Supreme Court Judgment on 7th July 2010 Re: Consumer Credit Act

[Ruprecht]

I have not seen anyone else mention the Judgment from the Supreme Court on the 7th July 2010.

 

http://www.supremecourt.gov.uk/docs/UKSC_2009_0217_Judgment.pdf

 

For those of you defending wholly unenforceable agreements it might be worth printing out the judgment to get the Judge's attention.

 

I know it is something we already knew but it could save you time and waffle. Let the Barrister they send argue against a recent Supreme Court Judgment! LOL

 

See at 12:

 

12. The Act and the Regulations distinguish between ‘prescribed terms’ and

‘required terms’. In the case of an agreement predating 6 April 2007 such as the

agreement which is the subject of this appeal, by section 127(3) of the Act a failure

properly to include a prescribed term in the agreement renders the agreement

wholly unenforceable, whereas a failure properly to include a required term merely

means that the agreement is enforceable only by court order under section 65(1) of

the Act.

[wycombe]

Thanks R.

 

Interesting reading.

[Blondie40]

 

Let the Barrister they send argue against a recent Supreme Court Judgment! LOL

 

 

I'm sure some of them will.

[citizenB]

Thanks for this Ruperetch

[ncf355]

Anyone else getting "damaged file" when trying to get the PDF?

[wycombe]

Its fine with me. Try access with a different browser.

[means2anend]

I have not seen anyone else mention the Judgment from the Supreme Court on the 7th July 2010.

 

http://www.supremecourt.gov.uk/docs/UKSC_2009_0217_Judgment.pdf

 

For those of you defending wholly unenforceable agreements it might be worth printing out the judgment to get the Judge's attention.

 

I know it is something we already knew but it could save you time and waffle. Let the Barrister they send argue against a recent Supreme Court Judgment! LOL

 

See at 12:

 

12. The Act and the Regulations distinguish between ‘prescribed terms’ and

‘required terms’. In the case of an agreement predating 6 April 2007 such as the

agreement which is the subject of this appeal, by section 127(3) of the Act a failure

properly to include a prescribed term in the agreement renders the agreement

wholly unenforceable, whereas a failure properly to include a required term merely

means that the agreement is enforceable only by court order under section 65(1) of

the Act.

 

PaulWlton mentioned the Walker Judgement last week on the other thread ''dissecting Manchester Test cases''....

 

This affirms Wilson v FCT...

 

m2ae

[means2anend]

It is also good because for instance although a required term such as default charges sometimes are missing in the agreement yet in the Agreements Regulations 1983 they are required..So Ruprecht thanks for highlighting that point because although I did read the Judgement last week I overlooked this specific and important point....And yes it is Absolute Authority for DJ lotteries in County Courts

 

Rgds

 

m2ae;)

[Mistermind]

The whole issue of enforceability turned on the fact that an upfront fee being "the cost of obtaining credit" was added into the box described as "credit" -- similar to credit, claimed the lender, in that the cost of obtaining credit attracted the same debit interest as the "credit".

 

I understand their lordships to say they were in essence two separate loans and to comply with the law would need two agreements, linked if applicable.

 

Moving from the letter of the law to the spirit of the legislation, it could be that the legislators did not like the misleading signal that the borrower benefitted from the loan to the amount of the loan (which he could use to his benefit), plus the amount of the loan fee (which he could not use to his benefit). For this reason their lordships would not allow the spendable loan figure to be inflated by the unspendable loan fee in the same box. The loan fee has already been spent on the transaction, and cannot be spent by the borrower. It is therefore not true borrowing for his own benefit. It is borrowing for the lender's benefit. It is misrepresentation which the legislators sought to prevent. If the lender will not play ball with parliament, the Supreme Court will not play ball with the lender, Q.E.D.

 

Lenders will not like presenting a borrower with 2 separate agreements to sign, as it draws the borrower's attention to the inflated cost of the loan, to the part he cannot spend. Lenders who habitually put the combined amount in the CREDIT box will now have a very big exposure, if they can survive at all.

 

Any way this final verdict applies only to agreements signed before 6th April 2007.

Edited July 13, 2010 by Mistermind

[Lord_Alcohol]

Could some kind soul explain this judgement? For some reason I am having difficulty in 'getting' it...

 

The Js rightly point out the need for prescribed terms to be present to allow an agreement to be enforceable - good news for all with dodgy contracts with missing terms.

 

However, unless I have completely misunderstood (it does happen from time to time...), the judgement is merely to dismiss the appeal made by Walker (the debtor). So this is a loss, not a win...?

 

Confused!

 

LA

[rebel11]

The Judgement isn't important, it's the fact that the Judges reinforced

just 7 days ago what CCA 1974 states regarding Consumer Credit Agreements.

 

Could some kind soul explain this judgement? For some reason I am having difficulty in 'getting' it...

 

The Js rightly point out the need for prescribed terms to be present to allow an agreement to be enforceable - good news for all with dodgy contracts with missing terms.

 

However, unless I have completely misunderstood (it does happen from time to time...), the judgement is merely to dismiss the appeal made by Walker (the debtor). So this is a loss, not a win...?

 

Confused!

 

LA

[means2anend]

All it is LA is that the PT ''amount of credit'' nust not contain any fees when represented in it's box otherwise it's been misstated.

 

The broker's fee was not to be labelled as credit even though time for it to be repaid had been given

 

Walkers' said that true amount ought be the credit advanced PLUS brokers fee.

 

This was Fixed Sum...but it's interesting to note that the PT was NOT missing but allegedly misstated...

 

This was the ''ratio'' on the facts in THIS case...but it is interesting as it can be used as Obiter in others...for eg PT's Egg situation although it is running account is about ''misstating'' not missing.

 

It has not really broken any new ground just simply affirmed what we already sort of knew...AND affirmed Wilson V FCT

[Lord_Alcohol]

Ahhh.....

 

Thanks guys - the penny's dropped at last!

 

Apologies for being such a twit

 

LA

[means2anend]

Yes PT2537 said that it was ''interesting'' on all sorts of levels

 

Rgds

 

m2ae

[means2anend]

AND it is very persuasive authority from the Supreme court when used on the appropriate facts in the High Court which is where PT's is at the moment...but I do not know whehter time allowed for this argument to be used as we are awaitning judgement and THIS case was decided recently...

[Chipmeister]

Could this be sticky-ed please?

[ReasonableRon]

The judgement was actually a very welcome one for lenders.

 

Wilson v FCT is has for almost 10 years been the leading authority on the PT "amount of credit" and this judgement does not change anything in this respect.

 

However, Walker was seeking to claim that a fee not showing as part of the amount of credit should have been listed as such because interest was being charged on it. To rule in their favour would have been completely inconsistent with the Wilson case, and they therefore rightly dismissed this argument.

 

The judgement went on to confirm that just because the fee was (correctly) listed as a component part of the total cost of credit, this did not preclude the ability to charge interest on it. The judgement therefore provides clarification on the meaning behind s9 of the CCA 1974 (The meaning of credit) and in particular s9(4) "For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment".

 

It seems that this judgement is being described as in some way welcome to debtors, but I cannot see how because it effectively closes the argument that interest should not have been charged on fees as a means to get an agreement declared to be unenforceable.

 

I am personally amazed that the Walker team couldn't see this ruling coming a mile off, and in the process incurred well over £100k in costs

 

Anyone giving advice to forum members about challenging interest on fees needs to be aware of this case.

[means2anend]

That is why it is so important to understand and get a good handle of one's own facts in one's own case...which is then set out in the particulars....the Obiter is what is useful

 

m2ae

[Mistermind]

Could some kind soul explain this judgement? For some reason I am having difficulty in 'getting' it...

 

The Js rightly point out the need for prescribed terms to be present to allow an agreement to be enforceable - good news for all with dodgy contracts with missing terms.

 

However, unless I have completely misunderstood (it does happen from time to time...), the judgement is merely to dismiss the appeal made by Walker (the debtor). So this is a loss, not a win...?

 

Confused!

 

LA

 

Introduction

1. The appeal arises in another case which involves the meaning of ‘credit’,

the ‘amount of credit’ and the ‘charge for credit’ in the Consumer Credit Act 1974

(‘the Act’). The case for the appellant borrowers is that the respondent lender

failed correctly to state the ‘amount of credit’ in the loan agreement.

If that case is accepted, it follows that the loan agreement is wholly unenforceable under the Act. This point was not taken before District Judge Gilham, who made a suspended

order for possession on terms that the borrowers made the payments as and when

due and paid off what were substantial arrears by monthly instalments.

The borrowers appealed to the Circuit Judge and were permitted to take the point that

the agreement was unenforceable. They succeeded before His Honour Judge

Halbert on 27 April 2009, with the result that he ordered the discharge of the

charge registered on the property.

However, the Court of Appeal allowed the lender’s appeal on 12 November 2009. This appeal by the borrowers is brought with the permission of the Supreme Court.

30. The appeal is dismissed, essentially for the reasons given by the Court of Appeal.

You are not the only one confused.

 

DJ Gilham in county court ruled the debt was enforceable and allowed a suspended charge on the house(?).

 

Walker appealed, and Circuit Judge Halbert on 27 April 2009 upon appeal ruled it was unenforceable, overturning the charge on the house.

 

The lender appealed, and on 12 NOV 2009 the Court of Appeal allowed the lender appeal, and gave permission for the borrower's appeal to the Supreme Court.

 

Walker then appealed to the Supreme Court to rule again on the lender's appeal on 12 NOV 2009. In para 30 the Supreme Court dismissed the (lender's) appeal. I understand it as the selfsame appeal as was ruled on by the court of Appeal, i.e. the second ruling by a higher and binding court. The entire document says the law lords agreed the true amount of "credit" was misstated, as per legislation before 2007. If that is the correct reading then as their lordships said, the agreement is irredeemably unenforceable in court. Whether the lender will try to collect outside of court is doubtful. My impression is that the OFT clearly said they disapproved of continuing attempted collection where the courts have irredeemably ruled.

[means2anend]

Yes on the facts they lost...the fact in issue was that the PT was misstated...although on the facts of THIS case they found for the Lender they gave an example of how a term when misstated could lead to ireemable unenforceability...This is the Obiter that can be used in a case when the Facts primas facie show that there has been a misstatement of a PT..

 

In Pt2537's case it is the phrase ''approved limit'' instead of ''credit limit'' that is in issue....although it appears that the PT is not missing could it be argued that it has been misstated so as to give the debtor an ambigous understanding of what it means.

 

Walkers was fixed sum..Pt2537 is running account but the argument as to misstatement can be applied to both when PTerms are in issue....this is to be distinguished from Required terms which can be remedied under s65 where there is no prejudice to the debtor in the exercise of Court's discretion.

 

Remembering this s127(3) applies to agreements pre-2006

 

It is the Obiter that should be extracted.

 

m2ae

Edited July 14, 2010 by means2anend
change from approved 'credit' to approved 'limit'

[Mistermind]

My impression is that in all cases of misstatement the intention behind misstatement would be taken into consideration by judges, whether there was any intention to mislead and misrepresent, whether any benefit or loss issued from the misstatement, or even mispelling.

 

In the case of misstating the amount of credit, clearly parliament was ahead of the game, allowing no latitude for misstatement.

[means2anend]

The crucial issue here was whether the brokers fee could rightly be defined as credit or not...This is what we should be concentrating on and on WHAT criteria have the judges said that this is not credit..I know they quote s9(4) in determinig it not to be credit.

 

Is a brokers fee a charge?

 

They decided it was...therefore it was rightfully absent from the amount of credit box

 

m2ae

[rebel11]

I'm personally looking at it from a personal, selfish point of view, how it help's me, sorry folks.

[means2anend]

My impression is that in all cases of misstatement the intention behind misstatement would be taken into consideration by judges, whether there was any intention to mislead and misrepresent, whether any benefit or loss issued from the misstatement, or even mispelling.

 

In the case of misstating the amount of credit, clearly parliament was ahead of the game, allowing no latitude for misstatement.

 

Intent is subjective and notoriously a bit of a snark to prove

[humbleman]

Would you guys be kind enough to look at the attached agreement to see if all seems in order. Looks like they have stated the VAT amount incorrectly.