England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
NORTHAMPTON COUNTY COURT
(His Honour Judge Mayor)

		The Royal Courts of Justice The Strand London Friday 1 March 2002

Friday 1 March 2002

1. LORD JUSTICE ROBERT WALKER: This is an application for permission to appeal by Mr Peter Anderson on behalf of himself and his wife, Mrs Margaret Anderson. Mr Anderson has acted as spokesman this morning, supported by his daughter.
2. He seeks permission to appeal from an order of Judge Mayor QC made in the Northampton County Court on 14 December 2001, when judgment was given for Universal Credit Ltd ("Universal") for the sum of £18,017.89, with interest at 25.7 per cent. In doing so, the judge allowed an appeal from an order of District Judge Elliott, made in the same court on 17 October 2001. Then the district judge had given judgment for Universal for the sum of £5,457.97 only, payable at the rate of £100 a month. As the rate of interest suggests, we are here concerned with tertiary lending to borrowers who are not regarded as good credit risks, and with a loan agreement regulated by the Consumer Credit Act 1974 ("the 1974 Act").
3. By an agreement dated 9 July 1991 Universal agreed to lend, and Mr and Mrs Anderson agreed to borrow, the sum of £10,000 (plus a protected payment premium of £975) at an APR of 28.95 per cent (variable), repayable over ten years by 120 monthly payments of £255.11. Despite the high interest rate, Mr and Mrs Anderson do not contend that it was an extortionate credit bargain. From 1991 until about April 1998 Mr and Mrs Anderson kept up payments with almost complete regularity.
4. The printouts show the balance due as diminishing with painful slowness, no doubt because of the high interest rate and the so-called rule of 78 (which regulates the rate at which principal is regarded as repaid under loans of this sort). However, by 17 April 1998 the balance due was down to just over £10,000.
5. Then Mr Anderson had the misfortune to be made redundant twice within a year and since then he and his wife had have had particularly distressing family troubles which affected her capacity to work, at any rate for part of this period. Since then, as the printouts show, the Andersons have fallen seriously behind in their payments.
6. One point which Mr and Mrs Anderson made in their witness statement in defence was that they could not understand the printouts. In particular, every single sheet in the appeal bundle contains the figures:

"Current balance 18017.89

Interest balance 18017.89

Arrears5713.03"

without any date or further explanation of what these figures mean. It is apparent that District Judge Elliott also found this puzzling, but £18,017.89 was the sum for which Judge Mayor gave judgment.

7. One of the Andersons' grounds of appeal is that apparently their witness statement, which was standing as the defence, was not included in the trial bundle. It is also part of Mr and Mrs Anderson's grounds of appeal that the loan agreement was varied in March 1991 to provide for monthly payments of £115 (or, initially, the slightly smaller sum of £114.56). That is reflected in the printouts. It also seems to have been accepted in the witness statement of Ms Melanie Hacker, a solicitor at Shoosmiths, Universal's solicitors. She says in her witness statement:

"It is agreed that reduced payments of £114.56 were made to the account between March 1999 and October 1999. Payments to the account ceased between November 1999 and January 2000. I would refer to exhibit MAH1 for full details of all the promises made and not kept by the Defendants during this period. [I add parenthetically that, having looked at the exhibit, I have not found details of promises either made or broken.]

The Defendants made a token payment of £10.00 in January 2001 and agreed to re-commence payments of £114.56 from February 2000.

On 15th February 2000 a standard automated letter was sent by the Claimant to all of its customers who were in arrears and making payments by cheque or cash, in order to offer an incentive to customers to pay by standing order. A copy of this standard letter is attached at exhibit MAH1. The terms of the letter are self-explanatory. It requested:

1. The return of a Standing Order Mandate;

2. A cheque for February's payment and post dated cheque for March.

The Defendants sent the two cheques and the Standing Order Mandate which were received by the Claimant on 22nd February 2000."

8. So Mr and Mrs Anderson complied with the proposal put to them by Universal in February 2000 -- although they acknowledge that with Mr Anderson's second redundancy they have not been able to continue to keep up payments, even at the reduced level.
9. However, Mr and Mrs Anderson take the point that the variation of the loan agreement which was put to them in February 2000, and which they agreed to, was a variation falling within section 82 of the 1974 Act, and so required to be completed with all the statutory formalities (especially those in sections 61-63 of the 1974 Act). That proposition is supported by the editors of Halsbury's Laws Vol 11, 2000 reissue. It may not be a particularly attractive point but the Andersons feel that they have their backs to the wall and are entitled to rely on any grounds available to them.
10. This would be a second appeal but the last-mentioned point appears to me to be not only arguable, but also of some general importance.
11. I will grant permission to appeal on both the proposed grounds of appeal, although I very much doubt whether Article 6 of the European Convention on Human Rights adds anything to what was already the common law of England in relation to fair trial. I therefore grant permission to appeal.
ORDER: Applications for permission to appeal and stay of execution allowed. (Order not part of approved judgment)