Appeal sheriffs refuse Court of Session remit in "novel" case
The Sheriff Appeal Court has decided that it should hear an appeal raising "novel" issues itself, rather than remit the case to the Court of Session.
The dispute concerned the right of a claimant to agreed compensation for mis-sold payment protection insurance, against the claim of her lender bank to set off the money due against unpaid loans, where the claimant became insolvent between the date of the loans and the date of the PPI agreement.
Alison Donnelly claimed she was entitled to payment of sums totalling £10,815.76 under agreements reached with Royal Bank of Scotland in 2014. The bank claimed the right to set off £21,617.42 allegedly still due under loan agreements dating from between 1997 and 2003. In 2006 Ms Donnelly signed a trust deed for creditors and the bank received dividends on its claims. Ms Donnelly was discharged in 2012.
At first instance Sheriff Stuart Reid upheld the bank's right to set off the loan debts, following a series of legal rulings (click here for report). When Ms Donnelly appealed to the Sheriff Appeal Court, the bank moved for the appeal to be remitted to the Court of Session. It argued that the appeal dealt with many complex and novel points of law, including vesting of assets in insolvency, classification of obligations, the common law principle of balancing of accounts in bankruptcy, the effect of discharge in insolvency and specific aspects of prescription. There was a lack of direct authority on the points to be addressed.
Further, the subject matter of the appeal was of great importance to them and had wider implications for banks, and potentially also for consumers and for insolvency generally.
Delivering the opinion of the court, Sheriff Principal Craig Scott QC, who sat with Sheriff Principal Ian Abercrombie QC and Sheriff Paul Arthurson QC, said the court "wholly agree with the sheriff’s assessment to the effect that the action raises a number of interesting and novel issues".
However, the court did not accept that the points of law involved were complex "or, at least, sufficiently complex to merit the appeal being remitted directly to the Court of Session".
He continued: "We arrive at that view not least because the sheriff, whatever the merits of his decision, has commendably described with great clarity each discrete legal question involved. In exercising our qualitative judgement in the matter, we do not hold to the opinion that, when the various issues are broken down and analysed, they are particularly complex whether individually or in the round. Indeed, leaving out of account the question of prescription, it might readily be said that there really is only one main issue, viz the bank’s entitlement or otherwise to plead set-off in the whole circumstances of this case."
The bank's argument on the wider importance of the appeal "does not meet the sort of criteria desiderated when it comes to this court’s readiness to remit an appeal to the Court of Session". Saying that the questions at issue would be of interest to others with a financial stake " does not equate to a scenario involving national or wide ranging issues of public concern. Allowing for the fact that the present dispute cannot merely be regarded as a singular litigation between this appellant and the bank, it is nevertheless limited to largely private interests within a particular parcel of the financial sector".
Nor was it suggested that the issues would attract the attention of the Supreme Court at some stage. The court shared the sheriff's view expressed at an earlier stage, "to the effect that the complexity or novelty of the points of law arising together with the allegedly wider “importance” of the cause can be viewed as being overstated".
The motion to remit was refused.