Santander Consumer (UK) PLC v Meher-Un-Nisa Chaudhry

A creditor does not contravene section 90 of the Consumer Credit Act 1974 merely by recovering protected goods from the police or their bailee. Lawful statutory seizure suspends the debtor’s right to possession during the seizure. Recovery from the police is not recovery from the debtor.

Later retention is not a second recovery of possession for section 90 purposes. Issues concerning default notices, unfair terms and wrongful retention must be determined by the pleaded causes of action.

Santander financed the defendant’s Mercedes-Benz vehicle under a regulated conditional sale agreement. The defendant had paid more than one third of the total price, while title remained with Santander. The police lawfully seized the vehicle after the defendant’s brother drove it uninsured and while disqualified.

Santander recovered the vehicle from police custody without a court order and retained it despite requests for its return. The Recorder held that the vehicle had been recovered from the police rather than from the debtor, so section 90 did not apply. The central issue on appeal was whether that conclusion was correct, together with related grounds concerning default notices, unfairness and data protection.

1. Appeal dismissed. The Recorder’s orders stood.
2. Section 90 of the Consumer Credit Act 1974 is confined to recovery from the debtor. Lawful police seizure under statutory powers suspends the debtor’s right to possession during the seizure. The police do not thereby become the debtor’s bailee.
3. When Santander collected the vehicle from police custody under regulation 5 of the Road Traffic Act 1988 (Retention and Disposal of Seized Motor Vehicles) Regulations 2005, it recovered possession from the police. The suggested intermediate transfer to the debtor was artificial.
4. Once possession had been recovered, later retention after demands for return was not a second recovery for section 90 purposes. Any wrongful retention would engage other causes of action, such as conversion or detinue, but those claims were not pleaded.
5. The court upheld the finding that the police seizure was lawful under section 165A of the Road Traffic Act 1988.
6. The grounds concerning default notices, contracting out, unfair terms and data protection did not alter the result. The unfair-relationship argument failed in any event because the defendant’s conduct outweighed the alleged unfairness.

1. High Court (King’s Bench Division) — appeal from the order of Recorder Cameron in the County Court. The appeal was dismissed and the Recorder’s orders stood.