Janette Cooper v The Freedom Travel Group Ltd

The term debtor in section 75 of the Consumer Credit Act 1974 means the contractual debtor: the individual who receives credit under the relevant consumer credit agreement. It does not include a third-party beneficiary of the goods or services financed by the agreement. A person may have a statutory claim under the package-travel regime without becoming a party to the underlying holiday contract, but that does not make the person a debtor under section 75. Where statutory language is plain and unambiguous, the court must give it its natural meaning. The Marleasing principle does not require a different interpretation where the two statutory schemes pursue distinct objectives and there is no conflict with the Directive.

Mr Cooper used a Halifax Mastercard to pay the deposit for a package holiday booked for himself and Mrs Cooper. Mr Cooper alone was party to the credit agreement and the holiday contract. Mrs Cooper, who was named as another passenger, suffered a personal injury during the holiday and pursued a statutory claim against the holiday company under regulation 15 of the Package Travel, Package Holidays and Package Tours Regulations 1992.

After the holiday company entered liquidation, Mrs Cooper applied under CPR 19.5 to add Bank of Scotland plc as jointly and severally liable under section 75 of the Consumer Credit Act 1974. The County Court held that she was not a debtor and dismissed the appeal. The central issue was whether section 75 extended to a third-party beneficiary of the credit agreement.

1. Appeal dismissed. The second ground, concerning limitation and prejudice, did not arise because it depended on success on the first ground.
2. The statutory scheme uses carefully defined terms. Under sections 8, 9 and 189 of the Consumer Credit Act 1974, credit is provided under an agreement between a debtor and a creditor. Receiving credit therefore means having the contractual right to defer repayment of a debt under that agreement. A person who is not a party to the agreement cannot have that contractual right.
3. Section 75(1) makes the creditor jointly and severally liable to the debtor for a like claim against the supplier in respect of misrepresentation or breach of contract. The reference to a debtor under a debtor-creditor-supplier agreement confines the provision to the contractual debtor. It does not extend liability to third-party beneficiaries, and section 75 contains no wider definition comparable to the express exceptions elsewhere in the Act.
4. Mrs Cooper’s status as an other beneficiary under regulation 2(2) of the Package Travel, Package Holidays and Package Tours Regulations 1992 gave her a statutory cause of action under regulation 15. It did not make her a party to the holiday contract or give her a contractual claim. The package-travel legislation’s insolvency protection was directed to refunds and repatriation, with no provision addressing personal-injury claims.
5. The plain meaning of debtor made a purposive construction unnecessary. The interpretation did not conflict with Council Directive 90/314/EEC. The Directive and the Consumer Credit Act 1974 establish distinct schemes pursuing different policy objectives, and the Marleasing principle therefore did not require the proposed extension of section 75.

1. Court of Appeal (Civil Division) [2022] EWCA Civ 1557: appeal from the County Court dismissed. The court held that a non-contracting beneficiary was not a debtor under section 75 of the Consumer Credit Act 1974.
2. Brighton County Court: HHJ Simpkiss dismissed the appeal on 1 September 2021, holding that Mrs Cooper was not a debtor under the Act. The court did not determine the limitation ground.
3. Brighton County Court: the Deputy District Judge dismissed the application to add Bank of Scotland plc on 21 April 2020, holding that Mrs Cooper could not claim under section 75 and that the limitation period should not be disapplied.