Stephen Kilpatrick Kerr v Nationwide Building Society

JurisdictionEngland & Wales
JudgeLORD JUSTICE RIX
Judgment Date01 February 2002
Neutral Citation[2002] EWCA Civ 116
CourtCourt of Appeal (Civil Division)
Date01 February 2002
Docket NumberB2/01/1879

[2002] EWCA Civ 116

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM READING COUNTY COURT

(HIS HONOUR JUDGE MORTON-JACK)

Before

Lord Justice Rix

B2/01/1879

Stephen Kilpatrick Kerr
Claimant/Applicant
and
Nationwide Building Society
Defendant/Respondent

MR DONALD BROATCH (Instructed by Messrs Joseph Aaron & Co, Essex 1G2 6LR) appeared on behalf of the Applicant.

The Respondent did not attend and was not represented.

LORD JUSTICE RIX
1

This is an application for permission to appeal by Mr Stephen Kerr. It arises out of the claim which he brought against the Nationwide Building Society.

2

The background to the claim was that in 1990 he obtained a mortgage of £250,000 and a top-up loan of £15,000 from the Nationwide in respect of the purchase of his home. They were on the same standard terms for such mortgages. They required repayment over a period of 25 years and payment of interest at a variable mortgage rate which, at the outset of the mortgage, was 14.75 per cent, but it varied in accordance with changes in the cost of money.

3

The terms of the mortgage provided that interest was charged on the total debt until repayment. The provisions permitted compounding of arrears at the end of each year. Thus there was a rather modest term for compounding once a year. Mr Kerr claimed a sum of some £10,000 which was calculated on the following basis. He submitted that, first, there should have been no compounding at all, and, secondly, that he should not have paid interest on his arrears at the mortgage rate but at some lower rate which represented the Nationwide's costs of borrowing. He submitted that to continue to charge the mortgage rate on the loan and on the arrears of interest, to the extent that there were such arrears, at the mortgage rate rather than at the lower cost of borrowing to the Nationwide, was in effect to impose an unlawful penalty. Alternatively, Mr Kerr submitted that the £10,000 increase over the cost of replacing the arrears in the market represented extortionate terms on a credit bargain and could be reopened under sections 137 to 139 of the Consumer Credit Act 1974, in which respect the burden of proving that the bargain was not extortionate was placed upon the Nationwide under section 171(7) of that Act.

4

In a short and trenchant judgment, the judge dismissed the claim holding that there was no penalty provision and that the appropriate rate to look at was not the rate at which the Nationwide borrowed but the rate at which the Nationwide lent. As for the Consumer Credit Act, the evidence which Mr Kerr sought to bring to bear, by reference to what was described as an expert report of Mr Bolderson, was of no value since Mr Bolderson was, on his own admission, not an expert in this field: he was merely an expert in formulating the consequences of inputting financial data. Although the Nationwide had relied upon no specific evidence for itself, the judge was satisfied that the burden resting upon the Nationwide had been met and that the bargain was not extortionate. It was common ground in this connection that the mortgage rate applied to the loan was not in itself an extortionate rate. Indeed it was a standard variable mortgage rate about which there was no...

To continue reading

Request your trial
2 cases
  • R Houghton and Wyton Parish Council v Huntingdonshire Distirct Council
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 2 May 2013
    ...always a form of non-statutory planning guidance with a recognised role, see R (JA Pye (Oxford) Ltd and Others v Oxford City Council [2002] EWCA Civ 116. The mere fact that SPDs had now been given a statutory basis in the planning legislation did not preclude the use of non-statutory guidan......
  • R Miller Homes Ltd v Leeds City Council
    • United Kingdom
    • Queen's Bench Division (Administrative Court)
    • 27 January 2014
    ...See Westminster City Council v Great Portland Estates Plc [1985] 1 AC 661 at 674 B-G; R (J.A. Pye (Oxford) Ltd) v Oxford City Council [2002] EWCA Civ 116 paragraphs 18 and 24. (iv) Any document which falls within regulation 5(1)(a)(i), (ii) or or 5(2)(a) or (b) is prescribed as a DPD (regu......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT