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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Boyo v Lloyds Bank Plc [2019] EWHC 2279 (QB) (23 August 2019) URL: http://www.bailii.org/ew/cases/EWHC/QB/2019/2279.html Cite as: [2019] EWHC 2279 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
Aniekan Mary Boyo |
Claimant |
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- and - |
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Lloyds Bank Plc |
Defendant |
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The Defendant represented by Mr Lee Finch of Counsel,
(instructed by TLT Solicitors)
Hearing dates: 9th and 10th July 2019
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Crown Copyright ©
Anthony Metzer QC:
The Claim and Background Circumstances
"Recent risk assessment on your accounts has highlighted concerns and as a result we have taken the decision to close all the accounts you currently hold with us in two months' time. The two-month notice period is set out in our terms and conditions and starts from the date of this letter. In the meantime, I have placed a block on all of your accounts to stop all transactions. You will need to make other arrangements for any credits, direct debits or standing orders set up on your accounts as no further payments will be made …
"If you are in debt with us on any of your accounts you will need to make arrangements to repay the outstanding balance owed to us. We understand that it may not always be possible for you to repay the full amount within two months. If this is the case, you need to visit one of our branches to discuss this further. Please make sure you take this letter with you as a reference".
"Whilst it is appreciated Ms Boyo's frustration with this matter, Lloyds TSB's decision to close her account is a legitimate exercise of its commercial judgment. This is not something with the Financial Ombudsman Service ordinarily investigates and it is not appropriate to do so in this case. The decision is in line with the terms and conditions of the account and therefore there is insufficient evidence of a bank error".
"Where we cannot return an account to order with the customer or no payments are received, we take a decision to close an account and transfer the outstanding balance to Recoveries. Our records show that your account was closed on 4 January 2013 and the sum of £1,080.90 transferred to Recoveries.
For clarity, the benefit to customers when this action is taken is that no further interest and charges are applied; however a default is recorded which remains on your credit file for a period of six years".
"After reading your further comments, I can confirm that a Formal Demand letter was sent to you on 4 December 2012. This notified you that your account would be closed and that a default would be applied to your credit file unless you cleared the arrears or came to an arrangement with us. Our records show you called us on 12 December 2012 and confirmed you had received our letter. I am therefore unsure why you feel we have failed to notify you of the consequences of not repaying the amount owed to the bank.
"I have already explained the default was correctly applied to your credit file when your account was closed and transferred to Recoveries on 4 January 2013. It will remain on your credit file for a period of six years, no mistake has been made in this regard".
"As part of the closure process in relation to the above account, we issued a Default Notice. Our Default Notice letters are computer produced and we are not obliged to retain a copy of these. Our records show that this letter was issued by first-class mail to you on 4 December 2012 and this was not returned as undelivered. I believe, therefore, that it is correct for us to consider that this legal document should be deemed as served".
(1) Does the Claimant have any defamation or malicious falsehood claim against the Defendant;
(2) Has the Defendant breached its contract with the Claimant;
(3) Has the Defendant breached any common law duty it owed to the Claimant?
Trial Management
Approach to the Evidence
"To place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts" (at Paragraph 22).
The Default Notice Issue
Other Issues
Factual Points of Dispute
- The account has been referred to a collection agency or in-house debit collection department
- The lender takes or has taken steps to cut off the service provided (or would do so if they are not prevented on social rather than commercial grounds or by other regulations, codes of practice or statute)
- The customer has not made satisfactory proposals in response to a demand for repayment
- The lender has evidence that an account has been opened or used for fraudulent purposes by the applicant.
The Law
Consequences of Not Serving a Default Notice
"I do not consider that either reporting to the CRAs or the related activities referred … come anywhere near amounting to enforcement if [other] activities are not enforcement. These activities are concerned with reporting to CRAs or other third parties and are not even steps taken prior to enforcement such as threatening proceedings would be.
"It follows that, in my judgment the reporting to CRAs and related activities do not constitute enforcement for the purposes of the Consumer Credit Act".
The defamation claim
"At Paragraph 9.1 (C)
… There is no doubt that it is defamatory of someone to say that he is a delinquent or unauthorised overdraft… the defamatory meaning, which includes the inferences that a hypothetical reasonable reader would draw from the literal facts stated would be to the effect that "he had shown serious irresponsibility in financial matters by overdrawing money from his bank in grave excess of the limits it had allowed".
The Limitation Defence
"The discretion afforded by this section is largely unfettered. It requires the Court to balance any prejudices to the Claimant on the one hand and the Defendant on the other in allowing for the action to proceed or otherwise. All the circumstances of the case must be had in regard to assessing the justice of the matter with a particular reference to the length of, and reasons for, the delay and the extent to which passage of time since the expiration of the limitation period has had an impact on the availability or cogency of relevant evidence".
"It is for the Claimant to make out a case for the disapplication, or relaxation, of the normal rule. The reference by Parker LJ in Hartley v Birmingham District Council [1992] 1 WLR 968 at 9.80C to the 'paramount' importance of the effect of the delay upon the Defendant's ability to defend was made in the context of a discussion of what is meant by prejudice to the Defendant in the equivalent of Section 32A(1)(b). This has to be set against the prejudice to the Claimant. Under Section 32A(2), the Court must have regard to the 'the length of, and the reasons for, the delay on the part of the plaintiff', independently of 'the extent to which, having regard to the delay, relevant evidence is likely (i) to be unavailable or (ii) to be less cogent than if the action had been brought within the period…' The effect of the delay upon the Defendant's ability to defend cannot therefore be the only consideration".
The Defence of Truth
"… There would obviously be a serious risk that the words complained of would be found to have been substantially true; I have held above they were literally true, and there is much in the history of his dealings with the Bank, as set out above, which would support the truth of the defamatory inferences spelt out in the meaning at 9.1.C above".
Qualified Privilege
"In the modern world, it is plainly in the public interest that such authoritative credit information can be obtained and relied on by banks and other financial institutions, provided it is done in a lawful and duly-regulated matter which respects the rights of the general public and the individuals affected… The passing of the present information by Barclays into the CRAs pool, and its onward transmission by the CRAs to the Bank of Scotland and/or any other subscribers who may have accessed it for the purpose of deciding whether or not to accept an application from the Gatts for finance, plainly took place on occasions of common-law qualified privilege. This occasion protects the publications equally where the complaint is made MG and/or CG, subject to the question of express malice …"
"Qualified privilege is defeated if the Claimant can prove that the Defendant was actuated by express malice in publishing the words complained of. In this context, what must be shown as a dominant and improper motive i.e. other than the purpose for which the privilege was given; and generally this is proved by showing that the Defendant knew that his words were untrue, or at least did not believe them to be true: See Horrocks v Lowe [1975] AC 135. Negligence is not enough, unless it rises to the point of reckless indifference to truth. Where the Defendant is a corporation, it must also be shown that a particular employee or agent both participated in the publication and had the required malice state of mind: Broadway Approvals v Odhams [1965] 1 WLR 805".
The breach of contract claim
"If we end this agreement or stop providing an account or service, we will act in a manner we think is reasonably appropriate for the circumstances and will try to reduce the inconvenience to you".
The Common-Law Duty/Negligence Claim
Postscript
Anthony Metzer QC
Deputy Judge of the High Court