Carey and Others v HSBC Bank and Others
| Jurisdiction | England & Wales |
| Judgment Date | 23 December 2009 |
| Neutral Citation | [2009] EWHC 3417 (QB) |
| Docket Number | Case No. 9MA06008 9TS02266 0SF01266 9SF02648 9MA02780 9MA10331 9PR00618 9MA11185 |
| Court | Queen's Bench Division |
| Date | 23 December 2009 |
[2009] EWHC 3417 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE COURT
Before: His Honour Judge Waksman QC
(Sitting as a Judge of the High Court)
Case No. 9MA06008
9MA06008
9TS02266
0SF01266
9SF02648
9MA02780
9MA10331
9PR00618
9MA11185
David Uff and James Malam (instructed by MSB Solicitors) for Emma Carey David Uff and James
Malam (instructed by BPS Solicitors) for Samantha Conniff, Brian Backwell
and Andrew Light
Zoe Thompson and Laura D'Cruz (instructed by Ascot Lawyers Solicitors) for Shafeel Yunis Julian
Gun Cuninghame and Bradley Say (instructed by Consumer Credit Litigation Solicitors)
for Mohammed Adris, Raj an Mandal and Robert Atkinson
Sonia Tolaney and James Macdonald (instructed by Addleshaw Goddard LLP Solicitors) for
HSBC Bank Plc
Andrew Mitchell (instructed by Lovells LLP) for Barclays Bank Pic Bankim Thanki QC and Julia
Smith (instructed by DLA Piper (UK) LLP Solicitors) for The Royal
Bank of Scotland Plc
Geraint Howells (instructed by Bank of America Legal Dept.) for MBNA Europe Bank Limited Fred
Philpott (instructed by SCM Solicitors) for Bank of Scotland Plc
Stephen Neville (instructed by the OFT Legal Dept.) for the Office of Fair Trading
Hearing dates: 30 November —4 December 2009
INTRODUCTION
This judgment deals with two matters concerning requests for copies of credit card agreements pursuant to section 78 of the Consumer Credit Act 1974 (“the Act”) and the consequences of non-compliance with that provision. The first matter is the determination of six preliminary issues of law, arising in a number of selected cases. The second is the application by two of the Defendant banks to strike out or to obtain under CPR 24 the summary dismissal of certain claims brought against them on the basis of no reasonable grounds and/or abuse of process and/or no real prospect of success (“the Applications”).
The purpose of this judgment is to give general guidance, in the context of the cases before me, in the hope that this will narrow or eliminate the issues arising in the hundreds of other similar claims issued in County Courts around the country, many of which have been stayed pending the outcome here.
On 8 October 2009, over 100 such cases, issued in the North-West of England, were listed before me at a CMC. From them, a number were transferred into the Manchester Mercantile Court from which the issues were taken or in respect of which the Applications were later made. 3 cases were also listed for trial before me, without the need for oral evidence, but they were later settled.
The claims made on behalf of individual credit card holders are usually handled initially by claims management companies. In the main, they tend to use a relatively small number of solicitors. One result of this is that in the hearings, I had the benefit of submissions from Counsel instructed by such firms who have appeared in or dealt with a good many of the issued claims. I also heard from Counsel instructed by a fair cross—section of the banks involved as Defendants. This has meant that I have had full and careful argument from both sides on all of the issues. I have had the additional advantage of the involvement of the Office of Fair Trading, which intervened by consent and which was also represented by Counsel. I am grateful to all Counsel for their considerable assistance and also to the solicitors who co-operated to produce unified bundles of case papers, skeleton arguments, and authorities.
The preliminary issues have been framed as the following questions:
(1) When providing a copy of an executed agreement in response to a request under s78(l) of the Consumer Credit Act 1974:
(a) Must a creditor
(i) provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or complete copy thereof, or
(ii) can a creditor provide a document which is a reconstitution of the original agreement which may be from sources other than the actual signed agreement itself?
(b) Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made in order to comply with s78?
(c) Must the copy provided under s78 include the debtor's name and address as at the date when the agreement was made, and if so in what form?
(2) If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of s78(l), or must the creditor provide a copy of the original agreement as well?
(3) Does a creditor's breach of s78(l) of itself give rise to an unfair relationship within the meaning of section 140 A?
(4) If there is a breach of s78(l), is that sufficient without more to make a declaration to that effect (pursuant to CPR 40.20) appropriate, in particular:
(a) Where the creditor admits the breach but did not admit it before the issue of proceedings?
(b) Where the creditor denies or does not admit the breach?
(5) Does the document signed by the debtor contain the prescribed terms for the purposes of section 61 and/or section 127(3) if:
(a) they are on a sheet which is referred to on the piece of paper that was signed by the debtor; or
(b) where that sheet is attached to the piece of paper signed by the debtor; or
(c) where that sheet is separate from but was supplied with the piece of paper signed by the debtor?
(6) If it were not established, at trial, that there was a document signed by the debtor containing the Prescribed Terms, would that of itself entail an unfair relationship?
THE STATUTORY PROVISIONS The nature of the agreements
It is common ground that the (typical) credit card agreements which are the subject of the preliminary issues constitute “regulated agreements” for “running account credit” falling within ss8 and 10 (1) (a) of the Act. They also constitute “credit token agreements” under sl4 by reason of the provision of the credit cards themselves.
Executed and unexecuted agreements
“Executed agreement” is defined under si 89 (1) as being “a document, signed by or on behalf of the parties, embodying the terms of a regulated agreement, or such of them as have been reduced to writing.” An “unexecuted agreement” is defined as “a document embodying the terms of a prospective regulated agreement, or such of them as it is intended to reduce to writing.” By si 89(4) “A document embodies a provision if the provision is set out either in the document itself or in another document referred to in it.”
Part V of the Act
This Part is entitled “Entry into Credit or Hire Agreements” and then a section within that, immediately before s60, is entitled “Making the agreement”. This is concerned, among other things, with the duties of the creditor when the agreement is first made.
Proper execution of the agreement
In particular while the parties may succeed in making an executed agreement (see above), if it fails to conform to requirements made by regulations as to form and content it will be an improperly executed agreement (“IEA”).
Specifically, s61 (1) provides as follows:
s61 (1) “A regulated agreement is not properly executed unless:
(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and
(b) the document embodies all the terms of the agreement, other than implied terms, and
(c) the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.”
Section 189 (1) defines “prescribed” as “prescribed by regulations made by the Secretary of State”. The relevant power here is contained in s60:
s60 (1) “The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of —
(a) the rights and duties conferred or imposed on him by the agreement,
(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),
(c) the protection and remedies available to him under this Act, and
(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement.
(2) Regulations under subsection (1) may in particular —
(a) require specified information to be included in the prescribed manner in documents, and other specified material to be excluded;
(b) contain requirements to ensure that specified information is clearly brought to the attention of the debtor or hirer, and that one part of a document is not given insufficient or excessive prominence compared with another….”
The Consumer Credit (Agreements) Regulations 1983 (“the Agreements Regulations”)
These were made by the Secretary of State pursuant to s60.
By Regulation 2 (1) and Schedule 1, the credit card agreements with which I am concerned had to contain certain...
To continue reading
Request your trial
-
Adris and Others v the Royal Bank of Scotland Plc
...practice were intervened by the Solicitors' Regulation Authority (“SRA”). 2 On 23 December 2009 I handed down a lengthy judgment in Carey v HSBC [2009] EWHC 3417 which dealt with various issues arising in a very large number of County Court cases in relation to s78 of the Consumer Credit Ac......
-
Kneale v Barclays Bank Plc (t/a Barclaycard)
...original or a direct copy of the original, executed agreement in order to comply with its obligations under section 78 of the Act. 7 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 ali......
-
Anthony Joseph Champion Crossley & Others v Volkswagen Aktiengesellschaft
...law of a wide variety but which can include limitation. In that regard see the cases of Deep Vein Thrombosis Litigation [2002] EWHC 2825, Carey v HSBC [2009] EWHC 3417, Poole v HM Treasury [2006] EWHC 2731 (the Lloyds Names litigation) and Dobson v Thames Utilities [2007] EWHC 2021 (TCC) an......
-
Erica Brookes v Hsbc Bank Plc
...claims were stayed pending his decision. On 23 rd December 2009 he delivered judgment in the case reported as Carey v HSBC Bank Plc [2009] EWHC 3417 (QB), [2009] CTLC 103, in which he held, among other things, that a creditor was not obliged by section 78 to provide the debtor with a copy o......
-
2009 - The Banks' Annus Mirabilis: Through the Consumer Credit Looking-Glass
...provide advisors with a structured analytical approach drawing the line dividing "credit" from "charge for credit". Carey v HSBC plc [2009] EWHC 3417 (QB), 23 December 2009 Carey is the most important, and certainly the most lengthy, of the three decisions. With the north-western courts clo......