QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| PHILLIP McGUFFICK
|- and -
|THE ROYAL BANK OF SCOTLAND PLC
Mr Richard Handyside QC and Miss Julia Smith (instructed by DLAPiper UK LLP) for the Defendant
Hearing dates: 23rd and 24th September 2009
Crown Copyright ©
The Hon. Mr Justice Flaux :
The essential facts
"Please note that unless within 28 days of the date of this letter, satisfactory payment or arrangements for payment are made with the Bank, in response to the attached default notice, information about your indebtedness will be given to the following Credit Reference Agencies,
Equifax Europe Limited
The Group and other companies may use the record of default and any other information provided to the agencies when considering applications by you, or other members of your household, for facilities including motor, household, credit, life and general insurance.
The existence of information on accounts in default at the Credit Reference Agencies may impair your ability to obtain credit or other financial facilities such as current accounts for a period of up to six years."
Duty to give information to debtor under fixed-sum credit agreement
77 (1) The creditor under a regulated agreement for fixed-sum credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—
(a) the total sum paid under the agreement by the debtor;
(b) the total sum which has become payable under the agreement by the debtor but remains unpaid, and the various amounts comprised in that total sum, with the date when each became due; and
(c) the total sum which is to become payable under the agreement by the debtor, and the various amounts comprised in that total sum, with the date, or mode of determining the date, when each becomes due.
(4) If the creditor under an agreement fails to comply with subsection (1)—
(a) he is not entitled, while the default continues, to enforce the agreement…..
The relief sought
(1) An injunction restraining the bank from making reports of the claimant's non-payment under the agreement to any of the CRAs.
(2) In the alternative, if the bank is entitled to continue such reporting, a mandatory injunction requiring the bank to report additionally to the CRAs that by reason of the bank's breach of section 77, the claimant has no enforceable liability to make payments under the agreement.
(3) A mandatory injunction requiring the bank to notify CRAs to whom it has previously reported the state of the claimant's account either (i) that from 11 March 2009 onwards (the date when the 12 working days prescribed period under section 77 expired) the claimant has not been in default under the agreement or (ii) that from 11 March 2009 onwards, the claimant has defaulted on the agreement in circumstances where through the bank's breach of section 77, he has no enforceable liability to pay.
(4) A mandatory injunction ordering the bank to provide the claimant with a signed statement of account required by section 77(1).
The parameters of the case
(1) Whether the claimant's contractual obligation to pay the amount of £15,066.21, which has been outstanding under the agreement since June 2007, has been extinguished/suspended or continues during the bank's period of non-compliance with the claimant's request for information under section 77(1) of the 1974 Act.
(2) Whether, during that period of non-compliance, any of the following steps would, if taken by the bank, be enforcement of the agreement contrary to section 77(4)(a) of the 1974 Act:
(i) reporting or threatening to report information about the agreement to a credit reference agency;
(ii) disseminating or threatening to disseminate the claimant's personal data in respect of the Agreement to any third party;
(iii) demanding payment from the claimant;
(iv) issuing a default notice to the claimant;
(v) threatening legal action;
(vi) instructing a third party to demand payment or otherwise seek to procure payment.
(3) Whether the claimant has any right which might properly be protected by an injunction and/or whether it would be just or serve any useful purpose for the Court to grant an injunction restraining the bank from taking any of those steps during the period of non-compliance.
(4) Whether the claimant has any right which might properly be protected by an injunction and/or whether it would be just or serve any useful purpose for the Court to grant an injunction requiring the bank to serve the signed statement of account required by section 77(1) of the Act.
(5) Whether (if the bank is permitted to continue reporting to CRAs) the claimant has any right which might properly be protected by an injunction and/or whether it would be just or serve any useful purpose for the Court to grant an injunction requiring the bank to notify the CRAs that by reason of the operation of section 77, the claimant has no enforceable liability under the agreement.
(6) What, if any, impact the Consumer Protection from Unfair Trading Regulations 2008 have on the issues concerned with enforcement of regulated agreements.
(7) Whether the letter from MJP solicitors of 10 June 2009 was a valid notice under section 10 of the Data Protection Act 1998.
(8) Whether the processing of personal data by the bank which has involved or caused to be made comments, entries or references adverse to the claimant's creditworthiness is contrary to the first data protection principle set out in paragraph 1 of Schedule 1 to the Data Protection Act or is fair and necessary for the purposes of legitimate interests pursued by the bank and by the CRAs.
(9) Whether the taking of any of the steps referred to in paragraph (2) above or the failure to notify CRAs that the claimant has no enforceable liability under the agreement would give rise to a relationship between the parties which was unfair to the claimant within the meaning of section 140A of the Consumer Credit Act.
The provisions of the Consumer Credit Act
Form and content of agreements.
60. (1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—
(a) the rights and duties conferred or imposed on him by the agreement,
(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),
(c) the protection and remedies available to him under this Act, and
(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement.
Signing of agreement.
61. (1) A regulated agreement is not properly executed unless—
(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and
(b) the document embodies all the terms of the agreement, other than implied terms, and
(c) the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.
Consequences of improper execution.
65. (1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.
(2) A retaking of goods or land to which a regulated agreement relates is an enforcement of the agreement.
Statements to be provided in relation to fixed-sum credit agreements
77A (1) The creditor under a regulated agreement for fixed-sum credit—
(a) shall, within the period of one year beginning with the day after the day on which the agreement is made, give the debtor a statement under this section; and
(b) after the giving of that statement, shall give the debtor further statements under this section at intervals of not more than one year.
(6) Where this subsection applies in relation to a failure to give a statement under this section to the debtor—
(a) the creditor shall not be entitled to enforce the agreement during the period of non-compliance;
(b) the debtor shall have no liability to pay any sum of interest to the extent calculated by reference to the period of non-compliance or to any part of it; and
(c) the debtor shall have no liability to pay any default sum which (apart from this paragraph)—
(i) would have become payable during the period of non-compliance; or
(ii) would have become payable after the end of that period in connection with a breach of the agreement which occurs during that period (whether or not the breach continues after the end of that period).
106 Where, under any provision of this Act, this section is applied to any security provided in relation to a regulated agreement, then, subject to section 177 (saving for registered charges)—
(a) the security, so far as it is so provided, shall be treated as never having effect;
(b) any property lodged with the creditor or owner solely for the purposes of the security as so provided shall be returned by him forthwith;
(c) the creditor or owner shall take any necessary action to remove or cancel an entry in any register, so far as the entry relates to the security as so provided; and
(d) any amount received by the creditor or owner on realisation of the security shall, so far as it is referable to the agreement, be repaid to the surety.
Act not to be evaded by use of security.
113 (1) Where a security is provided in relation to an actual or prospective regulated agreement, the security shall not be enforced so as to benefit the creditor or owner, directly or indirectly, to an extent greater (whether as respects the amount of any payment or the time or manner of its being made) than would be the case if the security were not provided and any obligations of the debtor or hirer, or his relative, under or in relation to the agreement were carried out to the extent (if any) to which they would be enforced under this Act.
(2) In accordance with subsection (1), where a regulated agreement is enforceable on an order of the court or the OFT only, any security provided in relation to the agreement is enforceable (so far as provided in relation to the agreement) where such an order has been made in relation to the agreement, but not otherwise.
(a) a regulated agreement is cancelled under section 69(1) or becomes subject to section 69(2), or
(b) a regulated agreement is terminated under section 91, or
(c) in relation to any agreement an application for an order under section 40(2), 65(1), 124(1) or 149(2) is dismissed (except on technical grounds only), or
(d) a declaration is made by the court under section 142(1) (refusal of enforcement order) as respects any regulated agreement,
section 106 shall apply to any security provided in relation to the agreement.
Enforcement orders in cases of infringement.
127. (1) In the case of an application for an enforcement order under—
(a) section 65(1) (improperly executed agreements),
(3) The court shall not make an enforcement order under section 65(1) if section 61(1) (a) (signing of agreements) was not complied with…
Unfair relationships between creditors and debtors
140A (1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—
(a) any of the terms of the agreement or of any related agreement;
(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;
(c) any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement)…..
Powers of court in relation to unfair relationships
140B (1) An order under this section in connection with a credit agreement may do one or more of the following—
(a) require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);
(b) require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;
(c) reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;
(d) direct the return to a surety of any property provided by him for the purposes of a security;
(e) otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;
(f) alter the terms of the agreement or of any related agreement;
(g) direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.
Power to declare rights of parties.
142. (1) Where under any provision of this Act a thing can be done by a creditor or owner on an enforcement order only, and either—
(a) the court dismisses (except on technical grounds only) an application for an enforcement order, or
(b) where no such application has been made or such an application has been dismissed on technical grounds only, an interested party applies to the court for a declaration under this subsection,
the court may if it thinks just make a declaration that the creditor or owner is not entitled to do that thing, and thereafter no application for an enforcement order in respect of it shall be entertained.
Notification to CRAs
A credit reference agency is a person carrying on a business comprising the furnishing of persons with information relevant to the financial standing of individuals, being information collected by the agency for that purpose.
Data are shared only for the prevention of over-commitment, bad debt, fraud and money laundering, and to support debt recovery and debtor tracing, with the aim of promoting responsible lending.
The project will consider behaviour and practices around the decision to lend or to extend an existing line of credit, and the nature and extent of any assessments of a borrower's ability to repay.
Considerations about the affordability of a product or amount (the consumer's ability to repay) and the likelihood of repayment (the consumer's expected level of risk) are a key and central part of most mainstream lending decisions.
At paragraph 4.23 the scoping paper goes on to discuss the importance of credit scoring in these terms:
Credit scoring and behavioural scoring techniques are a central part of the operation of modern consumer credit markets. Information is available through Credit Reference Agencies which can enable lenders to make better informed decisions on a consumer's ability to repay and likelihood of default.
Whether non-compliance with section 77(1) extinguishes the bank's rights
(1) In cases under sections 65 and 127 where the agreement is improperly executed and is either only enforceable by order of the court or is irredeemably unenforceable by virtue of section 127(3), the effect of the statute is that the creditor never acquires contractual rights against the debtor or is deprived of those contractual rights and, correspondingly, the borrower does not come or remain under an enforceable obligation or liability to repay or that liability is removed. The creditor can only acquire or regain the rights and the borrower can only come under an obligation in those cases in which the court makes an enforcement order under section 127(1).
(2) In the same regulatory legislative and contractual context and to give a consistent meaning to "enforceable" in different sections of the Act, section 77(4) should be interpreted as depriving the creditor of its contractual right to repayment and, correspondingly, removing the debtor's obligation or liability to repay, subject to a means to restore the right of the creditor and the obligation of the debtor, by compliance with section 77(1).
(3) Accordingly the phrase "not entitled while the default continues to enforce the agreement" in section 77(4) should be interpreted as depriving the creditor of its right to take any coercive action to compel or secure performance of the removed obligation or liability of the debtor to make repayment. Reporting to CRAs is said to be such coercive action.
The effect of Wilson v First County Trust Limited (No 2)
44. Thus the question in the present case is one of characterisation of the nature and effect of the relevant provisions of the Consumer Credit Act, considered as a matter of substance rather than form. In my view, consistently with the underlying objective of article 1 of the First Protocol, the relevant provisions in the Consumer Credit Act are more readily and appropriately characterised as a statutory deprivation of the lender's rights of property in the broadest sense of that expression than as a mere delimitation of the extent of the rights granted by a transaction. The rigid ban on enforcement of security and contractual rights prescribed by section 127(3) alone and in conjunction with sections 106 and 113 engages article 1 of the First Protocol. The lender's rights were extinguished in favour of the borrower by legislation for which the state is responsible. This was a deprivation of possessions within the meaning of article 1: see James v United Kingdom (1986) 8 EHRR 123, 140, para 38. Whether this statutory interference with First County Trust's peaceful enjoyment of its possessions was justified, and therefore not a breach of article 1, is a separate issue.
136. The relevant Article is Article 1 of the First Protocol. The complaint of those arguing for incompatibility is that the provisions of the Consumer Credit Act 1974 denied the lender its 'Convention rights' under this Article. I agree with your Lordships that they did not but my reasoning is not wholly the same. The evidence of what really happened in the material transaction is exiguous and I recognise that the Article may have been engaged. The transaction purported to be a transaction of pledge, that is to say, a transaction where the possession of a chattel of the borrower is given to and retained by the lender as security for the repayment of the money lent together with agreed interest. So long as the loan has not been repaid the pledgee has a special title in the chattel which is in his possession, by virtue of that possession. At common law the pledgee can thus sue if his possession is wrongfully interfered with, even by the owner. Dishonestly to deprive the pledgee of the possession of the chattel is theft (formerly larceny). Therefore, s.65 of the 1974 Act has the potential to deprive the pledgee of his special property in the pledged chattel. It follows that s.65 may deprive the pledgee of one of its possessions.
137. Whether or not this is what actually occurred in the instant case is, for me at least, still not clear but I will proceed on the assumption that there was a true pledge involving a transfer of the possession of the motor car from the borrower to the lenders. The documentation purported to evidence a contract of pledge. On this basis, the lenders were seeking to exercise the rights of a person in possession of a chattel and were being prevented from doing so by s.65 so as, in effect, to deprive them of their possession of the motor car and there would be the basis for an Article 1 complaint. If, on the other hand, she actually remained in possession of the motor car throughout, the complaint of the lenders would be that they should have been allowed to seize the motor car from her after she defaulted and sell it to reduce or discharge her indebtedness to them. This would have been merely the purported enforcement of a claimed contractual right which the lenders had never in truth validly acquired, Article 1 would never have been engaged and that would be the short answer to the complaint.
First, article 1 of the First Protocol is directed to interference with existing possessions or property rights. FCT never had, at any stage in the history of the loan agreement, the right to enforce against Mrs Wilson the repayment of the £5000. Neither the 1974 Act as a whole nor section 127(3) in particular constituted an interference with a pre-existing right of FCT to enforce repayment by Mrs Wilson of the £5000. The Act, and section 127(3) prevented FCT from ever possessing that right. No authority has been cited to your Lordships for the proposition that a statutory provision which prevents a transaction from having the quality of legal enforceability can be regarded as an interference for article 1 purposes with the possessions of the party who would have benefited if the transaction had had that quality. In my opinion, the proposition should be rejected.
107. The rights of property which are in issue in this case are those set in an agreement which is regulated by the 1974 Act. The Act subjects the rights of the creditor to restrictions in some circumstances. Section 65 declares that a regulated agreement which is improperly executed cannot be enforced by the creditor except by means of an order of the court, and section 127(3) declares that it is not to be enforceable at all except upon the condition which it lays down. The agreement which was entered into in this case was from the outset an agreement which was improperly executed. So it was always subject to the restrictions on its execution which sections 65(1) and 127(3) of the 1974 Act set out. I would hold that FCT's Convention rights under article 1 of the First Protocol are not engaged in these circumstances.
108. The Court of Appeal said that the effect of sections 65(1) and 127(3) was to deprive the pawnbroker of its ability to enjoy benefit from the contractual rights arising from the agreement or from the rights arising from the delivery of the pawn: para 32. But the fact is that FCT never had an absolute and unqualified right to enforce this agreement or to enforce the rights arising from the delivery of the motor car. Article 6(1) of the Convention and article 1 of the First Protocol cannot be used to confer absolute and unqualified rights on FCT which, having regard to the terms of the statute by which agreements of this kind are regulated, it never had at any time under the improperly executed agreement which it entered into.
These restrictions on enforcement of a regulated agreement are for the protection of borrowers. They do not deprive a regulated agreement of all legal effect. They do not render a regulated agreement void. A regulated agreement is enforceable by the debtor against the creditor. It seems, for instance, that a borrower may insist on making further drawdowns under a regulated agreement even though the agreement is unenforceable against him. Further, section 173(3) expressly permits consensual enforcement against a borrower. A borrower may consent to the sale of a security or to judgment. Moreover, the creditor is entitled to retain any security lodged until either an application for an enforcement order is dismissed or the court makes a declaration under section 142 that the agreement is not enforceable. That is the effect of sections 113(3) and 106.
On its face article 1 is engaged in this case, most obviously with regard to the BMW car delivered by Mrs Wilson to First County Trust as security. On delivery First County Trust as pawnee acquired a proprietary interest in the car. That was in January 1999. The company's proprietary interest ceased eight months later, in September 1999, when the court refused to make an enforcement order. In addition, both parties acquired contractual rights under the agreement. 'Possessions' in article 1 is apt to embrace contractual rights as much as personal rights. Contractual rights may be more valuable and enduring than proprietary rights. But, by virtue of the statute, the contractual rights acquired by First County Trust were enforceable only with the consent of the borrower pursuant to section 173(3).
The distinction between the substantive content of a right and an unacceptable procedural bar to its enforcement by a court can give rise to difficulty in distinguishing the one from the other in a particular case. As a matter of drafting, a restriction on the scope of a right may be framed in several different ways. But the drafting technique chosen by the draftsman cannot be determinative of this issue. Human Rights conventions are concerned with substance, not form, with practicalities and realities, not linguistic niceties. The crucial question in the present context is whether, as a matter of substance, the relevant provision of national law has the effect of preventing an issue which ought to be decided by a court from being so decided. The touchstone in this regard is the proper role of courts in a democratic society. A right of access to a court is one of the checks on the danger of arbitrary power.
50. I have already said that in Wilson v First County Trust Limited (No 2)  UKHL 40,  1 AC 816 it was held that section 127(3) was compatible with Article 6 of the European Convention on Human Rights, and with the right to peaceful enjoyment of possessions under Article 1 of the First Protocol; and that the House was divided on the reasons for the conclusion on the Article 1 point. The majority considered that Article 1 was not engaged because (per Lords Hobhouse and Scott) the effect of the legislation was that the lender never acquired rights against the borrower or because (per Lord Hope) the borrower never had a right to enforce the agreement. Lord Nicholls (with whom Lord Rodger agreed) considered that Article 1 was engaged because the lender had rights, which were extinguished by legislation, but that the interference with those rights was justified.
51 Lord Hope said (at para 108) that the lender "never had an absolute and unqualified right to enforce" the agreement. Lord Hobhouse considered that the lenders "never in truth validly acquired" the claimed contractual right: para 137. Lord Scott said that the agreement was not void or unlawful but was "merely unenforceable except on an order of the court" (at para 164); section 127(3) did not constitute an interference with the pre-existing right to enforce payment because the Act and section 127(3) prevented the lender "from ever possessing that right", and the statutory provision prevented the transaction "from having the quality of legal enforceability" (at para 168). Lord Nicholls (with whom Lord Rodger agreed) said that, where there was a failure to comply with the Act, the legislation did not deprive a regulated agreement of legal effect, or render it void, since it was enforceable by the debtor against the creditor (para 31). But the lender's "rights were extinguished in favour of the borrower by the legislation" (para 44); the agreement was "rendered irredeemably unenforceable by section 127(3)" (para 46); the legislation "renders the entire agreement inoperative" (para 49); and the lender "loses all his rights under the agreement" (para 72). But even Lord Nicholls referred to section 127(3) as being "a restriction on the scope of the rights a creditor acquires under a regulated agreement" (para 36).
52 The judge considered that Wilson was binding authority to the effect that Conister had no rights under an unenforceable credit agreement, and it followed that the client had no corresponding liability. Wilson was dispositive of the legal definition of the word "liability" but that was not conclusive on the question of construction. In concluding that the word "liability" in clause 4.5 did not mean legal liability the judge relied on the colloquial use of the words "debtor" and "creditor" by Lord Nicholls at para 31.
53 I do not consider that any of the cases assists on the question of construction in the present context. The most that can be said is that the different formulations in Wilson indicate that for the purposes of Article 1 of Protocol 1 the lender is in the position of never having had any rights or having them extinguished. It is not suggested that the panel solicitor agreement was drafted or negotiated against the background of that decision.
The contract is good. The only effect of the non-fulfilment of the statutory conditions is that it is unenforceable. And, the contract being good, all the legal consequences of a contract follow; so that, if the contract is for the sale of specific goods, the property in the goods passes to the buyer.
How is the present case affected by the fact that the hire-purchase agreement is unenforceable? If the Act said that it was void, then of course the character of Murphy's possession could not be altered by it. But the Act says merely that it is to be unenforceable. This must mean that it is effective to alter the rights of the parties but that the altered rights cannot be enforced.
Agreements or securities that are unenforceable are not devoid of all legal effect. Payments made voluntarily pursuant to their terms are not recoverable and I regard it as open to question whether the unenforceability of a higher ranking security which is not void ab initio excludes the doctrine of the merger in it of a lower ranking security in respect of the same charge, at any rate when the higher ranking security remains potentially enforceable in the hands of an assignee.
There was an existing liability, albeit only enforceable by an order of the court. It is quite plain from s 65 that the object of that provision is that if the agreement is not properly completed, then one of the methods of the disappointed contractor enforcing his liability is removed from him. He cannot help himself. In other words he cannot retake the vehicle if it is a hire-purchase type of agreement. But the argument that no legal liability exists in the light of those matters is one which is not tenable.
The impact of Wilson on section 77
The meaning of enforcement
6.10.27 Within certain limits, a creditor is entitled to exercise self-help and to take steps for his own protection which do not involve recourse to the courts. Repossession of secured goods is one such method, though restrictions are imposed by existing legislation and these would continue to apply under the Consumer Sale and Loan Act.
6.10.28 There are, however, various forms of pressure put on debtors which are improper and cause considerable hardship and anxiety to the debtors concerned. These methods include threats of violence, calls on the debtor in person or by telephone late at night or early in the morning, threats to blacklist the debtor or to report him to his employer, the despatch to the debtor's home of vans carrying signs prominently indicating that they are from a debt collecting agency, and so on. Harassment of this kind, which was made the subject of specific recommendations by the Payne Report (paragraphs 1238 et seq.) is now an offence under section 40 of the Administration of Justice Act, 1970. We therefore do not propose to go over this ground again.
The effect of the Consumer Protection from Unfair Trading Regulations 2008
35. Firstly, it follows from the case-law that not only the national provisions specifically intended to transpose a directive but also, from the date of that directive's entry into force, the pre-existing national provisions capable of ensuring that the national law is consistent with it must be considered to fall within the scope of that directive (see, to that effect, Case C-1/05 Cordero Alonso  ECR I-7569, paragraph 29).
36 While it is true that, in the main proceedings, the Law of 5 June 2007 amending the 1991 Law and intended formally to transpose the Directive is later in time than the main proceedings and the adoption of the decision to refer, the fact remains that, as is apparent from that decision and as the Belgian Government acknowledged at the hearing, the disputed provisions in Articles 54 to 57 of the 1991 Law, that is to say, those laying down the principle of a general prohibition of combined offers and providing for certain exceptions to that principle, were neither repealed nor even amended by the Law of 5 June 2007.
37 In other words, both at the time of the main proceedings and at the time when the decision to refer was adopted, those pre-existing provisions were regarded by the national authorities as being capable of ensuring transposition of the Directive from the date of its entry into force, that is to say, from 12 June 2005, and, accordingly, as falling within its scope.
38 Secondly, in any event, it follows from the case-law of the Court that, during the period prescribed for transposition of a directive, the Member States to which it is addressed must refrain from taking any measures liable seriously to compromise the attainment of the result prescribed by that directive (Case C-29/96 Inter-Environnement Wallonie  ECR I-7411, paragraph 45; Case C-4/02 ATRAL  ECR I-4431, paragraph 58; and Case C-44/04 Mangold  ECR I-9981, paragraph 67).
39 In that respect, the Court has had occasion to hold that all the authorities of the Member States concerned, including the national courts, have such an obligation to refrain from taking measures. It follows that, from the date upon which a directive has entered into force, the courts of the Member States must refrain as far as possible from interpreting domestic law in a manner which might seriously compromise, after the period for transposition has expired, attainment of the objective pursued by that directive (see, in particular, Case C-12/04 Adeneler and Others  ECR I-6057, paragraphs 122 and 123).
The Data Protection Act
Right to prevent processing likely to cause damage or distress.
10 (1) Subject to subsection (2), an individual is entitled at any time by notice in writing to a data controller to require the data controller at the end of such period as is reasonable in the circumstances to cease, or not to begin, processing, or processing for a specified purpose or in a specified manner, any personal data in respect of which he is the data subject, on the ground that, for specified reasons—
(a) the processing of those data or their processing for that purpose or in that manner is causing or is likely to cause substantial damage or substantial distress to him or to another, and
(b) that damage or distress is or would be unwarranted. (my emphasis)
Please consider this letter a statutory notice under section 10 of the Data Protection Act to cease processing any data in relation to the above account with immediate effect. This means you must remove all information regarding this account from your own internal records and you are advised that you are not entitled to refer this account to any third party and this includes but is not limited to any debt collection agency and credit reference agency.
Should you refuse to comply, you must within 21 days provide us with a detailed breakdown of your reasoning behind continuing to process my data.
It is not sufficient to simply state that you have a 'legal right' you must outline your reasoning in this matter and state upon which legislation this reasoning depends. Should you fail to respond within 21 days, we will expect that this means you agree to remove all such data.
Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless—
(a) at least one of the conditions in Schedule 2 is met….
The conditions in Schedule 2 are as follows:
1. The data subject has given his consent to the processing.
2. The processing is necessary—
(a) for the performance of a contract to which the data subject is a party, or
(b) for the taking of steps at the request of the data subject with a view to entering into a contract.
3. The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract.
4. The processing is necessary in order to protect the vital interests of the data subject.
5. The processing is necessary—
(a) for the administration of justice,
(aa) for the exercise of any functions of either House of Parliament,
(b) for the exercise of any functions conferred on any person by or under any enactment,
(c) for the exercise of any functions of the Crown, a Minister of the Crown or a government department, or
(d) for the exercise of any other functions of a public nature exercised in the public interest by any person.
6. — (1) The processing is necessary for the purposes of legitimate interests pursued by the data controller or by the third party or parties to whom the data are disclosed, except where the processing is unwarranted in any particular case by reason of prejudice to the rights and freedoms or legitimate interests of the data subject.
(2) The Secretary of State may by order specify particular circumstances in which this condition is, or is not, to be taken to be satisfied.
Unfair relationship under sections 140A and 140B of the Consumer Credit Act