JUDGMENT (as approved) Case No: 9JU Lewins Place Lewins Mead. Bristol BS1 2NR. Tuesday, 25 May Before:

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1 Lewins Place Lewins Mead Bristol County Court IN THE BRISTOL COUNTY COURT Case No: 9JU P Tel: Fax: Hill Rise, Romiley, Stockport, Cheshire SK6 3AP Tape Transcription by Audrey Jones Transcription, JUDGMENT (as approved) The Defendant on behalf in person. MISS URELL appeared on behalf of the Claimant. Appellant IAN KARL ROBERT BRANDON Defendant - and - AMERICAN EXPRESS SERVICES EUROPE Clalmant/ PE LIMITED Respondent Between: Sitting as a Judge of the High Court HIS HONOUR JUDGE RODERICK DENVER QC Before: Tuesday, 25 May 2010 BS1 2NR Bristol 23 JUN :02

2 when drafting the overriding objective, namely, dealing with cases in ways which are that so far as I am aware in no witness statement has Mr Brandon actually said in terms that he does not owe American Express money. proportionate, may be open to question. This is particularly in the context of the fact the better part of a day in front of me. Whether that is what Lord Woolf had in mind Judge, Deputy District Judge Gisby. and he indeed reserved judgment. It has taken As I understand it, this case took several hours in front of the learned Deputy District P That prospect must be real, ie, the court will disregard prospects which judge has to apply under CPR Part 24 is not one of probability, it is absence of reality. success even if it is improbable. The hearing of an application for only to the extent necessary to determine whether it has sufficient merit Brandon in the course of his submissions to me this morning, the criterion which the 5. Referring specifically to a dictum of Lord Hobhouse in Three River,c, quoted by Mr In order to defeat the application for summary judgment it is sufficient are false, fanciful or imaginary. The inclusion of the word,.real means to proceed to trial. A court does not involve itself in mini trials. judgment application will consider the merits of the respondent s case probably succeed at trial, A case may be held to have a real prospect of summary judgment is not a summary trial. The court at the summary arguable, but the respondent is not required to show that his case will that the respondent has to have a case which is better than merely for the respondent to show some prospect, ie some chance of success. the White Book: myself of what is set out in the notes at page 624 of the current volume, volume 1, of 4. 1 was perfectly properly reminded by Mr Braridon of the approach that one has to take disposed of at trial. successfully defending means. He quoted certain passages to me, I simply remind (h) there is no other compelling reason why the case should be to such applications and in particular what no real prospect of succeeding or claim or issues; and (ii) that defendant has no real prospect of successfully defending the (a) it considers that The court may give summary judgment against a defendant if judgment by American Express. Summary judgment is dealt with In Part 24.2 of the Civil Procedure Rules. the learned Deputy District Judge was dealing with was an application for summary 3. It is I think important and useflul just to bear in mind certain fairly basic points. What Rutherford and so the matter comes before me by way of an appeal. Judge gave judgment on 2 October 2009 in a sum slightly in excess of6,500. Permission to appeal against that decision was given I think by His Honour Judge which is brought by American Express and upon which the learned Deputy District 2. Be that as it may, he is of course entitled to defend himself against the money claim 23 JUN :03

3 court. In relation to an appeal the appeal court has all the powers of the lower mind, was there some prospect of the defence of Mr Brandon succeeding, or was it in truth a prospect which could only be described as false, fanciftil or imaginary. Rules and in particular 52,10 and By Rule 52.10: 6. So that is the first question which the learned Deputy District 3udge had to bear in 7. That was the issue which the learned Deputy District Judge had to deal with. I, sitting in the appellate capacity, am of course governed by Part 52 of the Civil Procedure P about that, any unfairness clearly must have been cured by the fact that I have had the appellant with a copy of that witness statement, It is clear having read it that simply repeated in summary form many of those points. It did not, for example, deal descend or condescend rather, to the factual merits but simply reiterated the various particularly as Mr Brandon was given ample opportunity, and indeed took the opportunity of addressing his various arguments to the Judge. Even were I wrong record for the purposes of this judgment that I was provided specifically by the 11. In those circumstances it is not obvious to me that the trial below was unfair, allow the appeal that the decision of the court below was wrong. So that seems to me virtue of the failure of the District Judge to refer to the witness statement which he technical points upon which he was relying. the money, he had not used the card or anything like that. So in other words it did not out of the way at a relatively early stage. Mr Brandon makes the point that in relation then certainly a breach of his Article 6 rights, his right of course to a fair trial, by with any particular disputed factual matters, such as. for example, that he did not owe subsequently an apology was given, that that witness statement had been mislaid. essentially it referred to passages in the skeleton submissions that he was making and had filed. As a matter of fact it looks to be the case, and, as I understand it, to the hearing before the Deputy District Judge there was, if not an inequality of arms, 9. There are a number grounds of appeal. There are one or two matters I ought to get to establish the framework within which I should act. 8. So essentially my function is a reviewing function and I have to be satisfied if I am to irregularities. court was wrong or unjust because of serious procedural or other The appeal court will allow an appeal where the decision of the lower And 52.11(3) court, Every appeal will be limited to a review of the decision of the lower One turns then to 52.11(1): judgment made or given by the lower court. The appeal court has power to affirm, set aside or vary any order or Then by 52.10(2): 23 JUN :03

4 the proceedings. had been a non-compliance with paragraph 7.3 of the Practice Direction which is the Rules, read it, its non-reading by the Deputy District Judge in no way affected the fairness of other points of a formal nature that were made. In particular, it was said that there annexed to Rule 16 of the Civil Procedure Rules. Let me deal with that Part 16.4 of 12. There were, although I think not particularly strongly pressed on me today, certain opportunity to read it, which I have taken, I stress that it seems to mc, having now P annexed to the particulars of claim. point that the Article 6 rights of Mr Brandon were in some way infringed. Neither do refusing the application simply because a copy of the relevant agreement was not I think there is anything in the point that would have justified the District Judge in respectfully agree with that sentiment, So I do not think there is anything in the justice, not as traps. experience it is very rare to see a case where a document is exhibited to approach should be to use the Rules in a way that assists in achieving will be concerned is the meaning of that document. Even if I am wrong, In my view there is nothing in the point about non-compliance. In my the particulars of claim unless the principal issue with which the court this is something that could easily be cured by amendment. The court s paragraph 6 of his judgment. He said: 15. Now in any event this was dealt with by the learned Deputy District Judge in a meaningful breach of the Practice Direction, but I have some difficulty in applying it might be said that failure to annex a copy of the contract did in some way constitute particularly where the construction of a contract is what the case is all about, whereby 14. The operative word is should not must. I can conceive of some circumstances, should be attached to or served with the particulars of claim and original(s) should be available at the hearing. contract and, more to the point, rio argument based upon the construction, for point about the back of the agreement, there is no dispute about the terms of the example, of particular clauses in the contract. (a) a copy of the contract or documents constituting the agreement that to the facts of this case where so far as I am aware, although there is a related Where a claim is based upon a written agreement: 13. Now there is a Practice Direction and the relcvant paragraph is 7.3: such other matters as may be set out in a Practice Direction. I do not read out the next few matters but by 167.4(l)(e): the claimant relies. Particulars of claim must include a concise statement of the facts on which 23 JUN :03

5 17. It is perhaps now appropriate simply to refer to certain basic dates. The relevant 18. So there is the agreement on 28 March which you could pay by monthly instalments rather than paying the whole lot off each month, but that is nothing to the point. matter, Slightly to my surprise, though it is probably not appropriate for a Judge to credit card agreement is dated 28 March [have called it a credit card. I think there is some suggestion that it may have been a debit card but that seems to me not to give evidence himself I had not realised that American Express provided a card P The first is that the claimant is correct in its assertion that there were terms and conditions endorsed on the back of the agreement and that judgment to that very point. He is shown to be right. I refer in particular to paragraph 11 of his judgment. front and clearly the back showing the terms and conditions. So as a matter of fact Judge approached the matter. He devoted paragraphs 8, 9, 10, 1 I, 12 and 13 of his 23. But I think it has this effect as well. It shows the care with which the Deputy District The Secretary of State shall make regulations as to the form and which was not available to the learned Deputy District Judge which is the original section 60 of the Act was complied with. did not ask to see it in the course of these proceedings and I have available to me that I observe in passing that the original has now been produced to me. It is my fault. I content of documents embodying regulated agreements Section 60: has been breached? conditions which American Express say are written on the back are in fact blank on by the defendant in discharge of his indebtedness since July Certainly, as I say, no evidence in the form of a witness statement has been put in. was being claimed, I infer and am entitled to infer that no sums in fact have been paid There is now, because Mr Brandon went and got his own expert evidence, rio question that mean, therefore, that in some way section 60 of the Consumer Credit Act 1974 American Express money, and I infer, as I think I am entitled to infer given that when about the basic validity of the agreement that was signed. It is undoubtedly true that witness statement any assertion that at the time of cancellation he did not owe dealing with the argument that the copy agreement may have been blank on the back. agreement were in some way not brought to the attention of the appellant and does have already indicated that at no stage has the appellant, Mr Brandon, put in a the matter was in front of the Deputy District Judge something in excess of 6,500 letter was sent cancelling the credit card agreement not in any narrow sense, was served by American Express and on 11 July 2007 a 21. A lot of time in the court below, though in fairness I think far less so here, was spent the document available to the court has writing only on the one side. The terms and the copy that has been provided. Does that mean that not(?) all the terms of the 19. On 19 June 2007 a default notice, and Twill use the word served in a broad sense, 23 JUN :04

6 back of the agreement was blank. The first possibility appears to me highly probable. There is a convincing explanation as to why no copy American Express is a very large and respectable operation, almost all suppose that it was not aware of the need to comply with a well known entered into his agreement. requirement which has been in force for 24 years when Mr Brandon of whose business must be regulated by the Act. It would be absurd to of the reverse was kept. The second appears to me highly improbable. thosc complied with the statutory requirements. The second is that the P remedy it and the date before which that action is to be taken. (b) if the breach is capable of remedy, what action is required to (a) the nature of the alleged breach; The default notice must be in the prescribed form and specify By section 88: (b) to demand earlier payment of any sum... (a) to terminate the agreement; or by reason of any breach by the debtor,1efault notice ) is necessary before the creditor can become entitled, Service of a notice on the debtor in accordance with section 88 (a 28. Section 87 of the Consumer Credit Act 1974: the default notice and to section 87, 88 and 176 of the Act. This was a point raised by appellant, and indeed argued by him in front of the Deputy District Judge, relates to obviously, which he pursues in front of me today. he says one of the points was that the default notice is invalid, and that is a point, brief encapsulation of the defendant s case at paragraph S because in paragraph 5(7) 27, In some ways and at first sight the most compelling argument advanced by the him in the court below and specifically adverted to by the Deputy District Judge in his his judgment to that effect seem to me to be unassailable. any event the findings of fact by the learned Deputy District Judge at paragraph 15 of of the agreement. As a matter of fact, it is clear that the agreement is legible and in point pursued with any vigour by Mr Brandon, namely, that relating to the legibility 26. Again it does not seem to me to matter very much now in the sense that it is not a orders in cases of infringement, ie improperly executed agreements and such like, so I need not spend any more time on that. outwith the ambit of section 127 of the Act which simply deals with enforcement 25, The compliance, as it seems to me, with section 60 would seem to take the case window. 24. The insight of the learned Deputy District Judge is, of course, shown by the fact that the agreement as produced does indeed show terms and conditions on the back and thc point of non-compliance with section 60 of the Act simply disappears out of the 23 JUN :04

7 ft says this: argument advanced by Mr Rankin the section 87 default notice is dated 19 June have already indicated the dates of the default notice but in deference to the date so specified or... before those 14 days have elapsed. shall not take action such as is mentioned in section 87(l) before the after the date of service of the default notice, and the creditor or owner A date specified under subsection (1) must not be less than 14 days Then by subsection 2: P remedy it. The whole idea is that a debtor should have 14 days within which to enforcement notice hut nothing immediately happens. In those circumstances, even if action was taken within 14 days of 19 June. So we have the service of the say, I do not dismiss it as being unreal. But, the fact of the matter is no enforcement action within 14 days of 19 June, it may well be that the validity of that enforcement nature of the breach arid if the breach is capable of remedy what action is required to redeem the position, in this case pay So I understand the argument. As I do understand the argument because, to go back to section 87, it must specify the action would have been open to challenge. I express no final view on the matter but I 34, Now, somewhat theoretical though it is, had American xpress taken enforcement and it seems to me the post is an appropriate method. days of that date he was to pay 275. He makes the point this probably contravenes says in that by the time the letter was received on the face of things he would no be delivered within two days of sending. So technically there is something in what hc I send a letter by first class post the assumption made by the civil courts is that it will of service of the default notice and he points me to authority, and I think he is right, if 33. Mr Brandon makes the point that it is dated 19 June. The demand is that within 14 mentioned in the following subsections. The document may be delivered or sent by an appropriate method to the subject or addressed to appropriate method or addressed to him by name, but sent is the appropriate word counsel on behalf of American Express that as a matter of fact there is no evidence assumptions it does seem to me that if posted on the 19th 1 would be entitled to from him as to when in fact he received the notice but simply working on standard A document to be served under this Act by one person on another 31, Now the date of the default notice is clearly 19 June By section 176 of the Act 32. So section 176 clearly contemplates service by post. The document may be sent by an within 14 calendar days from the date of this default notice. section 88(2) because the date would then have been less than 14 days after the date longer have 14 days within which to remedy the breach. I take the point made by assume it would arrive on the 21St. breach the payment due on your account of must be received person is to be treated as properly served on the subject if dealt with as as required by clause 3 of the terms and conditions. To remedy this You have failed to make the minimum payments due to your account him by name and left at his proper address. 23 JUN :05

8 suffered any prejudice at all by virtue of that technical breach because, never mind remained in breach of his obligation to pay a monthly instalment. within 14 days he did not, for example, within 21 days, which on my finding would clearly have been an appropriate period of time properly to comply with section 87. cancellation to Mr Brandon: 35. What did happen was this. On II July 2007 American Express sent a notice of He did not send American Express the cheque for 275. Nothing happened. So he Mr Brandon s point is a good one, it seems to me to be not relevant in that he has not P.10 Brandon to assist him in his appeal, I note that His Honour Judge Griggs, dealing in many ways with a number of arguments not dissimilar to those which have been advanced before me today, specifically deals with clause 10 of the agreement. At paragraph 19 he says this: Harrison, I observe in passing that Mr Harrison has appeared here today with Mr note that in the decision of His Honour Judge Griggs in 4merican Expre.cs v Alternatively, we can stop you from using the card. If we end the agreement you must pay all money you owe on the account. right to terminate the agreement and on termination all sums due and owing by the debtor are to be paid. So paragraph or clause 10(2) of the agreement clearly gives American Express thc We can end this agreement at any time by giving immediate notice. Then 10(2): You can end this agreement at any time by returning to us all cards we have sent you, coupled with a letter asking us to end the agreement will deal with Mr Brandon s Ladd v Marshall argument. I have not overlooked it. 39. Paragraph 10 of the terms and conditions is as follows: agreement to an end. 37. On any view that letter seems to me to be an effective means of bringing the agencies. 36. So there is a termination on 11 July and further, providing that if nothing happens After a period of 28 days from the date of this letter steps will be taken to register the default status of your account with the credit reference agencies Experian and Equifax. within 28 days, details of Mr Brandon would be supplied to the credit reference And then it goes on to say that the account has been transferred to a debt collection agency. on the account are now payable in full, card account agreement with immediate effect. All monies outstanding This letter serves as notice of cancellation of your account and credit 23 JUN :05 141

9 default on the part of the debtor by virtue of clause 10(2). Mr Harrison notice of termination. 98(2) provides that subsection 1 only applies agreement except by or after giving the debtor not less than seven days own default notice it was an invalid default notice. Section 98 of the Act provides that the creditor is not entitled to terminate a regulated has asserted that because that did not comply with thc provisions of their They assert they were entitled to terminate the agreement without any P legal arguments which go to buttress the decision in the court below. And it seems to Now I am fully familiar with the Ladd v Marshall case and I am fully familiar with the reference to the reasoning of the court below but is also entitled to advance any other appeal is entitled not only to seek to support the decision of the court below by thinking particularly here of cases in the Court of Appeal, that the respondent to an has certainly always been my understanding that the respondent to an appeal, I am test regarding the admissibility of fresh evidence in the Court of Appeal. But, to introduce a new argument of the law is not the same as introducing fresh evidence. It But, says Mr Brandon, Ladd v Marshall, they are trying to introduce fresh evidence. 41. Now that seems to me to have considerable relevance so far as this case is concerned. default notice was defective. Harrison that they were required to serve a default notice and that the I am sausfied therefore there is nothing in the point advanced by Mr payment but whatever their position they were entitled to terminate it as any time and that the Act does not prevent them from so doing. They breaches. It is asserted on the part of the defendant because of his non they did. did purport to terminate this agreement. There had in fact been Section 10(2) provides that the claimants were entitled to terminate at the references I have already made. I am quite satisfied there is nothing in that point for the reason that is apparent from purported to serve a default notice. The default notice, because it was agreement, even though they had not served seven days notice of termination. Mr Harrison has made the strong point that they have any time. Tt follows that the claimants were entitled to terminate the served on a Sunday, did not give the adequate seven days, therefore it. was not valid. It was a running credit agreement which either party could terminate at And that, I observe in passing, must apply in this case. was specified in the agreement. does not apply because this was not an agreement where the duration and he is there dealing with section 98, agreement and that period is not ended where the creditor does an act mentioned in subsection (1), So far as this case is concerned, subsection (1), where a period for the duration of the agreement is specified in the 23 JUN :06

10 42. 1 conclude 1 therefore, that as a defence or, more to the point, as a possible defence to Mr Brandon, but is one that was flagged up some while ago. agreement. So this is not an argument that has simply been sprung on the appellant, the time 1 think the matter came before Judge Roach who it was I think dealt with the something to say about its lateness, but this had clearly been flagged up certainly by permission of Mr Braridon to obtain an expert report about the validity of the original has been pursued. Had it only emerged for the first time today I might have had me that all that has happened in the context of this appeal is that the clause 10 point P to make payment on time or goes over the agreed limit. I accept he I do not accept that the claimant suffers no loss when a borrower fails 46. At paragraph 20 the learned District Judge says this: provision is to be found in section 7 of the terms and conditions endorsed on the back payment fees. contracts and noting that more recently American Express had reduced its late Fair Trading setting out their views as to what were fair default charges in credit card the charges constitute a penalty for nonperformance, and there is the reference then the Unfair Contract Terms Regulations as well as Guidance from the Office of to the Dunlop case and two others. Apparently Mr Brandon also referred the Judge to of the agreement. So the contractual right existed. But the next question is whether 45. The learned Judge then flags up another argument, that in fact the claimants have not question: was there a contractual right to impose those charges? He said the relevant judgment and I shall not spend time on that. But, at paragraph 18 he poses this suffered any loss because they can still charge interest. He deals with that later in his which that happens. obliged to keep the account within the agreed borrowing limit. A customer who goes over the limit is charged 25 for each month in to do so attracts a late payment charge of 25, The customer is also customer is obliged to make a minimum payment each month. Failure payment fees and over limit fees. The claimant s position is that a Mr Brandon complained that the claimant has sought to charge late 44. Let us see how the learned Deputy District Judge dealt with it. In paragraph 16: judgment or ruling was given say 1 July because I think in fact if one looks at the speeches that is when the the sense that it is a problem which has occupied the courts on previous occasions 1 then they are, of course, not enforceable. This is a relatively ancient area of the law in understand it, he asserts that effectively they are penalties and if they are penalties for over limit fees. Those two terms seem to me to be pretty self-explanatory. As I judgment, has any chance of success. real prospect of a successful defence. In other words, it is not a defence which, in my already given, have not given the full 14 days, does not provide Mr Brandon with any certainly back as far as I think 1 July 1914 in the Dunlop case reported at [1915] AC the claim that is made, the fact that the default notice may, for the reasons I have 43. In the court below Mr Brandon took issue with part of the computation of the sums claimed. In particular 1 the claim for sums such as 25 for late payment fees and JUN :06

11 unauthorised borrowing puts pressure on cash flow. Financial compensated by being able to charge interest on the outstanding sum. If I do not accept Mr Brandon s argument that the claimant is fully do not pay it puts pressure on the reserves. If a sufficient number of continues to be entitled to charge interest but the failure to pay an institutions are regulated and are required to keep reserves. If borrowers borrowers fail to pay that can put the lender in breach of its regulator requirements. P which is the test for liquidated damages and not a penalty. In my judgment that was a should never haie gone on. That seems to me to be very different from the situation correct and lawful thing to do. 49. For all those reasons, with apologies for a somewhat lengthy judgment, this appeal is damages, the courts will enforce the agrcement. The courts will not view to which he was perfectly entitled to come, clearly exercised his right to terminate the contract and clearly and properly his name should be tempted to lend money to them unaware of existing debts, so it seems to me dismissed. that the Deputy l3istrict Judge s striking out of the counterclaim was again a perfectly damaging to a person s credit standing and credit rating. One of the authorities, and I 48. Lastly, there was the counterclaim. This involves Mr Brandon s assertion that his 47. And he went on to express his view that these were a genuine pre-estimate of loss enforce a term that is a penalty for non-performance. commercial reputation has been besmirched by virtue of the fact that his so-called default has been referred to one or more of the credit agencies. I quite accept on the authorities that a wrongful placing of someone s name with one of those authorities bought a computer and he took it back because it did not work properly and, as was that the suppliers put his name on the credit blacklist. It is clearly outrageous. Me credit are entitled to keep information about those who owe money in case others here. The fact is that money is owed. The fact is, in my judgment, that suppliers of subsequently found, was entitled to take it back and repudiate the contract In spite of paid as compensation for breach of contract, known as liquidated and registering such a person as a bad debtor is wholly defamatory and can be very have forgotten which one it is now, refers specifically to a case where a man had 21. The law on this point is if the parties agree a reasonable sum to be additional sum. anything was compensated by a right to be paid more with no reason to correct the effect would be that a lendcr who was not being paid suppose that the sum already owing would be paid, let alone the 23 JUN :07