VW Finance - Excess Mileage

[CarlH]

Hi all,

Look for some help regarding a response I received from Blake Morgan following a letter i sent to them regarding excess mileage, I used the template 'disputing excess mileage'.

I received the attached document this morning along with the BCA vehicle report which reported damaged alloys, all of which I paid for as part of the fair wear and tear agreement. I am not sure if this is related however I did receive a document earlier in the week from VW finance saying my outstanding balance was £0 (have they passed this onto Blake Morgan)?

Not really sure how to respond to the attached therefore any help / advice would be appreciated.

Regards,

Carl

[R0b]

Dear Sir or Madam,

I do not agree with the contents of your letter dated [DATE], for the reasons set out below.

First, I should point out that the points raised in your letter were exactly the same arguments raised by Mercedes in the County Court case Mercedes-Benz Financial Services UK Limited v Cahalane (Willesden County Court 26 February 2018). Unfortunately, Mercedes lost their claim for the following reasons:

1. it was rejected that the excess mileage charges were rolling throughout the contract. The excess mileage charges only accrued by crystallising on termination. The judge stated that she was further bound by the Court of Appeal decision in Julian Hodge Bank v Malcolm John Hall [1997] WL 1103662. In any event, the judge confirmed that the definition of 'total price' excluded that the excess mileage charges did not fall within the definition of total price under Section 100(1).

2. As to the reasonable care argument, that also failed because the judge found no correlation between the excess mileage and the condition of the car.

Second, I am somewhat baffled that your client appears to rely on 100(4) for the basis of claiming excess mileage charges yet you are applying the contractual formula which, have already pointed out, Section 100(1) liability is limited to one half of the total price. Please can you explain to me the basis on which you can rely on the contractual terms despite liability being limited on termination.

Nonetheless, the correct standard when applying the reasonable care test is the negligent standard in tort, not the contractual one as you appear to be suggesting. I would refer you to Jarvis v Moy, Davies, Smith, Vandervell and Company [1936] 1 K.B. 399, where Lord Justice Greer said the following:

"where the breach of duty alleged arises out of a liability independently of the personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, if the duty in fact arises independently of that contract."

Given that Section 100(4) arises independently of the contractual agreement, any breach under this provision must therefore be treated as tortious damages. As far as I understand, your client's claim is, in reality, a claim for pure economic loss and, as I am sure you will no doubt be aware, pure economic loss is not a recoverable head under the law of tort. Indeed, the authority for this is White v Jones [1995] 2 A.C. 207 in which Lord Browne-Wilkinson confirmed that:

"The law of England does not impose any general duty of care to avoid negligent misstatements or to avoid causing pure economic loss even if economic damage to the plaintiff was foreseeable."

Finally, your reference to the Financial Ombudsman's decision on excess mileage is somewhat out of date. Since the Mercedes-Benz decision it is now reviewing its decisions on complaints of excess mileage. From where I am standing, it seems that your client has no reasonable grounds for pursuing the excess mileage charges and you may wish to revert to your client for further instructions.

I trust that my position outlined above is clear to you and do not find it necessary to engage in any further discussion on the matter, since I have previously informed your client of the same.