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http://www.bailii.org/ew/cases/Misc/2012/10.html
IN THE CARLISLE COUNTY COURT
Case No: 1HG02053
Courts of Justice
Earl Street
Carlisle Cumbria
England
CA1 1DJ
22nd March 2012
BEFORE:
DISTRICT JUDGE PARK
B E T W E E N :
Mr David Murray
Claimant
- and –
(1) Black Horse Limited
(2) Brownhills Motorhomes (Newark) Limited
Defendants
APPROVED TRANSCRIPT OF JUDGMENT
Transcript provided by:
Posib, Y Gilfach, Ffordd y Pentre, Nercwys, Flintshire, CH7 4EL
Posib, DX26560 MOLD
Tel: 01352 757273
Fax: 01352 757252
APPEARANCES:
For the Claimant: Mr Stephen Turner
Park Lane Plowden Chambers, 19 Westgate, Leeds LS1 2RD
Instructed by Michael Lewin Solicitors Limited
376 Harrogate Road, Leeds, LS17 6PY.
For the 1st Defendant: Mr Thomas Samuels
Gough Square Chambers, 6-7 Gough Square,
London EC4A 3DE
Instructed by SCM Solicitors, Holbrook House,
116 Cockfosters Road, Barnet, Hertfordshire. EN4 0DY
For the 2nd Defendant: The Second Defendant did not appear and was not represented.
DISTRICT JUDGE PARK:
In late March 2007, Mr Murray, the Claimant, agreed to buy a motor home from the second Defendant, Brownhills. A deal was done on price at that stage but Mr Murray wanted to buy the vehicle on 'Hire Purchase' and said he wanted to pay about £200 per month. Proposals were put to by Brownhills to Black Horse Limited, the first Defendant, on 23rd and 24th March 2007. These are in the bundle and neither of them included 'PPI' cover. The arrangement that Mr Murray reached with Brownhills was that he would return to Brownhills in late April to sign the paperwork and collect the motor home.
On the date when he called to collect his motor home, he was, with his wife, busy transferring his possessions from his old motor home to the new motor home, whilst the dealer was away exchanging faxes with Black Horse and sorting out the paperwork. Mr Murray candidly states that, when the dealer put the paperwork to him and said "Sign here, here and here", he did just that. He did not read any of it and he did not notice that, by then, the dealer had added 'PPI' at a premium of £901.71, which was to be added to the amount to be borrowed from Black Horse Limited to pay for the new motor home (in other words, to be put on finance) so that the total cost of the Payment Protection Insurance, including the finance of it, was £1,578.00. Mr Murray did not notice that. He said though that PPI had not been mentioned before he signed, had not been discussed, he did not ask for it, he did not want it and he did not need it. The question, therefore, arises as to whether he was mis-sold that policy and, if so, by whom and what provisions of the Consumer Credit Act apply. There is some doubt as to whether Brownhills is still in business and, therefore, in a position to satisfy any judgment given against it. Certainly that company has not appeared here today. The Claimant, therefore, pursues Black Horse as the principal behind the agreement.
The first question I have to ask myself is whether, apart from any Consumer Credit Act considerations, Brownhills was Black Horse's agent for the purposes of this deal. I conclude it was not. I have been referred to Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, a decision of the House of Lords, the facts of which, for the sake of brevity, I will not recite but they were very similar to the facts of this case. The principle difference is the fact that in that case the customer signed a blank Hire Purchase form. Mr Murray's was not blank but it might as well have been for all attention he gave to it. So, under normal law, I find that Brownhills was not the agent of Black Horse.
I have to turn, therefore, to the Consumer Credit Act, Section 56 of which deals with "Antecedent negotiations" to be considered before concluding whether there is a relationship of agency. Section 56(2) provides that: "in a case falling within subsection (1)(b) or (c) [the negotiator] shall be deemed to be the agent of the creditor" in such negotiations. So, looking at those in turn, subsection (1)(b) relates to goods sold by the credit broker (Brownhills in this case) to the creditor (Black Horse) before an arrangement is formed within the meaning of Section 12(a). Subsection (1)(c) of Section 56 relates to the negotiation by the supplier before forming an arrangement within Section 12(b) or (c). It seems to me that 'supplier', for the purposes of subsection (1)(c), must be Scottish Widows. That was the insurer who supplied the PPI policy and Black Horse supplied the motor home because that is the nature of a Hire Purchase agreement; Black Horse acquires the motor home from a supplier, Brownhills, and then transfers ownership of it to Mr Murray. The position must be different though so far as concerns the Payment Protection Insurance because Black Horse simply did not supply it. It did not and it could not acquire the policy from Scottish Widows and did not and could not have then passed it on to Mr Murray.
So I must pause to consider Section 18 of the Consumer Credit Act, which relates to multiple agreements. It is important because, if there were multiple agreements, they have to be considered separately. The financial arrangement is a multiple agreement if it places one part of the agreement in one category of agreement under the Act and another part of the agreement in a different category under the Act. Section 12 is the next port of call – that defines Debtor-Creditor-Supplier agreements as being of three types. This was a "restricted-use" credit agreement, in other words, the credit being supplied was restricted in its use; it had to be used for the purchase of the motor home and the purchase of the PPI. Thus it is one of those types described in Section 11(1)(a) and/or (b). The first of these, Section 11(1)(a), is an agreement "…to finance a transaction between the debtor and the creditor…" this must be the type of agreement applicable to the sale of the motor home because it is being sold by Black Horse, the creditor, to Mr Murray, the debtor. The second type of agreement under Section 11(1)(b) is "…to finance a transaction between the debtor [Mr Murray] and… (the 'supplier')…", which, as I have already found, is Scottish Widows. Thus this agreement falls within two categories and must be a multiple agreement within the meaning of Section 18. As I have said, as such the two parts of the agreement must be dealt with separately.
There is no dispute concerning the part of the deal which concerns the motor home and so I go back to Section 56(1)(b) to consider the other part of the agreement, the PPI. Section 56(1)(b) does not apply here because this is not an agreement falling within Section 12(a). Section 56(1)(c) does not, it seems to me, apply because any negotiations were not conducted by the supplier, Scottish Widows. Indeed, there were no negotiations because Mr Murray did not even know he was buying the policy. And that leads me to the conclusion that the agency provisions implied by Section 56(2) do not arise, from which it follows that any wrong doing on the part of Brownhills in selling the PPI cannot be attributed to Black Horse because that wrong doing was not done on Black Horse's behalf. I do not think that is a technical argument as Mr Turner counsel for the Claimant argues. Rather I think that, if I stand back and look at the realities of the situation, it is simply the case that Brownhills sold to Mr Murray something he did not want and did not know he was buying, and it appears concealed from him the fact that he was buying it. Why should that deception be laid at the door of Black Horse Limited just because Brownhills arranged for Black Horse Limited to finance the purchase?
So, that takes me on to Mr Murray's final argument, which is that Black Horse was in breach of the provisions of Section 140A of the Consumer Credit Act - that there was an unfair relationship between the parties. Section 140A(1) defines an unfair relationship as resulting from: (a) the terms of the agreement; (b) the way Black Horse had exercised or enforced its rights (and this provision must be irrelevant to the present case because Black Horse is not seeking to exercise or enforce its rights); and (c) anything else done or said by or on behalf of Black Horse before or after the making of the agreement by it or, as I say, on its behalf, and I have already found nothing was said on its behalf because Brownhills was not Black Horse's agent.
Taking everything into account that I consider to be relevant, in other words looking at it through the eyes of Section 140A(2) and my finding already that there is no agency, it seems to me that the only dealing between Black Horse and Mr Murray was that they lent him money and that, therefore, Section 140A(1)(c) cannot apply. But, there was a term of the agreement that was unfair (this is under Section 140A(1)(a)) because it must be unfair to Mr Murray that he be sold something he did not want and did not know he was buying, but it was not sold to him by Black Horse under the agreement. The agreement was simply to finance the sale by Scottish Widows to Mr Murray.
Mr Turner points out, rightly, that the box at the bottom of the agreement stating that Mr Murray wished to purchase Payment Protection Insurance had not been ticked and that should have alerted Black Horse to there being a problem if they had checked the paperwork properly. That aside, he argues in any event that Black Horse should have made a follow up customer care type telephone call to Mr Murray to check that everything was in order and, had they done that, they would have found out and it would have dawned on Mr Murray that he had bought something that he did not intend to buy. In fact, we do not know that no such telephone calls were made. Mr Murray did say that he was very busy at that time and had other things to think about apart from this finance agreement so it is possible that some calls were attempted but did not connect, although it is not suggested on behalf of Black Horse that any such telephone calls were made.
I do not think that there is any merit in either of those arguments. I am of the view that Black Horse was entitled to think, erroneously as it turns out, that Mr Murray knew what he was buying; he had signed in the relevant box even though he had not ticked it. There is nothing, it seems to me, in this case sufficient to put Black Horse on notice that he may not have known what he was buying. They advised him of a right to cancel the agreement within thirty days of the making of the agreement. They did that in writing by sending the standard documentation to him through the post and, if he had read that, he would perhaps first have scratched his head wondering why it had been sent and then he might have gone back to look at the agreement and see that he had bought PPI. But he did not read that either. In my view, it is unreasonable to expect Black Horse to do any more than comply with its statutory requirements of sending notice of the right to cancel within thirty days.
In my view, therefore, taking into account all the relevant factors, there was no unfair relationship here so that allegation must fail. Thus the claim against Black Horse Limited must be dismissed but the claim against Brownhills must succeed for all the reasons set out in the Particulars of Claim and today. I accept Mr Murray's evidence that he was duped into buying something he did not want or order. He is entitled to judgment for the cost of that policy and it seems to me interest on that sum. I take the view that four per cent interest is sufficient these days and as that loss is something which is still continuing to accrue then half the rate would be appropriate. The sum for the judgment is £1,578.00 and I will leave it to Mr Turner to work out what the interest on that will be.
End of judgment.
Approved by District Judge Park
26th June 2012
M1
IN THE CARLISLE COUNTY COURT
Case No: 1HG02053
Courts of Justice
Earl Street
Carlisle Cumbria
England
CA1 1DJ
22nd March 2012
BEFORE:
DISTRICT JUDGE PARK
B E T W E E N :
Mr David Murray
Claimant
- and –
(1) Black Horse Limited
(2) Brownhills Motorhomes (Newark) Limited
Defendants
APPROVED TRANSCRIPT OF JUDGMENT
Transcript provided by:
Posib, Y Gilfach, Ffordd y Pentre, Nercwys, Flintshire, CH7 4EL
Posib, DX26560 MOLD
Tel: 01352 757273
Fax: 01352 757252
APPEARANCES:
For the Claimant: Mr Stephen Turner
Park Lane Plowden Chambers, 19 Westgate, Leeds LS1 2RD
Instructed by Michael Lewin Solicitors Limited
376 Harrogate Road, Leeds, LS17 6PY.
For the 1st Defendant: Mr Thomas Samuels
Gough Square Chambers, 6-7 Gough Square,
London EC4A 3DE
Instructed by SCM Solicitors, Holbrook House,
116 Cockfosters Road, Barnet, Hertfordshire. EN4 0DY
For the 2nd Defendant: The Second Defendant did not appear and was not represented.
DISTRICT JUDGE PARK:
In late March 2007, Mr Murray, the Claimant, agreed to buy a motor home from the second Defendant, Brownhills. A deal was done on price at that stage but Mr Murray wanted to buy the vehicle on 'Hire Purchase' and said he wanted to pay about £200 per month. Proposals were put to by Brownhills to Black Horse Limited, the first Defendant, on 23rd and 24th March 2007. These are in the bundle and neither of them included 'PPI' cover. The arrangement that Mr Murray reached with Brownhills was that he would return to Brownhills in late April to sign the paperwork and collect the motor home.
On the date when he called to collect his motor home, he was, with his wife, busy transferring his possessions from his old motor home to the new motor home, whilst the dealer was away exchanging faxes with Black Horse and sorting out the paperwork. Mr Murray candidly states that, when the dealer put the paperwork to him and said "Sign here, here and here", he did just that. He did not read any of it and he did not notice that, by then, the dealer had added 'PPI' at a premium of £901.71, which was to be added to the amount to be borrowed from Black Horse Limited to pay for the new motor home (in other words, to be put on finance) so that the total cost of the Payment Protection Insurance, including the finance of it, was £1,578.00. Mr Murray did not notice that. He said though that PPI had not been mentioned before he signed, had not been discussed, he did not ask for it, he did not want it and he did not need it. The question, therefore, arises as to whether he was mis-sold that policy and, if so, by whom and what provisions of the Consumer Credit Act apply. There is some doubt as to whether Brownhills is still in business and, therefore, in a position to satisfy any judgment given against it. Certainly that company has not appeared here today. The Claimant, therefore, pursues Black Horse as the principal behind the agreement.
The first question I have to ask myself is whether, apart from any Consumer Credit Act considerations, Brownhills was Black Horse's agent for the purposes of this deal. I conclude it was not. I have been referred to Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, a decision of the House of Lords, the facts of which, for the sake of brevity, I will not recite but they were very similar to the facts of this case. The principle difference is the fact that in that case the customer signed a blank Hire Purchase form. Mr Murray's was not blank but it might as well have been for all attention he gave to it. So, under normal law, I find that Brownhills was not the agent of Black Horse.
I have to turn, therefore, to the Consumer Credit Act, Section 56 of which deals with "Antecedent negotiations" to be considered before concluding whether there is a relationship of agency. Section 56(2) provides that: "in a case falling within subsection (1)(b) or (c) [the negotiator] shall be deemed to be the agent of the creditor" in such negotiations. So, looking at those in turn, subsection (1)(b) relates to goods sold by the credit broker (Brownhills in this case) to the creditor (Black Horse) before an arrangement is formed within the meaning of Section 12(a). Subsection (1)(c) of Section 56 relates to the negotiation by the supplier before forming an arrangement within Section 12(b) or (c). It seems to me that 'supplier', for the purposes of subsection (1)(c), must be Scottish Widows. That was the insurer who supplied the PPI policy and Black Horse supplied the motor home because that is the nature of a Hire Purchase agreement; Black Horse acquires the motor home from a supplier, Brownhills, and then transfers ownership of it to Mr Murray. The position must be different though so far as concerns the Payment Protection Insurance because Black Horse simply did not supply it. It did not and it could not acquire the policy from Scottish Widows and did not and could not have then passed it on to Mr Murray.
So I must pause to consider Section 18 of the Consumer Credit Act, which relates to multiple agreements. It is important because, if there were multiple agreements, they have to be considered separately. The financial arrangement is a multiple agreement if it places one part of the agreement in one category of agreement under the Act and another part of the agreement in a different category under the Act. Section 12 is the next port of call – that defines Debtor-Creditor-Supplier agreements as being of three types. This was a "restricted-use" credit agreement, in other words, the credit being supplied was restricted in its use; it had to be used for the purchase of the motor home and the purchase of the PPI. Thus it is one of those types described in Section 11(1)(a) and/or (b). The first of these, Section 11(1)(a), is an agreement "…to finance a transaction between the debtor and the creditor…" this must be the type of agreement applicable to the sale of the motor home because it is being sold by Black Horse, the creditor, to Mr Murray, the debtor. The second type of agreement under Section 11(1)(b) is "…to finance a transaction between the debtor [Mr Murray] and… (the 'supplier')…", which, as I have already found, is Scottish Widows. Thus this agreement falls within two categories and must be a multiple agreement within the meaning of Section 18. As I have said, as such the two parts of the agreement must be dealt with separately.
There is no dispute concerning the part of the deal which concerns the motor home and so I go back to Section 56(1)(b) to consider the other part of the agreement, the PPI. Section 56(1)(b) does not apply here because this is not an agreement falling within Section 12(a). Section 56(1)(c) does not, it seems to me, apply because any negotiations were not conducted by the supplier, Scottish Widows. Indeed, there were no negotiations because Mr Murray did not even know he was buying the policy. And that leads me to the conclusion that the agency provisions implied by Section 56(2) do not arise, from which it follows that any wrong doing on the part of Brownhills in selling the PPI cannot be attributed to Black Horse because that wrong doing was not done on Black Horse's behalf. I do not think that is a technical argument as Mr Turner counsel for the Claimant argues. Rather I think that, if I stand back and look at the realities of the situation, it is simply the case that Brownhills sold to Mr Murray something he did not want and did not know he was buying, and it appears concealed from him the fact that he was buying it. Why should that deception be laid at the door of Black Horse Limited just because Brownhills arranged for Black Horse Limited to finance the purchase?
So, that takes me on to Mr Murray's final argument, which is that Black Horse was in breach of the provisions of Section 140A of the Consumer Credit Act - that there was an unfair relationship between the parties. Section 140A(1) defines an unfair relationship as resulting from: (a) the terms of the agreement; (b) the way Black Horse had exercised or enforced its rights (and this provision must be irrelevant to the present case because Black Horse is not seeking to exercise or enforce its rights); and (c) anything else done or said by or on behalf of Black Horse before or after the making of the agreement by it or, as I say, on its behalf, and I have already found nothing was said on its behalf because Brownhills was not Black Horse's agent.
Taking everything into account that I consider to be relevant, in other words looking at it through the eyes of Section 140A(2) and my finding already that there is no agency, it seems to me that the only dealing between Black Horse and Mr Murray was that they lent him money and that, therefore, Section 140A(1)(c) cannot apply. But, there was a term of the agreement that was unfair (this is under Section 140A(1)(a)) because it must be unfair to Mr Murray that he be sold something he did not want and did not know he was buying, but it was not sold to him by Black Horse under the agreement. The agreement was simply to finance the sale by Scottish Widows to Mr Murray.
Mr Turner points out, rightly, that the box at the bottom of the agreement stating that Mr Murray wished to purchase Payment Protection Insurance had not been ticked and that should have alerted Black Horse to there being a problem if they had checked the paperwork properly. That aside, he argues in any event that Black Horse should have made a follow up customer care type telephone call to Mr Murray to check that everything was in order and, had they done that, they would have found out and it would have dawned on Mr Murray that he had bought something that he did not intend to buy. In fact, we do not know that no such telephone calls were made. Mr Murray did say that he was very busy at that time and had other things to think about apart from this finance agreement so it is possible that some calls were attempted but did not connect, although it is not suggested on behalf of Black Horse that any such telephone calls were made.
I do not think that there is any merit in either of those arguments. I am of the view that Black Horse was entitled to think, erroneously as it turns out, that Mr Murray knew what he was buying; he had signed in the relevant box even though he had not ticked it. There is nothing, it seems to me, in this case sufficient to put Black Horse on notice that he may not have known what he was buying. They advised him of a right to cancel the agreement within thirty days of the making of the agreement. They did that in writing by sending the standard documentation to him through the post and, if he had read that, he would perhaps first have scratched his head wondering why it had been sent and then he might have gone back to look at the agreement and see that he had bought PPI. But he did not read that either. In my view, it is unreasonable to expect Black Horse to do any more than comply with its statutory requirements of sending notice of the right to cancel within thirty days.
In my view, therefore, taking into account all the relevant factors, there was no unfair relationship here so that allegation must fail. Thus the claim against Black Horse Limited must be dismissed but the claim against Brownhills must succeed for all the reasons set out in the Particulars of Claim and today. I accept Mr Murray's evidence that he was duped into buying something he did not want or order. He is entitled to judgment for the cost of that policy and it seems to me interest on that sum. I take the view that four per cent interest is sufficient these days and as that loss is something which is still continuing to accrue then half the rate would be appropriate. The sum for the judgment is £1,578.00 and I will leave it to Mr Turner to work out what the interest on that will be.
End of judgment.
Approved by District Judge Park
26th June 2012
M1
Comment