ON APPEAL FROM THE COUNTY COURT AT BASINGSTOKE
DISTRICT JUDGE LYNDS
B e f o r e :
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Jakub Kasperczak |
Appellant |
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FirstRand Bank Limited (London Branch) T/A Motornovo Finance |
Respondent |
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Harrison Denner (instructed by Eversheds Sutherland (International) LLP) for the Respondent
Hearing date: 11 October 2024
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Crown Copyright ©
His Honour Judge Glen:
Introduction.
Background.
The appeal.
The judgment.
"…on the basis of the contract as it currently presents this is not a secret commission claim. What might be argued is that it is a half-secret commission. And I say that because there is a written agreement in which the possibility of payment of commission to the claimant is explicit…"
For this reason, he went on to find that rescission was an unlikely outcome even on a discretionary basis.
"…there is no calculation, or complete calculation, before the court which would account for the return of the car and its value, any depreciation, and the value attributable to the use of the car during the course of the contract. I simply have starting figures which are likely in my view to be subject to dramatic reduction even if…restitution were possible."
Submissions.
"The reality is that this claim is very much a Small Claims Track matter even putting value to one side. These cases are flooding the County Courts at the moment in their thousands. They require relatively limited factual evidence, the areas of dispute are well-understood by both sides and are narrow, and District Judges and Deputy District Judges routinely deal with these matters on the Small Claims Track on a daily basis."
The law.
Secret commissions
Remedies
"The commission of £1,650 should be repaid to Mr Johnson by the lender, together with the interest he paid on it under the hire purchase and personal loan agreements, and interest on the total of those two elements at an appropriate commercial rate from the date of the agreement…"
The Court's final order awarded Mr Johnson an inclusive sum of £3,231.76. The commission was £1,650 and the agreement ran for about three and half years during which time I calculate that he would have paid approximately £800 in interest on the commission. This suggests that the 'commercial interest rate' was a modest single figure one.
The Rules
"(a) the financial value, if any, of the claim;
(b) the nature of the remedy sought;
(c) the likely complexity of the facts, law or evidence;
(d) the number of parties or likely parties;
(e) the value of any counterclaim or additional claim and the complexity of any matters relating to it;
(f) the amount of oral evidence which may be required;
(g) the importance of the claim to persons who are not parties to the proceedings;
(h) the views expressed by the parties; and
(i) the circumstances of the parties."
CPR26.13(2) provides that "It is for the court to assess the financial value of a claim and in doing so it shall disregard— (a) any amount not in dispute; (b) any claim for interest…"
"(1) The small claims track is intended to provide a proportionate procedure by which most straightforward claims with a financial value of not more than £10,000 can be decided, without the need for substantial pre-hearing preparation and the formalities of a traditional trial, and without incurring large legal costs…
(2)The procedure laid down in Part 27 for the preparation of the case and the conduct of the hearing are designed to make it possible for a litigant to conduct their own case without legal representation if they wish.
(3)Cases generally suitable for the small claims track will include consumer disputes…".
(4)A case involving a disputed allegation of dishonesty will not usually be suitable for the small claims track.
(5)The court may allocate to the small claims track a claim, the value of which is above the limits mentioned in rule 26.9(1). The court will not normally allow more than one day for the hearing of such a claim."
"a) ensuring that the parties are on an equal footing and can participate fully in proceedings, and that parties and witnesses can give their best evidence;
(b) saving expense;
(c) dealing with the case in ways which are proportionate—
(i) to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues; and
(iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly…"
Appeals
"It is well established that it would be inappropriate for an appellate court to reverse or interfere with such a decision unless it is "plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree"
(Parsdome Holdings Ltd v Plastic Energy Global S.L. [2024] EWCA Civ 1293 citing Lewison LJ in Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743). Where decisions (like that in this case) are made by District Judges at short hearings in pressured lists, a degree of latitude in expression of reasoning should be afforded to them.
Conclusions.
"…at least until the Financial Conduct Authority ("FCA") introduced new rules with effect from 28 January 2021, the consumer may have been surprised to discover that the dealer, who arranged the finance on their behalf, also received a commission from the lender for introducing the business to them, financed by the interest charged under the credit agreement.
"As explained above, the basic objective of equitable rescission is to restore the parties as near to their original positions as may be possible. This being the case, on rescission, the general rule is that money will be returned together with interest. This is not by way of damages but instead to reflect the fact that the receiving party has been kept from his or her money and that to restore them to their original position they ought also to receive interest on that money."