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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Gregory v MBNA Europe Bank Ltd [2013] EWCA Civ 716 (21 May 2013) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/716.html Cite as: [2013] EWCA Civ 716

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CLERKENWELL & SHOREDITCH COUNTY COURT
(HIS HONOUR JUDGE MITCHELL)

		Royal Courts of Justice Strand, London, WC2A 2LL
		21st May 2013

Lord Justice Underhill:

1. The applicant was sued in the county court for some £8,000 said to be due on his credit card. The claimant applied for summary judgment. The applicant had two defences – (1) that the claimant had never served a default notice under section 87 of the Consumer Credit Act 1974, and (2) that he had agreed on the telephone with one of the claimant's staff that he could enjoy a payment and interest "holiday" because of some unfortunate circumstances in his personal life. District Judge Sterlini in the Clerkenwell and Shoreditch County Court held that neither defence had a real prospect of success. The applicant appealed, but on 29 May 2012 HHJ Mitchell dismissed the appeal. The applicant's application for permission to appeal to this court was dismissed on the papers by Lewison LJ. He has exercised his right to an oral hearing. He is represented by Mr Hugh O'Donoghue of counsel, who has put his case effectively and with appropriate focus.
2. I will take the two defences in turn.
3. I start with the alleged non-service of the default notice. The burden of proving that it had been served, at least once it had been put in issue, was on the claimant. By reason of the provisions of section 176 of the 1974 Act, it could establish a prima facie case of service by showing that the notice had been posted; that is common ground. The claimant produced a copy of the default notice, which shows that it was generated on its system; but it adduced no direct evidence from any witness who was in a position to aver that it had been sent or of the details of the system which should have produced a posting. But both the district judge and HHJ Mitchell said that it was an obvious inference, given that the document was in fact generated, that it was also posted. HHJ Mitchell referred to the presumption of regularity. There was also evidence that it had not been returned, and that the claimant had received other documents sent to the same address both before and afterwards. That last point was perhaps more relevant to the other side of the equation, which was the applicant's evidence: this consisted of a straightforward denial that he had ever received the notice.
4. The judge held that on that evidential basis there was no realistic prospect that a judge at trial could find that the notice had not been sent. What Mr O'Donoghue submits is that the applicant's denial of receipt raised a quintessential issue of fact which could not properly be resolved without a trial, and all the more so where there had been no particularised evidence of the claimant's system. The judge was wrong, as he put it to me this morning, to draw a double inference based simply on an assumption that there would have been regular compliance with the system, in circumstances where no evidence of the system had been put forward and there had been no disclosure in relation to it. He also submits that if it were possible for lenders to prove service of a default notice on such, as he says, perfunctory evidence that would undermine the scheme of consumer protection under the Act. And he says that the question of what evidence a lender needs to supply in these circumstances is a question of principle and an important one, because of the frequency with which this issue is likely to arise, so that the second appeal criteria are satisfied.
5. I have given this some careful thought, both when I first read the papers and again in the light of Mr O'Donoghue's submissions, but I am afraid I do not accept that it is arguable that the applicant's bare denial of receipt gave rise to a triable issue, in the light of the evidence that the notice was sent. In my opinion, HHJ Mitchell was right to say that, even though the evidence of the system could have been sharpened up somewhat, the fact of the creation of the default notice did justify a common sense presumption that the document, once produced, would in fact have been sent. In the absence of any other evidence there was no realistic prospect that a judge would have found otherwise merely because the applicant said that he had not received it.
6. Even if I were wrong about that, I would not regard this ground as satisfying the second appeals test. Mr O'Donoghue beguilingly referred to the fact that such a situation must be a very common one throughout this industry and that there ought to be a common standard set for what was necessary in order to prove postage. I am afraid I do not see it that way. In my view this remains a question of what was proved in the circumstances of the particular case and gives rise to no general issue of principle within the meaning of the rule.
7. I turn to the alleged oral agreement. As to this, the pleaded defence says simply "C's agent had agreed that D would be granted a payment holiday and that the interest being charged would be frozen for the period."
8. That is obviously inadequate. There have, however, been a number of slightly more particularised statements made by the applicant or his solicitors, Charles Henry and Co., in correspondence and in his two witness statements. The judge went carefully through those in his judgment and exposed a number of inconsistencies. I will not repeat that exercise. The district judge held that those inconsistencies meant that the applicant's account was simply incredible. HHJ Mitchell took a somewhat different approach, no doubt recognising that it was not appropriate to make a finding which might be tantamount to a finding of dishonesty on a summary trial. His point was that the applicant had simply never pleaded, or even advanced in evidence, a coherent account of what the agreement which he said had been made was, or of anything that could be capable of giving a defence. On the face of it, the most authoritative account would be that given in the two letters of 24 September, one from himself and one from Charles Henry, purporting to record the agreement as made earlier that day. Those, however, purport to record only a "payment holiday" and interest freeze for two months, which would be no defence to a claim commenced, as this was, in June 2010. It is suggested that it might to a limited extent affect the quantum of the amount due, though even that I cannot accept. As the judge said: "This was his defence and he was under a duty to plead it clearly, and he failed to do so. For that reason, I am satisfied there was no real prospect of his satisfying the court on the matter."
9. Mr O'Donoghue has not been able to persuade me that that approach by the judge was even arguably wrong. The fact is that it was up to the applicant, who had plenty of opportunity to do so, to put forward a clear and coherent account of what he said had been agreed, and he had not done so. Even if I were wrong about that, and I do not think that I am, this point even less than the first raises no possible point of principle capable of satisfying the second appeal criteria. The fact is that, in accordance with the policy governing appeals now, the applicant has had two clear opportunities to persuade the court that he has a defence on this point and he has been unable to put forward a coherent defence. I should also add that there is no prospect, with respect, of his establishing that there are other compelling reasons for allowing a second appeal, in circumstances where there is no issue that he owes the money, and the only question would be whether he had some kind of formal defence to the claim made at the time or in the form that it was.
10. I am grateful to Mr O'Donoghue, who has said all that could be said for the applicant, but this application must be refused.

Order: Application refused.