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HFC v Brophy went through High Court and Brophy lost - HFC were entitled to enforce the debt - however Brophy has now won the right to appeal. We received an email at LB admin as he is looking for investment to assist him bringing the case ..... that aside, it's an interesting case and quite relevant at the moment. Anyway summaries below and documents ref appeal attached.
Originally posted by Addleshaw Goddard
Patrick Brophy v HFC Bank 2010 EWHC - Consumer Law Law Articles and News - Lawdit Reading Room
Patrick Brophy v HFC Bank 2010 EWHC
20 June 2010
Patrick Brophy v HFC Bank 2010 EWHC
20 June 2010
Patrick Brophy v HFC Bank 2010 EWHC
By Paul Bicknell
INTRODUCTION
This case was an appeal of Judge Million's decision in the Willesden County Court in which the judge found for HFC Bank. The case concerned issues relating to the enforceability of the agreement (as is usually the case).
ARGUMENTS
The grounds of appeal where as follows
"the judge erred in finding that the application form signed by Mr Brophy was an executed agreement for the purposes of the Consumer Credit Act. The way in which Miss O'Connor, for Mr Brophy, puts her case is refined somewhat from what she submitted before the learned judge, where she essentially sought to argue that there was no intention to create legal relations as there was no certainty as to whether Mr Brophy would be granted credit and, if so, in what amount."
It was also averred that the agreement was irredeemably unenforceable because the credit limit has been miss-asserted. Which, of course, was a breach of schedule 6 to the Consumer Credit (Agreements) Regulations 1983. The resulting effect of which is that the agreement is improperly executed under section 61(1) of the Consumer Credit 1974 ('the Act') and a court cannot order the enforcement of such an agreement :section 127(3) of the Act) see also the decisison in Wilson v First County Trust [2004] 1 AC 816. (The reader should also note that that the Consumer Credit Act 2006 repealed with prospective effect section 127(3) of the Act).
"application form was in essence merely an agreement by which the debtor gave the bank permission to investigate his credit rating and, accordingly, it was no more than an agreement to enter into a prospective regulated agreement, which is void under Section 59 of the Act."
HELD
Justice Flaux however, disagreed with the above analysis under point 1 above: "It seems to me that Miss O'Connor's submissions mischaracterise what is the correct contractual analysis here. By completing the application form the debtor agreed to be bound by the terms and conditions, as was expressly stated, in the event that the bank agreed to extend credit to him. The agreement warns him in terms not to sign it unless he wants to be legally bound by its terms. Thus, by completing the application form Mr Brophy made an offer to contract on these terms, which the bank accepted by counter-signing, and at that point there was an executed agreement within the meaning of Section 61 of the Act."
In relation to the enforceability of the agreement Justice Flaux stated: it is not the purpose of Schedule 6 primarily to inform the borrower, a task which is discharged by Schedule 1, but rather the purpose of Schedule 6 is to set out the bare minimum terms which have to be included as an inflexible condition of enforceability.
The result of the case was that the agreement did not contain any breaches of schedule 6 to the Consumer Credit (Agreements) Regulations 1983, so the agreement was enforceable and the court is entitled to order the enforcement of the same.
By Paul Bicknell
INTRODUCTION
This case was an appeal of Judge Million's decision in the Willesden County Court in which the judge found for HFC Bank. The case concerned issues relating to the enforceability of the agreement (as is usually the case).
ARGUMENTS
The grounds of appeal where as follows
"the judge erred in finding that the application form signed by Mr Brophy was an executed agreement for the purposes of the Consumer Credit Act. The way in which Miss O'Connor, for Mr Brophy, puts her case is refined somewhat from what she submitted before the learned judge, where she essentially sought to argue that there was no intention to create legal relations as there was no certainty as to whether Mr Brophy would be granted credit and, if so, in what amount."
It was also averred that the agreement was irredeemably unenforceable because the credit limit has been miss-asserted. Which, of course, was a breach of schedule 6 to the Consumer Credit (Agreements) Regulations 1983. The resulting effect of which is that the agreement is improperly executed under section 61(1) of the Consumer Credit 1974 ('the Act') and a court cannot order the enforcement of such an agreement :section 127(3) of the Act) see also the decisison in Wilson v First County Trust [2004] 1 AC 816. (The reader should also note that that the Consumer Credit Act 2006 repealed with prospective effect section 127(3) of the Act).
"application form was in essence merely an agreement by which the debtor gave the bank permission to investigate his credit rating and, accordingly, it was no more than an agreement to enter into a prospective regulated agreement, which is void under Section 59 of the Act."
HELD
Justice Flaux however, disagreed with the above analysis under point 1 above: "It seems to me that Miss O'Connor's submissions mischaracterise what is the correct contractual analysis here. By completing the application form the debtor agreed to be bound by the terms and conditions, as was expressly stated, in the event that the bank agreed to extend credit to him. The agreement warns him in terms not to sign it unless he wants to be legally bound by its terms. Thus, by completing the application form Mr Brophy made an offer to contract on these terms, which the bank accepted by counter-signing, and at that point there was an executed agreement within the meaning of Section 61 of the Act."
In relation to the enforceability of the agreement Justice Flaux stated: it is not the purpose of Schedule 6 primarily to inform the borrower, a task which is discharged by Schedule 1, but rather the purpose of Schedule 6 is to set out the bare minimum terms which have to be included as an inflexible condition of enforceability.
The result of the case was that the agreement did not contain any breaches of schedule 6 to the Consumer Credit (Agreements) Regulations 1983, so the agreement was enforceable and the court is entitled to order the enforcement of the same.
Comment