Southern Pacific Mortgage Ltd v Heath: CA 5 Nov 2009

The court considered the effect of an agreement within the 1974 Act falling into more than one category of agreement. Part was used to be used for the repayment of an existing mortgage (restricted use credit), and part was unrestricted. The question was as to whether different parts of the contract could be treated separately so as to bring it under the Act.
Held: It is from the terms of the agreement that one must find out whether the agreement is one under which there are two or more parts, in different categories, or whether it, or part of it, falls into two or more categories. It is not correct to start from the proposition that more than one disparate category is concerned, and to conclude from this that the agreement must fall into two or more parts. Though this might cause practical difficulties, the section was intended to restrict avoidance of the Act. There was nothing in the agreement requiring a division of it into two parts. The agreement was one whose terms placed the whole of the agreement in two relevant and disparate categories under the Act, so that section 18(1)(b) applied. Thus seen, the total loan exceeded the maximum, and the whole agreement was not a regulated agreement.
Lloyd, Dyson, Waller VP CA LJJ
Times 19-Nov-2009, [2009] EWCA Civ 1135, [2010] 2 WLR 1081, [2010] Ch 254, [2009] 45 EG 104, [2010] 1 All ER 748, [2010] 6 EG 116
Consumer Credit Act 1974 18
England and Wales
CitedMcGinn v Grangewood Securities Ltd CA 23-Apr-2002
The lender used part of the loan to repay a small amount of arrears of the claimant on another loan. The part so used was not part of the objective of the loan, but one of the costs of obtaining it.
Held: The deduction was properly part of the . .
CitedBurdis v Livsey QBD 2001
The several cases claimed the cost of provision by credit hire companies of car hire and repair services to the innocent victims of road accidents. The transactions were ‘res inter alios acta’ – collateral to the commission of the tort. . .
CitedDimond v Lovell HL 12-May-2000
A claimant sought as part of her damages for the cost of hiring a care whilst her own was off the road after an accident caused by the defendant. She agreed with a hire company to hire a car, but payment was delayed until the claim was settled.
CitedNational Westminster Bank Plc v Story and Another CA 7-May-1999
The court asked whether a series of smaller loans were governed by the 1974 Act. Three facilities had been provided under one loan agreement. 2 loans were held to be for unrestricted-use credit.
Held: Three credit agreements separately signed, . .
CitedLondon North Securities Ltd v Meadows, and Meadows CA 27-Jul-2005
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Lists of cited by and citing cases may be incomplete.
Updated: 27 September 2021; Ref: scu.377552