Gray v Lloyds TSB Bank Plc [2012] EW Misc 13 (CC) (30 March 2012) [2012] EW Misc 13 (CC)

IN THE WINCHESTER COUNTY COURT

[2012] EW Misc 13 (CC)

Case No IUD08793

Venue Case No: IUD08793, The Law Courts, Winchester, Hampshire, SO23 9EL

Between

Gray

Lloyds TSB Bank Plc [2012] EW Misc 13 (CC) (30 March 2012)

For the Claimant: Dr Annette Prand Lamb Chambers, Elm Court, Temple, London EC4Y 7AS

Instructed by Wixted & Co Limited trading as "Claims for you", 57, Putney Bridge Road, London, SW18 1NP.

For the Defendant: Miss Ruth Bala Gough Square Chambers, 6-7 Gough Square, London EC4A 3DE

Instructed by SCM Solicitors, Three City Park, The Droveway, Hove, East Sussex. BN3 7AU

Date 30 March 2012

[1]Neutral Citation Number:

[2012] EW Misc 13 (CC)

IN THE WINCHESTER COUNTY COURT Case No: IUD08793 The Law Courts Winchester Hampshire SO23 9EL Friday, 30 March 2012 BEFORE: HIS HONOUR JUDGE IAIN HUGHES QC BETWEEN : STEPHEN GRAY Claimant/Respondent - and - LLOYDS TSB BANK PLC Defendant/Appellant APPROVED TRANSCRIPT OF JUDGMENT Crown Copyright © Digital Transcript of: Wordwave International, a Merrill Communications Company 101 Finsbury Pavement London EC2A 1ER Tel No: 020 7422 6131 Fax No: 020 7422 6134 Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com (Official Shorthand Writers to the Court) APPEARANCES: For the Claimant: Dr Annette Prand Lamb Chambers, Elm Court, Temple, London EC4Y 7AS Instructed by Wixted & Co Limited trading as "Claims for you", 57, Putney Bridge Road, London, SW18 1NP. For the Defendant: Miss Ruth Bala Gough Square Chambers, 6-7 Gough Square, London EC4A 3DE Instructed by SCM Solicitors, Three City Park, The Droveway, Hove, East Sussex. BN3 7AU JUDGMENT 30 th March 2012 HIS HONOUR JUDGE IAIN HUGHES QC: This is an appeal from a case management decision made by District Judge Asplin in the Salisbury County Court on 20 December last year. On that occasion District Judge Asplin, after hearing representations from both parties, directed that the case be allocated to the fast-track. Permission to appeal was given and I have today heard counsel on both sides, Miss Bala for the Bank, Lloyds TSB who are appealing that decision, and Miss Prand for the respondent/claimant Stephen Gray who seeks to uphold the decision.

[2]I have to say I am very grateful to both counsel for both their skeletons arguments and for the eloquence of their submissions. They have been very helpful.

[3]This is a claim for the mis-selling of payment protection insurance. These claims started at the end of 2009, or early 2010 and they have generated a very considerable volume of litigation. Inevitably much of this litigation has had to be dealt with at County Court level because of the limited value of the sums in dispute. That has meant there have been no authorities properly so-called until recently when some cases were finally heard by the High Court and the Court of Appeal.

[4]The claim form is helpful in that it summarises what is set out in a very considerable length in the particulars of claim. I quote the brief details of claim:

"The Claimant's claim against the Defendant is for damages relating to the sale of a single premium payment protection insurance policy sold alongside a loan entered into with the Defendant on 22 August 2006 and arising from misrepresentations made, misrepresentations by partial non-disclosure, breach of the Insurance Conduct [of] Business (ICOB) rules and a claim that an unfair credit relationship arose within the meaning of section 140A."

[5]It is clear from those brief details that there is a four-pronged attack by the claimant, Mr Gray, against Lloyds TSB. First of all misrepresentation; secondly, misrepresentation by partial non-disclosure; thirdly, breach of the ICOB rules; and finally, a claim that an unfair credit relationship arose within the meaning of section 140(a) of the Financial Services Act. The ICOB rules are rules that were imposed by the Financial Services Authority and in respect of that and section 140(a), they both give rise to causes of action in their own right. It follows, therefore, that there are four causes of action here.

[6]As I indicated, the particulars of claim is a lengthy document, some 15 pages long, and extending to 58 paragraphs. The factual dispute, so far as the interaction between the claimant and the bank is concerned, is limited. The claimant's case is he was told he had to take out this policy and he did not understand that he had any alternative. The sum in dispute is in the region of £1,800. The matter came before District Judge Asplin. I note that in the course of the short hearing, the District Judge was referred to a recent Court of Appeal case called Harrison & Anor v Black Horse Ltd [2011]EWCA Civ 1128. I will return to that case in just a moment. The reason given for the decision the District Judge made was as follows:

"I am concerned with which track it is appropriate to allocate this to and I hear particularly what Mr Banks is saying to me about the issues raised in interpretation of the regulations and the Act and the fact that there is a dearth of authority. Therefore, it strikes me that the formality of the parties being represented, providing thereby an equality of arms, is an important factor in my thinking. For that reason alone, I think it is more appropriate for it to be allocated to the fast track, which is what I am going to order."

The District Judge's principal reasons for making his decision were the interpretation of the regulations, the limited authority that is available in respect of these areas of the law, and equality of arms. All those are matters the District Judge was entitled to take into account. I should also indicate that in respect of an ex tempore judgment at a case management hearing, it is not necessary for a first instance judge to set out in detail each and every matter that has played some part in his decision. The minutiae of the reasons are not to be extracted on the basis of word by word examination. This was an ex tempore judgment.

[7]This court is a reviewing court. It is not a rehearing, and the decision I would have made had I been in District Judge Asplin's position is not relevant.

[8]The case that, in my respectful view, provides the most assistance is Royal & Sun Alliance Insurance PLC v T&N Ltd (in administration)

[2002] EWCA Civ 1964

. At paragraph 38 of his judgment, Chadwick LJ set out the following:

"... this Court should not interfere with case management decisions made by a judge who has applied the correct principles, and who has taken into account the matters which should be taken into account and left out of account matters which are irrelevant, unless satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge ... If his approach to the evaluation of the risk was correct, I would not think it right to substitute my own view for the conclusion that he reached."

[9]That is the principle that I must adopt in dealing with this appeal. In the course of her submissions, Miss Bala, who appears for the appellant bank, identified the four issues and submitted that really there was only one live issue, that being the question of fact as to whether or not the claimant, Mr Gray, was told by the bank's representative that he was obliged to purchase the payment protection insurance if he wanted the loan. She pointed out that is a simple question of fact, ideally suited to the small claims jurisdiction and well within the capabilities of any District Judge or Deputy District Judge to determine. The second issue, Miss Bala submitted, was essentially this: if Mr Gray succeeded in respect of the first issue, then really he did not need to trouble about the remaining issues. However, if he failed in respect of the first issue, then his case would go down and that was because of causation. The second issue as to whether or not Mr Gray needed any such insurance at all, given his personal circumstances, is a non-runner, in Miss Bala's submission, because the claimant's case is formulated on the basis he bought the policy because he believed it was mandatory and so if it was optional and he failed in respect of the first issue, he cannot succeed on the second.

[10]So far as the other two issues are concerned, the breach of the ICOB rules and the breach of section 140A, Miss Bala relies on the case of Harrison (this is Harrison v Black Horse Ltd

[2011] EWCA Civ 1128

). Miss Bala speaks from some authority in respect of this case as she was counsel in it. This was a case that was decided on 12 October 2011. In summarising this authority, Miss Bala said that non-disclosure of commission is not relevant anymore as a result of this decision, and so far as the argument that there were more suitable alternatives, the Court of Appeal decided there was no obligation to compare the product being offered with other products that may have been on the market. I am told by counsel that Harrison is now going to go to the Supreme Court. Miss Prand has said that as a result of Harrison that section of the particulars of claim that dealt with the non-disclosure of commission was at first removed and then has been added back in similar cases pending the final decision of the Supreme Court. That decision is not expected, however, for some considerable time and I have to deal with the law as it appears to be today.

[11]Both counsel, for different reasons, referred me to a case decided by Judge Kay [1] . This was a case that was decided on its own merits and there is no principle of law or practice that it is necessary for me to refer to. I was also referred to the well-known guidance provided by Judge Waksman QC, the Mercantile Judge in Manchester, where in March 2010 he indicated that the fast-track was probably the best home for these cases, certainly at the start. I have to say, with respect to Judge Waksman, I have not found this guidance to be of particular assistance given the passage of time. It is two years out of date now; the litigation has progressed; we are now having decisions of the Court of Appeal that are of assistance and can enable these matters to proceed with some of the technicalities removed.

[12]Miss Prand argues that even if her client were to lose on the principal factual dispute as to whether or not there was a misrepresentation in respect of whether or not it was optional or compulsory to purchase this insurance, she would still proceed on whether or not Mr Gray needed this insurance. In other words, she would still rely on the breach of the ICOB regimes. That led to some discussion at the Bar with competing submissions as to whether or not the particulars of claim, as they are presently set out, sufficiently identify these matters. That is one reason why I quoted from the claim form which, in my judgment, does set out clearly four distinct causes of action and would, in my view, allow Miss Prand to proceed in the way that she has indicated. Miss Prand also drew my attention to the inevitability of disclosure of a nature and extent that is ordinarily outside the Small Claims regime.

[13]That in summary form is the dispute in this case. I should make it clear that if I was dealing with this matter at first instance, I would come to the conclusion that on balance, this was an appropriate case to proceed in the Small Claims Court. I would do that on the basis that Harrison has provided sufficient guidance to remove some, although not all, of the complexity, and what remains is well within the capability of the full time District Judges who could be directed to take this case as a small claim. However, I am not dealing with this case at the first instance and I have to be obedient to the appeals regime which applies to junior appellant tribunals. I cannot describe the decision that was made by District Judge Asplin on 20 December of last year as plainly wrong. I have already made it clear that adopting some sort of score card approach to a brief ex tempore judgment at the conclusion of the argument, with both sides represented, is not usually a helpful way to decide whether or not a first instance tribunal has taken into account everything that should have been taken into account, and ignored matters that should not been. But on what the District Judge said, it is clear he had in mind the essential areas of the nature and the complexity of the case and also the overriding objective and in particular, the equality of arms. As I have indicated, although I would have reached a different decision, I cannot say that District Judge Asplin was wrong and for that reason therefore this appeal will have to be refused.

[14]The Appeal is dismissed, the defendant is to pay claimant's costs of appeal summarily assessed at £1,597. End of judgment Note 1 Gillies v. Black Horse Limited.

[2011] EW Misc 20