Axton & Anor v GE Money Mortgages Ltd & Anor

Summary judgment may be given where the evidence and documents establish that a claim has no real prospect of success. The reverse burden of proving fairness under the Consumer Credit Act 1974 does not prevent summary disposal in every unfair-relationship case.

For an unfair-relationship claim, the alleged unfairness must arise in the relationship between the creditor and debtor and must be connected with one of the statutory circumstances. A lender’s limited involvement in financing a separately arranged third-party insurance policy may be insufficient to establish that relationship or causative unfairness. The principles in Plevin v Paragon Personal Finance Ltd and another are fact-sensitive and do not automatically apply to a different lending and insurance structure.

The claimants appealed against summary judgment entered for GE Money Mortgages Ltd by His Honour Judge Armitage QC on 14 November 2014. Their claim concerned allegedly mis-sold payment protection insurance connected with successive secured credit agreements.

By the time of the summary judgment application, the claimants relied only on sections 140A–140C of the Consumer Credit Act 1974. They argued that earlier agreements and insurance policies were related agreements and that the relationship arising from the continuing fourth agreement was unfair. The central issues were whether summary judgment was appropriate and whether the lender’s involvement was sufficient to support an unfair-relationship claim.

1. Appeal dismissed. The summary judgment for GE Money was upheld.
2. Under CPR 24.2, the court must decide whether the claimant has a real, rather than fanciful, prospect of success and whether there is any other compelling reason for trial. The court must not conduct a mini-trial. However, where the material facts are sufficiently established and the issue turns on law or construction, summary judgment remains available.
3. The reverse burden under section 140B(9) of the Consumer Credit Act 1974 does not mean that an unfair-relationship claim can never be summarily determined. The judge was entitled to proceed on assumptions favourable to the claimants, including that the policies were related agreements and had unfavourable terms.
4. Section 140A required the alleged unfairness to arise in the relationship between the creditor and debtor. The lender had not provided the PPI, had not required its purchase, had not selected the insurer or policy terms, and had merely paid the premiums from the loan on the broker’s request. Those facts gave the claimants no realistic prospect of showing that the lender’s limited involvement caused unfairness in the creditor–debtor relationship.
5. Plevin v Paragon Personal Finance Ltd and another was materially different. In that case the lender had a central role in the PPI arrangement and was the only party necessarily able to know the commissions. The present evidence indicated that the lender received no PPI commission and that responsibility for explaining the insurance arrangements lay with the broker. The suggested disclosure duty therefore provided no realistic basis for the claim.
6. The claimants were ordered to pay the respondent’s appeal costs. The costs were summarily assessed at £10,359.60. Any application for a stay of enforcement had to be made to the Court of Appeal.

• High Court (Queen's Bench Division): Appeal against the order of His Honour Judge Armitage QC dated 14 November 2014. The appeal was dismissed and summary judgment for the respondent upheld.
• County Court: Summary judgment was entered for the respondent under CPR 24.2 on the whole claim.