Rights in security

Question 1

Nisbet’s Creditors v Robertson

Answer 1

1. Goods were being smuggled (in other words, illegally shipped) from the Netherlands to Scotland
2. The duty to pay for the goods (the financial liability) by the person who was bringing the goods in was secured over land
3. However, this security failed because it secured an illegal contract (pactum illicitum)
4. There was no valid contract, and therefore no valid debt and no valid security
5. The security here was invalid because the debt was invalid

Question 2

McKichen v Muir

Answer 2

1. The Muir family was going to a ball
2. They booked into a hotel to change for the ball
3. They had an argument with the innkeeper after the ball about the bill for the room, whereafter the innkeeper refused to hand over their clothes that they had left in their room
4. A criminal case followed as the Muir family argued that the hotel had stolen their clothes
5. This was unsuccessful
6. It was held that the innkeeper had a right to retain these pieces of property until the hotel bill was paid

Question 3

Trade Development Bank v Warriner & Mason

Answer 3

1. Consent was not sought from the lender
2. A lease was granted without the creditor’s permission
3. It was held that the lease could be set aside by the bank
4. This case is sometimes analysed as an offside goals case

Question 4

Guidi v Clydesdale Bank

Answer 4

1. One of the issues was how closely you have to follow the statutory form
2. The answer given by the Inner House was not that closely
3. The document in this case did not follow the form that closely, but this was held to be fine
4. The court held that forms should be “servants, not masters”

Question 5

Royal Bank of Scotland v Wilson

Answer 5

1. Before this case, it was thought you could choose
2. If it is a mandatory default, you must do the calling up notice procedure first