Alliance & Leicester Plc v Godolphin

Under the Consumer Credit Act 1974, an overstated default notice may prevent a creditor demanding earlier payment of capital, but does not extinguish arrears of interest already due. A partial discontinuance notice is not required to preserve that interest claim. A regulated credit agreement may satisfy prescribed repayment terms by providing for notification of the first payment date and amount; the date need not appear in the agreement. Confusing account presentation does not ground an appeal where unchallenged expert calculations support the judgment.

This was an adjourned application by Mr Godolphin for permission to appeal from a money judgment of the Truro County Court. Alliance & Leicester had advanced sums secured on his home through six accounts. Disputes arose about the allocation of payments and the calculation of arrears.

The applicant argued that the judgment included sums relating to three abandoned capital claims, that the proceedings were invalid because no partial discontinuance notice had been served, and that three regulated agreements were unenforceable under section 127(3) of the Consumer Credit Act 1974. The central statutory issue was whether the agreements stated the prescribed repayment terms required by the Consumer Credit (Agreements) Regulations 1983.

Application dismissed. Lord Justice Dyson refused permission to appeal because none of the proposed grounds had a real prospect of success. There was no order for costs.

1. The judgment sum was based on the jointly instructed expert’s calculation of arrears under the six accounts. The sums attributed to accounts 3, 5 and 6 represented arrears of interest, not the capital sums which the claimant had abandoned. There was therefore no substance in the contention that the judgment included abandoned claims.
2. Section 87 of the Consumer Credit Act 1974 required a default notice before the creditor could demand earlier payment of sums due under a regulated agreement. The claimant’s acceptance that the figures in the notices for three accounts were too high prevented it from relying on those notices to demand earlier payment of the capital. It did not invalidate the claim for interest arrears that had already fallen due. The absence of a partial discontinuance notice afforded no ground of appeal.
3. The applicant relied on section 127(3) of the Act and the prescribed repayment terms in the Consumer Credit (Agreements) Regulations 1983. The agreements stated that the date and amount of the first monthly payment would be notified to the borrower and that later payments would fall due monthly on the same date. Paragraph 5(e) of Schedule 6 permitted the manner in which the repayment date was determined to be stated in that way. The first payment date therefore did not have to be incorporated in the agreement itself.
4. Even if the treatment of the no. 1 MIRAS account was confusing, it could not found an appeal because the judgment rested on the expert’s figures, which were not challenged.

1. Court of Appeal (Civil Division): In [2002] EWCA Civ 12, Lord Justice Dyson refused permission to appeal and dismissed the application, with no order for costs.
2. Truro County Court: His Honour Judge Tyzack entered judgment for £95,199.84 following the calculation of arrears under the six loan accounts.