Scots property developer wins seven-year legal case against RBS
A Scottish property developer has won a landmark legal victory over the Royal Bank of Scotland at the Supreme Court.
Derek Carlyle has had a seven-year battle with the bank over loans for work on two properties at Gleneagles.
The Hamilton-based builder was given one loan to buy the plots, but a second to develop them was not paid.
The case has now been referred to a commercial judge at the Court of Session, with Mr Carlyle planning a £3m counter-claim for loss of profits.
Mr Carlyle's solicitors said the case could have "far-reaching consequences" for the banking sector, with other banks potentially now open to similar actions.
The developer originally won a Court of Session decision against RBS, which ruled that the bank had a contractual obligation to provide £700,000 of development funding on top of the £1.4m provided in 2007 to buy two plots on the grounds of the Gleneagles Hotel.
An initial verbal agreement was made for RBS to provide both purchase and development funding, but the bank reneged on the latter loan, scuppering Mr Carlyle's plans to develop rental houses at the site in time for the 2014 Ryder Cup golf tournament.
The plots were later repossessed by the bank and sold for £900,000.
The Court of Session decision was overturned on appeal by the Inner House, but the panel of five Lords at the Supreme Court has now unanimously sided with Mr Carlyle.
The decision leaves RBS open to a £3m counter-claim from the developer for loss of profits and future income.
Cat McLean, Mr Carlyle's solicitor and head of dispute resolution for MBM Commercial LLP, said the case could open up other banks to legal action.
She said: "This has been a long, hard battle for Derek, who has had his life put on hold for a number of years, but has stuck with the case with dogged determination in the face of numerous obstacles put in his way by RBS.
"It is a vindication of not only his position, but also gives hope to many individuals and businesses in the property and other sectors who have suffered at the hands of banks.
"It sends a message that banks are not beyond censure or free to do what they choose, regardless of the human consequences - they will face legal redress in the end."