England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		05/07/2005

Mr Justice Laddie:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 l will say nothing more about it.
8. 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 ..
9. 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.
10. 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.
11. 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.
12. 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%.
13. 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.

14. 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".
15. Although Mrs Wilson did not formally drop this ground of appeal, she said virtually nothing about it before me. 1 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.

16. 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 .... "

17. Against that background, I turn to consider the facts and law in relation to this issue. S 116 of the 1974 Act provides:

"( 1) A pawn is redeemable at any time within six months after it was taken.

(2) Subject to subsection (1), the period within which a pawn is redeemable shall be the same as the period fixed by the parties for the duration of the credit secured by the pledge, or such longer period as they may agree.

(3) If the pawn is not redeemed by the end of the period laid down by sub-sections (1) and (2) (the "redemption period"), it nevertheless remains redeemable until it is realised by the pawnee under section 121, except where under section 120(1)(a) the property in it passes to the pawnee.

(4) No special charge shall be made for redemption of a pawn after the end of the redemption period, and charges in respect of the safe keeping of the pawn shall not be at a higher rate after the end of the redemption period than before."

18. Mrs Wilson asserts and Mr Cook agrees that the effect of these provisions is to provide that a pawnbroking agreement must contain a term which allows the borrower a minimum of 6 months within which to redeem the pawn. S 173 of the 1974 Act provides that it is not possible to contract out of this protection for the borrower.
19. The relevant facts. in this case may be illustrated by reference to two agreements entered into by Mrs Wilson under which she pawned to the Respondent the same Lady's Cartier Wristwatch. The first is contract No. 61360. It is dated 22 May 1995 and it sets a monthly interest rate of 4.5%. It sets a full period of redemption of 6 months, that is until 21 November 1995. In fact the watch was not redeemed within that period but the Respondent had not disposed of it when the second agreement, No 66330, was entered into. The latter was signed by Mrs Wilson on 22 March 1996. However it was antedated by three months to 21 December 1995. The 6 month redemption period was fixed as 20 June 1996, that is to say 6 months from the antedated date, not from the actual date of signing. From the latter date, the redemption period was only 3 months. Under the new agreement the monthly rate of interest was 5%.
20. Mrs Wilson argued before the judge and before me that the new agreements were unenforceable because they did not give her the statutory minimum redemption period.
21. HHJ Rose dealt with this as follows:

"A question remains of novation of the agreement. Mrs Wilson contends that she entered into a number of agreements rolled over one into another. Effectively the agreements were for a period of six months. Occasionally she could not redeem within that time and was therefore under pressure to repay in default of which the goods would have been sold. She entered into a number of agreements to payoff outstanding amounts by entering into further, fresh, agreements. These did not reflect the true position because they were backdated. It is said that this took place to assist her, but this is disputed. If she entered into a new agreement she would owe 10 or 11 months interest. To assist her they were backdated so that any payment was only of six months' interest, the rest was rolled over into the new agreement. Mrs Wilson says that renders the agreements unenforceable. I know of no reason in law why parties cannot agree to backdate when they clearly intend to do so and there was ample consideration for the advantage gained, this being the deferment of the debt in the present case. This was done with the knowledge of both parties and it seems to me to be utterly wrong to set aside the agreement she freely entered. I find, as a matter of fact and law that there was no defect in the agreements for this reason."

22. Mr Cook explains the reference in this passage to the assistance given by this arrangement to Mrs Wilson as follows. Had the first agreement come to an end, Mrs Wilson would have been liable to pay the interest due under it in order to redeem the watch. What the second agreement does is to absorb the last three months of the first agreement into the second agreement and thereby allow her to roll over the interest due. He says that this was done with her full knowledge and understanding, did not disadvantage her in any way and was to her advantage since it reduced the amount that had to be paid immediately in order to prevent her pawned goods being sold. He accepts that Mrs Wilson is correct to state that, until the new agreement is entered into, the watch is pawned under the old agreement. However he says that there is no reason why the parties cannot properly agree that it shall be treated as pawned under the new agreement from a particular date, particularly when this does not result in any overlap between the agreements or any double-charging.
23. I am not sure that the claim that there is no double charging is correct. As I understand the effect of s 116(4), under contract 61360 the monthly interest rate was 4.5% and it had to stay at that rate even after the 6 month redemption period had expired. What contract 66330 does is to charge an extra 0.5% per month in respect of this excess period. Either it is prohibited under the first agreement or it amounts to double charging under the second. But I shall ignore that for the purpose of this judgment since it was not raised by Mrs Wilson or argued by Mr Cook. I shall assume that the interest terms were identical in the two agreements.
24. It seems to me that, however one looks at it, contract 66330 was entered into on 22 March 1996. From that date there was only a three month redemption period. Mr Cook's argument that it is open to the parties to agree to antedate the agreement is, in substance, an argument that it is possible to contract out of the statutory minimum 6 month redemption period by deeming a smaller period to be 6 months. However it is not open to the parties to contract out of this minimum period. With respect to the judge, it is neither here nor there that Mrs Wilson knew what she was doing or that there was ample consideration for the agreement. The prohibition on contracting out applies even if there is good consideration and benefits to the borrower for doing so are substantial. What the 1974 Act does is put in place bright lines over which the parties, and in particular the lender, must not step. In particular there is a bright line that the borrower must be given a minimum of 6 months to redeem. No matter how attractive it may be in the circumstances of a particular case, the parties are not allowed to enter into an agreement like this with less than· 6 months for the redemption period and they are not allowed to contract out of this. That is what has happened here.
25. Mr Cook argues that the parties could have avoided this problem by entering into a modifying agreement for contract 61360. That may well be so, but the fact that there would have been an acceptable alternative route to achieving the Respondent's goal does not make it permissible to enter into an agreement which does not meet the mandatory requirements of the 1974 Act. If anything it means that keeping the Respondent to the strict letter of the statute cannot be seen as imposing an unreasonable hardship on it.
26. Mr Cook also places particular reliance on the fact that s 116(1) refers to the 6 month period running from the date on which the pawn "was taken". He argues that there is significance in the fact that the legislation does not state that the period should run from the date of execution of the agreement. He says that the watch was put in the hands of the Respondent on the date of contract 61360, namely 22 May 1995 and remained there thereafter. It was therefore legitimate to treat it as taken at the date on which contract 66330 was deemed to commence, namely 21 December 1995.
27. It is not clear that this was an argument which was put before HHJ Rose and it does not figure in his judgment nor is it raised in any Respondent's Notice. But in any event, I think there is nothing in it. If one considers "taken" to refer to the time when the pawn first passes into the lender's possession, that would have been in May 1995. The 6 month minimum period would have expired before contract 66330 was entered into, so it would not help the Respondent. Alternatively, if one is allowed to select whatever date one likes for the date on which the pawn is taken, this is simply a way of contracting out of the statutory 6 month period, something which is not open to the parties.
28. As I understand it, there is no definition of "taken" in the 1974 Act. It seems to me~ that the natural meaning of it in the context is that it refers to the date on which the pawn is taken by the lender under the agreement. It cannot be earlier than the date on which the agreement is entered into by the parties.
29. It follows that Mrs Wilson's appeal on this issue succeeds.

The document fee issue

30. This is an altogether more difficult point. The Respondent has two types of charges to which it subjects its borrowers. One is interest. Of course the amount payable under this will depend upon the rate of interest charged and the period of the loan. The other is a fixed fee, called a document fee, which the Respondent imposes at the date of signature of the agreement. It is payable immediately. How this is dealt with can be illustrated by reference to contract No. 61360 for the Cartier watch. The loan made to Mrs Wilson was said to be £400. The interest rate was 4.5% per month. The period to redemption was set at six months. Therefore the total interest payable on redemption was £108 (i.e. 4.5% x 6 x £400). 'However Mrs Wilson did not receive £400 on entering into the agreement. She was paid £392, a document fee of £8 having been immediately deducted from the £400 loan. On redeeming the pawned item, Mrs Wilson had to pay the principal amount of the loan, that is to say £400, together with the accrued interest due. The contract records the Total Charge for Credit for the full period of the transaction (i.e. 6 months) as £ 116 - that is to say the £ 108 interest charge plus the £8 document fee. The APR figure is based on the latter Total Charge.
31. There is no dispute between the parties that, pursuant to Schedule 6 of the Consumer Credit (Agreements) Regulations 1983, there exists a mandatory requirement that each of the agreements between Mrs Wilson and the Respondent contains "a term stating the amount of credit". If that is not present, or the amount stated is incorrect, the agreement is unenforceable. Contract 61360 states the Amount of Credit to be £400. Mrs Wilson says that the correct figure should be £392. The Respondent accepts that if Mrs Wilson is correct, the contract is unenforceable.
32. S 9 of the 1974 Act provides:

"(1) In this Act "credit" means a cash loan, and any other

form of financial accommodation ....

(4) For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment."

33. Mrs Wilson's argument is that the total amount of credit in her agreement must not include anything which is "an item entering into the total charge for credit". The document fee is such an item. It cannot be treated as part of the total amount of credit. Therefore in contract 61360, the total amount of credit should have been stated as £392. Similar criticisms are made of the other agreements which are in issue.
34. The argument may be summarised simply as follows. Credit has to be treated separately from any charges made for obtaining that credit. It is not permissible to include any of the latter charges as part of the credit. There cannot be any overlap. So, what can be legitimately put forward as credit must not include anything which is properly identified as a charge for credit.
35. There is no dispute that this approach is supported by Professor Goode in his work Consumer Credit Law and Practice in which he says:

"24. 144 Item forming part of total charge for credit. Under the CCA 1974m s 9(4) an item entering into the total charge for credit is not treated as credit, even though time is allowed for its payment. At first sight such a provision seems superfluous, for how could a charge incurred by the debtor for credit extended to him be considered to accommodate him financially? Certainly, s 9(4) reflects the fundamental notion that credit involves financial assistance to the debtor, not charges or expenses he incurs .... It follows that the definition of 'total charge for credit' is of crucial importance, for it is the starting point in computing the amount of the credit. Those items financed by the creditor which form part of the total charge for credit must be identified and stripped out before the amount of the credit itself is determined. All other items financed by the creditor go to make up the amount of the credit. ... For the present it suffices to reiterate that the credit represents the amount of financial accommodation provided by the creditor, whilst the total charge for credit denotes the totality of the charges incurred by the debtor to the creditor or third parties under the transaction (so far as not excluded by the regulations), whether or not the services or facilities in respect of which such charges have been imposed are being financed by the creditor, supplied on credit by a third party concerned in the transaction or paid for by the debtor himself.

24.145 The rule that the credit charge is excluded in computing the amount of the credit applies whether the charge is an add-on charge or is a discount deducted at the outset from the agreed amount of the loan. The difference is that in the former case the charge is not added in computing the credit, whereas in the latter case it is deducted. Thus on a loan of £5,000 repayable with interest of £1,000 by 12 instalments of £5000, the credit is £5,000. The interest of £1 ,000 is not part of the credit. If the lender makes an advance of £5,000 for a year at a discount of 10% deductible at the outset, the real amount of the loan, representing the amount of the credit for the purpose of the CCA 1974, is £4,500, the remaining £500 is the credit charge."

36. Thus, for example, the lender cannot take part of the interest charge, turn it into a lump sum and add it to, and have it treated as part of, the amount of credit. All charges for credit, no matter what their form, have to be stripped out to reveal the sum which is the amount of credit. Mrs Wilson says that those principles, when applied to the facts of this case, demonstrate that the total amount of credit was wrongly stated. It is accepted that the £8 document fee is part of the charges for credit - it is included as part of such charges for the purpose of calculating the APR - so it must be stripped out of the sum made available to Mrs Wilson. The result is that the amount of credit is £392, not £400.
37. Mrs Wilson argues that this is also consistent with the FCT case. In the latter Mrs Wilson agreed to borrow £5,000 from FCT and lodged her motor car as security. FCT charged a document fee of £250. Mrs Wilson did not have the funds available to pay that. She and FCT therefore agreed that that sum be added to the loan, which was recorded as being for £5,250. Mrs Wilson argued successfully that the contract was unenforceable because the £250 had to be stripped out of the sum of £5,250 because it was an item which was part of the charge for credit.
38. In the Court of Appeal, reference was made to the Consumer Credit (Total Charge for Credit) Regulations 1980 which, by regulation 4, provides that amongst the items to be included in the computation of the total charge for credit are:

"(a) the total of the interest on the credit which may be provided under the agreement; and (b) other charges at any time payable under the transaction by or on behalf of the debtor ... whether to the creditor or any other person ... "

39. On behalf of Mrs Wilson it was argued first that the £250 added to the loan was not "credit" within the meaning of s9 of the 1974 Act. This was rejected. As Sir Andrew

Morritt V -C said:

"15 Accordingly the crucial issue is what was the amount of the credit provided to Mrs Wilson by . FCT. The word "credit" is defined in section 9(1) as including a cash loan and any other financial accommodation. Though the subsection uses the familiar technique of definition by inclusion I find it hard to envisage anything properly described as credit not included in either "a cash loan" or "any other form of financial accommodation". It was submitted by counsel for Mrs Wilson that the amount of £250 by which the loan was increased to enable Mrs Wilson to pay the document fee was not "credit" for the purposes of the Act. He relied on the fact that such amount was never available to Mrs Wilson to spend as she might think fit but was applied immediately in the discharge of her liability to pay the document fee on the issue of the loan agreement.

16 I do not accept this submission. The term "credit" is used in connection with a restricted use credit. Such a credit, as defined in section 11, is one under which the borrower is not able to use the loan for any purpose he pleases. To accept counsel's suggested limitation on the term would make it inapplicable to a restricted use credit to which it is evidently intended to apply. It is unnecessary to decide whether it was a cash loan applied immediately in the discharge of the borrower's liability because, obviously, it did constitute financial accommodation to Mrs Wilson."

40. By the same reasoning, the document fee here can be viewed as "credit". That is not disputed. The important point to realise is that although the document fee is part of the credit made-available to the borrower, yet it may still not be allowed to be "treated as credit" for the purpose of s 9(4). If, notwithstanding the fact that it is credit, it is also an "an item entering into the total charge for credit", then it must be ignored for the purpose of determining the total amount of credit under the section. This was considered in FCT The Vice-Chancellor said:

"19. It is apparent ... that section 9(4) must be applied without too narrow an interpretation of the word "item". If a charge for credit is correctly recognised in accordance with the detailed regulations to which I have referred, then any cash loan or other financial accommodation made or afforded by the creditor to the debtor for the purpose of discharging the liability for that charge should not be treated as part of that credit to which the total charge for credit relates. It may be, though it is unnecessary to any decision in this case, that the loan made to pay the charge is itself a separate credit which should be made the subject of a regulated agreement to which the Act applies, whether as a linked transaction within section 19 or otherwise."

41. Mrs Wilson argues that the same analysis applies to the £8 document fee charged under contract 61360. What she borrowed· was, in substance, £392, which was the sum paid to her by the Respondent, together with an £8 document fee which was added to the loan and deducted at source. Although the £8 was loaned to her, it was also an item which was part of the charge for credit and should have been excluded from the calculation of the total amount of credit.
42. Mr Cook accepts that, from a practical point of view, the financial position here is the same as that in FCT. However he says that there are crucial differences. He points out that HHJ Rose concluded that, as a matter of fact, the loan was for £400 and not for £392, as demonstrated by the valuation of the pawned item, the value upon which the document fee was calculated (i.e. the document fee was variable and was calculated on the basis that it was for an item valued at £400) and that the fact that there was no suggestion that any amount was added to the loan to cover the document fee. He suggests that the judge was right to distinguish this case from FCT on these facts. In the latter case the car was valued at £5000 and the £250 document fee was added to it.
43. Second, he says that, although s 9(4) does provide limitations as to the amount that can be included in the loan;

"it expressly refers to charges for credit for which time is allowed for payment. This is clearly not the case in the context of a fee that is immediately payable. There is simply nothing in section 9(4) which refers to immediately payable document fees or purports to make them unlawful." (Skeleton argument paragraph 20)

44. He says that, in determining the meaning of the provisions of s 9, the court must pay regard to the consequences of Mrs Wilson's arguments, were they to be correct. He argues that such consequences would be extreme. In effect it would mean that lenders could not charge transaction or document fees which were immediately payable, since the loan amount would always be treated as the original agreed loan amount minus the fee immediately payable. He says that this would be startling in view of the large number of lenders who currently charge such immediately payable document fees.
45. I do not accept these arguments. I can deal with the last of these points first. Even were it true that a large number of other pawnbrokers were caught by Mrs Wilson's arguments, that is no reason to conclude that she is wrong. Indeed Mrs Wilson, who appears to be something of an authority on pawnbroking, tells me that many pawnbrokers now do not charge document fees. But even if that is not accurate, I can see nothing sacrosanct in document fees. The Respondent accepts that they are part of the total cost of borrowing. If they cannot be charged, there is nothing to suggest that the same sums may not be recovered in another way, for example by increasing slightly the rate of interest charged (subject, of course, to those charges not becoming extortionate).
46. I do not accept Mr Cook's first argument for the following reason. It does not matter how the parties arrive at the loan figure. The distinction drawn between this case and FCT would result in document fees being chargeable if the valuation of the pawned item is stated to be the same as that of the total loan but not if the document fee is added to the valuation. The distinction would be one of terminology only. In substance the same transaction could be dressed up in a way which would allow the document fee to be charged. Although the 1974 Act is concerned, amongst other things, with ensuring that certain formalities are complied with, that does not mean that one should adopt a construction which would reward semantic differences which have no impact on the underlying transaction.
47. I also do not accept Mr Cook's second argument. He says that, because the subsection "expressly refers to charges for credit for which time is allowed for payment", it must be construed as limited to such charges. A document fee is not such a charge because no time is allowed for payment. If this is what the subsection means, it seems to me that FCT must have been wrongly decided. Mr Cook accepts that he cannot challenge the latter decision at this level, though he reserves the right to do so elsewhere. Furthermore the argument is based on an inaccurate reading of s. 9(4). The subsection does not purport to limit the exclusion only to charges for which time is allowed for payment. On the contrary it says that it covers charges "even though" time is allowed for payment. In other words it covers all charges, including, but not limited to, those for which time is allowed for payment. It seems to me that this emphasises that charges for which no time is allowed for payment are covered.
48. In the end I think the issue which I have to consider here can be approached in the following way. If one asks what credit was given to Mrs Wilson, the answer is £400. But she only received £392 in her hand. If one asks why she did not receive the full £400, the answer is that £8 of that sum was deducted immediately at source for a document fee, that is to say as part of the charge made for credit. Because the sum was deducted immediately at source its character can be assessed at that time. It seems' to me that Professor Goode was right to say that such charges have to. be stripped out in order to calculate the total amount of credit. For that reason Mrs Wilson is right to argue that the total amount of credit in the case of contract 61360 was £392, not £400. It follows that this contract and all the other contracts are defective in that they do not state correctly the total amount of credit. They are unenforceable as a consequence.
49. For these reasons, I allow Mrs Wilson's appeal on this issue as well.
50. I will hear the parties on what steps should now be taken to further progress this action.