Scottish Court of Session Decisions

Pursuers: Duncan; Brodies LLP

Defender: Dunlop; MBM Commercial LLP

6 August 2010

Introduction

[1] I issued an Opinion in this action on 13 January 2010 ([2010] CSOH 3) and directed the case to come out By Order thereafter to decide upon the appropriate interlocutor to reflect my decision. For various reasons with which I am not here concerned, the By Order hearing had to be continued on a number of occasions.

[2] At the By Order hearing, on 10 May 2010, the pursuers moved for a Minute of Amendment to be received. That Minute of Amendment sought to introduce averments to the effect that any obligation undertaken by the pursuers to provide funds to the defender for the purchase and development of the property was subject to a number of implied conditions. I refused the pursuers' motion. In light of that refusal, there was no opposition from the pursuers to the counterclaim being amended in terms of the defender's Minute of Amendment, which had been intimated by him in response to a suggestion coming from the pursuers at the By Order hearing on 18 January 2010. On the basis of the pleadings thus amended, I sustained the first plea-in-law in the counterclaim to the extent of granting decree of declarator on the question of liability, leaving open questions of causation and loss.

[3] The pursuers have marked a reclaiming motion in which they seek to challenge my substantive decision and also my refusal of their Minute of Amendment. I have been asked to give a Note of my reasons for refusing the Amendment. Given the lapse of time since the matter was before me, I am grateful to counsel and their agents for providing me with their notes of the hearing.

[4] According to the notes, I appear to have said words to this effect in refusing the Minute of Amendment:

"I re-read my Opinion and your Minute of Amendment and it seemed to me that what I decided at proof was that the Bank had given a cast-iron commitment and that would be inconsistent with the conditions in your Minute of Amendment. I was particularly influenced by the comment 'don't give me any money if you are not prepared to give it all' (I am not quoting exactly). He did not want the deposit unless he was sure of being able to go ahead. I held, or intended to hold, that none of the qualifications were relevant or could be relevant given the need for a commitment for the money to be advanced."

I suspect that that is a reasonably accurate summary of what I said.

[5] To expand slightly, my reason for refusing the amendment was in essence this. I had found, on the evidence, that the Bank had committed itself unequivocally and unconditionally to advance the funding sought by the defender. This was because the defender had insisted that for him it had to be a commitment to the whole funding - funding part only was no good to him. Whether I was right or wrong about that is, of course, for the Inner House to decide. But on the basis of the conclusion I had reached, it was simply not open to the pursuers to argue that the Bank's commitment to provide the funding was subject to a number of conditions. That would be inconsistent with the findings I had made.

[6] At paras.[38]-[42] of my Opinion I referred to Ms Munro's submission that any commitment to advance the funding was a commitment in principle only, with the Bank wanting to keep its options open until later. I rejected this submission. I dealt with this, in part, at para.[40] by saying that the defender was entitled to take the view that the Bank had already taken account of the state of his indebtedness. It would have made no sense, in my opinion, to allow in a Minute of Amendment which sought, in effect, to re-open this point in a slightly different form.

[7] As I understood it , Mr Duncan, for the pursuers, recognised that if that was the view I had taken of what I had decided, that foreclosed the prospect of the Minute of Amendment being allowed.

[8] I should note that it was my clear understanding during the proof that if I held that there was a collateral warranty, breach was not in dispute. I do not think, however, that this concession had any material impact on my decision to refuse the Minute of Amendment.

[9] Finally, I should note that in his submissions for the pursuers, Mr Duncan sought to draw a distinction between a unilateral promise and a bilateral agreement. I sought to indicate that I understood the distinction but did not understand how it impacted on the arguments for or against the amendment. I had decided that the Bank had given an unconditional commitment, and although I had put it in terms of a bilateral agreement it did not seem to me to make any difference if it were put in terms of a unilateral promise in circumstances where the defender had proceeded with the transaction on the strength of the promise.