Court refuses permission to appeal on CCA default notice

The Supreme Court has refused the Appellant debtor’s application for permission to appeal the Court of Appeal’s decision in Goodinson (Appellant) v PRA Group (UK) Ltd (Respondent) [2021] EWCA Civ 957, confirming that it raises no arguable point of law.

As a result of the Court of Appeal’s decision, a District Judge is entitled to infer, on the evidence, that a default notice had complied with the Consumer Credit Act 1974 (CCA) even though the original notice had not been produced.

The Appellant entered into a regulated credit agreement regulated by the CCA with MBNA and following his default under that credit agreement, MBNA assigned its rights under the agreement to the Respondent, who commenced an action against the Appellant to recover the outstanding debt. As part of that action, the Respondent had to prove that a default notice, in compliance with sections 87 and 88 of the CCA, had been served on the Appellant. The Respondent relied upon a “reconstituted” notice, rather than a facsimile of the notice which was in fact served upon the Appellant. The notice was considered to be “reconstituted” since it was not a copy of the notice that had been served, however it was a “reprint of the document […] electronically stored by MBNA” which bore some modifications, including an update to the company name and the FCA disclosure statement. The Respondent’s Particulars of Claim did not specify that the notice had been “reconstituted” and equally, the Respondent’s disclosure did not specify that the notice had been “reconstituted”. The Appellant’s defence denied receipt of the notice.

Two preliminary issues which arose for consideration were:

  1. Whether the default notice produced complied with the statutory requirements?
  2. Whether the default notice had been served on the Appellant?

The Appellant contended that the Respondent could not prove its case since there was no copy of the default notice.

Some contemporaneous records appeared to show what information would have appeared in the notice sent to the Appellant. At first instance, the Judge held that it was unlikely that MBNA would have recreated these contemporaneous records and therefore, they should be treated as a reliable source of evidence and notwithstanding certain minor errors in the content of the notice, he was satisfied that the notice had been served on the Appellant.

Upon the Appellant’s appeal, the Court of Appeal determined that the Judge was entitled to reach the conclusions which he did based on the evidence before him which he considered in some detail. Fundamentally, the Court of Appeal determined that there was no rule or requirement in law, that a creditor could only prove their compliance with sections 87 and 88 of CCA by producing the original notice which it had sent to the debtor, and the Court of Appeal was concerned that if such a rule were to exist, it would enable a debtor to escape in every case where the original was not produced, “no matter how good the explanation for [a creditor’s] failure to produce it and however compelling the secondary evidence”.

The Court of Appeal did confirm that its decision did not simply entitle creditors to rely upon secondary evidence to prove their compliance with CCA but the facts and circumstances of each case must be considered with “a healthy common-sense approach to the specific evidence adduced”. The Supreme Court’s refusal to provide permission for appeal means that the Court of Appeal’s judgment shall stand.

Harshil Patel