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Phoenix Recoveries vs D Kotecha - Court of Appeal


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But it still needs to be an original to enforce in court, regardless of what they produce for a s78 request.....is this right?

 

BF

 

 

But, the problem is,

 

The Court of Appeal, which overrides Waksman, said it doesnt need to be the original but for s78 purposes, it merely need to be a true copy as defined within the masses of case law

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Yes agreed pt, BUT s78 really is only for information purpose not proof purpose. C of A and Waksman have said so. It is just the creditors claimants that have managed to twist judges arms in the lower courts. Claimants have to prove their case, defendants i.e usually us have every right to challenge every word of a claimants case and the only way the balance of probability can be proved is with the original documents. This case, if what you have said so far is true, reinforces that premise so does Carey, so does "Wilson" and many many more including cases from your own firm.

 

regards

oilyrag.

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perhaps because , to date- they got away with bullsh*tting and playing "brinkmanship games " right up to the court door hoping that the def would cave in

 

all the CPUTR does (well i say ALL - it is a big step forward) is to force the creditor to comply with what has been a central plank of the reforms in any event........ a cards on the table approach

 

it can also be a criminal offence under the enterprise act for a creditor to mislead a debtor into making a transactional decision by deceiving or misleading him in pretending that a properly executed agreement exists when in fact it does not

 

getting back to the CCA it states in respect of court proceedings, only that the creditor SHOULD produce the original agreement to the court, not MUST produce.

 

also the act states that the claimant can show that on the balance of probabilities that the debtor "has signed" an agreement (past tense)- not that the original agreement- which is it claimed the debtor "has signed" still HAS to exist

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also the act states that the claimant can show that on the balance of probabilities that the debtor "has signed" an agreement (past tense)- not that the original agreement- which is it claimed the debtor "has signed" still HAS to exist

 

CCA 1974 sec. 127 (3) says different DD..... no balance of probabilities in it

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IMO we are in danger of slightly getting away from the primary issue that this case throws up i.e. not whether an original or exact copy must be produced but whether the document produced is a 'true' copy in that it accurately reflects the original T&Cs:

 

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).

 

pt's comments above should be noted:

 

The issue is with the substance of the document not the form, and the Carey decision did allow for minor slips providing the statutory content was correct.

 

I do empathise with DD's comments

also the act states that the claimant can show that on the balance of probabilities that the debtor "has signed" an agreement

as this indeed does seem to have been the line that some DJs have erroneously been taking recently.

 

I doubt that this CoA declaration will change that stance but will hopefully provide significant ammunition to successfully challenge it where the Defendant can show the Claimant has not provided a document that accurately represented the original terms of the agreement before taking legal action.

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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Perhaps we should remember in line with P1's comments that a significant proportion of us are protected by s127 of CCA1974 which was reppealed LATER in CCA2006 and enacted in April 2007, this gives no leeway, hence the the upsurge in activity by CMCs in this matter which has spoiled for us the opportunity to defend ourselves easily. The reppeal of 2006 does not effect those of us with earlier agreements and can never do so as Lisbon has also (grudgingly on our politicians parts) given us the protection that we CANNOT be disadvanatged by retrospective law no matter how it is formed, Statute, Supreme Court, C of A or anywhere else.

 

Much as I dislike the EU and its institutions, the ECJ is pretty miffed with British judges hence giving up to present some adavantage to those wishing to challenge British law decisions.

 

regards

oilyrag.

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no! there is NO obligation on the creditor to produce the original agreement in court

 

 

Thanks dd, can you just clear this one up for me.

 

In Waksman/Carey, ''Summary of Findings'', Section 234, he states:

 

''(4) If an agreement has been varied by the creditor under a unilateral power of variation, the creditor must still provide a copy of the original agreement, as well as the varied terms;''

 

So, in this case, a reconstituted copy will not do and a copy of the original agreement (the actual one signed by the creditor) must be provided in court?

 

BF

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well, it is open for debate

 

although i agree it is confirmed by Waksman that where an agreement has been varied it must be accompanied by a copy of the original agreement in its original form- BOTH (IMO) are subject of his comments as to what is acceptable for a s78 request (information) and i am not aware that he ever said that the "original" spoken of- had to be THE original and could not, like the varied agreement- be a re construction (but in the original form).

 

like many judgements- i dont think it was made clear enough- but i also think caggers are "seizing on something" as a golden bullet- which is not there!

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... but the DCAs are seizing on misinterpretation as their golden bullet and are fooling the judges – Waksman was pretty careful in stating that these recons applied to satisfaction of s78 requests, I think, rather than for enforcement in court.

“The industry is rotten to the core, whether it is in-house recovery and collection, or where agents are used, or where the debt has been sold.” Andrew Mackinley MP, House of Commons, 22 April 2009

 

If a Cagger helps you, click their star. Better still, make a donation however small, so that CAG can continue to help others.

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CCA 1974 sec. 127 (3) says different DD..... no balance of probabilities in it

 

i really have to disagree on this- as it is of vital importance that caggers do not "believe " that if the creditor does not produce the original agreement s127(3) will be the golden bullet

 

s127(3) states:-

 

127(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

there is already case law (where a creditor lost his records in a fire) where it was not necessary for the creditor to provide the actual executed agreement- merely to show the court that the debtor would have signed (Past tense) such an agreement because of the methods employed by the creditor which would (in their words) have made it impossible for the debtor to have obtained the card without having signed an executed agreement

 

further there is no requirement under s 127(3) for anyone other than the debtor to have signed- if the document concerned was an application form- provided it contained the PT's of the agreement

 

IMO the courts have come down largely in favour of the creditors- despite the occassional win for us- and even in 127(3) cases the debtor is going to have to make positive assertions (and supporting arguments) that he did not sign (past tense) an executed agreement - irrespective of whether the creditor can physically produce this agreement to the court

 

the recent judgement referred to by PT helps us along the way to try to dismantle the prevailing attitude by judges that these companies are so big and respectable that they could not possibly have made mistakes/lent without the agreement being in apple pie order

 

but it is going to take a few more like that i suspect- before judges get the message (or are forced to abandon their bias)

 

but it is a battle won (IMO) not the war

Edited by diddydicky
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i really have to disagree on this- as it is of vital importance that caggers do not "believe " that if the creditor does not produce the original agreement s127(3) will be the golden bullet

 

s127(3) states:-

 

127(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

there is already case law (where a creditor lost his records in a fire) where it was not necessary for the creditor to provide the actual executed agreement- merely to show the court that the debtor would have signed such an agreement because of the methods employed by the creditor which would (in their words) have made it impossible for the debtor to have obtained the card without having signed an executed agreement

 

further there is no requirement under s 127(3) for anyone other than the debtor to have signed- if the document concerned was an application form- provided it contained the PT's of the agreement

 

So going by that, a judgement should always go in favour of a creditor, as all they ever have to do is say, ''we dont have the original as its been lost over the years, but we wouldnt have issued a card without one being signed''? And as you say, there is case law already that proves that, so in effect, a debtor cannot possibly have a judgement in his/her favour.

 

BF

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no, in many cases LIP's - due to their failure to grasp the finer legal points - simply ARGUE that the creditor has not crossed the T's or dotted the I's ...which is indicative to the judge that this is no more than an attempt at trying to avoid the debt by using technical arguments

 

 

the defendant has to ACTIVELY assert that he did not sign such an agreement/application form etc AND AGAIN provide more than just a template argument- he must make out a convincing argument as to why he did not/could not have done so

 

a lot of this confusion stems (IMO) from a misguided if not natural desire for caggers to look for a "perry mason" style silver bullet-which does not exist

 

at the end of the day it is going to be down to the judge to take a view whose evidence is more compellling- which is why a simple denial by the defendant - without anything to back it up- versus the claimant spelling out to the court their procedures which you could not possibly have bypassed (according to them) simply wont wash

 

You HAVE to create sufficient doubt

 

PT was able to do that by showing the judge that the interest rate claimed to be prevalent by the creditor in the alleged agreement - was not that which had been charged to the defendant and was therefore wrong - and was able to show evidence from an accompanying leaflet at the time- which did contain the interest rates charged to the defendants credit card

 

the judge then felt on the balance of probabilities that the defendants case was more believable than that of the creditor- thus driving a small but significant stake into the heart of the creditors oft cited arguments that they were so big, powerful and respectable- that they could never make such a mistake

 

this is a battle won in this particular war (the claimants credibility) and we need more of the same

Edited by diddydicky
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Here we go again , just like the "Manchester" thread, "Invalid Default Notices" thread. Nothing positive, nothing to move forward with. Let us just put this forward then, To any one with a modicum of intelligence does it not seem perverse to not produce the original document at court if it exists and take the risk that the defendant has a darned good argument that will win the case? It certainly seems so to me and many others. It is logic that should the document exist then in fully compliant and executed form, it is not difficult for the alleged creditor to produce it. That is the end of the matter, there is no further argument, there is no further waste of the courts' time.

 

Should of course the alleged creditor prevaricate and not produce the document only some forged version (for regardless of what you call them that is what they are) then the asumption has to be that on the balance of probabilities the correct documentation does not exist. Then the whole premise of CCA 1974 cuts in does it not whereby the man himself, Francis bennion and Professor Goode stated the full consequences of the Act, and that is that the alleged creditor, should he not have all the documentation in order as prescribed, then they shall "forfeit all rights and benefits that any such flawed agreement bestows on them".

 

In no other area of law does this sort of nonsense prevail. And remember this judgement in its formal form has yet to handed down and it is pointless constantly jockeying for position in ths argument until it is completely in the public domain!!

 

regards

oilyrag

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don't shoot the messenger!!:wink:

 

its not a question of not "being positive" its a question of newbee caggers not getting carried away by others "egging them on" to defend indefensible situations and then ending up with egg on their face and a bill for £000,000's on top of the debt that they were wrongly persuaded to defend

 

 

Mr benyon quite clearly stated in his draft of the CCA which became law that the creditor SHOULD produce the original document to the court.......... if he was incapable of distinguishing between MUST and SHOULD- then what was he doing drafting the act in the first place!

 

Over the 37 years since the inception of the CCA - creditors have persuaded the courts that it is not physically practical to keep, archive and easily retreive literally hundreds of millions of documents (which is why many of them languish untouches in underground bunkers on disused airfields in khazakstan!

 

 

like it or not- the courts now will readily accept that technology has moved on and that creditors have copied stuff to computer files and destroyed the originals

 

we have to deal with the situation as it is- not as we would like it to be

 

there is no greater optimist than myself- but realism has to take a role in decision making

 

i say again- unless you can mount a convincing case for arguing that you did not sign a properly executed agreement- you are likely to get your fingers burned in defending on this basis on the strength simply of a statement to that effect

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no, in many cases LIP's - due to their failure to grasp the finer legal points - simply ARGUE that the creditor has not crossed the T's or dotted the I's ...which is indicative to the judge that this is no more than an attempt at trying to avoid the debt by using technical arguments

 

the defendant has to ACTIVELY assert that he did not sign such an agreement/application form etc AND AGAIN provide more than just a template argument- he must make out a convincing argument as to why he did not/could not have done so

 

Disagree. The Defendant doesn't have to do anything of the sort and would be foolish to do so after making token payments on an account for years (for example). What the Defendant has to do is to rely on the protection afforded to him under CCA law and argue his case effectively.... if he/she even gets taken to court in the first place, which remains hypothetical until/unless it actually happens.

 

a lot of this confusion stems (IMO) from a misguided if not natural desire for caggers to look for a "perry mason" style silver bullet-which does not exist CCA 1974; sec 127 (3) has been silver enough for many people on here for a very long time.

 

at the end of the day it is going to be down to the judge to take a view whose evidence is more compellling- which is why a simple denial by the defendant - without anything to back it up- versus the claimant spelling out to the court their procedures which you could not possibly have bypassed (according to them) simply wont wash

 

DD... it's not for the Defendant to back up the claim; it's for the Claimant to back up the claim. A denial is foolish but without proof from the Claimant there's no need for a denial anyway. A Judge would be in the wrong to side with a creditor who failed to prove their case against the Defendant under CCA law. I realise it's a Judge lottery out there but IMO, this is largely down to just not having a good enough defence beforehand.

 

You HAVE to create sufficient doubt

 

PT was able to do that by showing the judge that the interest rate claimed to be prevalent by the creditor in the alleged agreement - was not that which had been charged to the defendant and was therefore wrong - and was able to show evidence from an accompanying leaflet at the time- which did contain the interest rates charged to the defendants credit card Well presumably, this was because there was an alleged Agreement to show, rather than no Agreement at all or, an application form with no t&cs and so on.

 

the judge then felt on the balance of probabilities that the defendants case was more believable than that of the creditor- thus driving a small but significant stake into the heart of the creditors oft cited arguments that they were so big, powerful and respectable- that they could never make such a mistake

 

Well yes, he probably would.... because it a very clear anomaly in this instance,

 

this is a battle won in this particular war (the claimants credibility) and we need more of the same

 

I agree..... we do need more of the same but in situations where there is no enforceable paperwork at all, or reconstructed and/or microfiche docs., CPUTR can make things clear before you even enter a courtroom and in a lot of cases, will dissuade the creditor from being too economical with the truth beforehand in case in case the Defendant turns out to know more about his rights under CCA law than the creditor anticipated.

 

:-)

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Not trying to shoot the messenger DD, but what is becoming clearer and clearer over the last few months is that many potential caggers and some new members are becoming increasingly disillusioned with the negativity of the current situation as portrayed on CAG. I do know some people who have capitulated totally to their creditors when there have been grounds to make some fight of it and possibly reduce their liabilites. They have not done so because they have come to believe that to fight back against this highly suspect "industry" is futile. That is the picture they see and there are site team members who must also take some of the responsibility for that as well.

 

You and I know that it is not futile, particularly if there is reasoned objective help available. No it is not easy to prepare and present a defence even more difficult now for the LIP. I can study, I can comprehend along with the best of them and I can argue a case but not necessarily on my feet in a court room against a fleet of foot professional who knows the judge and drinks the same port at chambers dinners. I recognise my own limitiations, hence I took the option on medical advice to swallow my pride and to seek out professional advice and representation. God, that has not at times been easy either, there have been sharp exchanges but a relationship has been established at the right qualified level and everything they have done so far over 18 months or so has proven to to our benefit. I understand that has not been so in one of your cases luckily not our sols.

 

That is why I am trying to put a bit more of an optimistic, open minded face to these matters, realism is fine but at least let us examine what is possible as well.

 

regards

oilyrag.

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Personally I think the biggest mistake of any LiP is to fail to point out to the judge the correct arguments and laws. Judges are there to judge the facts and arguments presented to them, not to know the intricacies of the CCA inside out or the nuts and bolts of case law. Too often defendants, especially LiPs, lose the argument when the winning facts are available but not presented properly to the judge, sometimes because the basis of the defence is an old templated one.

 

I dare say this is why many Caggers win on appeal when they have expert legal representation, because an LiP will struggle to outwit a barrister at any time unless they are gifted in their oratory and presentation, or unless the claimant is a serial idiot like Carter or HFO.

 

In pt2537’s recently won case (the subject of this thread), I think the appeal judges commented that although the trial judge had the ‘winning argument’ in the bundle presented to her, the defendant did not raise the points in oratory which, other issues apart, may have contributed to the adverse judgment. I dare say this was a lucky escape in some ways – if those facts had not been there originally, the appeal may have been lost. I’ll leave that conundrum to pt!

 

I’ve yet to see a defence on CAG where the claimant’s reliance on Carey, for example, has been adequately refuted – ie. the assertion that Carey allows a recon to be used for enforcement (rather than s 78 fulfilment) – by properly quoting at length from the Waksman judgment. But there’s so many other laws and regs that can be used before you even get to Carey.

 

There’s more to it than judges’ failings – the claimants will always try to use the ‘blue chip’ systems and checks and balances reliability issue to get judges on their side, but you have to dissect their arguments bit by bit and show they are wrong.

 

The facts are usually there. It’s down to how we use them, I guess. Just MHO, though.

“The industry is rotten to the core, whether it is in-house recovery and collection, or where agents are used, or where the debt has been sold.” Andrew Mackinley MP, House of Commons, 22 April 2009

 

If a Cagger helps you, click their star. Better still, make a donation however small, so that CAG can continue to help others.

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Nicely put DonkeyB. It has been put to me professionally that Waksman certainly was not all in favour of the creditor, far from it if argued effectively and I am sure this latest judgement will be much the same vein and may even have a little seam of gold in it for us.

 

regards

oilyrag.

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Not trying to shoot the messenger DD, but what is becoming clearer and clearer over the last few months is that many potential caggers and some new members are becoming increasingly disillusioned with the negativity of the current situation as portrayed on CAG. I do know some people who have capitulated totally to their creditors when there have been grounds to make some fight of it and possibly reduce their liabilites. They have not done so because they have come to believe that to fight back against this highly suspect "industry" is futile. That is the picture they see and there are site team members who must also take some of the responsibility for that as well.

 

You and I know that it is not futile, particularly if there is reasoned objective help available. No it is not easy to prepare and present a defence even more difficult now for the LIP. I can study, I can comprehend along with the best of them and I can argue a case but not necessarily on my feet in a court room against a fleet of foot professional who knows the judge and drinks the same port at chambers dinners. I recognise my own limitiations, hence I took the option on medical advice to swallow my pride and to seek out professional advice and representation. God, that has not at times been easy either, there have been sharp exchanges but a relationship has been established at the right qualified level and everything they have done so far over 18 months or so has proven to to our benefit. I understand that has not been so in one of your cases luckily not our sols.

 

That is why I am trying to put a bit more of an optimistic, open minded face to these matters, realism is fine but at least let us examine what is possible as well.

 

regards

oilyrag.

 

my recent experience with sols has not coloured my opinion - far from it-

 

NOR am i advocating that caggers should give up the ghost

 

BUT if you ask-i guarantee that not many caggers would immediately realise- when taking on a creditor as a LIP- that the costs in a trial (not small claims) if they lose will typically be anything from £4-£8000. - and could be considerably more.

 

This requires some serious consideration as to the merits of the case and at the risk of being shot down again- i advise those whose creditor is arguing the loss/non availability of the original agreement- and is instead claiming it can show r through reliance on its internal systems that the debtor could not have got the credit without having signed an executed agreement-- (in other words that they can show that the debtor WOULD HAVE signed one as s127(3) states-) that they had better be sure they have something other than quoting s`127(3) or some other regulation as their defence or alternatively be prepared for the debt to increase substantially with costs if they lose

 

I am well aware that it is for the claimant to prove his case-and the whole point is that he CAN do so without the original agreement -

 

If the debtor does not actively assert that he never signed an agreement- i can GUARANTEE he will lose if he sits back and relies on quotes from the act

 

Alternatively if he DOES actively assert that he never signed an executed agreement- in the face of the creditor using the above argument and thinks that the court will not require him to provide more to substantiate the claim or at least create sufficient doubt - again - he had better be prepared for a shock.

 

i do agree that used properly- the arguments may well prevent the matter getting to court in the first place- but once there - the suggestion that all the defendant has to do is sit back and quote legislation and then watch the proceedings from the sidelines is sadly mistaken

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if anyone is in any further doubt as to the points raised- then i suggest they read and digest the details of the following succesful barclays appeal in exactly these circumstances

 

 

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

ON APPEAL FROM THE CHESTER COUNTY COURT

HH JUDGE HALBERT

 

Royal Courts of Justice

Strand, London, WC2A 2LL

23/07/2010

B e f o r e :

 

THE HONOURABLE MR JUSTICE FLAUX

____________________

 

Between:

ALAN KNEALE

Respondent

- and -

 

BARCLAYS BANK PLC (trading as BARCLAYCARD)

Appellant

____________________

 

Miss Rosalind Phelps (instructed by Hogan Lovells International LLP) for the Appellant

Mr Tom Gosling (instructed by Keith Park Solicitors) for the Respondent

Hearing date: 16 July 2010

____________________

 

HTML VERSION OF JUDGMENT

____________________

 

Crown Copyright ©

 

The Honourable Mr Justice Flaux:

 

Introduction

 

This is an appeal by Barclays Bank Plc (to which I will refer as "the bank") with the permission of the court below against a judgment of HH Judge Halbert sitting in the Chester County Court, handed down on 8 January 2010. By that judgment, he ordered pre-action disclosure by the bank in favour of the applicant Mr Kneale (to whom I will refer as "the applicant") and ordered the bank to pay all of the applicant's costs of that application. The learned judge gave permission to appeal both the order for pre-action disclosure and the order for costs.

Factual background

 

The background to the matter can be shortly stated. The applicant has been a Barclaycard customer since March 1995. The last payment by him to his Barclaycard account was £265 made in November 2008. As at November 2009, when the application for pre-action disclosure was made, the outstanding balance on the account was over £14,000. Although the bank has not commenced proceedings against him to recover that outstanding balance, during the course of 2009, a series of letters were sent to the applicant by the bank and by debt recovery agencies instructed on its behalf demanding payment of the outstanding balance, failing which proceedings would be commenced in the County Court, with the usual consequences in relation to enforcement of any judgment obtained.

During the course of 2009 and before the application for specific disclosure was made, a series of requests were made by the applicant, a claims management company acting on his behalf called Unfair Made Fair Limited and his present solicitors, under section 78 of the Consumer Credit Act 1974. That section requires the creditor to give the debtor (upon written request and the payment of a fee) a copy of the executed agreement and any other document referred to in it, together with a signed statement showing the current state of the account.

Pursuant to those requests, the bank provided:

(1) A copy of the terms and conditions of Barclaycard applicable at the time the agreement with the applicant was entered into in 1995, together with a copy of a blank Application which was said to be in use at the time.

 

(2) A copy of the terms and conditions currently applicable.

 

(3) The applicant's outstanding balance, current credit limit, date and amount required for next payment.

 

The copy of the terms and conditions and Application sent were not a photocopy of the actual Application filled in and signed by the applicant, but effectively the "pro forma" documents applicable at the time. In her witness statement, Lucy Clark, Legal Counsel for the bank says that Anne Temple, an employee of the bank with considerable experience of Barclaycard terms and conditions, is confident that the terms and conditions sent out pursuant to the section 78 request were the ones applicable at the time that the applicant opened his account.

It is clear from regulation 3(2)(b) of the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 that the creditor does not have to supply the original or a direct copy of the original, executed agreement in order to comply with its obligations under section 78 of the Act.

In Carey v HSBC [2009] EWHC 3417 (QB) HH Judge Waksman QC sitting in the Manchester Mercantile Court decided a series of test cases which concerned, inter alia, the scope of a creditor's obligations under section 78. In that case the debtor argued that the creditor was obliged pursuant to section 78 to recreate a copy of the executed agreement by reference to the original signed version. The learned judge rejected that argument, concluding that the creditor can satisfy its duty under the section by supplying a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.

It follows that under section 78, the debtor cannot oblige the creditor to produce the original executed agreement or even a photocopy of the original. The learned judge in the present case recognised this in paragraph 8 of his judgment. Although his judgment is dated 8 January 2010, I understand that the final judgment is essentially the same as a draft produced after the actual hearing of the application on 11 December 2009, which was in fact twelve days before the judgment in Carey was handed down, although HHJ Halbert was evidently well aware that it was imminent.

The present application

 

It was the inability of the applicant to obtain the original or a direct copy of the executed agreement under section 78 which was the ostensible reason for the present application. The power to order pre-action disclosure derives from section 33 of the Senior Courts Act 1981, as amended at the time that the Civil Procedure Rules came into force in April 1999, and Part 31.16 of the Civil Procedure Rules.

CPR 31.16 provides:

"(1) This rule applies where an application is made to the court under any Act for disclosure before proceedings have started.

(2) The application must be supported by evidence.

(3) The court may make an order under this rule only where –

(a) the respondent is likely to be a party to subsequent proceedings;

(b) the applicant is also likely to be a party to those proceedings;

© if proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and

(d) disclosure before proceedings have started is desirable in order to –

(i) dispose fairly of the anticipated proceedings;

(ii) assist the dispute to be resolved without proceedings; or

(iii) save costs."

The application is supported by a statement in Part C of the Application Notice by Mr Ian Bates, a solicitor with the applicant's solicitors. In the first paragraph, he refers to the fact that the applicant had contacted him following publicity generated by a "Panorama" programme on the television and adverts placed by claims management companies. In paragraph 2 he says:

"It is the Claimants' view that from what he has seen and read a large percentage of credit card agreements that were issued before 6th April 2007 (the date on which certain provisions of the Consumer Credit Act 2006 came into force) are unenforceable."

That is a reference to the fact that for all agreements entered into before the 2006 Act came into force on 6 April 2007, if section 61(1) (a) of the 1974 Act was not complied with, the agreement was irredeemably unenforceable by virtue of section 127(3) of the 1974 Act.

 

It is striking that in terms of information from the claimant, that is the sum total. There is no evidence from him as to whether his position is that he did not sign an agreement (in which case of course an application for pre-action disclosure would surely fail), whether he recalls signing an agreement or whether, whilst he cannot specifically recall, he accepts that he must have done. Equally, there is no evidence from him that he has considered the terms and conditions and Application which were sent by the bank in January 2009 pursuant to the section 78 request. In particular, the applicant has not condescended to say whether he accepts that, if he signed an agreement, it was in that form or whether, if he does not accept that, he has any positive case.

Rather, the remainder of the statement consists of what might be described as a standard argument and reasons advanced by solicitors in support of applications such as this without anything specific to this particular client. Indeed, Miss Phelps informed me that the bank has received some twenty applications in essentially the same form from this particular firm of solicitors.

As I have already said, the ostensible reason for the application is that it is essential that the applicant and his solicitors see the original or a direct copy of the original, executed agreement in order to establish whether or not it is unenforceable and, if so, whether the applicant can commence proceedings for a declaration that the agreement is unenforceable. Thus, Mr Bates' statement contains the following passages relevant to this contention:

"In order for the Claimant to consider whether the agreement can be enforced the Claimant must receive a copy of the agreement that he entered into with the credit card company, so that I, on behalf of the Claimant can establish if the agreement was properly executed in accordance with ss60, 61 and 65 of the Consumer Credit Act 1974.

In order to satisfy myself and the Claimant as to whether they have a case or not it is essential that I see a copy of the actual agreement to allow me to consider if it is properly executed.

The Defendant has complied with their statutory obligations pursuant to the Consumer Credit Act 1974, however they have not assisted my client in supplying a copy of the executed agreement which is essential to consider before the client can contemplate an application for a declaration that the agreement is unenforceable."

It is clear from the totality of the judge's judgment that he was much influenced by this consideration that the applicant and his advisers needed to see the signed, executed agreement in order to establish whether it was enforceable or not. I have to say that, for my part, from the outset of this appeal, I was unconvinced and unimpressed by this argument of necessity. Mr Gosling invited me to proceed on the basis that there was no positive case being advanced that the applicant had not signed the agreement, no doubt recognising realistically that, were his client to say he had not signed an agreement at all, he could hardly seek pre-action disclosure of something which on his case did not exist. In these circumstances, the applicant does not need to see the original or a direct copy of the agreement to establish that he signed it.

So far as the other requirements of section 61 of the 1974 Act are concerned, specifically that the agreement contained the prescribed terms and conformed with the Regulations and that it contained all the terms of the agreement, it seems to me that the applicant and his advisers are well able to establish whether the agreement complied with the requirements of section 61 from a consideration of the pro forma Application and terms and conditions which they have already received. Mr Gosling for the applicant saw the force of this point, but sought to challenge it by submitting that it might be that that pro forma Application and terms and conditions were not what the applicant signed and he could only be sure what he did sign when the original or a direct copy was disclosed.

The difficulty with that argument is that the only material before the court is that a bank employee who has considerable experience of Barclaycard terms and conditions is confident that these are the ones which the applicant would have signed. There is simply no evidence either from or on behalf of the applicant that he does not believe this is the form of agreement he signed or that some other form of terms and conditions and/or Application was extant at the time in 1995, which he might have signed instead. It seems to me inconceivable that, if the solicitors and claims management companies who lie behind this and similar applications had any evidence from past cases that, at any given time, more than one form of Barclaycard terms and conditions was extant, they would not have deployed it in support of this and similar applications.

Accordingly, I remain extremely sceptical about the suggestion that it is really necessary for the applicants in this or similar cases to receive by way of pre-action disclosure a direct copy of the executed agreement in order to see whether the particular agreement is unenforceable. This is a point which has a considerable bearing both on the question of jurisdiction to make an order under CPR 31.16 and the question whether the court should exercise its discretion to do so.

Distinct questions of jurisdiction and discretion

 

It is clear from the wording of the rule itself that there are distinct questions of jurisdiction (as in the court may "only" make an order where the four conditions in sub-rule (3) are fulfilled) and discretion (as in the court "may" not "must" make an order where those conditions are fulfilled). The existence of these two questions and the importance of keeping them distinct were emphasised in the leading Court of Appeal case on the current law as to pre-action disclosure, Black v Sumitomo [2002] 1 WLR 1562, in the judgment of Rix LJ. That judgment pointed out that although some of the jurisdictional questions raised by rule 31.16(3) merge into matters of discretion, it is important to keep jurisdiction and discretion distinct: see for example paragraphs 81 and 82:

"It is plain not only that the test of "desirable" [in rule (3)(d)] is one that easily merges into an exercise of discretion, but that the test of "dispose fairly" does so too. In the circumstances, it seems to me that it is necessary not to confuse the jurisdictional and the discretionary aspects of the paragraph as a whole. In Bermuda International Securities Ltd v . KPMG [2001] Lloyd's Rep PN 392, 397 Waller LJ contemplated (at para 26) that paragraph (d) may involve a two-stage process. I think that is correct. In my judgment, for jurisdictional purposes the court is only permitted to consider the granting of pre-action disclosure where there is a real prospect in principle of such an order being fair to the parties if litigation is commenced, or of assisting the parties to avoid litigation, or of saving costs in any event. If there is such a real prospect, then the court should go on to consider the question of discretion, which has to be considered on all the facts and not merely in principle but in detail.

Of course, since the questions of principle and of detail can merge into one another, it is not easy to keep the two stages of the process separate. Nor is it perhaps vital to do so, provided however that the court is aware of the need for both stages to be carried out. The danger, however, is that a court may be misled by the ease with which the jurisdictional threshold can be passed into thinking that it has thereby decided the question of discretion, when in truth it has not. This is a real danger because first, in very many if not most cases it will be possible to make a case for achieving one or other of the three purposes, and secondly, each of the three possibilities is in itself inherently desirable."

The reason why it is important to consider jurisdiction and discretion as distinct and separate is that even where the court has arrived at the conclusion that it has jurisdiction under rule 31.16, it should still only exercise its discretion to make an order for pre-trial disclosure where it is appropriate to do so, which will not be in every case but only where there is some aspect of the case which takes it out of the ordinary run: see Black v Sumitomo at paragraph 85 and Tomlinson J (as he then was) in Trouw UK v Mitsui UK [2006] EWHC 863 (Comm) at paragraph 23.

Jurisdiction: arguable case

 

The courts have tended to consider sub-rules (3) (a) and (b) together, concerned as they both are with the likelihood of the parties to the pre-action disclosure application being party to any subsequent proceedings. The Court of Appeal in Black v Sumitomo decided that these provisions do not require it to be likely that proceedings will be issued, but only that, if subsequent proceedings are issued, it is likely that the applicant and the respondent will be parties to those proceedings: see per Rix LJ at paragraph 71. However, the resolution of that question does not answer the further question which arises in the present case as to the extent to which an applicant under CPR 31.16 has to demonstrate an arguable case in order to satisfy the jurisdictional criteria of sub-rules (3) (a) and (b).

Prior to the coming into force of the Civil Procedure Rules in April 1999, section 33(2) of the 1981 Act (originally enacted as section 31 of the Administration of Justice Act 1970) only applied to cases of death and personal injury and also only applied where subsequent proceedings were "likely to be made". There were a number of decisions of the Court of Appeal which considered this question of what might be described as the "arguable case" jurisdictional threshold under the unamended section 33(2) of the Senior Courts Act 1981.

Those cases were analysed in some detail by Rix LJ at paragraphs 59 to 68 of his judgment in Black v Sumitomo, largely because the judge at first instance in that case had relied upon them in reaching his conclusion on this particular jurisdictional test. Given that analysis, it is unnecessary for me to engage in my own analysis of those authorities. Rix LJ considered those earlier cases of limited assistance given the change in wording of the statute at the time of the enactment of the CPR (see paragraphs 59 and 60).

He concluded his analysis as follows in paragraph 68:

"What, however, these authorities on the unamended section in my judgment reveal, and usefully so, is as follows. First, that at any rate in its origin the power to grant pre-trial disclosure was not intended to assist only those who could already plead a cause of action to improve their pleadings, but also those who needed disclosure as a vital step in deciding whether to litigate at all or as a vital ingredient in the pleading of their case. Secondly, however, that (as what I would call a matter of discretion) it was highly relevant in those cases that the injury was clear and called for examination of the documents in question, the disclosure requested was narrowly focused and bore directly on the injury complained of and responsibility for it, and the documents would be decisive on the conduct or even the existence of the litigation. Thirdly, that on the question of discretion, it was material that a prospective claimant in need of legal aid might be unable even to commence proceedings without the help of pre-action disclosure."

In paragraph 17 of his judgment the learned judge in the present case quoted the first of the points made by Rix LJ in that paragraph to the effect that pre-action disclosure was not only available to those who could already plead a cause of action, but also those who needed disclosure as a vital step in deciding whether to litigate at all. He went on to conclude that the applicant had demonstrated sufficient to satisfy this jurisdictional threshold because "the potential cause of action is clear". In my judgment this approach is flawed and misapplied the relevant authorities.

So far as Black v Sumitomo itself is concerned, the learned judge seems to have ignored completely the second point made by Rix LJ in paragraph 68 about the earlier authorities, albeit in the context of discretion, that it was highly relevant that in the cases where an order for pre-action disclosure had been made, the injury was clear and called for examination of the documents of which disclosure was being sought. It seems to me that the point being made is that where the claimant has suffered personal injury, provided that the circumstances of the incident causing that injury call for investigation, the claimant has a sufficiently arguable case for the purposes of pre-action disclosure, whether under the pre-CPR regime or the post-CPR regime.

In considering the jurisdictional threshold under 31.16(3) (a) and (b), having decided that those provisions do not require it to be likely that proceedings will be issued, but only that, if subsequent proceedings are issued it is likely that the applicant and the respondent will be parties to those proceedings, Rix LJ went on to consider what he categorised as the second question: whether in that context "likely" means "more probably than not" or "may well". He decided that it meant "may well", saying at paragraph 72:

"As to the second question, it is not uncommon for "likely" to mean something less than probable in its strict sense. It seems to me that if I am wrong about the first question, then it is plain that "likely" must be given its more extended and open meaning (see Lord Denning in Dunning's case), because otherwise one of the fundamental purposes of the statute will have been undermined. If, however, I am right about the first question, the second question is of less moment. Even so, however, I am inclined to answer it by saying that "likely" here means no more than "may well". Where the future has to be predicted, but on an application which is not merely pre-trial but pre-action, a high test requiring proof on the balance of probability will be both undesirable and unnecessary: undesirable, because it does not respond to the nature and timing of the application; and unnecessary, because the court has all the power it needs in the overall exercise of its discretion to balance the possible uncertainties of the situation against the specificity or otherwise of the disclosure requested. Clearly, the narrower the disclosure requested and the more determinative it may be of the dispute in issue between the parties to the application, the easier it is for the court to find the request well-founded; and vice versa."

It is striking that Rix LJ does not seek to define this jurisdictional threshold by reference to any particular degree of arguability of the applicant's possible claim, although, as I have said, it seems to me that the second principle which he sets out in paragraph 68 derived from the authorities before the amendment of section 33(2) is predicated upon an injury which calls for investigation, which suggests a case which is at least a prima facie arguable case.

A somewhat different approach to this "arguable case" jurisdictional threshold was adopted in the subsequent decision of the Court of Appeal in Rose v Lynx Express [2004] 1 BCLC 455. In that case, the judge at first instance had effectively concluded that the issue which lay behind the application for pre-action disclosure was of sufficient significance that it should be decided as a preliminary issue for the purposes of determining whether pre-action disclosure should be ordered. The Court of Appeal (Peter Gibson, Mance and Keene LJJ) disapproved of this approach, saying in paragraph 4 of the judgment of the Court:

"We have reservations about the approach adopted by the judge. We are concerned whether it is possible, and it is in our view certainly unsatisfactory, to have a situation in which what is described as a straightforward issue of construction is decided one way for one purpose, but may later be re-argued and possibly decided differently during the course of subsequent proceedings. Further, whether or not the determination would be binding at the trial of the substantive claim, there are practical dangers about considering any substantive issue, and particularly the core issue in the action, in the context of an application for pre-action disclosure. At the pre-action stage, the parties may not have thought through or seen all the implications of the issue in the same way as they will have done by the time when it comes to be tried. Any pre-action determination will have to take place in the light of assumptions about the factual circumstances, which may prove incomplete or incorrect. The actual factual circumstances, when known, may throw up problems about a particular construction of the articles which may not have been apparent at the pre-action stage. We think therefore that courts should be hesitant, in the context of an application for pre-action disclosure, about embarking upon any determination of substantive issues in the case. In our view it will normally be sufficient to found an application under CPR 31.16(3) for the substantive claim pursued in the proceedings to be properly arguable and to have a real prospect of success, and it will normally be appropriate to approach the conditions in CPR 31.16(3) on that basis."

Black v Sumitomo does not seem to have been cited to the Court of Appeal in that case, possibly because the specific application of CPR 31.16 was not in issue, save to the limited extent quoted. The dichotomy between the approach of the Court of Appeal in that case and the approach of the earlier Court of Appeal in Black v Sumitomo was noted by Patten J in BSW Limited v Balltec Limited [2006] EWHC 822 (Ch) in analysing the two decisions of the Court of Appeal. As he observed in paragraphs 19 and 20 of his judgment, the test of a properly arguable case with a real prospect of success is the same test as is set out in CPR 13.3(1) and 24.2 in relation to setting aside judgments in default and resisting summary judgment respectively.

Patten J went on to conclude in paragraph 21 of his judgment that the Court of Appeal in Rose had not been concerned with whether a lower threshold than a good arguable case satisfied the requirements of CPR 31.16:

"The leading case on the exercise of the Court's powers under CPR 31.16 is the decision of the Court of Appeal in Black v Sumitomo Corporation [2002] 1 WLR 1562. In Rose v Lynx Express Ltd this decision was not referred to by the Court of Appeal. Having decided that the applicant's construction of the articles of association was "properly arguable" the Court of Appeal appears to have considered that the jurisdictional conditions specified in CPR 31.16 (3) had been satisfied. The only objection to the making of the order seems to have been based on the meaning to be attached to the relevant article. It was therefore unnecessary for the Court of Appeal in that case to decide whether a lower threshold than a good arguable case satisfied the requirements of CPR 31.16 (3) and how the discretion should be exercised in such circumstances. But in Black v Sumitomo these issues did arise for consideration."

Patten J went on to conclude after a detailed analysis of the decision in Black v Sumitomo and of the facts of the case before him that, notwithstanding that the application before him was a speculative one, he would not reject it on grounds of failing the jurisdictional threshold in 31.16 (3)(a) and (b), although the question of the strength of any claim would go to discretion. He expressed this conclusion as follows in paragraph 75:

"In these circumstances it is really impossible to describe the application as anything but speculative and but for the authorities on s.33(2) of the 1981 Act prior to amendment, I would have been doubtful whether the jurisdictional threshold had been crossed in this case. But having regard to those authorities and the way in which Rix LJ approached this question in Black v Sumitomo Corporation, I am not convinced that I should reject the application on the basis that the requirements of CPR 31.16(3) (a) and (b) have not been complied with. It seems to me that my assessment of the strength of the concerns expressed by BSW is primarily relevant to the issue of discretion."

It seems to me that is a fairly clear rejection of the formulation in Rose of the "arguable case" jurisdictional threshold. On the other hand, Rose was recently followed and applied by David Steel J in Pineway Limited v London Mining Company Limited [2010] EWHC 1143 (Comm). Having considered Black v Sumitomo the learned judge said this at paragraphs 21 and 22:

"21. But although the likelihood of proceedings as such is not material, it does not follow in my judgment that the existence of a prima face claim upon which such proceedings could be instituted does not remain a necessary requirement. This point is touched on in the decision in Rose v Lynx Express Ltd [2004] EWCA Civ 447:-

"Courts should be hesitant in the context of an application for pre-action disclosure about embarking upon any determination of substantive issues in the case. In our view it will normally be sufficient to found an application under CPR rule 31.16(3) for the substantive claim pursued in the proceedings to be properly arguable and to have a real prospect of success and it will normally be appropriate to approach the conditions in CPR 31.16(3) on that basis:"

22. London Mining contends that Pineway has failed to establish any properly arguable claim let alone one which has a real prospect of success. To the contrary, London Mining point to the fact that it is Pineway's position that it has no idea whether it has a claim or not. The suggestion by Pineway (if it be maintained) that there must be an arguable claim because any failure to pay the monies under the assignment must constitute a breach of the assignment either because the conditions have been satisfied and there are no good grounds for withholding payment or the conditions have not been satisfied because of a failure to exercise best endeavours is in my judgment unsustainable."

David Steel J went on to conclude, applying the test formulated in Rose, that none of the claims in support of which the applicants were seeking the pre-action disclosure demonstrated a properly arguable case which had a real prospect of success.

In her oral submissions before me, Miss Phelps accepted that at the stage of pre-action disclosure the test of "real prospect of success" cannot really be the same as it would be for summary judgment under Part 24. It seems to me that this was a realistic concession, but the problem is that once made, it rather amounts to an acceptance that the approach in Rose cannot be correct, since the Court of Appeal was clearly formulating the same test of "real prospect of success" as under Part 24 and it is difficult to see how it could really be that "real prospect of success" meant one thing under one provision of the CPR and at one stage of the proceedings, but meant something different under another provision and at a different stage. Ultimately, Miss Phelps submitted that some threshold of arguability was required and, however it was formulated, the applicant could not satisfy it.

Mr Gosling for the applicant made the perfectly valid point that CPR 31.16 makes no mention of "real prospect of success" as the relevant jurisdictional criterion, in contrast to CPR 13.3 and 24, although he accepted, it seemed to me correctly, that an applicant under CPR 31.16 must show some level of arguability of the possible claim. Mr Gosling characterised this as a "properly arguable case", although when pressed he was unable to specify what degree of arguability was required.

If I had to decide which test was the correct one for the "arguable case" jurisdictional threshold, I would conclude that it was the lower one suggested by Black v Sumitomo and by BSW v Balltec. I have reached this conclusion not only on the basis of the authorities that led Patten J to the same conclusion in BSW v Balltec, but on the basis that, in principle, at the pre-action stage where the whole purpose of the application is to ascertain whether to bring a claim or not, it cannot be right that the applicant has to establish a case which is sufficiently arguable to have a "real prospect of success" in the sense which that phrase has under the CPR. It seems to me that Rix LJ was implicitly rejecting that approach in paragraph 72 of his judgment in Black v Sumitomo.

Having said that, it seems to me that because CPR 31.16 (3)(a) and (b) do require the applicant to show that proceedings may well ensue (per Rix LJ at paragraph 72 of Black v Sumitomo) the applicant has to show some sort of prima facie case which is more than a merely speculative "punt". In my judgment, that is exactly what any claim would be here. The applicant in the present case cannot even begin to demonstrate that his agreement with the bank was unenforceable and, for the reasons I have already given, I very much doubt whether it is necessary for him to have the disclosure he seeks in order to bring whatever claim he might wish to bring. The applicant certainly cannot show that proceedings may well ensue.

Accordingly, I consider that, even if the jurisdictional threshold under (3) (a) and (b) is as low as I have concluded it is, the applicant cannot reach that threshold. On that ground alone, the court does not have jurisdiction and the decision of HH Judge Halbert that he did have jurisdiction was wrong. Even if my conclusion on jurisdiction were open to question, the issue of the absence of any real arguable case on behalf of the applicant is highly relevant to the question of discretion to which I return below. Although as Rix LJ said in Black v Sumitomo, it is important to keep questions of jurisdiction and discretion separate, as David Steel J realistically observed in Pineway at paragraph 24, the matters that arise under the jurisdictional requirements of CPR 31.16 "re-emerge at the discretionary stage".

Jurisdiction: desirability

 

This is particularly true of the other jurisdictional requirement of CPR 31.16(3) (d) in issue in this case (it not being suggested that, other things being equal, sub-rule (3) © could not be satisfied). Sub-rule 3 (d) requires that pre-action disclosure is "desirable" in order to dispose fairly of the anticipated proceedings, assist resolution without proceedings or save costs. It might be thought that such an issue of desirability inevitably went to discretion, but the rule is clearly drafted in such a way that this issue is also a jurisdictional one.

The learned judge concluded that the jurisdictional requirements of sub-rule 3 (d) were satisfied. He found in paragraphs 20 to 22 of his judgment that sub paragraph (i) (disclosure desirable to dispose fairly of the anticipated proceedings) was satisfied because "if the document does exist and is in compliance with section 61 there will probably be no proceedings; the Claimant will abandon the case. If the document does not exist and never did or if it clearly does not comply with section 61, there will probably be no proceedings because the bank will concede the point and if there is a dispute about it then it will be disclosable in the proceedings anyway". Sub paragraph (ii) (disclosure desirable to assist the dispute to be resolved without proceedings) was satisfied for the same reasons. Sub paragraph (iii) (disclosure desirable to save costs) was satisfied because "there can be no doubt whatever that disclosure of the document has a high chance of saving a substantial amount in costs".

Contrary to the views of the learned judge, I do not consider that the jurisdictional requirement of desirability is satisfied. My primary reason for that conclusion is that, as I have already set out above, I am far from convinced that it is necessary for the applicant and his advisers to see a direct copy of the original executed agreement in order to ascertain whether he has a case that the agreement is irredeemably unenforceable. It seems to me that if he had an arguable case to that effect, he would be able to articulate that case from the materials which the bank have already made available under section 78. Thus, unlike the learned judge, I do not consider that this case is one where there is "doubt about whether section 61 has been complied with". On the contrary, the applicant simply does not advance any evidence to suggest that he has even the beginnings of a case that the agreement was unenforceable.

That leads into the second reason why it seems to me the requirement of desirability is not satisfied, that any claim the applicant might have is wholly speculative and lacking in merit. In the Application Notice the ostensible reason for making the application is that the applicant and his solicitor need to see the original or a direct copy of the original, executed agreement in order to establish whether or not it is unenforceable. Thus, no evidence is put forward to support the suggestion that the agreement is unenforceable. The applicant does not in fact say anything about what his position is concerning the enforceability of this agreement, as opposed to pre-2007 agreements generally. In my judgment this is a wholly speculative application.

Accordingly, the jurisdictional requirements of sub-rule 3 (a) (b) and (d) are not satisfied in this case and the court does not have jurisdiction to make an order under CPR 31.16.

Discretion

 

Even if I had concluded that the court had jurisdiction, I would have to go on to consider discretion separately and in detail for the reasons set out in paragraphs 19 and 20 above. It is not in every case that pre-action disclosure will be appropriate, but only in those cases where there is some feature of the case which takes it out of the ordinary run.

The learned judge considered that this was an appropriate case for the exercise of his discretion in favour of making an order for pre-action disclosure, describing the decision on discretion as "a repetition of the jurisdictional decision in relation to [sub-rule 3 (d)]", in other words that disclosure was desirable and that the interests of justice required the document to be disclosed at this stage (see paragraph 24 of his judgment). He rejected any factors which might be thought to weigh against disclosure, specifically any inability or difficulty for the bank in producing the original executed agreement or a direct copy of it. As he put it, it was a case of the bank simply refusing to produce the document at all.

The circumstances in which an appellate court can interfere with the exercise of discretion by the court below are limited. It was common ground before me that the applicable principle is that the appellate court should only interfere if the court below:

"…exceeds the generous ambit within which a reasonable disagreement is possible" (G. v G. (Minors: Custody Appeal) [1985] 1 W.L.R. 647 per Lord Fraser at 652)); or

"either erred in principle in his approach or has left out of account, or taken into account, some feature that he should, or should not, have considered, or that his decision was wholly wrong because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale." (Lord Woolf M.R. in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507 at 1523)

Miss Phelps submitted that the learned judge had erred in principle by referring to the issue of discretion as being a repetition of the issue of jurisdiction, because that effectively collapsed the jurisdictional and discretionary stages of CPR 31.16(3)(d), and in particular meant that the learned judge had failed properly to consider the issue of discretion under CPR 31.16(3) separately and in detail, as required by Black v Sumitomo. It seems to me that this criticism is somewhat unfair. The learned judge was only reflecting what a number of judges have said, most recently David Steel J in Pineway that at the discretion stage, the same issues will re-emerge as arose at the jurisdiction stage.

Nonetheless, I do agree that overall the learned judge did err in principle. In particular, it seems to me he paid scant, if any regard, to what on any view is the speculative nature of the application and of any possible claim the applicant might have. The learned judge's perception, in exercising his discretion in favour of granting the order, that this was a case where there was a doubt about whether section 61 had been complied with, seems to me to be wrong for the reasons I set out in paragraphs 42 and 43 above. Thus, the learned judge has failed to take account of the speculative nature of the application and any possible claim.

As I have said, one of the matters which clearly most influenced the judge in exercising his discretion, was that he considered that it was necessary to make the order in order for the applicant to ascertain whether or not the agreement was unenforceable. Leaving to one side the question whether that is a legitimate purpose of such an order where the application is wholly speculative, for reasons I have also elaborated above, I have considerable doubts as to this alleged necessity. It seems to me that, if the applicant had a case to make that his agreement was unenforceable, he would have been able to do so from the materials produced by the bank under section 78. The application smacks of "Micawberism", the hope that something will turn up, rather than necessity. So this is a respect in which the learned judge has taken account of something of which he ought not to have taken account.

For those reasons, I consider that his exercise of discretion was flawed and this court can look at the issue of discretion afresh. In exercising that discretion, I do not consider that this is a suitable case for the making of an order under CPR 31.16. I have reached that conclusion for two reasons that will be apparent from what I have already said, first the speculative nature of the application and of any possible claim and second, that the obtaining of the document sought is not on analysis necessary to establish whether the applicant has a claim or not.

Where the application and any possible claim do appear speculative, the court will usually, in the exercise of its discretion, refuse to make an order for pre-trial disclosure: see per Patten J in BSW v Balltec at paragraphs 81 and 82 and David Steel J in Pineway at paragraph 53. Another case where the court refused to make an order because of the speculative nature of the claim is the decision of Coulson J in Gwelhayl Limited v Midas Construction Limited [2008] EWHC 2316 (TCC), where at paragraph 28 the learned judge said:

"For the avoidance of doubt, I should say that I reject the suggestion that the documents in question should be provided in order for Gwelhayl to work out whether they have a claim at all. It does not seem to me that that is the purpose of the provisions at CPR 31.16. It follows that I do not accept Mr. Bowling's submission that these documents are required, as he put it, 'to break the circle'. It seems to me that, in circumstances where Bailey have provided a large amount of copy documentation, and in circumstances where, for the reasons that I have given, the alleged claim is inchoate and entirely speculative, it would be wrong to conclude that the documents should be provided before the commencement of proceedings. I do not accept Mr. Bowling's submission that, by reference to the examples drawn by Rix LJ in Black, this is akin to a medical negligence case. It seems to me that this is precisely the sort of speculative commercial action that Rix LJ had in mind in paragraph 83 of his judgment. "

Mr Gosling submits that this case is different, because this is a focused application for a single document. He relies upon what Rix LJ said in Black v Sumitomo at paragraph 95:

"In my judgment, the more focused the complaint and the more limited the disclosure sought in that connection, the easier it is for the court to exercise its discretion in favour of pre-action disclosure, even where the complaint might seem somewhat speculative or the request might be argued to constitute a mere fishing exercise. In appropriate circumstances, where the jurisdictional thresholds have been crossed, the court might be entitled to take the view that transparency was what the interests of justice and proportionality most required. The more diffuse the allegations, however, and the wider the disclosure sought, the more sceptical the court is entitled to be about the merit of the exercise."

However, in my judgment the applicant can gain little assistance from that passage in a case such as the present, where the necessity to have the document to bring any claim is simply not demonstrated for the reasons I have given. I cannot see any reason why, if the applicant had any sort of arguable case that the agreement was unenforceable, he could not make it on the basis of the documents already produced under section 78. That is the second reason why I would exercise my discretion to refuse to make an order for pre-action disclosure in this case. There is nothing in this case which puts it out of the ordinary run.

In the circumstances, it is not necessary to deal in any detail with the other reasons advanced by Miss Phelps (primarily in her written Skeleton Argument rather than her oral submissions) as to why the court should exercise its discretion against making an order. Like the learned judge, I am unimpressed by the alleged difficulties the bank might face in producing the agreement if I otherwise thought it should do so, nor by the suggestion that if this application succeeds, there may be many other similar applications which will deluge the bank. Each application needs to be considered on its own merits and, if the particular application is one which, in its discretion, the court concluded should be granted, it seems to me it would be a wrong exercise of discretion to then go on and say that the order should not be made because of the general overall impact of such applications on the bank.

Equally, it does not seem to me that the existence of the statutory section 78 regime is of any more than marginal relevance. The fact is that, if the applicant were otherwise right in the arguments he advances, that regime has proved inadequate and the fact that the bank had produced documents under that section would not deter a court from making an order if the jurisdiction requirements of CPR 31.16 (3) were satisfied and the applicant demonstrated that the executed agreement was a necessary document to formulate a claim. In fact of course, for the reasons I have given, I am not satisfied on this issue of necessity.

It follows that the appeal must be allowed in relation to the order under CPR 31.16 and the order made by HH Judge Halbert must be discharged.

Costs

 

In the circumstances, the order for costs which the learned judge made must also be discharged and the appeal allowed on that ground as well. It is not strictly necessary to deal with the judge's decision on costs in any detail but since the point was fully argued and is of some significance generally, I will deal with it briefly.

The general rule is that the court will award costs in any event to the person against whom an application for pre-action disclosure is made (CPR 48.1(2) (a)). The Court may make a different order having regard to all the circumstances, including the extent to which it was reasonable for the person against whom the order was sought to oppose the application (CPR 48.1(3) (a)).

It is clear from this rule and from the decision of the Court of Appeal in SES Contracting Limited v UK Coal Plc [2007] EWCA 79 that merely opposing unsuccessfully an application for pre-action disclosure does not justify a departure from this general rule. As Moore-Bick LJ stated in paragraph 17 of that case:

"Although a respondent to an application may incur some costs merely in considering what response to make to an application of this kind, in most cases he will only incur substantial costs if he opposes it. By laying down a general rule that the respondent will be awarded his costs, therefore, I think that the Rules implicitly recognise that it will not usually be unreasonable for him to require the applicant to satisfy the court that he ought to be granted the relief which he seeks. The reason for that (if it be necessary to find one) lies, I think, in a recognition that a private person who is not a party to existing litigation which brings with it an obligation of disclosure is entitled to maintain the privacy of his papers unless sufficient grounds can be shown for overriding it and that it is for the person seeking to invade that privacy to justify doing so. At all events, the rule is clear in its terms and provides the point of departure for a judge dealing with the costs of an application of this kind."

Moore-Bick LJ went on to consider the circumstances which would justify a departure from that general rule in paragraph 24 of the judgment:

"If one is starting from the position set out in rule 48.1(2) one would expect an order of this kind to be made only in a case where it was clearly unreasonable for the respondent to oppose the application or where the manner of his opposition was so unreasonable as to make it appropriate to require him to bear the whole of both parties' costs."

In that case the judge at first instance had concluded that the respondent's conduct in resisting the application and the manner of its opposition was such as to justify an order that it should pay all the costs. In fact, from the material before the Court of Appeal in SES it appears that there had never been a previous case in which a court, however unreasonable the respondent's conduct, had ever gone further than requiring the respondent to bear its own costs, in other words making no order as to costs. It is clear from paragraph 24 of the judgment of Moore-Bick LJ that he was not prepared to limit the most stringent of orders in response to unreasonable conduct by a respondent to no order as to costs and thus to rule out the possibility of an order that the respondent pay all the costs, such as the learned judge made in the present case.

Nonetheless, although in that case the Court of Appeal was not prepared to interfere with the conclusion of the judge at first instance that the conduct of the respondent had been unreasonable (a conclusion reached after a somewhat remarkable three day hearing as to whether there should be an order for pre-action disclosure), it did conclude that the judge's exercise of discretion in ordering the respondent to pay all the costs was flawed and, in exercising that discretion afresh, the Court of Appeal concluded that whilst there was ample material to justify departure from the general rule, there was no justification for making a more stringent order than no order for costs.

In the present case, the basis upon which the learned judge concluded that it was appropriate to make an order that the bank pay all the costs was set out in paragraphs 30 and 31 of the judgment:

"It would have been quite simple for the bank, if they have the agreement to produce it, if they have not to say so, and if they have secondary evidence that the agreement did exist, though it does not any longer exist, to produce the secondary evidence. If the deluge of requests means they need more time, they could have asked for it. To have done none of these things but simply in a blanket way flatly to refuse to produce the document is in my judgment unreasonable.

..in my view the entirety of the costs in this application have been incurred as a result of the unreasonable attitude of the bank. In those circumstances the bank should pay all the costs of the application."

I consider that this exercise of discretion was flawed for a number of reasons:

(1) The learned judge has identified no particular factor which renders the bank's opposition to the application unreasonable. On the contrary, it seems to me that the bank resisted the application on grounds of principle, so that although the learned judge found for the applicant in strong terms it was wrong to conclude that the bank's opposition was unreasonable. As Miss Phelps rightly submitted, the learned judge acknowledged at the hearing that the issue in the case was a difficult one and gave permission to appeal in respect of it, which as I see it, is somewhat inconsistent with the suggestion that the bank acted unreasonably in opposing the application.

 

(2) The learned judge identified nothing in the manner of the bank's opposition which was so unreasonable as to warrant a departure from the normal order, let alone an order that the bank should pay all the costs. This is in stark contrast to SES where, notwithstanding the unreasonable manner in which the respondent had conducted its opposition, the Court of Appeal concluded that the order by the judge that the respondent should pay all the costs was not an order that he was justified in making. It would seem to me that the present case must be an a fortiori one given the absence of anything to suggest that the bank's conduct even began to be unreasonable in the way in which the judge found it had been in SES.

 

Given that flawed approach, it would have been open to this court to exercise the discretion afresh. Had I done so, I would have concluded that there was nothing unreasonable in the bank's opposition to the application, since the opposition was on a point of principle, so that departure from the normal rule that the applicant pays the respondent's costs was not justified. Even if I had been prepared to find, which I was not, that the bank's conduct was unreasonable, in the light of the facts of and decision of the Court of Appeal in SES, the very worst sanction that could or should have been visited on the bank was that it should pay its own costs.

At all events this is academic since I have decided that, whether on grounds of jurisdiction or of discretion, there is no basis for any order for pre-action disclosure, so that the applicant must pay all the respondent's costs both at first instance and before me.

Conclusion

 

The appeal is allowed and the applicant must accordingly pay the costs below and before me.

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During the course of 2009 and before the application for specific disclosure was made, a series of requests were made by the applicant, a claims management company acting on his behalf

 

Where he initially cocked it all up for himself, IMO....

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