This is a Court of Appeal judgment involving a debt of £5,000 owed by Mr Brandon in respect of his credit card with Amex.
On 19 June 2007, Amex issued a Default Notice asserting a breach of the agreement requiring remedial action in accordance with section 87(1) of the Consumer Credit Act 1974 (“the Act”). Mr Brandon did not make the minimum payment and so on 11 July 2007, Amex sent Mr Brandon a Notice of Cancellation.
Amex then issued proceedings and Amex applied for summary judgment. For Amex to succeed, Mr Brandon must have no real prospect of successfully defending the claim or issue in accordance with CPR Part 24.2(a)(ii).
Before the District Judge, Mr Brandon argued that the default notice required payment within 14 calendar days from the date of this Default Notice, but no allowance was made for the fact that he would not receive this notice on the same day and so he was given less than 14 days before the agreement was cancelled. Applying the usual Civil Procedure Rules on service the District Judge gave summary judgment for Amex regarding the default as de minimis (minimal) and something he was prepared to overlook. Subsequently, on appeal, the Judge held that as no enforcement action was taken within the 14 days, the argument was not relevant because Mr Brandon had not suffered “any prejudice at all by virtue of that technical breach…” At the appeal stage, Amex also sought to rely on the contractual agreement which entitled Amex to terminate as an alternative to the Default Notice. The Judge considered that this argument had not “simply been sprung” on Mr Brandon as it had been flagged previously.
The Court of Appeal noted that Mr Brandon’s stance was devoid of merit, but it could not conclude that there was no real prospect of a successful defence.
- On the first issue of the validity of the Default Notice the court was of the view that Amex was not entitled to summary judgment. Mr Brandon’s defence could not be dismissed “as being unreal”.
- As a matter of construction, the Court of Appeal could not accept that the 14 day period ran from service of the Default Notice as opposed to the date of the Default Notice. It could not be presumed that the Default Notice would have been served less than two days after being posted.
- As a matter of construction, the Default Notice had not or may not have allowed the minimum statutory period for Mr Brandon to remedy the breach and so the defect could not be overlooked as de minimis.
- As regards the arguments on contractual termination, the Court of Appeal considered whether it could rely on a clause in the agreement and proceed on the basis of non-default termination. The court was in broad agreement that sections 76 and 98 did not apply to this agreement. However, there had been no mention of this before the District Judge and the point was only mentioned in the skeleton argument before the Judge. The Court of Appeal considered that this was too significant a change of case and therefore it would not be fair to permit summary judgment on the basis of contractual determination without proper arguments.
Accordingly, Amex was not entitled to summary judgment and this matter would proceed to trial. As the Court of Appeal noted “regardless of the outcome of the appeal, Mr Brandon is a bad credit risk; for this conclusion, he has only himself to blame.”
Ian Karl Robert Brandon v American Express Services Europe Ltd [2011] EWCA Civ 1187