Cases Flashcards
Tay Valley Joinery v CF Financial Services- outcome
Held that the terms of the agreement effectively created a trust over the book debts sufficient to divest the company of the beneficial right to the debts.
Smith v Bank of Scotland on whether Barclays Bank Plc v O’Brien can apply in Scotland?
Smith was induced by her husband’s representation to grant security over her share of the matrimonial home. The bank hadn’t explained the consequences to her or suggested independent legal advice. Held that Barclays Bank Plc v O’Brien (presumption of constructive notice) could apply in Scotland as no difference between Scottish general principles on caution and English principles governing surety, especially since the rules governing cautioner’s obligations were the same in both countries. Bank of Scotland was therefore held to have constructive notice of the misrepresentation made by Smith’s husband.
Royal Bank of Scotland v Wilson
Held that neither of the obligations were gratuitous, that neither of the brothers had made positive misrepresentations and that the brothers under a duty to disclose the cautioner the kind of information to which the wives referred, as the wives were expected to look after their own interests, that the bank was under no duty to verify the content or quality of the independent legal advice received by the cautioner, there was nothing to suggest the special duties in Ettridge (what are these? Lol) should apply in Scotland, and while the duty of good faith requires not misleading, there was no positive duty of disclosure on the brothers as neither of the wives had inquired as to their husband’s indebtedness.
Difference between Smith v Bank of Scotland and Royal Bank of Scotland v Wilson?
Case in RBS v Wilson failed because granting the cautionary obligation wasn’t gratuitous, Smith proceeded on the basis that the wife received nothing in return for her obligation.
Tay Valley Joinery v CF Financial Services- background to case
Tay Valley Joinery agreed to sell all current and future book debts to CFFS. There was no formal assignation or intimation but Tay Valley prepared and stamped a monthly statement with a notice that the receivables therein had been assigned to CFFS.
Tay Valley Joinery v CF Financial Services - legal question
When a receiver was appointed to Tay Valley, questions arose as to whether the “receivables” still on the company’s books formed part of the property and undertaking of the company at the date of the appointment of the receiver and accordingly were attached by the floating charge, or whether the beneficial ownership of the debts had been transferred to CFFS in terms of the invoice discounting agreement.
Smith v Bank of Scotland on undue influence?
Smith v Bank of Scotland held there’s no presumption of undue influence in married couples, but where the facts “cry out for an explanation” (Honeyman’s Exrs v Sharp), the burden of proof will shift to the creditor.
Smith v Bank of Scotland on creditor’s duty of care?
The creditor is under a duty of care when the circumstances would lead a reasonable man to believe that the relationship between the debtor and cautioner means the consent may not be fully informed or freely given.
