Penelope Wilson v Howard (Pawnbrokers) Ltd: CA 4 Feb 2005

The customer challenged a series of pawn agreements. The broker appealed the finding that the contracts were invalid, on the basis that the judgment had created an unjust enrichment.
Held: The appeal failed: ‘in pawn transactions the debtor is particularly at risk because there is nothing to stop the pawnbroker selling the security in order to realise the amounts owed without resort to the courts, leaving it to the debtor to go to court if anybody is going to do so. The other is that the unenforceability of these contracts derives in large part from far from technical breaches. They include Mr Howard’s entry into the agreements under a name in which he was not licensed to trade and the omission in other contracts of the identity of the lender.
In this situation, given the provisions of section 106, it seems to me that the judge was justified in adopting the claimant’s account of the parties’ mutual indebtedness, and that in all probability he was obliged to do so. The moral for a pawnbroker such as Mr Howard is that if he wants the rewards of his trade he must operate strictly by the book, and that the result of failing to do so may be not merely to unravel agreements, but to reverse the indebtedness that they have purportedly created.’


Potter, Sedley LJJ


[2005] EWCA Civ 147




Consumer Credit Act 1974 106


England and Wales


CitedJ and E Hall Ltd v Barclay 1937
The company had erected and tested two experimental davits for the appellant. They were then taken down and left unused for many years. The parties disputed the account. The company claimed also for damages for detinue or conversion of the davits . .
CitedMatthew v T M Sutton Ltd ChD 23-Jun-1994
A pawnbroker was liable to pay interest on excess funds recovered in its capacity as trustee. The court ordered an enquiry: ‘. . . as to what use was made by the defendant of the proceeds of sale and what return was obtained by him on those monies . .
Lists of cited by and citing cases may be incomplete.

Contract, Consumer

Updated: 29 June 2022; Ref: scu.224240