HOWARD RUTHERFORD v HSBC BANK PLC (2009)
[2009] EWHC 733 (QB)

QBD (Blair J) 6/4/2009


CIVIL PROCEDURE – BANKING AND FINANCE

BANK CHARGES : DISCRETION : HARDSHIP : STAY OF PROCEEDINGS : STAY OF CLAIM TO RECOVER BANK CHARGES : LIFTING STAY : CONSIDERATION OF PARTICULAR FACTS OF CASE AND GENERAL GUIDANCE ON STAYS OF CLAIMS TO RECOVER BANK CHARGES : UNFAIR TERMS IN CONSUMER CONTRACTS REGULATIONS 1999

A judge had been entitled to exercise his discretion and refuse to lift a stay on a claim to recover bank charges that were said to be unfair. The judge had not merely applied the general guidance given in respect of such stays but had given reasons why a stay pending the resolution of a test case was fair and sensible and he went on to consider the particular facts of the case.


The appellant (R) appealed against a decision refusing to lift a stay previously imposed on his claim against the respondent bank (H) to recover bank charges that were said to be unfair. The schedule annexed to R’s claim, which had been stayed pending the outcome of a test case, showed his bank charges increasing from £27.50 to £3,226. R had sought to recover that sum together with interest, which he said he was entitled to recover at the same rate as that which he had been charged by the bank, namely 19.1 per cent. R claimed that he had mortgage arrears and was issued with a warrant for possession of his home and that he would be able to pay off some of the arrears and keep his home if he was able to pursue his claim against the bank. After the test case began, it was indicated by the Deputy Head of Civil Justice that each case should be considered on its own merits with a separate discretionary exercise but that there might well be thought to be a case for staying most of the claims to recover bank charges pending the resolution of the test case. R submitted that following the stay of his claim the law had been made clear and the banks’ case that on its true construction the Unfair Terms in Consumer Contracts Regulations 1999 precluded an assessment by the Office of Fair Trading into the fairness of the charges had been rejected at first instance and on appeal to the Court of Appeal. R argued that the judge’s decision refusing to lift the stay on his claim was wrong as he had applied the general guidance that the court had given in respect of stay without regard to the facts of his case. R also argued that the issue of stay was relevant to an application to the county courtto suspend the warrant of possession.
HELD: (1) No application had ever been made to suspend the warrant for possession. It may also be the case that a warrant for possession had not yet been granted. If a warrant was issued, it would be open to R to apply to a district judge and to appeal to a circuit judge on the basis that if he recovered all his monies from H then that would discharge or significantly discharge the arrears and that it would be appropriate to suspend the order. On the information available it could not be said whether such an application would have any prospect of success but that was at least one route for R to consider. (2) The judge, when refusing to lift the stay on R’s claim, had not merely applied the general guidance given in respect of stay. Having indentified the reasons why a stay pending the test case was fair and sensible he went on to consider R’s individual position, including the question of financial hardship, dealing in particular with the warrant for possession that was the principal point made by R. In the circumstances, the judge, who had fairly balanced the various factors, had been entitled to exercise his discretion and decide that the stay should not be lifted.

Appeal dismissed

For related proceedings see Office of Fair Trading v Abbey National Plc (200 EWHC 875 (Comm)
Counsel:
For the appellant: Thomas Brennan
For the respondent: Patrick Goodall
Solicitors:
For the appellant: Bar Pro Bono Unit
For the respondent: DG

(NB This case is continuing and is in court next on 26th July 2012)