Steiner v NatWest
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lavender |
| Judgment Date | 10 October 2022 |
| Neutral Citation | [2022] EWHC 2519 (KB) |
| Docket Number | Appeal No. QB/2021/019 |
| Court | Court of Appeal |
| Year | 2022 |
[2022] EWHC 2519 (KB)
Mr Justice Lavender
Appeal No. QB/2021/019
Claim No. F56YM2310
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
LEEDS DISTRICT REGISTRY
on appeal from the
NEWCASTLE-UPON-TYNE COUNTY COURT
(HHJ FREEDMAN)
Royal Courts of Justice
Strand, London, WC2A 2LL
Steven McGarry (instructed by New South Law Ltd) for the Appellant
Lee Finch (instructed by DMH Stallard LLP) for the Respondent
Hearing date: 26 May 2022
(1) Introduction
This is an appeal against the decision of HHJ Freedman on 14 September 2021 on a preliminary issue of law, namely whether there was a debtor-creditor-supplier agreement between, on the one hand, Paul Steiner, the late husband of the Appellant, Gail Steiner, and, on the other hand, the Respondent, National Westminster Bank PLC (“NatWest”), and the judge's consequential order dismissing Ms Steiner's claim.
It is acknowledged that the existence of such an agreement is an essential element of Ms Steiner's claim against NatWest, which she brings as executor and personal representative of the estate of the late Mr Steiner. That is because Ms Steiner relies on the provisions of subsections 56(1)(c) and (2) of the Consumer Credit Act 1974 (“the Act”), by which negotiations conducted by the supplier in relation to a transaction financed or proposed to be financed by a debtor-creditor-supplier agreement within section 12(b) or (c) of the Act are deemed to be conducted by the negotiator in the capacity of agent of the creditor as well as in his actual capacity.
(2) Background
The negotiations in question are those which led to Mr & Ms Steiner entering into an agreement dated 27 April 2004 with Club La Costa Vacation Club Ltd (“CLC”), a company incorporated under the laws of Scotland, to purchase from CLC the right to participate in a timeshare scheme for the price of £14,000. That price was paid by Mr Steiner using his Mastercard, which had been issued by NatWest pursuant to an agreement between NatWest and Mr Steiner.
At the heart of the dispute in this case is the fact that Mr Steiner did not pay the sum of £14,000 to CLC, but paid it instead to First National Trustee Company Limited (“FNTC”), a company incorporated under the laws of the Isle of Man. There is some confusion in the payment documents which I have seen, but it was not in dispute that Mr Steiner used his NatWest Mastercard to pay first £9,000 and then £5,000 to FNTC. As to the documents:
(1) Mr Steiner completed a Credit Card Authorisation form for each payment. This form was headed with CLC's logo, which included the words “Club La Costa”. It then gave a merchant number, which I assume was FNTC's merchant number. It then said, “FNTC/Consolidated Resorts Ltd”, although there was no evidence that this was a name of a legal entity. At the bottom of each form was a statement that “I/We hereby authorise CLC Consolidated Resorts Ltd to claim the above amount on my/our credit card as stated.” Again, there was no evidence that CLC Consolidated Resorts Ltd was a legal entity.
(2) Mr Steiner's credit card statement gave the following description for each of the payments: “FNTC/CONSOLIDATED RESO DOUGLAS IRL”
(3) A receipt for an earlier payment made by Mr Steiner was headed, “First National Trustee Company Ltd.” It gave FNTC's address in Douglas and its website and email addresses, but also stated, “Club La Costa – Choice Points – Spain”.
FNTC was the Trustee under a Deed of Trust. The other parties to the Deed of Trust were:
(1) CLC, referred to as “the Association”; and
(2) CLC Resort Developments Limited, referred to as “the Founder Member”.
The recitals to the Deed of Trust stated as follows:
“A. The Founder Member has established the Association to secure for the Members of the Association exclusive rights of occupation of holiday resort accommodation in the properties detailed in the Scheme Accommodation Tables (as defined in the Articles) for specific periods of time as set forth and in accordance with the Memorandum and Articles from time to time of the Association (“The Articles”), the Scheme Rules and the Scheme Regulations made pursuant to the Articles.
B. The Ownership and control of the Owning Companies (as defined in the Articles) has been or shall be transferred to the Trustee or as the Trustee may direct (all of such Owning Companies together with their assets including, without limitation, all Scheme Accommodation and all other property which may from time to time be transferred to the Trustee or otherwise to be held for the benefit of the Association upon the trusts of this Deed shall be hereinafter called “the Property”) and the Trustee has agreed to hold the same upon the trusts and terms set out in this Deed.”
Clause 3 of the Deed of Trust provided as follows:
“The Founder Member and the Association hereby appoint the Trustee and the Trustee hereby agrees to act as Trustee on behalf of the Association on the terms set out in this Deed.”
Clause 4.1 of the Deed of Trust provided as follows:
“The Trustee shall hold the Property upon trust to secure for the Members the rights of occupation in the Scheme Accommodation under and in accordance with and subject to the provisions of the Articles.”
Clauses 10.1 to 10.6 of the Deed of Trust provided as follows:
“10.1 The Trustee shall hold or procure that the Owning Companies hold the Property on trust to secure the use and enjoyment of the Scheme Accommodation by the Members in accordance with the Articles and the Scheme Rules.
10.2 The Trustee shall preserve the Property and notwithstanding anything contained in this Deed, shall not allow the Owning Companies to trade in or otherwise carry on business and, subject to clause 15, the Trustee shall not have the power to alienate, dispose of, mortgage or otherwise encumber or in any manner whatsoever deal with the Property except as expressly provided herein or as specifically authorised by the Association.
10.3 The Trustee shall not be responsible for the repair, maintenance or management of the Scheme Accommodation or the contents thereof and shall not be liable for any damage or loss or depreciation which may arise as a result of the repairs, maintenance or management of the Scheme Accommodation, or the lack thereof. The Trustee shall furthermore not be responsible for the replacement or renewal of any of the furniture, fixtures or fittings of the Scheme Accommodation.
10.4 The Trustee shall not be bound to concern itself in any way with the management of the Association, its assets or finances nor with the rights, duties or obligations of the Members inter se.
10.5 The Association shall issue Point Rights Certificates to Members in accordance with the Articles and the provisions of clause 8.1 which Certificates shall also be signed by the Trustee.
10.6 The Trustee shall be entitled to obtain legal advice from Solicitors and/or the opinion of counsel and/or any other legal advice on any matter relating to the Property or in relation to the trust hereby constituted or the exercise of the Trustee's powers, rights and discretions hereunder, or the performance of its duties hereunder.”
Clauses 12.4 to 12.6 of the Deed of Trust provided as follows:
“12.4 The Trustee shall not be required to take any legal or other action whatever in relation to any matter concerning the Property, unless fully indemnified by the Association to the reasonable satisfaction of the Trustee for all costs and liabilities likely to be incurred or suffered by the Trustee.
12.5 The Association hereby indemnifies and holds harmless the Trustee against losses, claims, demands, taxes, actions, damages, costs and expenses made or incurred by the Trustee in connection with the exercise by the Trustee of its powers and the performance of its duties under this Deed.
12.6 The Association hereby covenants with the Trustee to pay on demand as the Trustee may direct all outgoings whatsoever (including management fees, rates, service charge, interest, costs, expenses and damages) covenanted or agreed to be paid (whether contingently or otherwise) in respect of the Property, and at all times to observe and perform all the covenants and terms and conditions to which the Scheme Accommodation may from time to time be subject.”
Clause 22 of the Deed of Trust provided that the Deed should be governed by and construed in accordance with the laws of Scotland. However, neither party has contended that the relevant laws of Scotland are different in any material respect from English law.
There was no evidence before me as to the general practice as to the structure of time share arrangements, but it was not disputed that the use of a trustee in such an arrangement, while not required by law, is common in the United Kingdom and has as its purpose, as one would expect, the protection of consumers.
Equally, there was no evidence before me as to the rules of the Mastercard network, but it was not suggested that they prohibited a merchant who was a member of the scheme from receiving payment under the scheme as trustee or agent for another.
(3) The Law
Against that background:
(1) In the terms of the Act, Mr Steiner was the debtor, NatWest was the creditor and CLC was the supplier.
(2) Ms Steiner contended that, insofar as NatWest provided credit to Mr Steiner for the payments totalling £14,000, there was a debtor-creditor-supplier agreement between them.
(3) NatWest conceded that, if the payment had been made direct to CLC, there would have been a debtor-creditor-supplier agreement. However, because the payment was made to FNTC rather than to CLC, NatWest contended, and the judge decided, that there was no...
To continue reading
Request your trial