Requirements for Enforcing Consumer Loan Agreement
The claimant challenged the validity of a loan agreement with his bank as a regulated consumer credit agreement. After default, the lender failed to satisfy a request for a copy of the agreement under section 77. The bank said that though it could not enforce the agreement, it remained valid and that default would be reported to credit reference agencies. The court was asked whether during a period when the agreement was unenforceable for non-compliance, the debt was extinguished/suspended or continued and what steps were available to the bank.
Held: The House of Lords in Wilson had left this situation unclear, and the conflicting judgements were issued without full citation of the case law. The effect of unenforceability under section 65 is that the rights of the creditor and corresponding liability or obligations of the debtor do exist but are unenforceable, rather than that those rights were never acquired or that the creditor was deprived of those rights whilst the agreement was unenforceable.
The 1974 Act did not make clear what was meant by enforcement, but reference to credit reference agencies was said by the claimant to be coercive. Steps up to and including applications to court for permission to enforce such an agreement did not themselves amount to enforcement.
The 2008 regulations were not enforceable by private action.
The claimant had objected under the 1998 Act to the continued holding of information regarding his account. That claim failed: ‘There is simply no basis for the contention that the data is not being processed fairly and lawfully. The processing of the data by sharing it with other financial institutions through the CRAs, pursuant to the Principles of Reciprocity, is clearly in the legitimate interests of the bank, the CRAs and other financial institutions, for all of whom the governing principle is that the sharing of data has the aim of promoting responsible lending.’
Judges:
Flaux J
Citations:
[2009] EWHC 2386 (Comm)
Links:
Statutes:
Consumer Credit Act 1974, Consumer Protection from Unfair Trading Regulations 2008, Directive 2005/29EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices., Data Protection Act 1998 10(1)
Jurisdiction:
England and Wales
Citing:
Cited – Wilson v Secretary of State for Trade and Industry; Wilson v First County Trust Ltd (No 2) HL 10-Jul-2003
The respondent appealed against a finding that the provision which made a loan agreement completely invalid for lack of compliance with the 1974 Act was itself invalid under the Human Rights Act since it deprived the respondent lender of its . .
Cited – Taylor v Great Eastern Railway Company 1901
The section provided that: ‘A contract for the sale of any goods of the value of ten pounds or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold, and actually receive the same, or give something in . .
Cited – Rankine v American Express Services Europe Ltd 2009
The court considered the enforcement of a contract which offended the 1974 Act.
Held: The bringing of proceedings is only a step taken with a view to enforcement and not actually enforcement. . .
Cited – Eastern Distributors Limited v Goldring (Murphy, Third Party) CA 1957
The court considered the meaning of the phrase: ‘shall not be entitled to enforce’ in the section.
Held: ‘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 . .
Cited – VTB-VAB v Total Belgium NV; Galatea BVBA v Sanoma Magazines Belgium NV ECJ 21-Oct-2008
ECJ (Approximation of Laws) Opinion – Admissibility of a reference for a preliminary ruling – Proper subject of interpretation Relevance to the decision Combined offers – Directive 2005/29/EC – Interpretation in . .
Cited – Conister Trust Ltd v John Hardman and Co CA 21-Jul-2008
The court was asked whether an agreement by the defendant solicitors under a personal injury litigation funding scheme, to discharge a client’s ‘remaining liability’ under a loan agreement applies on its true construction where the loan agreement is . .
Cited – Orakpo v Manson Investments Ltd HL 1977
Transactions were entered into under which loans were made to enable the borrower to acquire and develop certain properties were held to be unenforceable under the 1927 Act. The effect was to enrich the borrower, who had fallen into arrears of . .
Cited – Regina v Modupe CACD 1991
The appellant obtained loans enabling him to buy cars by giving false information when entering into hire purchase agreements. The relevant agreement did not contain all the prescribed information and was improperly executed so that by virtue of . .
Cited by:
Cited – Carey v HSBC Bank plc, Yunis v Barclays Bank plc and similar QBD 23-Dec-2009
(Manchester Mercantile Court) The court considered the effects in detail where a bank was unable to comply with a request under section 78 of the 1974 Act to provide a copy of the agreement signed by the client.
Held: The court set out to give . .
Cited – Doyle v PRA Group (UK) Ltd CA 23-Jan-2019
Whether the cause of action for the outstanding sums accrued when Mr Doyle first defaulted in his payments or only when Mr Doyle failed to comply with the default notice stipulated by CCA s.87(1) and required by clause 8f of the Agreement. Mr Doyle . .
Lists of cited by and citing cases may be incomplete.
Consumer, Banking, Information
Updated: 08 August 2022; Ref: scu.375741