Phoenix Recoveries vs D Kotecha - Court of Appeal

[pt2537]

PHOENIX RECOVERIES (UK) LTD SARL v DEVENDRA KOTECHA (2011)

 

CA (Civ Div) (Thorpe LJ, Lloyd LJ, Patten LJ) 26/1/2011

CONSUMER LAW

CONSUMER CREDIT : CREDIT CARDS : CREDITORS' POWERS AND DUTIES : REGULATED AGREEMENTS : CREDITOR'S COMPLIANCE WITH DEBTOR'S REQUEST FOR COPY OF REGULATED CREDIT AGREEMENT : ENTITLEMENT TO ENFORCE DEBT : CONSUMER CREDIT ACT 1974 : s.78(1) CONSUMER CREDIT ACT 1974 : s.78(6) CONSUMER CREDIT ACT 1974

 

A creditor had failed to satisfy a debtor's request under the Consumer Credit Act 1974 s.78(1) for a copy of a credit card agreement as it had not, on the evidence, included the original, actual terms and conditions in respect of interest rates then in force. The creditor was, accordingly, not entitled to proceed to enforce the debt under s.78(6).

 

The appellant (K) appealed against a decision of the judge allowing a claim by the respondent company (P) for amounts due under a credit card agreement. That agreement, which was regulated by the Consumer Credit Act 1974, had been entered into by K and a bank (B) in 1998. K was then issued with a credit card which he used extensively. B subsequently merged with another bank (H) and H took over B's credit card business. In 2007, K made a request under s.78(1) of the Act for a copy of the credit card agreement. H supplied an incomplete version and following K's further request it sent a copy of what it contended were the terms and conditions incorporated into the agreement. K disputed whether that version of the terms and conditions was correct. H later sent a default notice and issued proceedings against K, alleging that he was in breach of the agreement. H then assigned the claim to P, who was substituted as a party. K, then acting in person, defended the action on the ground that, because the s.78(1) request was not complied with, P could not enforce the agreement pursuant to s.78(6) of the Act. The judge found, on the balance of probabilities, that the appropriate records had been supplied by P. She therefore held that P had satisfied the s.78(1) request and that it was not precluded from enforcing the debt. K contended that there was no credible evidence that the documents set out as evidence by P were the same as those which had been used in the agreement between him and B. He submitted, inter alia, that a scanned copy of B's leaflet inviting him to apply for the credit card clearly set out an annual percentage rate (APR) of 9.9 per cent for balance transfers, reverting to 16.9 per cent after six months, and 18.7 per cent APR for cash withdrawals, whereas by contrast the terms and conditions given in evidence by P sent out in terms rates of 20.9 per cent APR for balance transfers and 22.8 per cent for cash withdrawals. It was accepted that that point had not been before the judge, although it was discernible from the papers.

 

HELD: Interest rates were a term of central importance in credit card agreements. There was a strong case that the interest charges which would have been specified in the terms and conditions when B and K made the agreement in 1998 were those in the leaflet and not those which appeared in P's evidence. Under s.78(1), a creditor was required to set out the actual, original terms and conditions of the agreement at the time it was made. In those circumstances, P had not proved that that obligation was satisfied, and it was therefore not entitled to progress to enforce the debt against K under s.78(6).

 

Appeal allowed

Counsel:

For the appellant: Kelly Pennifer

For the respondent: Guy Sims

 

 

 

 

Hot of the press

 

The case which we took to the Court of Appeal yesterday

[Docman]

An Exocet across Carey v HSBC perhaps - or at least when the judgment is misapplied by DJs accepting the banks' reconstructed agreements.

[pt2537]

Theres a good High Court judgment on the Horizon too

[DonkeyB]

Love it.

[DonkeyB]

Mind you, Carey v HSBC didn’t need an exocet – it just needed to be applied properly!

[42man]

Thanks for that PT....

[pt2537]

np 42

 

I just hope that it doesnt disappear, as it isnt reported on the open databases, it is only on Law tel and Westlaw which are subscription only.

 

It is a Court of Appeal ruling so binds all lower courts.

[dadofholly]

This may be relevant to a case i am involved in.

 

Are we able to quote this case now?

 

And would it have had to be pleaded in the defence - or can it be used in a court to refute a claimants arguements?

Edited January 27, 2011 by dadofholly

[pt2537]

dadofholly

 

The judgment is of the Court of Appeal Civil Division, it is binding on all lower courts including High Court.

 

The facts you rely on must be pleaded, but the Case would really be used in argument,

[Jasper1965]

"A creditor had failed to satisfy a debtor's request under the Consumer Credit Act 1974 s.78(1) for a copy of a credit card agreement as it had not, on the evidence, included the original, actual terms and conditions in respect of interest rates then in force. The creditor was, accordingly, not entitled to proceed to enforce the debt under s.78(6)."

 

Can't be said any clearer than this not much room there for a judge to misinterpret.

 

good result PT for you, your client and a good many others I'd wager!!

[DonkeyB]

Good news, dadofholly – just what you needed!

[coledog]

[dadofholly]

Good news, dadofholly – just what you needed!

 

Oh Yes - am almost looking forward to the hearing now.

 

A common sense judgement as well

[dadofholly]

AND a help in every other case where a certain company claims interest pre & post judgement relating to T&C's that dont exist.

[vjohn82]

I attended the original hearing with Dev and I saw, first hand, the mutual love hugs between the counsel for the Phoenix and the DJ. It was quite embarrassing at times to be honest. I think Dev posted the entire transcript of the hearing on here too and everyone was quite shocked at how it went.

 

I wasn't allowed to speak even though I was in attendance as litigation friend... the whole thing was quite hostile to be honest... I'd spent nearly an hour travelling too only to be told I couldn't participate in any meaningful sense. Weird.

 

I knew he would get this on appeal... brilliant work guys!

[dadofholly]

Just a thought - does this apply only to Credit card debts - or all Credit agreements.

And what if the APR is stated on the front of the agreement - though the T&C's for the agreement are not available.

 

I know my case is different and that a claim has been made refering to the T&C's but was just thinking of other individuals that may need advice.

[DemandFairness]

np 42

 

I just hope that it doesnt disappear, as it isnt reported on the open databases, it is only on Law tel and Westlaw which are subscription only.

 

It is a Court of Appeal ruling so binds all lower courts.

 

Just wanted to say well done pt2537!

 

I'm relatively new to this forum but on my thread about MBNA, I had wondered when there would be a Court of Appeal ruling about the strange rulings in Carey like reconstituted agreement instead of the true, signed copy. So it's a step in the right direction for me as MBNA still have not sent us the CCA but have issued "Default Notice Served under Section 87(1) of the CCA 1974" dated 10 January 2011. It said my OH had to pay all the arrears before 31.1.11 to remedy this breach. Or else, we have to pay the whole amount as the agreement is terminated and no further statements will be issued.

 

So am I correct in thinking that they can no longer charge their fees and exorbitant interest rate on the outstanding balance, including the arrears, but have to charge 8% instead?

 

BTW. if the case disappears because it is not on the open databases, people can still quote the Kotecha's ruling if needed, can't they?

 

My thread is at "Hi all Urgent Help needed re Default Notice Served from MBNA even though they have not sent CCA" in MBNA forum in case anyone can offer some help.

 

Thanks in advance,

 

DemandFairness

[DonkeyB]

I attended the original hearing with Dev and I saw, first hand, the mutual love hugs between the counsel for the Phoenix and the DJ. It was quite embarrassing at times to be honest. I think Dev posted the entire transcript of the hearing on here too and everyone was quite shocked at how it went.

 

I wasn't allowed to speak even though I was in attendance as litigation friend... the whole thing was quite hostile to be honest... I'd spent nearly an hour travelling too only to be told I couldn't participate in any meaningful sense. Weird.

 

I knew he would get this on appeal... brilliant work guys!

 

Remember it well. Your perfectly valid arguments then were simply bulldozed by the DJ, I seem to remember – at least the system came good in the end. It’s just wrong that it has to happen this way.

[Undercover-Elsa]

Excellent result, thanks for keeping us in the loop pt

 

 

Elsa x

[vjohn82]

Remember it well. Your perfectly valid arguments then were simply bulldozed by the DJ, I seem to remember – at least the system came good in the end. It’s just wrong that it has to happen this way.

 

It was shocking. Mind you, without the experience I might have been a lamb to the wolves with the HFO tactics. I saw them coming a mile off after I had been to this hearing...

 

...and we all know what happened with me and HFO ;-)

[frettful38]

Thanks PT for bringing more hope to the ones who sometimes feel none is left.

 

Well done a victory worth celebrating.

[Fluffystuff]

Way to go Humbleman & 'PT'.

[Gallahad]

It was shocking. Mind you, without the experience I might have been a lamb to the wolves with the HFO tactics. I saw them coming a mile off after I had been to this hearing...

 

...and we all know what happened with me and HFO ;-)

Great result guys but the blatant bias of the original judge should have bought some sort of reprimand or sanction.

G

[oilyrag]

Hi All

 

A huge pat on the back for PT and his colleagues. Let us hope all the doom and gloom merchants now doing the rounds on CAG will sit up and take notice. Teasdale is also on appeal in February, so lets hope that goes the right way as well.

[cymruambyth]

Thank you for posting this, can I clarify, if I am going to court in the next couple of weeks and have a short application form and different t&cs and no APR is listed anywhere. Can I print off a copy of this to take to court and do I need a new ws to include this.

Thank you