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Cite as: [2023] ScotCS CSOH_33, 2023 GWD 20-179, [2023] CSOH 33, 2023 SCLR 449

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OUTER HOUSE, COURT OF SESSION

[2023] CSOH 33

CA135/21

OPINION OF LORD SANDISON

In the cause

VED PARKASH

Pursuer

against

THE ROYAL BANK OF SCOTLAND PLC

Defender

Pursuer: Tosh; Drummond Miller LLP (for MBS Solicitors)

Defender: Massaro; Addleshaw Goddard LLP

23 May 2023

Introduction

[1]

In this action the pursuer, Ved Parkash, seeks reduction of three personal guarantees

granted by him in June and August 2006 and April 2007 respectively, in favour of the Royal

Bank of Scotland and in corroboration of the debts of a company with which he was

associated, Kasssk Limited. The claimed ground of reduction is that the guarantees were

signed by him on the basis of an essential error induced by misrepresentations made on

behalf of the Bank. After very lengthy delays in the conduct of the action, it eventually came

before the court for a diet of proof before answer which proceeded over four days.

Background

[2]

The pursuer is presently 74 years old and has been a property investor since 1985.

He began investing in property as a sole trader, on occasion using the trading name

KK Properties and Development, in 1985. In the course of his business he built up a

portfolio of properties using bank borrowing secured by way of Standard Securities over the

properties in the portfolio. He became a customer of the Royal Bank in 2002, and entered

into various loan and overdraft agreements with it between then and 2007, in each case as an

individual. From the start of 2006 until about 2008, his relationship manager at the Bank

was Brian Craig. In 2006 Kasssk was formed and the pursuer and his children formed its

board of directors. The pursuer then approached Mr Craig on three separate occasions, in

June and August 2006, and April 2007, to seek two loans and an overdraft respectively from

the bank for Kasssk, and on each occasion signed the documentation which the bank

required him to sign in order for the facility in question to be made available to the

company. Amongst the documents which he was asked to sign on each such occasion was a

personal guarantee supported by Standard Securities already held by the bank over

properties in his portfolio. The guarantees are for principal sums of £480,000, £147,500

and £25,000 respectively. These are the guarantees which he seeks to have reduced. The

pursuer accepts that he granted two further personal guarantees to the bank, one in

July 2004 in respect of the liabilities to the bank of his daughter Samantha Parkash, and the

other in July 2008 in respect of Kasssk's liabilities to the bank. These two guarantees are not

challenged.

The Evidence

Pursuer's Factual Case

The Pursuer

[3]

The pursuer provided two affidavits which formed his evidence in chief. Their

content may be summarised as follows:

He had a good relationship with the bank and with Mr Craig in particular. They would

have lunch on occasion, and he would send Christmas gifts to Mr Craig. When he and

Mr Craig first agreed a loan for Kasssk, he asked Mr Craig to prepare the relevant

paperwork and let him know when it was ready for signature. There was no mention of any

personal guarantee or that he would be signing anything in any capacity other than as a

director of Kasssk. After first signing some papers in May 2006, he had been telephoned in

June and told that further loan paperwork was ready at the bank for signing. No documents

had ever been sent to him. On 28 June 2006 his son drove him to the bank and waited

outside in the car while he went in to sign the papers. He identified himself to the staff at

reception and after a short while Kirsty Lawson, a manager, appeared to show him the

papers that were waiting for his signature. She told him where to sign each document,

which he did. Although Mr Craig knew that his eyesight was very bad and that he

struggled to read documents, Ms Lawson made no offer to read the content of the papers to

him. She mentioned nothing about the possibility of taking legal advice. After he had

signed what was required, he was shown out of the building and did not receive, then or

later, any copies of what he had signed. The same sequence of events had occurred in

relation to the other facilities made available to Kasssk, the papers for which he signed when

he attended at the bank on 4 August 2006 and 26 April 2007. The only difference was that it

had been Mr Craig who had met him and supervised the signing of the documents on those

occasions. In July 2008 he had sought further funding for Kasssk and had happened to be

with his solicitor, Mr Soutar of Hadden Rankin, when a representative of the bank had

called and said the relative paperwork was ready. Mr Soutar had come with him to the

bank, where a staff member other than Mr Craig had provided the papers for the first time,

just as before, and Mr Soutar had signed as his witness. On no occasion was he aware that

he was signing a personal guarantee, and would not have done so had he known, as it was

not his policy to make his personal property available as security for the company's debts.

He considered that the bank's position was adequately covered by the Standard Securities it

held over his own portfolio of properties. He had been shocked when, in 2014, the bank had

told him that it was calling up its personal guarantees. The only time he had granted a

personal guarantee to the bank was to facilitate a moderate loan to his daughter Samantha.

In cross-examination, the pursuer accepted that he had been a reasonably successful

businessman and that he knew what banks usually required before making loans. In 2006

he could read documents except in very small print, and he drove his car in his local area.

He was not conscious at the time of having granted a personal guarantee to the bank in 2004

in order to secure the liabilities of his daughter; he had been under the impression that he

and she had simply been joint borrowers, until informed to the contrary at some later date.

He had set up Kasssk for his son Kunal to run, but it was the pursuer rather than Kunal who

dealt with Kasssk's business with the bank, and Kunal was not consulted about it. The

pursuer was unable to explain why the loan documentation included certificates about what

had been agreed at board meetings of Kasssk signed by Samantha when, as he maintained,

no documents had been sent out in advance of the signing meetings; perhaps Samantha had

accompanied him to the bank and he had forgotten about it, or perhaps those certificates

alone had been sent out for advance signature. In any event, no such board meetings had

actually taken place. He was equally unable to explain the circumstances in which a

Standard Security signed by him two days before the August 2006 guarantee, and in

connection with the same loan transaction, had been witnessed by a person whose name he

did not recognise and stating her address as being in Buccleuch Street, Edinburgh. As far as

he was concerned, all relevant documents had been signed at the bank's premises. When it

became apparent that his evidence about the circumstances surrounding the execution of the

2008 guarantee, and his awareness that that was the nature of the document he was signing,

was almost entirely at odds with that of his former solicitor, Mr Soutar, he had no

explanation as to why that might be; he was right and Soutar was wrong, as was the bank's

representative in that transaction, Kevin Shanks.

Kunal Parkash

[4]

Kunal Parkash is the pursuer's son. He swore an affidavit as his evidence in chief, in

which he stated that he did not have much to do with his father's businesses until recently.

His father was very trusting of his bankers and his professional advisers in general. In

summer 2006 he had, upon request, driven his father from their home to Edinburgh city

centre and waited outside the bank's office in St Andrew Square there while his father went

inside for five minutes. Upon returning to the car, his father had said that he had been

signing paperwork which had been made ready for him. No further discussion was had. A

similar episode occurred shortly afterwards, and again in April 2007. Although he did assist

his father by reading to him business documents which his eyesight hindered him from

reading himself, he did not recall ever having read out documents from the bank.

In cross-examination, he confirmed that he had not engaged with the bank in relation to

Kasssk's banking arrangements; that was left entirely to his father. He had never heard any

mention of guarantees, not even those which his father was not challenging. He had never

taken Samantha to the bank.

Brian Warner

[5]

Parties agreed by joint minute that the affidavit of Brian Warner, a retired solicitor

who formerly acted for the pursuer in conveyancing matters, should stand as his evidence.

It stated that he was not aware of the guarantees in question and had given no advice about

them. He was aware of the difficulties experienced by the pursuer in reading documents.

Defender's Factual Case

Brian Craig

[6]

Mr Craig had died before the proof was heard, but two witness statements given by

him in 2016 and 2022 were admitted as his evidence in terms of section 2(1)(b) of the Civil

Evidence (Scotland) Act 1988. They were to the following effect:

He was a relationship director with the bank from January 2006. One of the customers he

looked after was the pursuer. They did not have a close relationship, and it was purely a

business one. He had become aware in the course of their relationship that the pursuer had

some issues with his eyesight, but was unaware of the details. In the context of the bank's

lending to the pursuer as an individual, there was evidently no need for any personal

guarantee. However, when it came to lending to Kasssk, the bank required adequate

security, and that would take the form of a personal guarantee from the pursuer in addition

to a heritable security over the company's property. The pursuer would first have had to

discuss with him why the company wanted the loan and what he expected the return to be.

The matter of security would then be discussed, and he would have explained that a

personal guarantee would have to be granted. That was non-negotiable, at least in the case

of lending to a company operated by the pursuer. The amount of the guarantee would be

the difference between the prudently written-down value of the security granted by the

company and the amount of the facility afforded to it. He would have compiled a credit

report, checked with the pursuer that the details were right, and would then have submitted

the report to the appropriate department of the bank to sanction the lending. The facility

documentation would then have been produced. He was sure that, as well as discussing the

terms of the guarantee and the reasons why it was required, he would have emailed the

pursuer the terms of the loan, which would include the requirement for a guarantee. The

guarantee itself would not have been sent out, because if the opportunity to take legal advice

was to be waived, it was the bank's policy to require the relevant waiver and the guarantee

to be signed in person at a meeting with the bank's personnel. If the guarantor did want to

take legal advice, the guarantee would be sent directly to his lawyer.

He was not at the signing meeting in respect of the first loan to Kasssk on 28 June 2006,

which had been conducted in his absence by his colleague Kirsty Lawson. Such meetings

followed a process set out in writing specifically for each meeting by the bank's Credit

Documentation Department, and took a lot longer than five minutes. At the meeting, each

of the loan terms would have been read through and there was every opportunity for the

pursuer to obtain legal advice. There would have been a form waiving the option to take

legal advice as part of the pack made available at the signing meeting, and it would be read

out to the customer. If the customer was happy to proceed without legal advice, that form

would have been signed; otherwise the signing meeting would have been stopped so that

such advice could be taken. The pursuer had chosen to waive the opportunity to take legal

advice and had signed the relative form. There were usually three copies of the

documentation so that the bank could have one copy and the customer the other, with one

spare, but that was not an invariable practice. The process would have been the same in

respect of the subsequent facilities made available to Kasssk in August 2006 and April 2007,

save that he had evidently conducted those signing meetings himself. The pursuer had read

the documents presented to him at those meetings before signing them. At the April 2007

meeting, he had held the documents a couple of centimetres from his eyes when reading

them, but had not asked for any help.

Kirstine Watt

[7]

Kirstine (Kirsty) Watt, formerly Lawson, gave evidence in chief by way of two

witness statements, which may be summarised as follows:

She was an assistant commercial manager at the bank between 2004 and 2006, which

involved working with and assisting a relationship manager with his or her portfolio of

around 60 customers. She had conducted the signing meeting with the pursuer on 28 June

2006. She had not previously known him. She had been told that he had problems with his

eyesight, but observed no such problems at the meeting, and he had not asked for any help.

She was aware that he was concerned about getting a parking ticket on his car outside the

office, but the meeting had taken longer than five minutes. Two copies of each document to

be signed would have been available, marked as the bank and customer copy respectively.

She would have gone over the terms of the guarantee with the pursuer and would have

highlighted to him the wording on the guarantee document that suggested that independent

legal advice should be taken. She would have given him the opportunity to read it for

himself. She would have done the same things in relation to the document waiving legal

advice which he had also signed, and would have followed the process for the meeting as

laid down by the bank's Credit Documentation Department. She was very careful about

that as a result of a personal family experience she had had concerning a misunderstood

guarantee.

[8]

In cross-examination, she accepted that her meeting with the pursuer had been a

routine one. She re-iterated her position she had a good memory for the processes to be

followed, and, as a perfectionist, would certainly have followed them precisely. She would

have asked the pursuer if he knew that what he was signing was a guarantee, and would

have specifically pointed out to him that he had the option of taking legal advice. Copies of

the general loan documentation would have been sent out in advance of the meeting, but

not the guarantee. The pursuer had not asked for assistance in reading or understanding the

documentation; had he asked for it, it would certainly have been given.

Kevin Shanks

[9]

Kevin Shanks gave evidence in chief by way of a witness statement, which may be

summarised as follows: He was an assistant manager at the bank in 2008. At that point the

bank perceived that it was exposed in relation to the liabilities of Kasssk because the value of

the properties over which it had granted Standard Securities to the bank was thought to

have fallen. The Bank wanted a further personal guarantee from the pursuer as a condition

of continuing to provide financial support to the company. Although the pursuer was

reluctant to grant a further personal guarantee, he had ultimately agreed to do so. A copy of

the proposed guarantee had been provided to the pursuer's solicitor, Alasdair Soutar of

Hadden Rankin, to allow him to review it and provide advice to the pursuer. No concerns

had been raised and there had been a signing meeting on 1 July 2008 attended by the

pursuer, Mr Soutar and Mr Shanks, at which the pursuer had signed the guarantee.

[10]

In cross-examination, he accepted that he did not specifically recall the meeting at

which the guarantee had been signed, and was asked about the apparent inability of the

bank to find and produce the correspondence which it was said must have been sent to the

pursuer in connection with the 2006 and 2007 Kasssk transactions, for which he had no very

clear explanation.

Alasdair Soutar

[11]

Parties agreed by joint minute that the witness statement of Alasdair Soutar, a

solicitor who formerly acted for the pursuer, should stand as his evidence. It stated that he

could not recall the details of how he had assisted the pursuer in 2008, but that his file notes

recorded that he had explained the terms of the guarantee granted then to the pursuer, and

that the pursuer had confirmed that he understood the nature of the document. Mr Soutar

had signed a clause confirming these matters as part of the signing process.

Expert Evidence

[12]

Concurrent expert evidence was heard from ophthalmologists Mr Shahriar Nabili

(instructed by the pursuer) and Dr Alistair Adams (instructed by the defender) in relation to

the pursuer's eyesight at the times he signed the guarantees in question. They agreed that,

without glasses, it would have been very poor, with a high level of myopia and astigmatism,

but that in an optician's consulting room, he would have been able to read the documents.

Mr Nabili considered that the pursuer's eye conditions would have made it difficult for him

to see the documents clearly and specifically for an extended period of time, and that

matters such as lighting, font size and print quality would affect his ability to read them.

Dr Adams did not accept that these matters, so long as they were within ordinary

parameters, would have a significant effect.

Pursuer's Submissions

[13]

On behalf of the pursuer, counsel submitted that the pursuer had only been asked to

sign loan papers relating to Kasssk by Mr Craig. He was not told that he was being asked to

sign personal guarantees in respect of the liabilities of Kasssk. He had significant difficulties

with his eyesight. He could not and did not read the guarantees. Instead, he relied upon

what he had been told by Mr Craig and signed them. He was in error as to the nature of the

documents that he signed. The error was an essential one. The guarantees would fall to be

reduced if that error was induced by misrepresentation: Fletcher v Lord Advocate 1923 SC 27

at 35 and 37. The pursuer had to prove that (i) there was a misrepresentation of fact, (ii) the

misrepresentation was made by or on behalf of the defender, and (iii) the misrepresentation

was material in the sense that it was a factor that induced the pursuer to sign the guarantees:

Royal Bank of Scotland plc v O'Donnell

[2014] CSIH 84,

2015 SC 258 at [25][26]. The pursuer

did not require to prove fraud or negligence. The state of mind of the party who made the

representation was irrelevant.

[14]

Mr Craig's description of what the pursuer was being asked to sign as "loan papers"

was a representation of fact made by him acting within the scope of his employment with

the defender and, thus, on behalf of the defender. It may not have been false when viewed

in isolation. However, the fact that a representation might literally be true was not

determinative. The court's task was not to construe the words used in isolation, but instead

to consider whether those words, when viewed in the light of the surrounding

circumstances, created a false impression: Park's of Hamilton (Holdings) Ltd v Campbell

[2008] CSOH 177 at [18]. These questions fell to be examined rigorously in the case of cautionary

obligations: O'Donnell at [27] and [41][43].

[15]

Even if there was no misrepresentation, this was one of the rare cases in which

uninduced, unilateral error was sufficient because the pursuer was in actual error as to the

nature of the guarantees rather than merely their legal effect: Ellis v Lochgelly Iron and Coal

Co Ltd 1909 SC 1278 at 1282; Steel's Tr v Bradley Homes (Scotland) Ltd 1972 SC 48 at 58;

McCallum v Soudan 1989 SLT 522 at 523D-F; Royal Bank of Scotland v Purvis 1990 SLT 262

at 265H-K; McBryde, The Law of Contract in Scotland, paragraphs 15.4015.41. Even if that

required the pursuer to show that something short of misrepresentation induced his

erroneous belief as to the nature of the guarantees, the nature of the security provided by the

pursuer in relation to earlier transactions with the defender (which was confined to

Standard Securities), coupled with the lack of any proper explanation as to the nature of the

guarantees, was sufficient for that purpose.

[16]

Whilst the pursuer bore the legal burden of proving error or misrepresentation, there

was only so much that he could say and do in order to prove a negative. Ultimately, the

persuasive burden rested firmly on the defender, as the party who offered to prove that the

pursuer knew what he was signing at the time that he did. Any doubt about those issues

should be resolved in favour of the pursuer.

[17]

The court should accept Mr Parkash's evidence as credible and reliable. He had

answered the questions put to him in a candid and straightforward manner. He was clear

about what he could and could not recall. His oral evidence was consistent with his written

evidence. He made appropriate concessions even where it was not in his interests to do so.

Mr Craig's statements were admissible hearsay, but should be received cum nota because the

pursuer had had no opportunity of testing their weight or credibility by cross-examination:

Polanski v Condé Nast Publications Ltd

[2005] UKHL 10,

[2005] 1 WLR 637 at [74]; Welsh v

Stokes

[2007] EWCA Civ 796,

[2008] 1 WLR 1224 at [23]. The absence of corroboration was

important: Gordon v Grampian Health Board 1991 SCLR 213, and its absence could be of some

evidential value in itself. If, for example, it could reasonably have been obtained and there

was no good reason for not obtaining it, that might be a matter to which the court could give

appropriate weight: MAH (Egypt) v Secretary of State for the Home Department

[2023] EWCA Civ 216 at [86]. Further, where Mr Craig's statements were ambiguous, they should be read

contra proferentem: Walker's Trs v McKinlay (1880) 7 R (HL) 85 at 98.

[18]

Ms Watt's evidence should not be regarded as credible and reliable. It had plainly

been reconstructed by reference to documents she had been shown and what she knew she

ought to have done, rather than being based on any active memory of what she had done.

Her reluctance to accept that in cross-examination seriously undermined her credibility and

reliability. It was clear that, consciously or not, she was intent on protecting the defender's

(and, thus, her own) position.

[19]

The difference between the ophthalmological experts should be resolved in favour of

the pursuer. It was more likely than not that the pursuer would have had significant

difficulty in reading detailed, closely spaced print.

[20]

In summary, the pursuer was asked to sign loan papers relating to Kasssk by

Mr Craig. He was not told that he was being asked to sign personal guarantees for liabilities

of Kasssk. He had significant difficulties with his eyesight. He could not and did not read

the guarantees. He relied upon what he had been told by Mr Craig. What Mr Craig told

him was a misrepresentation, even if he did not realise it at the time. The misrepresentation

was material. The pursuer would not have signed the documents presented to him if he had

known that they were guarantees. The court should reduce those documents.

Defender's Submissions

[21]

On behalf of the defender, counsel submitted that it was for the pursuer to satisfy

himself of the legal import of the documents he signed before signing them: Smith v Bank of

Scotland 1997 SC (HL) 111 at 117, per Lord Clyde. An exception applied where the

relationship between principal borrower and guarantor was such as would lead a reasonable

person to believe that the guarantor's consent might not be fully informed or freely given,

but that did not apply in cases such as the present when a company director was

guaranteeing the debts of a company in which he was a director and shareholder: Wright v

Cotias Investments Inc 2001 SLT 353 per Lord Macfadyen at [20]. As a general principle,

parties were bound by the contracts that they sign, whether they read them or not:

L'Estrange v F Graucob Ltd [1934] 2 KB 394 per Scrutton LJ at 403; Peekay Intermark Ltd v

Australia and New Zealand Banking Group Ltd [2006] 1 CLC 582 at [43]; Toll (FGCT) Pty Ltd v

Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40][50]; Chitty on Contracts

(34th ed 2021 and as updated by the first supplement, 2022), paragraph 15.005; Young v

Clydesdale Bank Ltd (1889) 17 R 231 at 243 and 248; The Royal Bank of Scotland PLC v

Purvis 1990 SLT 262 at 265L266B; McBryde, The Law of Contract in Scotland, 3rd ed (2007),

paragraph 6.12.

[22]

In English law, the plea of non est factum was available where the grantor of a

document argues that he or she did not intend to sign it by reason of some disability:

Saunders v Anglia Building Society [1971] AC 1004. The extent to which an equivalent to the

plea of non est factum applied in Scots law was uncertain, although it was referred to in

Gloag and Henderson, The Law of Scotland 15th ed (2022) at Vol 1, paragraph 7.30.

[23]

A misrepresentation by a bank could provide a basis to reduce a personal guarantee,

subject to the following conditions: (1) There would need to have been an inaccurate

statement of fact or law made by the defender's employee to the pursuer; (2) The pursuer

would have had to have in fact been induced to enter into the personal guarantees on

account of that inaccurate statement; and (3) The matter misrepresented would have to be

sufficiently important that it would have been a factor which would have induced a

reasonable person to enter the contract (Ritchie v Glass 1936 SLT 591 and McBryde,

para 15.68).

[24]

Where the misrepresentation was said to arise from an oral statement, there needed

to be clear evidence of the terms of the representation, the time and place at which it was

made, and the context in which it was made: Hamilton v Allied Domecq PLC 2006 SC 221

at [2] and [89].

[25]

The pursuer had not proved what was required. The Court had no adequate

evidence about what was said during the conversations between the pursuer and Mr Craig

before the respective signing meetings. That made it difficult to reach a confident view as to

whatever was said constituted a representation at all. If the court was unable to find that

there were misrepresentations, the pursuer's case would have failed. The condition of the

pursuer's eyesight did not assist him; on his own account, he made no attempt to establish

what the documents he was signing were.

[26]

In any event, the pursuer's account was neither credible nor reliable. It compared

unfavourably with that of Mr Craig (despite its limitations) and of Ms Watt. The latter's

evidence, in particular, was compelling as to what had been done at the signing meeting she

conducted. By contrast, the pursuer's evidence was riddled with inconsistencies, some

peripheral to the matters in issue, some directly relevant to them. In particular, his

explanation that he did not think that the bank would need further security for the lending

to Kasssk because it already had security over his other properties was confused and

nonsensical. His account of how he came to grant the 2008 guarantee was plainly a

fabrication, and although that guarantee was not challenged in this action, what he had

claimed in relation to it cast considerable doubt on the truth of the other parts of his

evidence. The ophthalmological evidence was not determinative of the case. The experts

agreed that the pursuer could have read the various documents in this case, and indeed he

accepted as much himself in oral evidence.

[27]

Neither party made any reference to a requirement for restitutio in integrum to be

possible as a pre-condition of reduction of the guarantees.

Decision

[28]

The explicit basis upon which the action proceeds is encapsulated in the pursuer's

first plea-in-law, which is in the following terms:

"1.

The guarantees having been signed by the pursuer as a result of essential

error induced by misrepresentations made on behalf of the defender, and being

voidable at the instance of the pursuer, Decree of Reduction should be pronounced

as first concluded for."

It is not open to the pursuer at the conclusion of the proof to advance, in addition to that

case, a separate argument that the guarantees should be reduced on the basis of an

uninduced and unilateral error on his part. The pursuer's case is and always has been that

he was led into error, not merely that he happened to wander into it. Had an additional case

based on uninduced error formed part of the action, the pursuer's pleadings would have

been subject to the discipline of the weaker alternative rule and a very harsh spotlight would

have been shone on that additional case, imperilling the entire action had it upon such

inspection been found wanting. It is not possible now to turn back the clock and make a

proof obtained on one basis about something different in addition.

[29]

Had it been appropriate to consider a case of uninduced and unilateral error, I would

have rejected it. While it may be possible in theory to conjure up a set of circumstances in

which a party to an apparent contractual obligation may be able to show that, objectively

viewed, he was not consenting to undertake that obligation because of such an error on his

part, such circumstances are vastly more likely to exist in the imagination of a professor of

law setting an undergraduate examination in contract law than they are in any remotely

likely real-life scenario. I agree in this regard with the observations of Lord McCluskey in

Royal Bank v Purvis already cited. The pursuer's case on uninduced error is not materially

different from, and is certainly no better than, that of the unsuccessful plaintiff in Saunders.

He knew that he was going to the bank to sign documents which pertained to facilities being

made available to Kasssk. He cannot sensibly have thought that those documents were

without legal significance of some sort of other. Although it might have been very difficult

for him, given his eyesight problems, to read the papers and determine their precise import

in the context of the signing meeting, on his own account he made no effort of any kind to

find out what that import was. He simply signed what was put in front of him. In these

circumstances it does not lie in his mouth to say that he should be relieved of the obligations

which outwardly he undertook because of some entirely self-generated error about their

nature.

[30]

The pursuer's case thus stands or falls on the issue of misrepresentation, and in

particular that all he had been told, whether before or at the relevant signing meetings,

about the nature of the documents which he signed and which transpired to include

personal guarantees, was that they were "loan papers" or words to similar effect.

[31]

The pursuer's version of events in that regard cannot be accepted as reliable. His

written and oral evidence contained numerous oddities and clear discrepancies, either

internally or in comparison with other evidence, about what had happened before and at the

meetings in question. Some of those matters (for example, where in the bank buildings the

meetings took place, or how long the meetings took) are capable of being explained by the

passage of time since the events in question. Others (for example, his apparent confusion

about his own portfolio of properties being already available to the bank as security for

Kasssk's debts, irrespective of the grant of the personal guarantees) may be ascribed to an

imperfect understanding of the intricacies of cross-securitisation and separate corporate

personality. However, his inability to explain with any conviction how it was that Samantha

had come to sign certificates about Kasssk's supposed board meetings as part of the package

of documents provided to the bank, or how one of the Standard Securities he granted over

Kasssk's property had been executed by him two days before the meeting at which the

relative guarantee was signed, witnessed by a person with no apparent connection to the

bank, when a crucial part of his claim was that no documents of any sort had ever been

provided in advance of a signing meeting, begins to undermine the confidence that may

reasonably be placed on his account.

[32]

Matters only get worse when one considers the pursuer's evidence as to the events

leading up to, and at, the execution of the 2008 guarantee. While the background

circumstances surrounding the grant of that guarantee were very different from those

pertaining to the earlier guarantees which the pursuer challenges (Kasssk's affairs having

fallen into disarray, the leverage of the bank to exact a guarantee having thus increased, and

the matter being dealt with by specialised Bank personnel rather than Mr Craig or Ms Watt),

the pursuer's evidence on how the 2008 guarantee came to be executed is entirely at odds

with the evidence of his own solicitor, Mr Soutar. Mr Soutar was clear, having consulted his

file notes, that in advance of the signing meeting he had advised the pursuer that he was

being asked to sign a guarantee and what that entailed, and that the pursuer had indicated

that he understood that. Mr Soutar's attendance at the signing meeting was as the pursuer's

lawyer, not merely to witness the signing of the guarantee, but also himself to sign a

confirmation that appropriate advice had been given to the pursuer. Mr Soutar's evidence

was not made the subject of challenge. The pursuer's account that Mr Soutar had told him

nothing about the guarantee, and was effectively present at the signing meeting by accident,

cannot be accepted. Further, if the pursuer's evidence as to the circumstances leading up to,

and at, the signing meeting for the 2008 guarantee is so wide of the mark, it is difficult to

place any confidence in the accuracy of his essentially similar account (ie that there was no

prior indication of what he was to sign, and no such information provided at the signing

meetings) of the circumstances pertaining to the grant of the earlier guarantees. Nothing in

the other evidence adduced on behalf of the pursuer (which was either uncontroversial or of

little to no moment) is capable of supplying that essential deficiency in the pursuer's case.

[33]

For those reasons, I do not accept the pursuer's evidence that he was told nothing

about the nature of the documents he was to sign beyond that they were "loan papers" as

reliable. Rejection of the pursuer's evidence on that matter, although enough to result in the

failure of his claim given that the burden of proving an adequate ground of reduction rests

on him, does not in itself provide any positive evidence of what (if anything) he was told

about the nature of the documents to be signed. However, on that matter I found the

evidence of Ms Watt as to what happened at the signing meeting she conducted, and as to

the bank's processes in connection with the signing of guarantees, to be clear and

convincing. She had long ago left the bank's employment and indeed the banking sector as

a whole. She had no particular reason to exaggerate the degree to which she and others

complied with those processes. Her evidence was supported in general terms at least by the

evidence of Mr Craig on the subject of those processes (even allowing for the fact that his

evidence could not be subject to cross-examination), and in turn supported his evidence on

the subject. I have no hesitation in concluding on the basis of the evidence of Ms Watt and

Mr Craig that, at the very least, the pursuer was informed at each of the signing meetings

pertaining to the guarantees under challenge that amongst the documents he was signing

was a personal guarantee, and that it was open to him to take legal advice before he signed.

Questions of the pursuer's ability to read the documents at the signing meeting do not arise;

he was told orally and in terms what the guarantees were.

[34]

I, further, do not accept that the pursuer was in fact at any material time labouring

under a positive misapprehension as to the nature of the documents he signed and which he

now challenges. Rather, I consider that suggestion to be a retrospective characterisation of

events. If the pursuer was paying any attention at all at the signing meetings, there was no

room for any such confusion, but more pointedly and in any event he manifested

throughout the events under examination such a pervasive incuriosity, even insouciance,

about the nature of the documents in question that it is difficult to conclude otherwise than

that he had no real interest in the subject and was in effect prepared to sign whatever the

bank wanted him to sign in order to obtain the funds which Kasssk needed to embark upon

and maintain its planned business. Such an attitude is by no means uncommon amongst

entrepreneurs confident of the success of what they are undertaking, and appears to me to

be the outlook which the pursuer had towards his activities at the relevant times.

[35]

It follows from what has already been said that it is not necessary to determine

whether the pursuer's claim that all he had been told about the nature of the documents to

be signed was that they were "loan papers" or the like amounts to a relevant claim that there

was a misrepresentation at all. Had it been necessary to determine that matter, I would have

held that it did not. I accept that, in cases of oral misrepresentations, it is not necessary to

specify the exact words said to have been used so long as their sense is stated, and that what

is proved to have been said need not be untrue when viewed in isolation, if nonetheless it is

calculated (ie has as its natural even if unintended result) to lead to a false impression being

created in the mind of its hearer. Those propositions are set out clearly in Park's of

Hamilton v Campbell at [15][18].

[36]

In the present case, as was conceded by counsel for the pursuer, the description of

what was to be signed, including the personal guarantees, as "loan papers" or the like was

not in itself false; the guarantees were indeed one element of the paperwork which the bank

required to be signed before it would release the loan monies to Kasssk. The pursuer's case

is that, in the context of earlier lending having been made by the bank to himself as an

individual, which lending self-evidently did not and could not include any requirement for

personal guarantees, it was misleading for Mr Craig to refer in such inspecific terms to what

would be required for the loans to Kasssk, and not to identify positively that a personal

guarantee was amongst those documents.

[37]

It is, however, not possible to regard what is alleged to have been said as objectively

misleading. The loans previously made to the pursuer had carried with them full personal

liability for their repayment on his part. A requirement for personal liability in connection

with the loans to Kasssk in issue in the present case was a continuation of that situation, not

a departure from it. The pursuer did not appear to put any particular store in the concept of

separate corporate personality, referring to Kasssk as "his" company and directing its

banking affairs accordingly, but rather maintained that he thought that there would be no

requirement for a personal guarantee because the bank already held the security of his

portfolio of investment properties. However, as a matter of fact and law those properties

were not available as security for the loans to Kasssk unless and until the pursuer entered

into the personal guarantees required of him. If there was any misapprehension on the part

of the pursuer as to what might or might not be included amongst the papers which

required to be signed as a condition of the advancement of the loan funds, it was entirely the

product of his own subjective thought processes which were not reasonably based on

anything said or done on behalf of the bank.

Conclusion

[38]

I shall sustain the defender's third plea-in-law, repel the pursuer's pleas, and grant

decree of absolvitor.