Mark William Taylor & Anor v Bank Of Scotland Plc
[2023] EWHC 3185 (Ch)
Shokrollah-Babaee v EFG Private Bank Limited
19 December 2023
[2023] EWHC 3270 (Ch)
High Court
A borrower sued their bank, claiming the bank's use of a valuation report that overstated the property's value caused them financial losses. The court threw out the case, saying the lawsuit was filed too late, the bank didn't owe the borrower extra protection, and the borrower hadn't properly stated their case.
Key Facts
- •Claimant sought to strike out a claim against EFG Private Bank Limited for alleged breaches of MCOB rules and a common law duty of care related to mortgage offers and valuations in 2012 and 2015.
- •The valuations were conducted by Savills Plc for the defendant's lending security purposes.
- •The claimant alleged the valuations significantly overstated the property's value, leading to losses in property development investments.
- •The defendant argued the claims were time-barred, lacked merit, and were outside the scope of the Claim Form.
- •The claimant's primary claim was for £5.18m representing overborrowed funds, interest, and the difference between the APR and the alleged true cost of credit.
- •The claimant also argued for loss of a chance to obtain alternative financing.
Legal Principles
Limitation Act 1980, sections 2 and 9: Claims in common law negligence and breach of statutory duty under s.138D of FSMA fall under these sections; actionable damage generally arises when the claimant first suffers damage.
Limitation Act 1980
Limitation Act 1980, section 14A: Extends limitation periods for negligence claims; claimant must plead and prove elements of an extension.
Limitation Act 1980
Duty of care in tort: A lender providing a valuation report prepared for its own lending purposes does not automatically owe a duty of care to the borrower. The existence of a statutory duty does not automatically create a co-equal common law duty.
Common Law; Rehman v Santander UK plc [2018] EWHC 748 (QB); Green v Rowley [2013] EWCA Civ 1197
CPR 17.4(1): Permission to amend a claim form is required if the limitation period has arguably expired.
Civil Procedure Rules 17.4(1)
MCOB rules 5.6.6R and 5.6.8R: Require a reasonable estimated valuation in mortgage illustrations; a regulated entity is not strictly liable for a valuer's negligence.
Mortgage Conduct of Business rules
MCOB rules 10.4.1R and 10.4.2R: Require proper statement of total charge for credit in mortgage illustrations.
Mortgage Conduct of Business rules
Sub-contracting a duty: A party sub-contracting the performance of a duty is not automatically responsible for the sub-contractor's negligence unless there is fault in selecting the sub-contractor or failing to realize errors.
Common law principles; Mulready v. J. H. & W Bell Ltd [1953] 2 QB 117; Donaghy v Boulton & Paul Ltd [1968] AC 1; Bamrah v Gempride Ltd [2018] EWCA Civ 1367
Claims under s.138D of FSMA are not actions for damages for negligence within the meaning of s.14A of the Limitation Act 1980.
Martin v Britannia Life [2000] Lloyds PN 412; Shore v Sedgwick Financial Services Ltd [2008] PNLR 10; Société Commerciale de Reassurance v ERAS International Ltd [1992] 1 Ll Rep 570; Laws v Society of Lloyd’s [2003] EWCA Civ 1887
Outcomes
The claimant's claims were struck out and dismissed.
The claims were time-barred, the defendant did not owe the claimant a common law duty of care, and several claims were outside the scope of the Claim Form. Further, there was no realistic case of breach of statutory duty or common law duty of care.