UKSC 21
On appeal from:  CSIH 49
Durkin (Appellant) v DSG Retail Limited and another (Respondents) (Scotland)
JUDGMENT GIVEN ON
26 March 2014
Heard on 28 January 2014
Andrew Smith QC
(Instructed by Patrick Campbell and Company)
Alistair Clark QC
(Instructed by DAC Beachcroft Scotland LLP)
LORD HODGE (with whom Lady Hale, Lord Wilson, Lord Sumption and Lord Reed agree)
The factual background
The legal proceedings
Whether Mr Durkin rescinded the credit agreement
"(a) We [HFC] agree to lend to you and you agree to borrow the Amount of Credit. Subject to clause 1(b) below, you authorise us to pay the Amount of Credit to the Supplier.
(b) We may withhold payment to the Supplier until we are satisfied that the Goods and/or Services have been supplied and/or installed or completed to your satisfaction.
(c) By signing this Agreement you declare that you have paid the Deposit (if any is shown in the Schedule) to the Supplier."
"(1) A restricted-use credit agreement is a regulated consumer credit agreement –
(a) to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or
(b) to finance a transaction between the debtor and a person ('the supplier') other than the creditor, or
(c) to refinance any existing indebtedness of the debtor's, whether to the creditor or another person,
and 'restricted-use credit' shall be construed accordingly.
(2) An unrestricted-use credit agreement is a regulated consumer credit agreement not falling within subsection (1), and 'unrestricted-use credit' shall be construed accordingly.
(3) An agreement does not fall within subsection (1) if the credit is in fact provided in such a way as to leave the debtor free to use it as he chooses, even though certain uses would contravene that or any other agreement."
"A debtor-creditor-supplier agreement is a regulated consumer credit agreement being –
(a) a restricted-use credit agreement which falls within section 11(1)(a), or
(b) a restricted-use credit agreement which falls within section 11(1)(b) and is made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier, or
(c) an unrestricted-use credit agreement which is made by the creditor under pre-existing arrangements between himself and a person ('the supplier') other than the debtor in the knowledge that the credit is to be used to finance a transaction between the debtor and the supplier."
"(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor."
"We therefore recommend that where the price payable under a consumer sale agreement is advanced wholly or in part by a connected lender that lender should be liable for misrepresentations relating to the goods made by the seller in the course of antecedent negotiations, and for defects in title, fitness and quality of the goods. Further, we consider that where the sale and the loan are made by separate contracts, the borrower should nevertheless have the right to set off against any sum payable by him under the loan contract any damages he is entitled to recover from the lender for breaches of the sale agreement by the seller."
It is of note that in this recommendation the claim against the lender is derived from the seller's breach of contract or misrepresentation and is not a claim relating to the credit agreement or the actions of the creditor.
"Where the debtor or hirer under a regulated agreement claims to have a right to rescind the agreement, each of the following shall be deemed to be the agent of the creditor or owner for the purpose of receiving any notice rescinding the agreement which is served by the debtor or hirer –
… (b) any person who, in the course of a business carried on by him, acted on behalf of the debtor or hirer in any negotiations for the agreement."
"Notice" means notice in writing (section 189 of the 1974 Act).
The delictual case against HFC
The quantification of Mr Durkin's loss
"(4) Where such an appeal is taken to the Court from the judgment of the sheriff principal or sheriff proceeding on a proof, the Court shall in giving judgment distinctly specify in its interlocutor the several facts material to the cause which it finds to be established by the proof, and express how far its judgment proceeds on the matter of facts so found, or on matter of law, and the several points of law which it means to decide."
In relation to the Supreme Court it provides:
"(5) The judgment of the Court on any such appeal shall be appealable to the Supreme Court only on matters of law."