Kneale v Barclays Bank Plc (t/a Barclaycard)
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Flaux |
| Judgment Date | 23 July 2010 |
| Neutral Citation | [2010] EWHC 1900 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | 2010 FOLIO 173 |
| Date | 23 July 2010 |
[2010] EWHC 1900 (Comm)
HH Judge Halbert
Before: The Honourable Mr Justice Flaux
2010 FOLIO 173
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
ON APPEAL FROM THE CHESTER COUNTY COURT
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
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;
(c) 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 6 th 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...
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