The judge refused to stay the claimant's claim to allow them to comply with the defendant's request for information under s.78 Consumer Credit Act 1974.
Summary
The claimant did not comply with s78(1) of the Consumer Credit Act 1974 (CCA) as they were unable to demonstrate that the terms and conditions disclosed to the defendant on request were those applicable to the agreements at the relevant times. The agreements were therefore unenforceable.
The judge refused to allow a stay for the Claimant to comply and the claim was dismissed.
Background
PRA Group had purchased the debt from the original creditor and issued the claim as an assignee of the original creditor’s rights. They claimed that Homes had entered into two running account credit card agreements and had breached the terms by not making the minimum payments.
PRA Group stated that default notices under s87(1) CCA were served and as the defendant failed to make the payments due, the accounts were terminated.
Holmes argued that he did not enter into one of the agreements with the original creditor, MBNA, and there had not been a proper assignment between MBNA and PRA Group.
Holmes argued that the default notices served were not compliant with s87 CCA, s88 CCA and the Consumer Credit Regulations 1983. The arguments for this were that the notices were sent to his agent rather than to him and the notices failed to state the correct nature of the breach because they referred to the breach of terms that had not been disclosed.
Holmes made a request under s78(1) CCA to be provided with a copy of the executed agreements and the terms in force at the date of the request. He said that s78(1) was not complied with because he did not receive a true copy of the documents he requested. He argued that because of this, the agreements could not be enforced.
The court's decision
The court was satisfied that Holmes had entered into the credit agreement with MBNA, that there had been valid legal assignments under s136 of the Law of Property Act 1925 and that Holmes had received written notices of assignment.
Based on the evidence provided the court found that the default notices were received by
Holmes.
On the issue of the validity of the default notices the court followed the case of Rankine v American Express [2009] CCLR 3 in holding that PRA Group had complied with s87(1) CCA as they had set out the alleged breach, whether the breach was capable of remedy and what action was required to remedy it.
When considering whether the creditor had complied with s78(1) CCA, the court held that
PRA Group had not demonstrated that the terms and conditions disclosed to Holmes on
request were those applicable to the agreements in question at the relevant times. The default notices made reference to terms that did not match those provided to Holmes and PRA Group also provided a set of terms that had additional terms to those that would have been incorporated into the agreement.
The court found the PRA Group to be in breach of s78(1) CCA.
The court refused to comply with PRA Group's request that the proceedings be stayed to allow them to comply. The judge decided that although this may be appropriate in some
circumstances this was not required in every case (as per the case of Phoenix Recoveries
(UK) Ltd v Kotetcha [2011] EWCA Civ 105); PRA Group had 2.5 years to comply with the request and significant court resources had been used on the matter.
PRA Group's claim was dismissed.
Comments
The judgment highlights a strict approach being taken by the court in relation to compliance with s78(1) CCA. It also makes it clear that claimants should not expect that they will be allowed a stay in order to comply.