In episode two of Brodies' podcast series, 'The Case Files', we discuss the significance of the case Gatty v McLaine 1921 S.C. (H.L) 1, a case from the House of Lords in which an early incarnation of Brodies LLP (John C Brodie & Sons WS) acted for the Pursuers.
This is a case that exists in the shadows of the Great War and had profound implications for all involved, and continues to inform the law today. The Defender in this case was Kenneth MacLaine who at that point was the Clan Chief of Clan MacLaine of Lochbuie who owned a 22,000 acre estate on the Isle of Mull. The MacLaine's had lived on that land for 500 years and built Moy Castle in the 1400's.
By the time Kenneth MacLaine was the Clan Chief, it became clear that his father had not prudently managed the Estate's finances (an issue not uncommon for landed estate's facing new taxation at that time). Kenneth MacLaine then sought to borrow £38,000 (being about £1.1m) from Sir Stephen and Lady Gatty in 1910.
The loan documents made it an express condition that interest should be "punctually paid". For various reasons, Kenneth MacLaine was unable to make payments on time. In 1917 he failed to make payments due to being "on duty with His Majesty's forces abroad". Sir Stephen Gatty and Lady Gatty raised proceedings against Kenneth MacLaine for the outstanding sums.
His lawyers argued, first for an interpretation of 'punctually' which gave flexibility to their client as well as pleading that because he was serving abroad he was entitled to rely on certain war powers legislation.
Secondly (which is why the case is relevant today), that the creditors were personally barred from calling up the debt and insisting upon a higher rate of interest because they had not done either of those two things on earlier occasions when interest was paid late.
In the episode we discuss the background to the case, the decision reached by the House of Lords and how the case still impacts the law today.