Case No: B2/2010/1463

Neutral Citation Number: [2011] EWCA Civ 1187
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT
HHJ Denyer QC
9JU75140
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 25/10/2011
Before :

LORD JUSTICE PILL
LORD JUSTICE GROSS
and
SIR RICHARD BUXTON
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Between :

	Ian Karl Robert Brandon	Appellant	
	- and -		
	American Express Services Europe Ltd.	Respondent	

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(Transcript of the Handed Down Judgment of
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John Pugh (instructed by Trinity Law Solicitors) for the Appellant
Fred Philpott and Kate Urell (instructed by Mishcon de Reya) for the Respondent

Hearing dates : 12th July 2011
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Judgment
LORD JUSTICE GROSS: 
INTRODUCTION
1.	This is an appeal from the judgment of HHJ Denyer QC, sitting as a Judge of the High Court, dated 25th May, 2010 (“the judgment”), upholding the reserved judgment of Deputy DJ Gisby given subsequent to a hearing on the 5th June, 2009 (“the judgment of DJ Gisby”), granting the Respondent (“Amex”) summary judgment against the Appellant (“Mr. Brandon”).  As will be seen, a principal issue on this appeal is whether Amex was entitled to summary judgment on its case of contractual termination introduced for the first time on appeal before HHJ Denyer QC, should the sole case it successfully advanced before DJ Gisby, based upon default, prove unsustainable. 
2.	Stripping out the many points in this dispute which no longer matter, the key facts can be very shortly summarised.   On the 28th March, 1998, Mr. Brandon entered into a Credit Card Agreement (“the agreement”) with Amex, relating to the use of an Amex Credit Card (“the Card”).  It is common ground that the agreement was regulated by the Consumer Credit Act 1974 (“the Act”).  
3.	As of June, 2007 it is, to my mind, indisputable that Mr. Brandon had built up a significant debit balance on the Card, regardless of there being some dispute as to the precise amount then outstanding (see below); for its part, Amex put the debit balance as in excess of £5,000.00.
4.	By a Default Notice dated 19th June, 2007 (“the Default Notice”), Amex asserted a breach of the agreement and required remedial action in the following terms:
“ ……
Re: AMERICAN EXPRESS CREDIT CARD ACCOUNT
DEFAULT NOTICE SERVED UNDER SECTION 87(1) OF THE CONSUMER CREDIT ACT 1974
IMPORTANT – YOU SHOULD READ THIS CAREFULLY
…..
We refer to the American Express Credit Card Agreement….between you and American Express… You have failed to make the minimum payments due to your account as required by Clause 3 of the Terms and Conditions governing the use of the American Express Credit Card. To remedy this breach the payment due on your account of £275.80 must be received within fourteen calendar days from the date of this Default Notice.
IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE STATED DATE NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THIS BREACH. IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE STATED DATE THEN FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU. 
1. The Agreement will be terminated.
2. All sums outstanding on your account plus interest will become immediately due and payable.
3. Your account may be referred to a debt collection agency and you may be charged for any costs which American Express incur in recovering any overdue amount from you…..
4.  No further use may be made of the Credit Card account….
5. Information regarding the status of the account will be reported to a credit bureau….
IF YOU HAVE DIFFICULTY IN PAYING ANY SUM OWING UNDER THE AGREEMENT OR TAKING ANY OTHER ACTION REQUIRED BY THIS NOTICE, YOU CAN APPLY TO THE COURT WHICH MAY MAKE AN ORDER ALLOWING YOU MORE TIME
….. ”
For the avoidance of any doubt the £275.80 required represented a minimum payment – as distinct from the total debit balance.
5.	Mr. Brandon did not make the minimum or any payment.  In my judgment, it is further indisputable that Mr. Brandon, neither then nor since, has had any intention of reducing, still less extinguishing, the sum outstanding.  On the 11th July, 2007, Amex sent to Mr. Brandon a Notice of Cancellation (“the Notice of Cancellation”).  The Notice of Cancellation included the following:
“ …..
This letter serves as notice of cancellation of your account and credit card account agreement with immediate effect. All monies outstanding on the account (including any new transactions or cash advances) are now payable in full.
…..
As is our policy in these instances, your account has been transferred to a debt collection agency. A collection fee has been applied to your account…..
After a period of 28 days from the date of this letter in accordance with the agreement governing your Card accounts, steps will be taken to register the default status of your account with the credit reference agencies, Experian Limited and Equifax Plc. This information may be shared with other organisations in assessing applications from you and members of your household for credit or other facilities. ”
6.	In 2009 Amex commenced proceedings against Mr. Brandon, alleging that he was indebted to Amex in the amount of £6,624.24, arising out of the use of the Card and inclusive of interest and costs.   By an application notice dated 21st April, 2009, Amex sought summary judgment against Mr. Brandon, alleging that he had no real prospect of successfully defending the claim and that Amex knew of no other reason why disposal of the claim should await trial.
7.	Brief reference should be made to the terms of the agreement.  By cl. 3, Mr. Brandon was obliged to make payments monthly.  The “minimum amount” he was required to pay each month was “….3% of the total amount owing or £5, whichever is more….”.    Cl. 10(2) of the agreement provided as follows:
“ 10.  ENDING THIS AGREEMENT
…..
(2) We can end this Agreement at any time by giving immediate notice. Alternatively, we can stop you from using the Card.  If we end this Agreement you must pay all money you owe on the account……”
8.	It is likewise at this point convenient to introduce certain provisions of the Act. 
“ Default notices
87.  Need for default notice
(1) Service of a notice on the debtor….in accordance with section 88 (a ‘default notice’) is necessary before the creditor ….can become entitled, by reason of any breach by the debtor ….of a regulated agreement, - 
(a) to terminate the agreement, or 
(b) to demand earlier payment of any sum….
……
88.  Contents and effect of default notice
(1) The default notice must be in the prescribed form and specify -
(a)  the nature of the alleged breach;
(b)  if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;
…..
(2) A date specified under subsection (1) must not be less than 14 days after the date of service of the default notice , and the creditor …..shall not take action such as is mentioned in section 87(1) before the date so specified……
176.  Service of documents
(1)  A document to be served under this Act by one person (‘the server’) on another person (‘the subject’) is to be treated as properly served on the subject if dealt with as mentioned in the following subsections.
(2)  The document may be delivered or sent by an appropriate method to the subject……at his proper address.
(3) For the purposes of this Act, a document sent by post to….the address last known to the server as the address of a person shall be treated as sent by post to….his proper address.”
THE PROCEEDINGS
9.	(1) The judgment of DJ Gisby: Before DJ Gisby, Amex was represented by counsel. Then and throughout until the proceedings reached this Court, Mr. Brandon was a litigant in person. In his careful judgment, DJ Gisby disposed of a variety of points raised by Mr. Brandon and which no longer matter.  
10.	At [24] and following DJ Gisby dealt with an argument which does matter; namely, whether the Default Notice was valid.  Mr. Brandon submitted that a default notice must give at least 14 days following the date of service to rectify the breach; the Judge agreed, having regard to the provisions of ss. 87 and 88 of the Act, set out above. DJ Gisby summarised Mr. Brandon’s contention as follows:
“ 25. …..His point about service is that the notice requires payment within ‘fourteen calendar days from the date of this Default Notice’. This, he says, means that no allowance is made for the fact that he would not receive this notice on the same day (there was no suggestion that it was delivered by hand; it was sent by post). So he was given less than 14 days and the default notice was invalid.
26.  In support of that proposition Mr. Brandon relies on CPR 6.26, which provides that the deemed date of service by post is two days after posting….”
11.	DJ Gisby rejected Mr. Brandon’s submission, saying this:
“ 27. ….. The only suggestion in the present case is that the default notice might not have been received on the day after it was posted.  Mr. Brandon does not say when he actually received it. If it was received the day after posting it gave the correct date. If not, I regard the default as de minimis, and one that I am prepared to overlook given that Mr. Brandon does not say that he would have paid if he had been given the full 14 days (if, indeed, he had not been).  His case is that the default notice was invalid, therefore there was no right to terminate the agreement, therefore the termination was unlawful, and therefore he does not have to repay the money. That is not an attractive argument.”
DJ Gisby went on to give judgment under Part 24 CPR for Amex.
12.	Three further matters may be noted arising out of the judgment of DJ Gisby and to which I shall return:
i)	It is apparent that Amex put its case on the basis of default.  There was no suggestion of a contractual termination of the agreement. 
ii)	Mr. Brandon argued that the £25 charged by Amex each month when he failed to make the minimum payment constituted a penalty and that, accordingly, the sum outstanding was to be reduced to disallow all such monthly amounts.  DJ Gisby disagreed (at [22]) but went on to say (at [23]) that had he regarded these standard provisions as a penalty, then he would have concluded that the maximum reduction to the Amex claim would have amounted to £1,000.
iii)	Mr. Brandon sought to advance a counterclaim for damages for “injury to credit”; Amex had registered the Default Notice – which it should not have done as the Default Notice was (he submitted) invalid.  His credit rating had been affected as a result and he claimed damages accordingly.  As DJ Gisby observed (at [29]), given his conclusion that the Default Notice was valid, the point fell away.  But even had he concluded that the Default Notice was invalid, he would still have dismissed the counterclaim: 
“ 29. …..Suppliers and lenders use a credit reference agency to ascertain whether it is commercially safe to extend credit to potential customers and borrowers. There is no doubt that Mr. Brandon has borrowed money from American Express and has no intention of repaying it. His case before the court boils down to an argument that, in effect, American Express should be deprived of its remedy because of its failure to comply with the regulations. I have held against him on this, but even if he were right American Express would plainly be entitled to say that this is a man who is a bad credit risk and to warn others…..”
Accordingly, DJ Gisby struck out the counterclaim. 
13.	(2) The hearing before HHJ Rutherford:  In the event – the detail does not matter for present purposes – HHJ Rutherford treated the hearing before him, on the 8th March, 2010, as the application for permission to appeal.   HHJ Rutherford took the view that there was (quite apart from other matters no longer relevant) a “clearly arguable” case as to the validity of the Default Notice justifying permission to appeal: see, at [14] – [18] of his ruling.   HHJ Rutherford’s reasoning may be summarised as follows:
i)	If a statute required a minimum period of 14 days it was very difficult for a court to say that it did not really matter and that an abridgement of the time available was de minimis.
ii)	Though the CPR provisions for service of documents did not strictly apply, they proceeded on the basis of 2 days for service – making it difficult to presume that a letter posted with a first class stamp would be delivered the next day.
iii)	Finally, the Judge dealt with the submission by counsel then appearing for Amex (viz., Ms Urell, who did not appear before DJ Gisby but has appeared as junior counsel before us) that the validity of the Default Notice did not matter because the agreement could have been terminated other than by relying on the Default Notice.  As HHJ Rutherford put it:
“ …The problem with that, and she may be right….is that this was not a point that was taken before the District Judge at all…..and therefore ….in considering whether or not to give permission to appeal it is a bit risky of me now to take into account something that was never argued before the District Judge. And, secondly, …..and maybe this is why it was not argued before the District Judge, …if you go down the default notice route then it really does not lie in your mouth afterwards to say, ‘Well, we didn’t give you 14 days but who cares. We could have done it some other way anyway.’ If you decide to go down the default notice route it seems to me that it is certainly arguable that that is a route by which you are bound and which you must follow.”
14.	Before leaving the hearing before HHJ Rutherford, it may be noted that there was a Respondent’s Notice – but nothing was said about Amex’s entitlement to terminate the agreement regardless of the validity of the Default Notice. It is fair, though, to record that Ms Urell’s skeleton argument for the Permission to Appeal and Appeal hearing (from the judgment of DJ Gisby) included the following brief submission:
“ Further, although the point does not appear to have been argued before the Judge, it was not necessary for R to serve a default notice as there was within the agreement, the right to terminate at any time. As such, R did not have to rely on any breach and it is only termination ‘by reason of any breach’ which requires the service of a default notice: s.87 of the Consumer Credit Act 1974…..”
15.	(3) The hearing before HHJ Denyer QC and the judgment: The appeal from the judgment of DJ Gisby was carefully and thoroughly considered by HHJ Denyer QC.  At the very outset of his judgment, he underlined, understandably, that nowhere had Mr. Brandon said in a witness statement that he did not owe Amex money: [1].   The Judge went on to remind himself of the test for judgment under CPR Part 24 and, in due course, he held that Amex satisfied that test and dismissed the appeal.   He too had to take time disposing of a variety of points pursued by Mr. Brandon, lacking any merit. 
16.	At [27] et seq, the Judge turned to the validity of the Default Notice. At [34], the Judge indicated that he understood Mr. Brandon’s argument that less than 14 days had been allowed by the Default Notice to remedy the breach, on the assumption that 2 days should be allowed between posting the Default Notice and its delivery.  The Judge then said this:
“ ….I do not dismiss it as being unreal…”
17.	However, the Judge went on (ibid) to emphasise that no enforcement action was taken within 14 days of the 19th June (the date of the Default Notice).  Accordingly, the Judge concluded that the argument was not “relevant” in that Mr. Brandon has not suffered “…any prejudice at all by virtue of that technical breach…”.    Instead, Mr. Brandon did nothing and remained in breach of his obligation to make a minimum monthly payment at the time when the Notice of Cancellation was sent (on the 11th July).  The Judge concluded that on “any view”, the Notice of Cancellation was “an effective means of bringing the agreement to an end” (at [37]). 
18.	The Judge then turned to the argument concerning Amex’s contractual right to terminate the agreement, by virtue of cl. 10(2) thereof.    During the course of the hearing Mr. Brandon had submitted that Amex, having gone down the “default notice route” could not subsequently claim that it was entitled to terminate for some other reason.   The Judge rejected (at [41]) what he described as Mr. Brandon’s Ladd v Marshall argument;  introducing a new argument of law was not the same as introducing fresh evidence.  Had the cl. 10 argument only emerged at the hearing before him, the Judge “might have had something to say about its lateness” but it had been “clearly flagged” some time before.  It had not “simply been sprung” on Mr. Brandon.  Accordingly, the Judge concluded (at [42]):
“ ….that….as a possible defence to the claim that is made, the fact that the default notice may, for the reasons I have already given, have not given the full 14 days, does not provide Mr. Brandon with any real prospect of a successful defence. In other words, it is not a defence which ….has any chance of success.”
19.	 For completeness, first, the Judge held that DJ Gisby had been entitled to conclude that the monthly £25 charge for failure to make a minimum payment was not a penalty.  Secondly, the Judge upheld DJ Gisby’s decision to strike out the counterclaim sought to be advanced by Mr. Brandon.
THE RIVAL CASES IN THIS COURT
20.	For Mr. Brandon, Mr. Pugh, submitted, in summary, that Amex had chosen to go down the “default” route; having done so it could not change its case and rely on the “afterthought” of contractual termination founded on cl.10(2) of the agreement - a fortiori for the purposes of summary judgment where it gave rise to triable issues.    
21.	The Amex case based on default was untenable; the Default Notice, on its true construction, did not give Mr. Brandon the requisite 14 days to remedy the breach – and a failure to comply with the time period provided by statute could not be overlooked as de minimis.   
22.	So far as concerned the suggestion of contractual termination (if open to Amex at all), although it had been raised before HHJ Rutherford, Mr. Brandon had not come to the hearing before HHJ Denyer QC expecting it.   Amex should not have been permitted, on (a first) appeal, to rely on so substantial a change of case.   In any event, if non-default termination was to be relied upon, then Amex was obliged to but had failed to comply with the notice requirements of ss. 76(1) and (3) and 98(1) of the Act, which provide as follows:
“ 76.  Duty to give notice before taking certain action.
(1) The creditor or owner is not entitled to enforce a term of a regulated agreement by – 
(a) demanding earlier payment of any sum….
…….
except by or after giving the debtor or hirer not less than seven days’ notice of his intention to do so.
(2) Subsection (1) applies only where – 
(a) a period for the duration of the agreement is specified in the agreement, and 
(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),
but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.
(3) A notice under subsection (1) is ineffective if not in the prescribed form.
98. Duty to give notice of termination (non-default cases).
(1) The creditor or owner is not entitled to terminate a regulated agreement except by or after giving the debtor or hirer not less than seven days’ notice of the termination.
 (2) Subsection (1) applies only where – 
(a) a period for the duration of the agreement is specified in the agreement, and 
(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),
but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.”
Accordingly, the non-default termination route did not avail Amex.
23.	It could not be right that Amex was neither bound to go down the default route (ss. 87 and 88 of the Act) nor the non-default route (ss. 76 and 98 of the Act);  if so, Amex would in a position “to turn a credit card agreement into a debit card agreement”.  But if that were the position, then, still further, cl. 10(2) of the agreement fell within reg. 5(1) of The Unfair Terms in Consumer Contract Regulations 1999 (SI 1999/2083) (“the Regulations”) and, if so, it should not have formed the basis upon which summary judgment was granted. Reg. 5(1) of the Regulations is in these terms:
“ 5. Unfair Terms
(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights  and obligations arising under the contract, to the detriment of the consumer.”
24.	Various other submissions were advanced by Mr. Pugh which need not be set out here save to note his contention that the summary dismissal of the counterclaim was “unfair, unwarranted, unsupported by evidence and ought to be reversed”. 
25.	For Amex, Mr. Philpott submitted that the litigation was disproportionate and wasteful.  The appeal should be dismissed and summary judgment upheld.  The thrust of his argument was as follows:
i)	The Default Notice was valid; it was “open to interpretation” that the period specified meant 14 days from the date of service.  In any event, any defect in the Notice as to the period for remedying the breach was de minimis.  Furthermore, any such defect was de minimis in that there was no prejudice - as Mr. Brandon had no intention of complying with any default notice. 
ii)	Regardless of the validity of the Default Notice, Amex was entitled to terminate the agreement contractually, relying on cl. 10(2).   Although there had been no Respondent’s Notice this alternative argument had been squarely before HHJ Denyer QC; Mr. Brandon had not been in any doubt that it was.   Moreover, neither ss. 76(1) nor 98(1) applied to the agreement; it was open-ended and clearly so and thus not of a fixed duration.  There was no arguable defence based on these sections. Mr. Brandon was confusing the credit token (the Card) and the underlying agreement. The agreement was continuing notwithstanding that the Card was limited in duration.  Credit cards (like overdrafts) are generally repayable on demand. 
iii)	It was wrong for the fairness of cl.10(2) to be raised for the first time before this Court.  Be that as it may, the clause was fair; it would be absurd to have an open-ended agreement with no power of termination.
iv)	In any event (as I understood it, without prejudice to the validity of the Default Notice), Amex had since used the new s.98A of the Act to terminate the agreement.  As of the 19th April, 2011, the debt owed exceeded the judgment debt; the agreement was terminated by this route on the 28th June, 2011.   Insofar as material, s.98A provides as follows:
“ 98A. Termination etc of open-end consumer credit agreements
(3) Where a regulated open-end consumer credit agreement….provides for termination of the agreement by the creditor –
(a) the termination must be by notice served on the debtor, and 
(b) the termination may not take effect until after the end of the period of two months, or such longer period as the agreement may provide, beginning with the day after the day on which notice is served.”
26.	It is clear from the rival cases that there are two principal issues on this appeal. First, as to the validity of the Default Notice.  Secondly, whether Amex was entitled to succeed by the route of non-default contractual termination.  I turn to deal with these two issues before a brief reference to some of the other issues raised before us.
THE VALIDITY OF THE DEFAULT NOTICE
27.	The Court is concerned here with summary judgment.  For Amex to succeed, Mr. Brandon must have “no real prospect” of successfully defending “the claim or issue”:  CPR Part 24.2(a)(ii).  With regret, given that Mr. Brandon’s stance is devoid of merit, I am wholly unable to conclude that there is no real prospect of a successful defence on this issue.  My reasons follow.
28.	First, as already highlighted, HHJ Denyer QC held that Mr. Brandon’s defence on this issue could not be dismissed “as being unreal”:  judgment, at [34] (see above).    Accordingly, for Amex to succeed on the validity of the Default Notice, it would be necessary not simply to dismiss Mr. Brandon’s appeal but, in a summary judgment context, to overturn this conclusion of HHJ Denyer QC.  For my part, I can see no basis for doing so.   That conclusion may be sufficient to prevent Amex succeeding before this Court by the default route but matters do not end there.
29.	Secondly, as a matter of construction of the Default Notice I cannot accept that Amex is plainly right in contending that the 14 day period ran from the service of the Notice as opposed to “the date of this Default Notice” as the Notice in terms stated; to the contrary, Mr. Brandon has much the better of the argument on this point of construction.   For the avoidance of doubt, there was no difficulty in Amex sending the Default Notice by post – see s.176 of the Act (set out above). But the facility to use the post does not assist Amex in establishing whether the Default Notice allowed the statutory minimum period.  For completeness, although CPR Part 6.26 does not apply (at least directly) to the sending of the Default Notice, I cannot agree that it should be presumed that the Default Notice would have been served less than two days after being posted; on any view, I would be unable to make any such assumption in Amex’s favour for the purposes of Part 24 judgment.
30.	Thirdly, if, as a matter of construction, the Default Notice has not or may not have allowed the minimum statutory period for Mr. Brandon to remedy the breach, then it is (at least) realistically arguable that the defect cannot be overlooked as de minimis.  To my mind, this conclusion applies both to the failure to allow a minimum 14 day period and to the absence of prejudice flowing from the defect in the Default Notice.   Insofar as DJ Gisby and HHJ Denyer thought otherwise, I am, with respect, unable to agree.  
31.	It follows from these conclusions that Amex can only succeed in having this appeal dismissed if it was entitled to summary judgment, on the basis of contractual termination, in reliance upon cl. 10(2).
NON-DEFAULT CONTRACTUAL TERMINATION
32.	The starting point here must be the reminder that this is a case where a major commercial enterprise is seeking summary judgment against a consumer.  It is true that the underlying “merits” undoubtedly favour Amex, as already sufficiently canvassed.  But it is also true that it is and was incumbent on Amex, especially when seeking summary judgment, to get its tackle in order. If it has not (or not sufficiently) done so then, however unfortunate, it should not have been granted summary judgment, so that it will have to start again or depend on its subsequent termination under s.98A of the Act.
33.	As it seems to me, in determining whether Amex’s tackle was (sufficiently) in order, a claim for summary judgment must be clearly formulated so that the defendant (represented or not) knows the case he has to meet – and so that it can be readily ascertained, without the need for a mini-trial, whether there is no real prospect of defending it.  Ordinarily at least, the claimant’s case should be so formulated – with such alternatives as are or might be relied upon – before the court hearing the claim; this is not something which should be left to emerge for the first time in the course of an appeal hearing.
34.	Turning to the facts here, it seems clear that both the Default Notice and the Notice of Cancellation contemplated were premised on default.  The point need not be belaboured.  The Default Notice referred in terms to s.87(1) of the Act; it referred to Mr. Brandon’s “breach” and to reporting him to a credit bureau because of the “status of the account”.  The Notice of Cancellation spoke of registering “the default status” of Mr. Brandon’s account with credit reference agencies.   Neither the Default Notice nor the Notice of Cancellation made any mention of contractual non-default termination. 
35.	Pausing here, with respect to Mr. Pugh’s submissions, I would not wish to be taken as agreeing that default and non-default termination could not be combined in the same notices; for my part, I do not see why a creditor needs to make any such “election”, provided only that any relevant statutory requirements are complied with.  For present purposes, however, it suffices that such a course was not followed here.  The notices in question were solely based on default.
36.	Did the terms of the Default Notice and the Notice of Cancellation, thus confined, of themselves present an insuperable hurdle to Amex obtaining summary judgment on the basis of non-default contractual termination?   Putting to one side for the moment questions of compliance with ss. 76, 98 and 98A of the Act (as I understand it, s.98A was in any event not in force at the relevant time), I would incline to the view that the terms of these Notices were not necessarily fatal to Amex obtaining summary judgment in reliance upon cl.10(2) of the agreement; to the extent that Mr. Pugh contended otherwise, I cannot agree.  
37.	However, if Amex was to preserve and proceed with a case of non-default termination (despite the terms of the Notices), that case needed to be clearly formulated, ideally at least, by the time of the hearing before DJ Gisby.  But of non-default termination there was no mention whatever before DJ Gisby; it was not pleaded; it was not argued; understandably, there is no hint of it in the judgment of DJ Gisby.  I do not think it is sufficient to say, as Mr. Philpott sought to do, that having succeeded on the basis of default, it was unnecessary to go on to consider the alternatives.  There is a significant difference between (1) a claimant relying on ground X, alternatively ground Y, whose submission is that both entitle him to summary judgment and (2) a claimant whose case is advanced solely on ground X.  In the first example, the claimant may well not need to develop ground Y if ground X finds favour; but the existence of ground Y will have been clearly flagged.  By contrast, in the second example, if judgment on the basis of ground X is overturned on appeal, then the claimant can only maintain summary judgment if the appeal court permits him to introduce ground Y at the appellate stage – an altogether more difficult proposition in the context of summary judgment but one which reflects Amex’s position here.
38.	How then did matters stand in respect of the first appeal in these proceedings?  As already set out, there was a Respondent’s Notice but it did not introduce the case of contractual termination.  The point was mentioned, if only somewhat briefly, in Ms Urell’s skeleton argument. It was aired by Ms Urell at what became the permission to appeal hearing before HHJ Rutherford, who saw various difficulties with it and was not deflected from granting permission to appeal.   There is an issue of fact – not at all easy for this Court to resolve – as to whether Mr. Brandon came to the hearing before HHJ Denyer QC expecting the point to be argued.  He opposed its introduction but HHJ Denyer QC ruled against him and went on to decide that the Amex case on contractual termination was soundly based.   In the view which I take of the Amex case based on default, its contractual termination case had thus evolved into the decisive issue in the course of an appeal on a question of summary judgment – and it had done so without any pleadings whatever.   
39.	These observations do not entail that Mr. Brandon’s submission based on Ladd v Marshall was soundly based; the rule in Ladd v Marshall is concerned with the introduction of fresh evidence.   The change of case here involved an alternative legal argument; Amex did not seek to adduce any fresh evidence in support of it.   It is further beyond dispute that an appeal court has a discretion to admit legal argument supporting the decision under appeal on an alternative legal basis not argued in the court below.  The question is whether HHJ Denyer QC’s decision to permit the introduction of Amex’s contractual termination case on appeal, in the circumstances already outlined, was justified.
40.	For my part, I can readily understand why HHJ Denyer QC took the course he did; the attractions of disposing of this litigation were and are manifest.  Having said that, I am, respectfully, unable to agree with the course taken by the Judge on the facts of this case.  My reasons are these:
i)	Recognising that the issue is one of fact and degree and involves a discretionary decision of the Judge hearing the first appeal, I feel reluctantly driven to the conclusion that permitting Amex to rely on contractual termination fell outside the proper ambit of that discretion.  In context, this was simply too significant a change of case – all the more so as it was not foreshadowed at all before DJ Gisby or in any written form in advance of the appeal, save incidentally in Ms Urell’s skeleton argument.  
ii)	The upshot of the way the case unfolded is that wide-ranging points, possibly of some general importance, concerning the application of ss. 76 and 98 of the Act to the agreement, were left to be developed “on the hoof” in the course of the appeal. It will be recollected that if the notice requirements of these sections were applicable then it was plainly arguable that Amex had not complied with them so that the contractual termination route was itself closed; in any event, a conclusion either way as to the applicability of these sections of the Act could have obvious ramifications for standard credit card agreements. While there cannot be one rule for those legally represented and another for litigants in person, I confess to concern as to the evolution of the argument at the appeal stage in the circumstances of this case.  Although this issue was realistically arguable on both sides, as it involves a point of law I am far from saying that it was incapable of summary disposal – had the procedural groundwork been laid.  But here that had not been done and I do not think it acceptable – in proceedings claiming summary judgment - for the argument as to contractual termination to have emerged in the manner and at the stage of proceedings when it did. For completeness, although (given the view I take of the matter) it is unnecessary to reach any final decision on the point (and I do not do so), my inclination, in broad agreement with Mr. Philpott’s submissions, would be to conclude that ss. 76 and 98 did not apply to the agreement – but, as already indicated, I do not think it was right for this issue to be determined summarily here.
iii)	 A further consequence of the manner in which matters have developed is that the first mention of the alleged “unfairness” of cl.10(2) of the agreement, by reason of reg. 5(1) of  the Regulations, has taken place before this Court on a second appeal.  That cannot be right; but to refuse to permit Mr. Pugh to advance this argument now would seem unduly harsh, given the tolerance shown to Amex to rely on contractual termination at the first appeal stage.  Again for completeness, I am bound to say – without expressing a final conclusion – that I am not attracted to Mr. Pugh’s submissions as to the unfairness of cl. 10(2) but I remain reluctant either to refuse to entertain the point or to dismiss it summarily in the light of the history of the matter.    
iv)	Pulling the threads together, the cumulative impact of the procedural history leads me to conclude that it would not be fair to permit summary judgment to stand on the basis of contractual termination. This is so whatever the position might have been as to summary judgment had the ss.76 and 98 and reg. 5(1) issues arisen in a more orderly fashion. At all events, against a background of expanding proceedings lacking a proper framework at the appeal stage, I am left with a sense of unease which I cannot dispel.  
41.	In the circumstances, I would allow the appeal. 
MISCELLANEOUS MATTERS
42.	Brief mention should be made of two remaining matters:
i)	I express no view as to whether it is realistically arguable that the £25 monthly charge was a penalty.  Although any disclosure would be a matter for the Judge dealing with any further hearings (if such there are), for my part I can see no merit whatever in the submission that some 6 years’ of disclosure (or anything like that) would be called for. A sense of realism coupled with considerations of proportionality should serve to preclude any such argument. In any event and in agreement with DJ Gisby (at [23] of his judgment), I cannot accept that this issue could be worth more than £1,000.00 at most.  Even if that sum was deducted from the Amex claim it is plain that a substantial sum would be due from Mr. Brandon to Amex, provided only that Amex complies with the relevant statutory and procedural requirements.
ii)	With respect, I reject Mr. Pugh’s complaint as to the dismissal of the counterclaim. It is devoid of merit for the reasons expressed by DJ Gisby at [29] of his judgment (set out above) and which I gratefully adopt.  On the facts before this Court and regardless of the outcome of the appeal, Mr. Brandon is a bad credit risk; for this conclusion, he has only himself to blame.
SIR RICHARD BUXTON:
43.	I agree.
LORD JUSTICE PILL:
44.	I also agree.