Error in Limited Mortgage Claim Dismissal Unveiled

Error in Limited Mortgage Claim Dismissal Unveiled

Published at 28 Apr 2025

The Birmingham County Court Upsets the Apple Cart, Revitalizes Unfair Relationship Claim Against Lenders

In the somewhat unassuming atmosphere of Birmingham County Court, Judge Saira Singh stirred things up on the 25th of April. Her judgment centered around the constraints of an unfair relationship claim (and the associated costs order) following Judge Longworth's earlier decision, who had brushed off the Howard's allegations against their lenders under section 140B of the Consumer Credit Act 1974 and slapped them with an order to cough up costs. Trevor and Anita Howard challenged this dismissal of their unfair relationship claim and the subsequent costs order.

THE NITTY-GRITTY

The Howards tackled an eye-watering GBP 121,750 fixed sum secured credit agreement with GE Money Mortgages (GE) on the 6th of October 2004, using their home as collateral, thanks to a registered credit broker, The Loan Company Limited. These middlemen bagged a cool GBP 4,261.25 from GE, while the Howards shelled out a broker's fee of GBP 1,250. However, the couple buckled under the weight of compounding debt, and in 2007, GE kickstarted possession proceedings, resulting in a suspended possession order in February 2008. The credit agreement was pushed over to Promontoria in September 2015, with the Howards continuing payments until the absolute repayment on the 13th of September 2019.

THE INITIAL SHOWDOWN

On the 17th of August 2023, the Howards stomped into the fray, filing a legal battle against GE and Promontoria. Their key allegations focused on the commission paid to the broker being a secret commission, with GE playing accomplice in the broker's breach of fiduciary duty. Additionally, they argued that their relationship with the respondents was unfair under section 140A CCA 1974. Judge Longworth, however, threw out all these claims, stating that the commission wasn't entirely cloaked in secrecy, and the breach of fiduciary duty claim was over the clock. She also waved away the unfair relationship claim as a tiresome rehash of unsuccessful previous arguments. Her final nail in the Howards' coffin was the GBP 9,600 in costs she imposed upon them, deeming their pursuit of the claim as unreasonable.

FRESH FIGHT IN THE BIRMINGHAM COUNTY COURT

On appeal, Andrew Clark, the Howards' legal eagle, packaged up some arguments for Judge Singh. He proposed that the six-year time limit for unfair relationship claims extends to September or October 2019, given that's when their relationship with Promontoria concluded. He also took Judge Longworth to task for dismissing the unfair relationship claim based on the same facts as the breach of fiduciary duty claim, as these claims have different time limits. Counsel for GE, George Mallet, and Promontoria's attorney, Jack Castle, defended Judge Longworth's call. They claimed that the relationship between the Howards and GE ended once the credit agreement was assigned to Promontoria in September 2015, and the unfair relationship claim was past its bedtime.

JUDGE SINGH'S VERDICT

In the end, Judge Singh agreed that Judge Longworth had made a boo-boo in dismissing the unfair relationship claim against Promontoria based on a limitation issue. She stated that the relationship between the Howards and Promontoria ended in September or October 2019 and, consequently, the original judge had "messed up the law" in dismissing the unfair relationship claim against Promontoria. This meant that this aspect of their case wouldn't turn into pumpkin at September or October 2025. Judge Singh dropped a few knowledge bombs on the UK Supreme Court ruling in Smith v Royal Bank of Scotland [2024], which supported the notion that the time limit for unfair relationship claims is six years from the end of the relationship. She also gave a shout-out to the decision in Carney v NM Rothschild & Sons [2018], where Mr Justice Waksman declared that an unfair relationship claim shouldn't be shot down solely because the facts underlying the claim were outdated, as long as brought as a separate cause of action.

The judge called it quits with the unfair relationship claim against GE, concluding that the claim was outlawed by the exclusionary rule established in Barnes v Black Horse Limited [2011]. In concluding remarks, the judge embraced Judge Longworth's dismissal of the claim against GE but expressed doubts about whether she had factored in all key aspects.

The court, therefore, found that while they backed Judge Longworth's dismissal of the claim against GE, she had committed errors of law in dismissing the unfair relationship claim against Promontoria. The costs order was swept aside, and now the dispute has been handed back to the Telford County Court for another round.

THE PARTIES

In Trevor Howard and Anita Howard (appellants) v GE Money and Promontoria (respondents), the claimants were represented by Andrew Clark of Nine Chambers, while GE and Promontoria received legal representation from George Mallet and Jack Castle of Henderson Chambers, respectively.

1. Judge Saira Singh's decision on the 25th of April, 2025, in the case Trevor Howard and Anita Howard (appellants) v GE Money and Promontoria (respondents), overturned a previous costs order, as she found limitations in Judge Longworth's dismissal of the unfair relationship claim against Promontoria.
2. Singh's ruling noted that the six-year time limit for unfair relationship claims extends to September or October 2019, as this marked the end of the Howards' relationship with Promontoria, according to the UK Supreme Court ruling in Smith v Royal Bank of Scotland [2024].
3. The judge also referenced the decision in Carney v NM Rothschild & Sons [2018], where Mr Justice Waksman determined that an unfair relationship claim should not be dismissed solely because the underlying facts were outdated, as long as it is presented as a separate cause of action.
4. The dispute has since been remanded back to the Telford County Court, as the court found errors of law in Judge Longworth's dismissal of the unfair relationship claim against Promontoria, while upholding her dismissal of the claim against GE Money.

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