Grace and Another v Black Horse Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Briggs,Lord Justice Beatson,The Master of the Rolls |
| Judgment Date | 30 October 2014 |
| Neutral Citation | [2014] EWCA Civ 1413 |
| Docket Number | Case No: B2/2013/0424 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 October 2014 |
[2014] EWCA Civ 1413
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHESTER COUNTY COURT
JUDGE HALBERT
9CH05795
Royal Courts of Justice
Strand, London, WC2A 2LL
THE MASTER OF THE ROLLS
Lord Justice Beatson
and
Lord Justice Briggs
Case No: B2/2013/0424
Thomas Brennan (instructed by QUALITY SOLICITORS HOWLETT CLARKE) for the APPELLANTS
Kate Urell (instructed by G.J. COOPER) for the RESPONDENT
Hearing dates: Monday 6 th October 2014
On 2 nd September 1997 the first appellant Mr. William Grace bought his grandson a laptop computer. He did so by entering into a hire purchase agreement with Chartered Trust PLC ("CTP"), the predecessor in title of the respondent, Black Horse Limited. It was a regulated agreement within the meaning of the Consumer Credit Act 1974 ("the CCA"), with the consequence that CTP was obliged, pursuant to s. 63, to supply Mr. Grace with a copy of it. The purported copy differed in material respects from the agreement which Mr. Grace had signed (as to interest rate and APR). The result was that, pursuant to s. 63(5), the agreement was not properly executed.
In those days, the draconian consequence of CTP's failure to comply with s. 63 was not merely that, pursuant to s. 65, the agreement was unenforceable against Mr. Grace otherwise than by an order of the court. By s. 127(4), the court was prohibited from enforcing a regulated agreement where its improper execution was the result of a breach of s. 63. Mr. Grace's agreement was, as the judge put it, "irremediably unenforceable". It could never have been enforced against Mr. Grace by CTP or (later) by Black Horse. Even though the rigour of s. 127 has since been ameliorated, in relation to regulated agreements made in or after April 2007, it remains in full force in relation to earlier agreements, so that Mr. Grace's agreement was and remains permanently unenforceable, against him.
Mr. Grace fell into arrears under the agreement, initially because he closed the business account from which instalments were being made by direct debit. This led to the imposition of penalty charges by CTP which, since Mr. Grace regarded the direct debit breakdown as CTP's fault, he protested by refusing to make any further payments at all.
Eventually CTP brought proceedings in respect of the mounting arrears (by then just under £700 plus penalties) and, on 10 th April 2000, entered a default judgment which was registered against Mr. Grace with credit reference agencies ("CRAs").
There followed a series of county court hearings in 2000 during which (probably on the court's own initiative) the unenforceability of the agreement came to light. The result was that the default judgment was set aside, CTP's claim dismissed, with costs, and CTP gave an undertaking to remove the default judgment registration, with which it belatedly complied, in January 2003.
CTP then added the costs amount to the amount of the hire purchase debt for which default judgment had previously been obtained, together with some other charges, giving rise in its records to an apparent debt owed by Mr. Grace of £928. CTP then wrote off that debt, but filed an entry with the CRAs alleging that Mr. Grace had defaulted, in May 2000, in repayments of a loan in the sum of £928. It is this registration ("the default registration") which was the casus belli in the present litigation. It is common ground that, by then, the contractual arrears and penalties under the hire purchase agreement amounted to about £800 odd.
Mr. Grace found out about the default registration in September or October 2003. Having raised the matter with the CRA Experian, he pursued his complaint with CTP (by then known as Black Horse Finance Limited) in November and December 2003. Black Horse vacated the default registration with the CRAs on 5 th January 2004. Mr. Grace's claim in these proceedings is that, in the meantime, the existence of the default registration had caused him to be unable to obtain banking facilities other than a simple cash account, and that this disability persisted, even after the removal of the default registration, until October 2004.
Meanwhile, Mr. Grace's partner Mrs. Margaret George entered into a hire purchase agreement with Capital Bank for the purchase of a static caravan at Talacre Beach in North Wales. That agreement superseded an earlier agreement for a different caravan which she made in 2002. Whereas the 2002 agreement involved an APR of 10.5%, she incurred an APR of 17.9% under the 2003 agreement. In March 2006, as the result of correspondence with Capital Bank by Mr. Grace on her behalf, she discovered that the increased APR was attributable to the blot on his credit record constituted by the default registration, since she was cohabiting with him. The hire purchase agreement was later assigned by Capital Bank to Black Horse.
On 14 th December 2009, Mr. Grace and Mrs. George issued a claim in the Chester County Court seeking (among other things) damages for breach of statutory duty by Black Horse under Section 13 of the Data Protection Act 1998 ("the DPA"), upon the basis that the default registration involved a contravention of the Data Protection Principles which had caused each of them damage, in his case due to his inability to obtain satisfactory banking facilities and, in her case, due to the increased APR which she incurred under the 2003 agreement.
Mrs. George had, on Mr. Grace's advice, in the meantime ceased making payments under the 2003 agreement, upon various grounds which I need not describe. The result was that Black Horse counterclaimed for arrears under the 2003 agreement, and sought delivery up of the caravan. In response, Mrs. George claimed rescission of the 2003 agreement for (among other things) misrepresentation which, she acknowledged, would require the return of the caravan to Black Horse.
The claim and counterclaim were tried by HHJ Halbert in the Chester County Court over three days starting on 28th August 2012. Mr. Grace and Mrs. George appeared as litigants in person. There had been some doubt about Mrs. George's fitness to participate. It was resolved by a medical certificate from her GP, to the effect that, while suffering short-term memory difficulties, she had full capacity to participate in the proceedings, in particular by appointing Mr. Grace to represent her. The judge was also given a letter signed by Mrs. George addressed to the court, conferring
"full authority to my partner Mr. William Brian Grace, to represent me in the proceedings before the court, in claim 9CH05795.
He has my full consent to disclose and discuss and present all aspects of my claim against Black Horse Limited, in which I am second claimant."
In the event, the substantial conduct of the trial was undertaken by Mr. Grace. Mrs. George attended for parts of it, in particular to give evidence. She was not in attendance on the final day of the trial.
At the end of closing submissions, and after the judge had indicated that he intended to reserve the judgment, counsel for Black Horse (Miss Urell) raised a concern about the caravan the subject of the 2003 agreement. It had become apparent during the giving of evidence that it had been unused by the appellants for a year prior to trial, that site rental payments were not being made, and that there was a threat from the site landlords to remove it. This led to the following exchange between the judge, Miss Urell and Mr. Grace:
"MISS URELL: Your Honour, there is just one other point before I ——
HHJ HALBERT: Subside?
MISS URELL: Exactly. You heard evidence from John Bloor about the state of the caravan and [inaudible] to be a reserved judgment I would have waited until the end, but the fact of the matter is the caravan is, it would appear about to be disposed of, uplifted, etc, by ——
HHJ HALBERT: By the landlords.
MISS URELL: —— and [inaudible] goods. So we can't repossess it.
HHJ HALBERT: Well I think the simplest thing to do is make an Order de bene esse in the meantime.
MISS URELL: I'm grateful.
HHJ HALBERT: And that you go and get it because Mrs George made it quite clear she doesn't want it any more.
MR GRACE: No, Your Honour.
HHJ HALBERT: So you might as well go and get it. So you have as of now permission to go and recover the caravan.
MISS URELL: I'm grateful.
HHJ HALBERT: What you're going to do with it I [inaudible] to think, but.
MR GRACE: Well it's im-, it was immaculate, Your Honour. It's absolutely immaculate.
HHJ HALBERT: Well when did you last see it?
MR GRACE: About twelve months ago, but there's no, there's nobody should have been in there except ——
HHJ HALBERT: Well we'll wait and see [inaudible].
MR GRACE: Well nobody at all really because it's been disconnected from the mains, the gas and the electric. We did have a buyer for £8,000 but we couldn't sell it because it was still under the hire purchase and that would have gone at time to offset any claim that we may have had, but we couldn't do it.
HHJ HALBERT: I understand. Right. Does that deal with it?
MISS URELL: I'm grateful.
HHJ HALBERT: Right Mr. Grace. Anything else you want to add?"
There followed closing submissions by Mr. Grace, during which he made no objection to the judge's oral order concerning the caravan.
In his careful and detailed reserved judgment delivered in draft to the parties on 25 th September and handed down on 21 st November 2012, the judge dismissed both Mr. Grace and Mrs. George's claims, and all her challenges to the enforceability of the 2003 agreement. By paragraph 2 of his...
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