Hurstanger Ltd v Wilson: 2006

(Coventry County Court) Michael Douglas discussed the 1983 Regulations, saying: ‘The 1983 Regulations prescribe, among other things, the minimum contents of a regulated agreement, the information which must be brought to the attention of the borrower and the manner in which it is to be brought to his or her attention.
By Regulation 2 documents embodying regulated consumer credit agreements must ‘contain the information’ set out in Schedule 1. Column two of Schedule 1 specifies the relevant information and column one correspondingly identifies the type or category of regulated agreement in which that information is to be included.
Regulation 6 states that the ‘terms’ specified in Schedule 6, column two are prescribed in relation to the types of regulated agreement referred to in column one. The terms are said to be prescribed for the purposes of Section 61(1)(a) and Section 127(3) of the 1974 Act. It is the failure to incorporate these terms or any of them into the document signed by the debtor or hirer which leads to irredeemable unenforceability.
The 1983 Regulations thus distinguished between the ‘information’ set out in Schedule 1 and the ‘terms’ set out in Schedule 6
. . The organisation and wording of the relevant provisions in the 1983 Regulations therefore suggest that the object of Schedule 1 is to fulfil that part of the purpose of Section 60 which is designed to inform the borrower of all relevant aspects of the agreement. The phraseology of Regulation 6 suggests that it is fulfilling that purpose of Section 60, and 61 is amplified by Section 127(3), which requires certain minimum terms to be included in a regulated agreement.
Regulation 2(4) as it was worded at the date of the agreement in this case makes further a provision about the way in which Schedule 1 information is to be presented: ‘The information about financial and related particulars set out in paragraphs 3 to 19 of Schedule 1 to these Regulations and also the statements of the protection and remedies available to debtors under the Act specified in Forms 5, 7 and 9 of Part 1 of Schedule 2 shall be shown together as a whole in documents embodying regulated consumer credit agreements and not interspersed with other information, apart from subtotals of total amounts and cross-references to terms of the agreement. . . ‘In other words, certain information contained in Schedule 1, primarily financial information, must be presented as a single block so as to prevent any possibility of bits of relevant information being concealed or tucked away in places where the borrower might not look. This provision appears to implement the requirement contemplated in Section 60(2)(b) of the 1974 Act.
On the other hand, Regulation 6(2) as it was at the time of the agreement in this case required only that the terms of the agreement and the information required by Schedule 1 should be legible and of a colour readily distinguishable from the colour of the paper on which they are written. Mr Say accepted in answer to a question which I posed that there is nothing in Regulation 6 which would have made it obligatory for the prescribed terms or any of them to be placed in a prominent part of the document or to have prevented them being interspersed throughout the document. This tends to reinforce the conclusion that the purpose of Schedule 6, whilst of course not inconsistent with the purpose of Schedule 1, is not primarily to inform the borrower (a task discharged by Regulation 2 and Schedule 1).
In my judgment the objective of Schedule 6 is to ensure that as an inflexible condition of unenforceability certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the court can identify within the four corners of the agreement those minimum provisions, combined with the requirement under Section 60(1) that all the terms should be in a single document, and backed up by the provisions of Section 127(3) ensure that these core terms are expressly set out in the agreement itself. They cannot be orally agreed. They cannot be found in another document. They cannot be implied and, above all, they cannot be in the slightest misstated. As a matter of policy the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions and the only question for the court is whether they are, on a true construction, included in the agreement. More detailed requirements which are designed to ensure that the debtor is made aware so far as possible of specified information (including information contained in the minimum terms) are to be found in Schedule 1.’

Judges:

Mr. Recorder Michael Douglas QC

Citations:

[2006] WL 4402848

Statutes:

Consumer Credit Act 1974, Consumer Credit Agreements Regulations 1983

Cited by:

Appeal fromWilson and Another v Hurstanger Ltd CA 4-Apr-2007
The company sought to enforce its loan agreement and charge over the defendants’ property. The defendants appealed saying that the agreement was unenforceable under the Act, since a commission had been paid to the introducing broker, and his fee had . .
ApprovedBrophy v HFC Bank QBD 22-Mar-2010
The customer sought to appeal against a finding of liability for the debt on his credit card, and that the credit card agreement which operated between Mr Brophy and the bank for a period of some 14 years, from 1994 to 2008, was a valid and . .
CitedHSBC Bank Plc v Brophy CA 2-Feb-2011
The customer appealed against an order finding that his credit card agreement was binding upon him.
Held: The appeal failed. His argument that the application form amounted only to an invitation to treat, and that the contract was one made by . .
Lists of cited by and citing cases may be incomplete.

Consumer, Banking

Updated: 06 May 2022; Ref: scu.430730