Vol 23 (2026) - Issue 1

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Garet O Finlayson and another v Caterpillar Financial Services Corporation [2025] UKPC 24

Synopsis
Garet O and Mark G Finlayson (the 'Guarantors') guaranteed a loan from Caterpillar Financial Services Corporation (the 'Mortgagee') to Kurk Limited (the 'Borrower'), to facilitate the construction of a mega yacht by the Borrower. After the Borrower defaulted on the loan, the Mortgagee took possession of the yacht and sold it. As the proceeds of sale were not enough to satisfy the debt, the Mortgagee sought to recover the shortfall from the Guarantors.
The Guarantors argued that the Mortgagee had failed to comply with its duty when exercising its power of sale to take reasonable steps to obtain the best price reasonably obtainable at the time. The Guarantors, having lost in the court of first instance in the Bahamas and the Bahamian Court of Appeal, appealed to the Privy Council.
The Privy Council upheld the decision of the lower courts, finding that the burden of proof for a mortgagee's breach of duty lay with the mortgagor, not the mortgagee. The Guarantors had failed to prove that the Mortgagee had breached this duty.