Gregory v MBNA Europe Bank Ltd

On an application for summary judgment, a creditor may establish a prima facie case that a default notice was served by showing that it was posted. Once the notice has been generated, a common-sense inference of posting may arise from its creation, absent contrary evidence; a debtor’s bare denial of receipt alone need not create a triable issue. The adequacy of proof remains fact-specific and does not necessarily raise an issue of principle for a second appeal. A defence based on an alleged oral payment holiday must be pleaded and evidenced clearly and coherently, with terms capable of constituting a defence.

A credit-card lender claimed approximately £8,000. The applicant relied on two defences: failure to serve a default notice under Consumer Credit Act 1974, section 87, and an alleged telephone agreement for a payment and interest holiday. District Judge Sterlini held that neither defence had a real prospect of success. His Honour Judge Mitchell dismissed the appeal on 29 May 2012. Permission to appeal was refused on the papers by Lewison LJ, and the applicant sought an oral hearing before the Court of Appeal. The issues were whether the evidence of posting raised a triable issue and whether the alleged oral agreement had been sufficiently identified to constitute a defence.

Application refused.

1. Once service of the default notice was put in issue, the claimant bore the burden of proving it. Under section 176 of the Consumer Credit Act 1974, showing that the notice had been posted could establish a prima facie case of service.
2. The claimant produced a notice generated on its system, together with evidence that it had not been returned and that other documents had reached the same address. Although evidence of the posting system could have been more detailed, the notice’s creation justified a common-sense inference that it had been sent. The applicant’s bare denial of receipt did not create a realistic prospect of a contrary finding at trial.
3. The question whether the evidence proved posting was specific to the circumstances and raised no general issue of principle for the purposes of a second appeal.
4. The pleaded oral-agreement defence was inadequate. The applicant had not supplied a clear and coherent account of what had been agreed or shown terms capable of constituting a defence. The most authoritative written accounts referred only to a two-month payment holiday and interest freeze, which could not answer a claim commenced in June 2010. The applicant had had two clear opportunities to advance a coherent defence and had failed to do so.
5. The oral-agreement issue likewise raised no point of principle or other compelling reason for a second appeal. The application was therefore refused.

• Court of Appeal (Civil Division): Following an oral hearing after permission had been refused on the papers by Lewison LJ, the application for permission to appeal was refused: [2013] EWCA Civ 716.
• Clerkenwell & Shoreditch County Court: District Judge Sterlini held that neither defence had a real prospect of success. His Honour Judge Mitchell dismissed the applicant’s appeal on 29 May 2012.