Tweet
Terry Armstrong v American Express Services Europe Ltd
Claim No: CC/2009/APP/0309
High Courts of Justice Queen's Bench Division
11 November 2009
[2009] EWHC 3556 (QB)
2009 WL 5386973
Before: Mr Justice MacKay
Wednesday, 11th November 2009
Representation
Judgment
Mr Justice MacKay:
1 This is an appeal against a fast-track judgment given by His Honour Judge Caddick at the Maidstone County Court on 8th May 2009. He gave judgment in favour of the Claimant for £4,809.83. This strikes me as being very far from the ideal case for a fast-track hearing, but the judge did an impressive job and valiantly produced an extemporary seven-page judgment at the end of the day's hearing, which is commendably clear in full. My appeal took a full day. By contrast I have enjoyed the relative luxury of an overnight reservation of my judgment until this morning.
2 Between 1990 and 2008, the Defendant/Appellant, Terry Armstrong (whom I will call, as the judge did, D) obtained two credit cards from the Claimant/Respondent, American Express Services Europe Limited (whom I will call AMEX). The judgment and this appeal from it focused on the claim based on his use of what was called the Optima card. There was a claim on another credit card, which was resolved. The original terms of the agreement between the parties was set out in a document dated 24th June 1990, signed by, which in its turn incorporated the standard terms and conditions under which the AMEX card operated. The agreement set out his personal credit limit; the relevant interest rates and their equivalent monthly rate; the annual fee; the annual percentage rate; the minimum monthly payments and indicated that the terms and conditions overleaf applied and that it was a credit agreement regulated by the Consumer Credit Act 1974 . And in the terms and conditions appeared condition 8, a provision for the charging of interest on a daily basis at the annual rates applicable to this agreement and it went on to set out details of how interest would be charged, which I do not need to repeat.
3 Although there had been a dispute on the horizon and in contemplation between the parties since a notice of default (for which I do not have the exact date, but was said to be sometime in 1998) the claim was not issued until November 2006. AMEX had, as a routine measure, destroyed and/or failed to exclude from destruction the statements of account relative to the use of this card from June 1990 to September 2001. Thereafter the statements survived with two gaps and are found at pages 105 to 231 of the appeal bundle, together with a summary of the running account omitting all interest and other charges at 235 and 236. The original claim for the balance due and payable at the end of the relevant period was put at £12,529.65. The original defence pleaded this was irrecoverable in its entirety under the terms of the Consumer Credit Act 1974 , since compound interest had been unlawfully included in that total. To this AMEX responded by “waiving” its claim to all extra charges bar the annual fee of £10, later £20, and stripping out from the original amount claimed all claims for interest of whatever kind, which led to a revised total for the claim of £6,809. So far, therefore, D had met with success of a kind in his defence of the claim.
4 The issues before the judge were twofold. Firstly, was the revised sum claimed enforceable as a debt at all? The judge held it was. If so, should it be reduced to reflect the court's response to AMEX's destruction of evidence, that is to say 11 of the 16 years statements for which the account was operative? The judge deducted £2,000 from the claim, leading to the judgment figure I have already mentioned. D has permission to appeal the judgment on the first of the above issues. That order was sealed on 24th September of this year and served on AMEX sometime before the end of that month.
5 The solicitor who was acting for AMEX at the trial and continued to act for it (as appears from a statement of costs, with which I have been provided) had, of course, been aware of the application for permission to appeal well before the result of it. He knew about that at the end of May and according to the statement of costs that has been submitted, was working on the appeal from 3rd June up to 6th November and proposing to charge £2,783 for what he was doing. He, however, took 14 days to decide that the matter should be referred upwards to the office of AMEX's “General Counsel”. That letter did not produce a response and appeared to have gone astray, but he issued no reminder or made no enquiries until 29th October, when he alerted general counsel of his position. He took another week to do anything and then on 6th November contacted new solicitors who lost no time at all, nor did counsel, Miss Smith, instructed in this appeal. Within three days together they produced a Respondent's notice seeking to affirm the judgment on alternative grounds and including an application for permission to cross-appeal the adverse features of the judgment on question 2, together with costs and interests. That notice and a skeleton in support of it was served on D's counsel at about lunchtime on the day before the hearing. He had other court commitments that afternoon.
6 So, AMEX's notice was due on, at the latest, 14th or 15th October and was over three week's out of time. The reasons for it being late are entirely unimpressive, in my judgment. However, AMEX's new counsel, Miss Smith, is on better ground when she argues that the contents of her notice, at least so far as the proposed alternative grounds are concerned, cannot come as a complete surprise to Mr Wallman, acting for D. One can see his anticipation of a response to them in paragraphs 42 to 46 of the re-amended defence and his amended skeleton argument dated the end of July at paragraph 37. If therefore, there is merit in the proposed notice, to which I will return later, it seems to me not to be appropriate or just as between the parties simply to decline to entertain it on the grounds of delay alone. Mr Wallman, though plainly under pressure by the lateness of its delivery, did not, as he might have done and as I might have listened to him doing, apply to adjourn the appeal.
7 At the hearing before the judge and at this appeal it was common ground that the agreement between the parties properly construed did not expressly allow AMEX to charge interest on interest, or compound interest. At the hearing below it was also common ground that a contractual right to charge compound interest would be a “prescribed term of the agreement” under the Consumer Credit Regulations (which I will set out later) and should have been set out in the agreement; see paragraph 5 of the judgment. That second concession is one which AMEX now seeks to withdraw, as will be seen, but I should first set out the relevant parts of the legislation, which is not straightforward.
The Relevant Legislative Provisions
8 The Consumer Credit Act 1974 s.9(1) :
11 He set out the two issues and recited what he saw as the relevant parts of the legislation. He recorded that the parties were in agreement that compound interest was not expressly included in the agreement, and that it should have been as being “prescribed term,” with the result that any claim AMEX made which included compound interest was one which would be unenforceable as not properly executed under s.61 . The judge concluded that the original claim would therefore have met what he thought would be an unanswerable objection. But, he noted they were not claiming interest of any kind. Indeed, they went further and expressly accepted that they were prohibited from doing so.
12 The judge allowed, then as now represented by Mr Wallman, to mount an argument based on estoppel by representation, to this effect: AMEX could not now be allowed to disown the agreement, which it was in effect asserting by the monthly statements month after month, the effect of which was to say and represent to the customer, D: “You owe us this sum and we are entitled to it under the terms of our agreement with you.”
So, the argument continued, D accepted and relied on this and acted to his detriment and AMEX should not be allowed to deny its representation that the agreement included such a term and was unenforceable.
13 The judge's answer to that was in these terms (see paragraph 10):
14 There were authorities relied on by Mr Wallman in support of his argument in this appeal; none of them, in my judgment, helped his submissions. Halsbury's Laws at 1058 say that the conduct amounting to representation must be unequivocal. That epithet is that work's categorisation of the state of clarity that a representation has to achieve. In the case of York Tramways v. Willows [1882] 8 QBD 685 , a company director who sought to resile from his application for shares who had himself taken part in the resolution allotting those shares to him, was not allowed to be heard later to say that the shares were never allotted by reason of the fact that the meeting which passed the resolution was not quorate, because effectively he knew what action he was joining in as a director and could not be heard to disown it. Secondly, Jones v. Watkins (Unreported) CA, 26th November 2000 , 1987. Slade LJ stated the test that was to be applied at the end of such representation argument was:
15 There is a subsidiary ground of appeal based on an alleged express term, which has occurred to counsel since the trial and was not argued below. It runs this way, that from September 2004 on the surviving monthly statements there was included a small print provision headed “Important information,” which is plainly apt when it is read to include a right to charge compound interest. The introduction of that, he says, was not in compliance with s.61(1)(a) and so the agreement was rendered unenforceable. There was a power to vary the agreement in condition 20 of its standard terms. The problem with this claim, apart from its novelty, is that as Burnett J said, granting permission to appeal, it cannot have been an express term of the agreement entered into on 24th June 1990, whatever else it might be, and that is the issue in this case when enforceability is under consideration. But it is also, in my judgment, too late to include this as an afterthought, when the evidence that the judge considered and was directed to was all to the effect that D never realised that compound interest was being charged at any stage.
16 It follows, therefore, that D's grounds for appealing this judgment fail and that is irrespective of the further alternative ground, which Miss Smith wanted to introduce in support of this part of the judgment. The ground she seeks to argue is to the effect that despite the concession below, had there been a term entitling AMEX to charge compound interest, its admitted failure to include it in the agreement would not have led to the application of s.127(3) so as to render it unenforceable. This is so, she says, because a term providing for compound interest is not a prescribed term within s.61(1)(a) and 127(3) of the Act and Regulation 6(1) of the 1983 Regulations.
17 By virtue of what I have already said, it is not necessary to resolve whether this argument is a good or bad one. It may, as an argument, need at some stage to be addressed in litigation on this legislation and is one which is not without importance potentially for other cases. My judgment is it would be better addressed if and when it arises where it has been considered by the Lower Court, reasons given and those reasons properly addressed on an appeal. It would also be better if it is decided after argument on both sides where counsel wishing to oppose it has had fuller and better notice of it in order to prepare the best response to it. It deserves, in my judgment, a more considered argument in response than, for all his valiant efforts, Mr Wallman was able to mount on this occasion. I therefore decline to rule on it.
The Cross-Appeal
18 AMEX did not seek permission from the trial judge to appeal any part of his judgment. A cross-appeal launched not in response to an Appellant's notice of appeal, but an Appellant's receipt of permission to appeal, never speaks of a burning sense of injustice on the part of the party making it. Nevertheless, I think it is right and proper to allow its presentation, out of time, as it is, and to consider it on the merits.
19 The first ground is that the judge was wrong to deduct £2,000 from the amount that was otherwise due to AMEX by way of this debt claim. I should say how he approached it, because he did so at some length and with care. He said as follows, starting at paragraph 11 of the judgment:
20 Miss Smith says she has been through all the statements now surviving and can only identify two months, December 2002 and February 2005, and then the months from November 2005 through to June 2006, when compound interest was or could have been charged at all. So, she concludes, that the inference that the judge drew in two parts of his judgment in paragraph 8, that over a long period AMEX had been rendering accounts with compound interest in them and in paragraph 14, that the deduction appropriate was one of £200 a year approximately over the ten/eleven year period, were such as no reasonable judge could properly draw.
21 This judge was aware of what he was doing, that he was applying an age-old maxim, which now has to be translated and can be rendered into English in something like these words: “Adverse inferences should be drawn against a party who destroys relevant evidence.” That applies whether the destruction is malicious or merely, as here, inappropriate or negligent or cavalier or whatever epithet the judge thought it deserved, so it applied even on his findings that there was no deliberate interference with evidence. He deduced from that principle that he was entitled to and should deal robustly with the problem and if mistakes were going to be made to the detriment of either party they should be made in favour of D. He was entirely right to take that view. He was aware of and took into account the examples that Miss Smith put before me in argument and to which I have referred and he was aware that they showed modest deductions where they could be identified. He had in mind and did not forget the concession that had been made on interest. He did not expressly refer to the Defendant's witness statement, probably as I would be readily inclined to accept, because it was not argued before him. It was not in very precise terms and it was a statement made when this particular issue had not crystallised at all.
22 So, Miss Smith invites me now to quash this deduction altogether, alternatively reduce it in its amount in some way to reflect the modesty of the examples post-2001 that she has now identified. I certainly do not accept the invitation to assume that no deduction whatever should have been made in this case where the known evidence starts with a balance figure, which must be the product of all that had gone before it. It would be erring in favour of the Claimants to do so and that would be unjust to D. Should I, therefore, tinker with the judge's order when I can see that he directed himself properly, he knew he was taking a robust approach, he was entitled to take a robust approach and there was a principle behind what he was doing? I do not think I should do so, so this limb of the cross-appeal fails.
23 The second limb relates to the judge's non-award of statutory interest, there being no particular evidence that he was ever asked to award it other than a prayer invoking s.69 of the County Courts Act 1984 in the claim form and secondly, the order for costs which he made. That was a slightly complex order, it read:
24 The conclusion of this appeal is therefore as follows: the appeal by the Defendant/Appellant is dismissed. Permission to cross-appeal is granted to the Respondent/Claimant and the cross-appeal is dismissed.
Claim No: CC/2009/APP/0309
High Courts of Justice Queen's Bench Division
11 November 2009
[2009] EWHC 3556 (QB)
2009 WL 5386973
Before: Mr Justice MacKay
Wednesday, 11th November 2009
Representation
- Mr Wellman and Mr Ian Tych appeared on behalf of the Applicant.
- Ms Julia Smith appeared on behalf of the Respondent.
Judgment
Mr Justice MacKay:
1 This is an appeal against a fast-track judgment given by His Honour Judge Caddick at the Maidstone County Court on 8th May 2009. He gave judgment in favour of the Claimant for £4,809.83. This strikes me as being very far from the ideal case for a fast-track hearing, but the judge did an impressive job and valiantly produced an extemporary seven-page judgment at the end of the day's hearing, which is commendably clear in full. My appeal took a full day. By contrast I have enjoyed the relative luxury of an overnight reservation of my judgment until this morning.
2 Between 1990 and 2008, the Defendant/Appellant, Terry Armstrong (whom I will call, as the judge did, D) obtained two credit cards from the Claimant/Respondent, American Express Services Europe Limited (whom I will call AMEX). The judgment and this appeal from it focused on the claim based on his use of what was called the Optima card. There was a claim on another credit card, which was resolved. The original terms of the agreement between the parties was set out in a document dated 24th June 1990, signed by, which in its turn incorporated the standard terms and conditions under which the AMEX card operated. The agreement set out his personal credit limit; the relevant interest rates and their equivalent monthly rate; the annual fee; the annual percentage rate; the minimum monthly payments and indicated that the terms and conditions overleaf applied and that it was a credit agreement regulated by the Consumer Credit Act 1974 . And in the terms and conditions appeared condition 8, a provision for the charging of interest on a daily basis at the annual rates applicable to this agreement and it went on to set out details of how interest would be charged, which I do not need to repeat.
3 Although there had been a dispute on the horizon and in contemplation between the parties since a notice of default (for which I do not have the exact date, but was said to be sometime in 1998) the claim was not issued until November 2006. AMEX had, as a routine measure, destroyed and/or failed to exclude from destruction the statements of account relative to the use of this card from June 1990 to September 2001. Thereafter the statements survived with two gaps and are found at pages 105 to 231 of the appeal bundle, together with a summary of the running account omitting all interest and other charges at 235 and 236. The original claim for the balance due and payable at the end of the relevant period was put at £12,529.65. The original defence pleaded this was irrecoverable in its entirety under the terms of the Consumer Credit Act 1974 , since compound interest had been unlawfully included in that total. To this AMEX responded by “waiving” its claim to all extra charges bar the annual fee of £10, later £20, and stripping out from the original amount claimed all claims for interest of whatever kind, which led to a revised total for the claim of £6,809. So far, therefore, D had met with success of a kind in his defence of the claim.
4 The issues before the judge were twofold. Firstly, was the revised sum claimed enforceable as a debt at all? The judge held it was. If so, should it be reduced to reflect the court's response to AMEX's destruction of evidence, that is to say 11 of the 16 years statements for which the account was operative? The judge deducted £2,000 from the claim, leading to the judgment figure I have already mentioned. D has permission to appeal the judgment on the first of the above issues. That order was sealed on 24th September of this year and served on AMEX sometime before the end of that month.
5 The solicitor who was acting for AMEX at the trial and continued to act for it (as appears from a statement of costs, with which I have been provided) had, of course, been aware of the application for permission to appeal well before the result of it. He knew about that at the end of May and according to the statement of costs that has been submitted, was working on the appeal from 3rd June up to 6th November and proposing to charge £2,783 for what he was doing. He, however, took 14 days to decide that the matter should be referred upwards to the office of AMEX's “General Counsel”. That letter did not produce a response and appeared to have gone astray, but he issued no reminder or made no enquiries until 29th October, when he alerted general counsel of his position. He took another week to do anything and then on 6th November contacted new solicitors who lost no time at all, nor did counsel, Miss Smith, instructed in this appeal. Within three days together they produced a Respondent's notice seeking to affirm the judgment on alternative grounds and including an application for permission to cross-appeal the adverse features of the judgment on question 2, together with costs and interests. That notice and a skeleton in support of it was served on D's counsel at about lunchtime on the day before the hearing. He had other court commitments that afternoon.
6 So, AMEX's notice was due on, at the latest, 14th or 15th October and was over three week's out of time. The reasons for it being late are entirely unimpressive, in my judgment. However, AMEX's new counsel, Miss Smith, is on better ground when she argues that the contents of her notice, at least so far as the proposed alternative grounds are concerned, cannot come as a complete surprise to Mr Wallman, acting for D. One can see his anticipation of a response to them in paragraphs 42 to 46 of the re-amended defence and his amended skeleton argument dated the end of July at paragraph 37. If therefore, there is merit in the proposed notice, to which I will return later, it seems to me not to be appropriate or just as between the parties simply to decline to entertain it on the grounds of delay alone. Mr Wallman, though plainly under pressure by the lateness of its delivery, did not, as he might have done and as I might have listened to him doing, apply to adjourn the appeal.
7 At the hearing before the judge and at this appeal it was common ground that the agreement between the parties properly construed did not expressly allow AMEX to charge interest on interest, or compound interest. At the hearing below it was also common ground that a contractual right to charge compound interest would be a “prescribed term of the agreement” under the Consumer Credit Regulations (which I will set out later) and should have been set out in the agreement; see paragraph 5 of the judgment. That second concession is one which AMEX now seeks to withdraw, as will be seen, but I should first set out the relevant parts of the legislation, which is not straightforward.
The Relevant Legislative Provisions
8 The Consumer Credit Act 1974 s.9(1) :
“(1) In this Act “credit” includes a cash loan and any other form of financial accommodation
…
(4) For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment.
8 Section 60
(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements… (the section then goes on to describe what should appear)
8 Section 61
(1) A regulated agreement is not properly executed unless;
(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and;
(b) the document embodies all the terms of the agreement, other than implied terms, and
8 Section 65
(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only
8 Section 127
(1) In the case of an application for an enforcement order under -
(a) section 65(1) (improperly executed agreements)…
the court shall dismiss the application if, but (subject to subsections (3) and (4)) only if, it considers it just to do so having regard to (i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and (ii) the powers conferred on the court by subsection (2) and sections 135 and 136.
…
(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).”
9 So far as Regulations made under the Act are concerned, in their relevant parts the Consumer Credit (Total Charge for Credit) Regulations 1980 SI 1980/51 read as follows: …
(4) For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment.
8 Section 60
(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements… (the section then goes on to describe what should appear)
8 Section 61
(1) A regulated agreement is not properly executed unless;
(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and;
(b) the document embodies all the terms of the agreement, other than implied terms, and
8 Section 65
(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only
8 Section 127
(1) In the case of an application for an enforcement order under -
(a) section 65(1) (improperly executed agreements)…
the court shall dismiss the application if, but (subject to subsections (3) and (4)) only if, it considers it just to do so having regard to (i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and (ii) the powers conferred on the court by subsection (2) and sections 135 and 136.
…
(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).”
“Part II — Total charge for Credit
4. Items included in total charge for credit, except as provided in regulation V below the amounts of the following charges are included in the total charge for credit in relation to an agreement:— (a) the total of the interest on the credit which may be provided under the agreement.
5. Items excluded from the total charge for credit (1) the amounts of the following items are not included in the total charge for credit in relation to an agreement:— (a) any charge payable under the transaction to the creditor upon failure by the debtor… to do… anything which he is required to do.”
10 Also made under the Act were the Consumer Credit (Agreements) Regulations 1983 SI 1983/1553 Regulation 6 — signing of agreement: 4. Items included in total charge for credit, except as provided in regulation V below the amounts of the following charges are included in the total charge for credit in relation to an agreement:— (a) the total of the interest on the credit which may be provided under the agreement.
5. Items excluded from the total charge for credit (1) the amounts of the following items are not included in the total charge for credit in relation to an agreement:— (a) any charge payable under the transaction to the creditor upon failure by the debtor… to do… anything which he is required to do.”
“(1) the terms specified in column 2 of Schedule 6 to these Regulations in relation to the type of regulated agreement referred to in column 1 (and no other terms) are hereby prescribed for the purposes of s.61(1)(a) of the Act… and of s.127(3).
Schedule 6 — Prescribed Terms for the purposes of 61(1)(a) and 127(3) of the Consumer Credit Act 1974 …
column 1: 3 agreements (inaudible) around credit;
column 2, a term stating the credit limit or the manner in which it will be determined or that there is no credit limit;
column 4, agreements for (inaudible) running account credit … column 2, a term stating the rate of any interest on the credit to be provided under the agreement;
5, Consumer Credit Agreements:
column 2, a term stating how the debtor is to discharge his obligations under the agreement to make the repayments …” (Quote unchecked)
The Judgment BelowSchedule 6 — Prescribed Terms for the purposes of 61(1)(a) and 127(3) of the Consumer Credit Act 1974 …
column 1: 3 agreements (inaudible) around credit;
column 2, a term stating the credit limit or the manner in which it will be determined or that there is no credit limit;
column 4, agreements for (inaudible) running account credit … column 2, a term stating the rate of any interest on the credit to be provided under the agreement;
5, Consumer Credit Agreements:
column 2, a term stating how the debtor is to discharge his obligations under the agreement to make the repayments …” (Quote unchecked)
11 He set out the two issues and recited what he saw as the relevant parts of the legislation. He recorded that the parties were in agreement that compound interest was not expressly included in the agreement, and that it should have been as being “prescribed term,” with the result that any claim AMEX made which included compound interest was one which would be unenforceable as not properly executed under s.61 . The judge concluded that the original claim would therefore have met what he thought would be an unanswerable objection. But, he noted they were not claiming interest of any kind. Indeed, they went further and expressly accepted that they were prohibited from doing so.
12 The judge allowed, then as now represented by Mr Wallman, to mount an argument based on estoppel by representation, to this effect: AMEX could not now be allowed to disown the agreement, which it was in effect asserting by the monthly statements month after month, the effect of which was to say and represent to the customer, D: “You owe us this sum and we are entitled to it under the terms of our agreement with you.”
So, the argument continued, D accepted and relied on this and acted to his detriment and AMEX should not be allowed to deny its representation that the agreement included such a term and was unenforceable.
13 The judge's answer to that was in these terms (see paragraph 10):
“…although a superficially attractive approach by D, the estoppel argument does not in my view properly meet this case. The fact remains there was no agreement between the parties for compound interest, D has never claimed that there was or that he thought there was. It never occurred to D that he had been paying or has been charged compound interest. Until he was so advised in the course of these proceedings his pleaded position was that no such interest was properly claimable and AMEX so conceded. The most apt explanation, it seems to me, for what has happened here is that there indeed was never any agreement to pay compound interest, it was charged in error by AMEX.”
Had the judge been taken, as I was taken, to classical textbook authority in this area of law, I believe he would have been fortified in that view. In “The Law Relating to Estoppel by Representation” by Spencer Bower, the following appears at I.2.3: “…from this statement of governing principle of estoppel by representation of fact it may be gathered that the following elements must be established in order to constitute a valid estoppel by representation of fact. First:
(1) That the alleged representation of the parties sought to be estopped was such as is in law deemed a representation of fact. [If I may interpose, that is not a problem for Mr Wallman's argument.]
(2) That the precise representation relied upon was in fact made. [That is a problem for his argument. This is far from being a clear and precise representation.]
(3) That the representation or case which the party is later sought to be estopped from making, setting up or attempting to prove, contradicts in substance his original representation according to proper canons of construction.”
The problem here is that the “case” that it is sought to estop AMEX from advancing, is a claim which is stripped of all traces of entitlement to compound interest:
“(4) That such original representation was of a nature to induce and was made with the intention, actual or presumed, and the result of inducing the party raising the estoppel to alter his position on the face thereof to his detriment.”
The judge's finding of mistaken action on the part of AMEX negatives any intention and he also found that D in no way altered his position on the face of any representation made to him. (1) That the alleged representation of the parties sought to be estopped was such as is in law deemed a representation of fact. [If I may interpose, that is not a problem for Mr Wallman's argument.]
(2) That the precise representation relied upon was in fact made. [That is a problem for his argument. This is far from being a clear and precise representation.]
(3) That the representation or case which the party is later sought to be estopped from making, setting up or attempting to prove, contradicts in substance his original representation according to proper canons of construction.”
The problem here is that the “case” that it is sought to estop AMEX from advancing, is a claim which is stripped of all traces of entitlement to compound interest:
“(4) That such original representation was of a nature to induce and was made with the intention, actual or presumed, and the result of inducing the party raising the estoppel to alter his position on the face thereof to his detriment.”
14 There were authorities relied on by Mr Wallman in support of his argument in this appeal; none of them, in my judgment, helped his submissions. Halsbury's Laws at 1058 say that the conduct amounting to representation must be unequivocal. That epithet is that work's categorisation of the state of clarity that a representation has to achieve. In the case of York Tramways v. Willows [1882] 8 QBD 685 , a company director who sought to resile from his application for shares who had himself taken part in the resolution allotting those shares to him, was not allowed to be heard later to say that the shares were never allotted by reason of the fact that the meeting which passed the resolution was not quorate, because effectively he knew what action he was joining in as a director and could not be heard to disown it. Secondly, Jones v. Watkins (Unreported) CA, 26th November 2000 , 1987. Slade LJ stated the test that was to be applied at the end of such representation argument was:
“Whether it appears unjust or inequitable that the representor should now be allowed to resile from his representation.”
Given the views the judge expressed of the evidence that this was a mistake and not a deliberate act, neither of these authorities would, in my judgment, have deflected him from the conclusion he reached on the estoppel point. 15 There is a subsidiary ground of appeal based on an alleged express term, which has occurred to counsel since the trial and was not argued below. It runs this way, that from September 2004 on the surviving monthly statements there was included a small print provision headed “Important information,” which is plainly apt when it is read to include a right to charge compound interest. The introduction of that, he says, was not in compliance with s.61(1)(a) and so the agreement was rendered unenforceable. There was a power to vary the agreement in condition 20 of its standard terms. The problem with this claim, apart from its novelty, is that as Burnett J said, granting permission to appeal, it cannot have been an express term of the agreement entered into on 24th June 1990, whatever else it might be, and that is the issue in this case when enforceability is under consideration. But it is also, in my judgment, too late to include this as an afterthought, when the evidence that the judge considered and was directed to was all to the effect that D never realised that compound interest was being charged at any stage.
16 It follows, therefore, that D's grounds for appealing this judgment fail and that is irrespective of the further alternative ground, which Miss Smith wanted to introduce in support of this part of the judgment. The ground she seeks to argue is to the effect that despite the concession below, had there been a term entitling AMEX to charge compound interest, its admitted failure to include it in the agreement would not have led to the application of s.127(3) so as to render it unenforceable. This is so, she says, because a term providing for compound interest is not a prescribed term within s.61(1)(a) and 127(3) of the Act and Regulation 6(1) of the 1983 Regulations.
17 By virtue of what I have already said, it is not necessary to resolve whether this argument is a good or bad one. It may, as an argument, need at some stage to be addressed in litigation on this legislation and is one which is not without importance potentially for other cases. My judgment is it would be better addressed if and when it arises where it has been considered by the Lower Court, reasons given and those reasons properly addressed on an appeal. It would also be better if it is decided after argument on both sides where counsel wishing to oppose it has had fuller and better notice of it in order to prepare the best response to it. It deserves, in my judgment, a more considered argument in response than, for all his valiant efforts, Mr Wallman was able to mount on this occasion. I therefore decline to rule on it.
The Cross-Appeal
18 AMEX did not seek permission from the trial judge to appeal any part of his judgment. A cross-appeal launched not in response to an Appellant's notice of appeal, but an Appellant's receipt of permission to appeal, never speaks of a burning sense of injustice on the part of the party making it. Nevertheless, I think it is right and proper to allow its presentation, out of time, as it is, and to consider it on the merits.
19 The first ground is that the judge was wrong to deduct £2,000 from the amount that was otherwise due to AMEX by way of this debt claim. I should say how he approached it, because he did so at some length and with care. He said as follows, starting at paragraph 11 of the judgment:
“11. AMEX is entitled to have judgment for what, in accordance with the contract, it is entitled to; £6,809 is an appropriate starting point. The admissions/concession by AMEX had taken out all of the improper things (essentially, the compounded interest from 2001 to date). Indeed, I think that it goes further, but that is a concession; so that is a starting point, £6,809. However, it is not the finish of the matter because I still have to consider the period of about 11 years before that when this account was operative. The only sensible inference I can make in respect of that period is that compound interest was debited to the account just as it was after 2001 when it should not have been. It is up to AMEX to prove what is due on the balance or probabilities.
12. AMEX have not produced any evidence for the period up to 2001, just a copy statement showing the opening balance carried forward at the beginning of the period from 2001 for which they have records.”
The judge then set out how this had happened. He described it as a cavalier approach to have destroyed the documents and he went on:— 12. AMEX have not produced any evidence for the period up to 2001, just a copy statement showing the opening balance carried forward at the beginning of the period from 2001 for which they have records.”
“Moreover, where as here it is a running account, it must be obvious that in the event of litigation the need could well arise to go back into the account to its inception. Unfortunately, AMEX did destroy about three years' worth of relevant documents; certainly they have not got them from a point seven years before notice of default. In all nothing by way of statements pre-2001. That was a deliberate course of action by AMEX, albeit one essentially driven by blanket policy of destruction rather than a considered course of action specific to the case. The lack of consideration of the particular circumstances of the case in that way is culpable on one level. An organisation such as AMEX should have appropriate systems in place to avoid it. On the other hand, it is not a case of deliberate destruction of documents to avoid disclosure in this litigation.
13. So we can never know exactly how much compound interest was charged and paid by D in that period of 11 or so years pre-2001, nor how much compounded interest is included in the starting figure for 2001 …
14. It seems to me that the fairest way of dealing with this case is to make a robust deduction in respect of the pre-2001 period in favour of D. In doing so I keep in mind that it is the fault of AMEX for not having the exact figures and so I err in favour of D. However, I also do not lose sight of the fact that the figures for actual amounts of compound interest in the post-2001 period were actually quite modest where I have seen examples of computation and I should not be blinded by the amount of the AMEX concession post-2001, which, as I have already observed, went well beyond stripping out compound interest. I propose making a deduction of £2,000, which equates to about £200 per year over the period in question.”
In her attack on this, Miss Smith argues as follows. First the evidence of D himself in his witness statement, which I note was dated 15th March 1997, well before the claim was amended, was to the effect that for “the first few years” (presumably from 1990) he had no difficulty in making minimum payments and therefore, she argues, no compound interest would be levied, and that he only failed to do so when he suffered a collapse of his business in 2004. This was not investigated or probed in any way at trial. Secondly, she points to what she identifies as the actual quantum of charged compound interest after 2001 in the period for which statements have survived and she says these are modest. The judge was, it seems, aware of these, if they are what he was referring to as examples of computation, in his paragraph 14. 13. So we can never know exactly how much compound interest was charged and paid by D in that period of 11 or so years pre-2001, nor how much compounded interest is included in the starting figure for 2001 …
14. It seems to me that the fairest way of dealing with this case is to make a robust deduction in respect of the pre-2001 period in favour of D. In doing so I keep in mind that it is the fault of AMEX for not having the exact figures and so I err in favour of D. However, I also do not lose sight of the fact that the figures for actual amounts of compound interest in the post-2001 period were actually quite modest where I have seen examples of computation and I should not be blinded by the amount of the AMEX concession post-2001, which, as I have already observed, went well beyond stripping out compound interest. I propose making a deduction of £2,000, which equates to about £200 per year over the period in question.”
20 Miss Smith says she has been through all the statements now surviving and can only identify two months, December 2002 and February 2005, and then the months from November 2005 through to June 2006, when compound interest was or could have been charged at all. So, she concludes, that the inference that the judge drew in two parts of his judgment in paragraph 8, that over a long period AMEX had been rendering accounts with compound interest in them and in paragraph 14, that the deduction appropriate was one of £200 a year approximately over the ten/eleven year period, were such as no reasonable judge could properly draw.
21 This judge was aware of what he was doing, that he was applying an age-old maxim, which now has to be translated and can be rendered into English in something like these words: “Adverse inferences should be drawn against a party who destroys relevant evidence.” That applies whether the destruction is malicious or merely, as here, inappropriate or negligent or cavalier or whatever epithet the judge thought it deserved, so it applied even on his findings that there was no deliberate interference with evidence. He deduced from that principle that he was entitled to and should deal robustly with the problem and if mistakes were going to be made to the detriment of either party they should be made in favour of D. He was entirely right to take that view. He was aware of and took into account the examples that Miss Smith put before me in argument and to which I have referred and he was aware that they showed modest deductions where they could be identified. He had in mind and did not forget the concession that had been made on interest. He did not expressly refer to the Defendant's witness statement, probably as I would be readily inclined to accept, because it was not argued before him. It was not in very precise terms and it was a statement made when this particular issue had not crystallised at all.
22 So, Miss Smith invites me now to quash this deduction altogether, alternatively reduce it in its amount in some way to reflect the modesty of the examples post-2001 that she has now identified. I certainly do not accept the invitation to assume that no deduction whatever should have been made in this case where the known evidence starts with a balance figure, which must be the product of all that had gone before it. It would be erring in favour of the Claimants to do so and that would be unjust to D. Should I, therefore, tinker with the judge's order when I can see that he directed himself properly, he knew he was taking a robust approach, he was entitled to take a robust approach and there was a principle behind what he was doing? I do not think I should do so, so this limb of the cross-appeal fails.
23 The second limb relates to the judge's non-award of statutory interest, there being no particular evidence that he was ever asked to award it other than a prayer invoking s.69 of the County Courts Act 1984 in the claim form and secondly, the order for costs which he made. That was a slightly complex order, it read:
“2. As to costs: (i) the order of Deputy District Judge Phillips on 2nd July 2008 for detailed assessment in respect of the costs of 28th November 2007 ordered by Deputy District Judge Petrou in favour of the Claimant is varied to summary assessment; (ii) Allowing for such costs as would be recoverable by the Claimant against the Defendant under (i) above the net overall order for costs in the claim is no order for costs.”
So the essential complaint here is that in effect the judge was awarding the Defendant, who had had a judgment made against him, his costs of the hearing. 24 The conclusion of this appeal is therefore as follows: the appeal by the Defendant/Appellant is dismissed. Permission to cross-appeal is granted to the Respondent/Claimant and the cross-appeal is dismissed.
Comment