Wilson v Robertsons (London) Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE LADDIE,Mr Justice Laddie |
| Judgment Date | 05 July 2005 |
| Neutral Citation | [2005] EWHC 1425 (Ch) |
| Date | 05 July 2005 |
| Court | Chancery Division |
| Docket Number | Case No: CH/2005/APP/0277 |
[2005] EWHC 1425 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Laddie
Case No: CH/2005/APP/0277
Mrs Wilson appeared in person
Mr Matthew Cook (instructed by Lester Aldridge Solicitors) for the Respondent
Hearing date: 27 June 2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is the judgment in an appeal brought by Mrs Penelope Wilson from the judgment of His Honour Judge Rose dated 13 April 2005. The Respondent, Robertsons (London) Limited, is a jeweller and pawnbroker. Mrs Wilson was a customer of the Respondent between April 1995 and April 1999, having pawned a number of items with the Respondent. Some of these items were pawned on a number of occasions.
Mrs Wilson has made extensive use of pawnbroking services over the years. She has also been involved in other litigation. Indeed, an important case in relation to the effects of the Consumer Credit Act 1974 ("the 1974 Act"), namely Wilson v First County Trust Ltd [2001] QB 407 ("FCT") is one which involves her.
As appears from the skeleton argument of Mr Matthew Cook, who appears for the Respondent, in the current proceedings Mrs Wilson has made claims in respect of 7 open and 20 closed pawnbroking agreements. She claims that they are unenforceable or only enforceable with an order of the court (which should not be given) as a result of a number of defects. First it is said that there was a failure to include the Amount of Credit in the agreements (or, more precisely, the correct Amount of Credit). This rendered the agreements unenforceable. Furthermore, because of this failure, the figure for APR was wrongly stated in the agreements. This defect was said to arise from the fact that all of the agreements included provision for payment of a "document fee". Mr Cook referred to this as the document fee issue and I shall do likewise.
Second, Mrs Wilson refers to the fact that the end of the redemption period was wrongly stated by one day on some of the agreements. There is no dispute that this is so. The dispute is as to the consequences of it.
Third, some of the agreements had been backdated with the consequence that there was a failure to ensure that the pawned goods were redeemable for a period of six months after they were taken. This is referred to as the backdating issue.
Mrs Wilson also contends that the agreements are exorbitant and contravene ordinary principles of fair dealing in that the interest rates charged were in excess of 80%. Various other issues have been raised, particularly in relation to the relief to which Mrs Wilson is entitled if she succeeds on her primary claims. As will be explained below, the latter are not before me on this appeal.
As Mr Cook explains in his skeleton argument, there were a number of issues which potentially called for consideration by HHJ Rose at the trial. If they were all considered at the hearing before him, the trial was likely to take a long time. However, some of the issues were dependent upon the conclusions reached by HHJ Rose in respect of earlier issues. Consequently, since most of the issues did not call for evidence, the judge concluded, with the agreement of both parties, that the most sensible way to proceed would be to deal with the case on an issue by issue basis. The result was that the hearing before the judge became, in effect, a hearing to determine certain preliminary issues, the remainder of the issues being reserved to be considered by the judge at a later date. Whether, in the long run, this was a course which was likely to save costs is not something which was discussed before me and I will say nothing more about it.
Before the judge four issues were carved out for consideration: (1) whether the agreements contained defects as alleged, (2) if defects existed, what effect did they have on enforceability, (3) if and to the extent agreements were unenforceable, what sums were payable and to whom and (4) were the agreements extortionate credit bargains.
In relation to (1), the judge found for the Respondent on the document fee issue, so that the amount of credit, interest charge, APR and total charge for credit were correctly stated. The agreements were therefore not unenforceable on these grounds. In relation to the redemption date, as indicated above, it was accepted by the Respondent that this defect existed in certain agreements. In relation to the backdating issue, again the judge held in favour of the Respondent.
As far as (2) is concerned, because of the findings under (1), the only issue to be considered was the effect of the misdating. Apparently the parties agreed that the misdating of the agreements by a single day did not render the agreements irredeemably unenforceable, but only unenforceable without permission of the court. Mr Cook explains that Mrs Wilson had not sought any remedy on this basis and, despite the judge offering to allow her permission to amend to seek a remedy, she chose not to do so. As I understand it, that continues to be her position before me. Thus she does not seek to assert that the agreements which have this defect are unenforceable.
Item (3) did not arise, save possibly in relation to a gold ring, and the issue was adjourned to a further hearing due to lack of time.
In relation to item (4), the judge concluded that the agreements were extortionate credit bargains and that the sums due should be recalculated on the basis of an APR of 50%.
Mrs Wilson raises a number of issues in her Notice of Appeal. In substance, three matters are live before me namely the document fee and backdating issues and a complaint concerning the way in which the trial was conducted. I can dispose of the last of these quite shortly.
The conduct of the trial.
Mrs Wilson's Notice of Appeal asserts that "not enough time was allowed for the hearing to enable [her] claim to be properly and fully considered by the court and for her to be given a full and fair hearing as required by the Human Rights Act 1998".
Although Mrs Wilson did not formally drop this ground of appeal, she said virtually nothing about it before me. I have seen nothing to suggest that HHJ Rose did anything other than comply with the obligation on him arising under the CPR to deal with the matters before him in a proportionate way. There is nothing to support the suggestion that Mrs Wilson was not given a full and fair hearing. I reject this ground of appeal.
The backdating issue.
Before considering the facts and arguments arising in relation to this issue, it is well to have in mind the legislative background against which it and the document fee issue are to be assessed. In Wilson v Secretary of State for Trade and Industry [2003] UKHL 40, the House of Lords explained that the 1974 Act was, like the Moneylenders Act 1927 before it, designed to tackle a significant social problem. The activities of some money lenders have given the money lending business a bad reputation. Something had to be done to protect the borrower, who frequently, indeed normally, would be in a weak bargaining position. Protection of borrowers is the social policy behind the legislation. Part of that policy is to be achieved by setting stringent rules which have to be complied with by the lender if his money lending agreement is to be enforceable. The strictness of the discipline imposed on lenders is illustrated by the following passage in the speech of Lord Nicholls:
"72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his right under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in the case of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.
73. The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face, considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach. …
74. Despite [criticism in the Crowther report] I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, to decide that failure to comply with certain formalities is an essential prerequisite to enforcement of certain types of agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumers adequately. …"
Against that background, I turn to consider the facts and law in relation to this issue....
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