to the Bank for the repayment of any indebtedness or liability of the firm of Wilson Brothers, and interest and charges thereon.
On 20 June 1995 Mr Alistair Henderson, Assistant Recoveries Manager in the Bank's Insolvency Unit, wrote to Mr Wilson in these terms:
" Our Penicuik Branch
I regret to learn that your indebtedness to the Bank as undernoted at our above Branch is not being repaid in accordance with arrangements and I have therefore to advise that unless within ten days from the date of this letter you effect repayment of the whole sums due to the Bank or, alternatively, make a substantial payment to account within that period coupled with acceptable proposals to take care of the remaining indebtedness I shall have no alternative but to institute proceedings against you for recovery.
Such proceedings will involve expense for which you will be liable and it is therefore in your own interest to give this matter your immediate attention."
The note showed that the Business Current Account of Wilson Brothers was overdrawn in the sum of £22,250.61 excluding accrued interest and charges, while the equivalent sum for the Business Current Account of F J Wilson Associates was £26,211.88. There was a further indebtedness of £854.07 on a Business Term Loan to F J Wilson Associates.
Mr McIlvride, who appeared for the Bank, accepted that, when they sent this letter, the Bank were demanding payment of Mr Wilson's debt under his personal obligation in the standard security and were intending to exercise their powers under the standard security, to take possession of the house at Dalum Grove and to eject Mr Wilson and his family, if the debt were not paid. But the sheriff found that, when Mr Wilson received and read the letter, he did not understand this. He thought that the Bank were merely seeking the sums of money from him. Mrs Wilson did not see the letter until early in 2007 and no similar letter was ever sent to her.
No part of any of the sums mentioned in the letter of 20 June 1995 has been repaid to the Bank. A certificate of default dated 3 February 2006 indicates that, by then, the indebtedness in respect of Wilson Brothers had reached £141,247.52, including accrued interest of £1,865.85, and in respect of F J Wilson Associates it had reached £99,172.81, including accrued interest of £1,310.05.
These proceedings
In April 1998 the Bank began proceedings in Edinburgh Sheriff Court against Mr and Mrs Wilson. Besides the usual crave for expenses, the initial writ contained two craves. In the first crave, which constituted an application under section 24(1) of the 1970 Act, the Bank asked the court:
"To grant warrant to the pursuers in terms of section 24(1) of the Conveyancing and Feudal Reform (Scotland) Act 1970 to enter into possession of [the house at Dalum Grove] being the subjects described in the Standard Security by Francis John Wilson and Mrs Annette Wilson for all sums of money due and that may become due to The Royal Bank of Scotland plc … and to exercise in relation to the said subjects all powers competent to a creditor in lawful possession of the security subjects including the power of sale of the said security subjects."
In the initial writ as originally drafted the Bank went on to crave removing of Mr and Mrs Wilson with a view to selling the subjects. But in the course of the hearing of an earlier appeal relating to a defence raised by Mrs Wilson, the Second Division granted leave to Mr McIlvride for the Bank to amend the crave to one for ejection: Royal Bank of Scotland v Wilson 2004 SC 153, 157, para 14. The second crave is now in these terms:
"To grant warrant to officers of court summarily to eject the defenders, and their family, goods, gear, and effects, from the said subjects, and to make the same void and redd, that the pursuers, or others in their name, may enter thereto and peaceably possess and enjoy the same."
On 27 April 1998 the initial writ was served on Mr and Mrs Wilson. This was the first time that she became aware that the Bank were seeking to repossess her home and eject herself and the family.
The action has been in one court or another for over twelve years. After Mrs Wilson's particular defence was rejected by the Second Division in Royal Bank of Scotland v Wilson 2004 SC 153, a proof before answer was allowed. Eventually, it took place in February 2007 and on 2 May 2007 Sheriff Stoddart assoilzied Mr and Mrs Wilson. The Bank appealed to the Court of Session and on 5 May 2009 an Extra Division (Lord Nimmo Smith, Lord Reed and Lord Drummond Young) allowed the appeal and granted decree as craved: Royal Bank of Scotland Plc v Wilson 2009 SLT 729. In effect, therefore, the Bank were granted a decree for the ejection of Mr and Mrs Wilson from their home. The Wilsons appeal against that interlocutor.
As is immediately apparent from the fact that Mr and Mrs Wilson have not paid any of their indebtedness to the Bank, the appeal relates to rather technical legal issues which are said to stand in the way of the Bank enforcing their security. Moreover, both Mr and Mrs Wilson have for many years been aware of the debt and of the steps which the Bank are taking to enforce their security. But a striking feature of the case is that the letter which the Bank sent to Mr Wilson on 20 June 1995 did not make any express reference to the standard security. Indeed, as already mentioned, at the time Mr Wilson did not realise that the Bank were indicating that...
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