Description
Outer House case relating to a personal guarantee granted by Mr Kipling to Dunbar Bank. The bank issued a charge for the payment of over £1m on Mr Kipling on the basis of the guarantee.
Mr Kipling argued amongst other things that he was not liable to pay as the bank had agreed to waive its right to recover under the guarantee.
Lord Pentland granted an interim suspension and interdict preventing the bank from taking diligence against Mr Kipling following on from the charge.
Subsequent to the granting of the interim interdict, Mr Kipling made amendments to his pleadings which led the bank to enrol a motion to recall the interim interdict, arguing that, given the amendments, the interim interdict was obtained in circumstances where Mr Kipling had failed to make full and frank disclosure on all matters material to his application for the interim orders and also that, following the amendments, the pleadings no longer disclosed a prima face case.
Lord Drummond Young refused the motion to recall the interim interdict. Five general matters are relevant when considering the application for, or suspension of, such an order:
- the court's decision on an interim order is not a conclusive determination of the parties' dispute;
- the orders under consideration are merely temporary orders;
- the court must give consideration to the balance of convenience. I.e. the prejudice that may occur to each of the parties in the event that an interim order is made or recalled (which requires a judgment as to both the likelihood and the seriousness of such prejudice);
- the relative strength of the cases put forward by the parties;
- the relative strength of the case that is said to justify an interim order must always be weighed with balance of convenience in the sense of likely prejudice.
As regards the matter before him, Lord Drummond Young found that, although the relative strengths of the cases tended to favour the bank (Mr Kipling's case relied on the bank having given up its guarantee for no obvious return), given that, if the interim order were withdrawn, the bank could proceed with diligence and ultimately sequestration against Mr Kipling, Mr Kipling's case on the balance of convenience outweighed the relative strength of the bank's case.
