Swift Advances PLC and Keith Scott and Elizabeth Mary Mythen
| Jurisdiction | Northern Ireland |
| Judge | Horner J |
| Judgment Date | 16 November 2018 |
| Neutral Citation | [2018] NICh 28 |
| Court | Chancery Division (Northern Ireland) |
| Date | 16 November 2018 |
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Neutral Citation No: [2018] NICh 28 Ref:
HOR10757
Judgment: approved by the Court for handing down Delivered:
16/11/2018
(subject to editorial corrections)*
IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
_________
CHANCERY DIVISION
_________
BETWEEN:
SWIFT ADVANCES PLC
Plaintiff/Respondent
and
KEITH SCOTT and ELIZABETH MARY MYTHEN
Defendants/Appellants
________
HORNER J
A. INTRODUCTION
[1] Swift Advances Plc (“Swift”) lent to Keith Scott (“Scott”) and Elizabeth Mary
Mythen (“Mythen”) £28,500 secured on premises known as 14 Hazel Grove,
Castlederg, County Tyrone (Folio TY16518) (“the Property”). The issue that this
court is asked to determine by the consent of all the parties is whether the loan
agreement between Swift of the one part and Scott and Mythen of the other should
be treated as two separate agreements each for credit not exceeding £25,000 or
whether it should be treated as one all-encompassing agreement for credit exceeding
£25,000, that is £28,500. The consequence of how the loan from Swift to Scott and
Mythen is treated is of great significance. Credit agreements of £25,000 or below at
the time of the advance were regulated under the Consumer Credit Act 1974 (“the
Act”). But credit agreements for sums above £25,000 were not regulated agreements
under the Act. Therefore, if the sum of £28,500 is the subject of two separate
agreements of £25,000 and £3,500, then those loans are irrecoverable for want of
compliance with the Act’s formalities. If, on the other hand, there is one agreement
for a loan of £28,500 that is unregulated by the Act, then Swift may be able to recover
its loan and accrued interest from the sale proceeds of the Property. However, there
are other issues which remain to be resolved and even if the loan is unregulated
there are potential arguments available to the applicants if Swift are found to have
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behaved improperly. But, it is this primary issue of whether the agreement is
regulated or unregulated that the parties wish the court to rule upon first.
B. BACKGROUND INFORMATION
[2] The history of this litigation can be set out briefly as follows. Scott and
Mythen were partners who in 2003 lived together at the Property. They applied
through Ocean Finance, a credit broker, for a loan of £25,000. The purpose of this
loan was to pay off outstanding credit card loans amounting to approximately
£16,000 and to use the balance to carry out renovations to the Property which at that
time was worth £120,000 approximately and was unencumbered.
[3] Scott was variously described as a self-employed painter and decorator but he
was someone of limited means and income. He claimed that he was living with
Mythen, who was unemployed. Neither Scott nor Mythen had ever taken out a
mortgage or a loan before. It was a strict condition of their being offered this loan,
they both claim, that they took out Personal Protection Insurance (“PPI”) with the
Norwich Union Life and Pension Fund, London and Edinburgh Insurance Co
Limited and with the policy being administered by Premier Writers Limited. The
cost of this was £3,500 but it only provided protection for 5 years even though the
mortgage was for 10 years. There was no discussion of the commission earned on
this policy. On the limited facts known to this court the PPI was a product which
was singularly ill suited to the needs of Scott and Mythen although it earned Ocean
Finance, the Credit Broker, substantial commission. The mortgage application form
states that Scott’s income was £450 per month and Mythen was said to be earning
£170 per month as a childminder. In fact Scott earned less than was claimed and
Mythen was unemployed. It is also true to say that by signing various documents
including the Confidential Application Form and the Income Affordability Letter,
Scott represented this information as being true. Mythen also signed documents
confirming information which she now claims was false. Swift say that on the basis
of this information given to it, it was entitled to conclude in good faith that both
Scott and Mythen were able to pay the £427 per month due in respect of the money
lent to them jointly.
[4] Predictably Scott and Mythen were unable to pay the monthly sums as they
became due and owing and with interest and various charges their loan escalated
out of control. By September 2014 their loan of £28,500 had been transformed into a
debt of some £78,000, a three-fold increase.
[5] On 10 June 2009 Master Kelly made an Order for Possession of the property in
favour of Swift. On 19 September 2014 Master Wells granted a stay on enforcement
of the said Order for Possession on the basis that the net proceeds of sale be held on
the joint account between the solicitors of Swift and the solicitors for Scott and
Mythen. At that time Scott and Mythen were jointly represented. Solicitors came on
record for Mythen to represent her interest when she and Scott separated afterwards.
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