JOHN GLARE AGAINST CLYDESDALE BANK PLC

Factual and Procedural Background

The Plaintiff purchased a tailored business loan (TBL) of just under £4 million from the Defendant on 14 February 2008, secured against a property used as a wedding venue and conference centre. The loan carried a fixed interest rate of 7.85% per annum for a 25-year term, with a clause requiring the Plaintiff to reimburse the Defendant for "break costs" if the loan was terminated early. The Defendant terminated the loan in September 2009 due to the Plaintiff's failure to meet financial covenants and repayments, adding break costs exceeding £700,000 to the Plaintiff's liability. Subsequently, receivers were appointed and the property was sold, leaving the Plaintiff owing nearly £2.5 million. The Plaintiff initiated an action in 2013 claiming damages for mis-selling of the TBL, arguing that but for the mis-selling, he would have obtained a variable rate loan and avoided bankruptcy and loss of property. The Defendant admitted liability but disputed causation. The first action proceeded to proof in 2015, where the court found against the Plaintiff, concluding that the Plaintiff was not credible, would not have obtained a variable rate loan, and that his business would have failed regardless.

The present action seeks reduction of the decree of absolvitor granted in the first action, on the basis that the Defendant suborned perjury by their senior witness concerning the calculation of break costs. The Plaintiff contends that the Defendant's witness gave false evidence about the nature of break costs, which, if true, would have enabled the Plaintiff to advance a different case involving sale and restart of a property business, potentially avoiding bankruptcy. The Defendant denies the perjury allegation and argues the Plaintiff's claim is irrelevant as the evidence did not affect the outcome of the first action. The commercial judge dismissed the Plaintiff’s action, upholding the principle of finality in litigation, and the Plaintiff appeals that decision.

Legal Issues Presented

1. Whether the Plaintiff’s allegation that the Defendant suborned perjury amounts to a relevant case for reduction of the decree of absolvitor.
2. Whether there is a causal link between the alleged perjury and the outcome of the first action.
3. Whether the principle of finality in litigation permits the recall of the decree in the circumstances of this case.
4. Whether the Plaintiff could have, with reasonable diligence, discovered and presented the alleged true facts during the first action.
5. Whether the Plaintiff’s attempt to advance a different case post-proof, based on newly discovered information, is permissible.

Arguments of the Parties

Plaintiff's Arguments

• The commercial judge failed to appreciate the serious nature of the perjury allegation against the Defendant’s senior witness.
• The Defendant concealed the true calculation of break costs until 2023, after the first action had concluded.
• The Plaintiff made reasonable attempts to obtain information about break costs during the first action, including cross-examination of the witness.
• It would be unjust to dismiss the case because the Plaintiff did not exhaust every possible investigative avenue.
• The commercial judge set an excessively high bar by requiring proof that the first action outcome would have been different but for the alleged perjury, instead of whether it could have been different.
• The break costs were material to an alternative argument the Plaintiff could have advanced involving sale and restart of the business, which would have succeeded.
• The commercial judge erred in interpreting a concession by the Defendant regarding break costs and in failing to take the Plaintiff’s averments as true.
• The Plaintiff contends that the Lord Ordinary’s rejection of his evidence was influenced by acceptance of the Defendant’s witness testimony.

Defendant's Arguments

• The commercial judge correctly found the break costs irrelevant to the Lord Ordinary’s reasoning in the first action.
• The Defendant accepted mis-selling of the TBL but denied any break costs would have arisen absent the loan.
• Any alleged deception about break costs could not have affected the outcome since the Plaintiff’s case failed on other grounds.
• The Plaintiff did not offer to prove that the Defendant’s witness’s evidence caused the loss of the first action.
• The Plaintiff’s attempt to advance a different case after proof had closed would have failed as a matter of procedure.
• The Plaintiff could have obtained the relevant information during the first action by reasonable diligence, including court orders.
• The Lord Ordinary’s critical findings on the Plaintiff’s credibility and the viability of the business were independent of the Defendant’s witness’s evidence about break costs.
• The commercial judge’s decision was consistent with established case law on reduction of decrees and the principle of finality.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the principle of finality in litigation, emphasizing that reduction of a decree is an exceptional remedy reserved for cases where substantial justice requires it. The Plaintiff’s allegation of subornation of perjury was taken pro veritate for testing relevance, but the court found that the Plaintiff failed to plead a causal link between the alleged perjury and the outcome of the first action. The Lord Ordinary’s judgment did not hinge on the Defendant’s witness’s evidence regarding break costs, as the issue was not material to the decision. The Plaintiff’s primary case failed on credibility and causation grounds unrelated to the break costs evidence.

The court noted that the Plaintiff had ample opportunity during the first action to investigate and challenge the calculation of break costs but chose not to do so for reasons of economy. The attempt to introduce a different case after proof had closed, based on newly discovered information, was procedurally impermissible and unlikely to succeed. Furthermore, the Defendant had conceded liability for mis-selling, effectively negating the break costs issue in the first action.

The court rejected the Plaintiff’s argument that the alleged perjury prevented him from advancing a different case, emphasizing that motions to amend after proof are subject to strict scrutiny and would likely have been refused. The Plaintiff’s failure to establish that the alleged fraud caused the loss of the first action was fatal to his claim for reduction. The court therefore upheld the commercial judge’s decision to refuse reduction, reinforcing that the principle of finality must prevail unless exceptional circumstances are demonstrated.

Holding and Implications

The court REFUSED THE RECLAIMING MOTION and upheld the interlocutor of the commercial judge dated 6 October 2023.

This decision affirms the stringent requirements for reduction of decrees in foro, particularly the necessity of demonstrating a causal link between alleged fraud and the original judgment. It underscores the importance of finality in litigation and the limited circumstances in which a case may be reopened. The ruling clarifies that newly discovered evidence which could have been obtained with reasonable diligence during the original proceedings is insufficient to justify reopening a case. No new precedent was established; the court applied established principles to the facts.