London North Securities Ltd v Tony James Meadows & Anor, Court of Appeal - Civil Division, July 27, 2005, [2005] EWCA Civ 956

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London North Securities Ltd v Tony James Meadows & Anor, Court of Appeal - Civil Division, July 27, 2005, [2005] EWCA Civ 956

Case No: B2/2004/2393/CCRTF

Neutral Citation Number: [2005] EWCA Civ 956

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE SOUTHPORT COUNTY COURT

HIS HONOUR JUDGE HOWARTH

Case Number 9002526

Royal Courts of Justice

Strand, London, WC2A 2LL

Wednesday, 27 July 2005

Before:

THE MASTER OF THE ROLLS

LORD JUSTICE WALLER

and

LORD JUSTICE LLOYD

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Between :

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(Transcript of the Handed Down Judgment of

Smith Bernal Wordwave Limited, 190 Fleet Street

London EC4A 2AG

Tel No: 020 7421 4040, Fax No: 020 7831 8838

Official Shorthand Writers to the Court)

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Adrian Palmer Q.C. and Neil Levy (instructed by Messrs Blatchfords) for the Appellant

Giles Wingate-Saul Q.C. and Paul Brant (instructed by Messrs Chestnutts)

for the Respondents

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JudgmentLord Justice Lloyd:

This is the judgment of the court.

1. This appeal raises issues under the Consumer Credit Act 1974 in relation to a credit agreement, incorporating a legal charge, made between Home Loans (Northern) Limited as lender and the Defendants as borrowers on 5th April 1989. Immediately upon making the agreement Home Loans (Northern) transferred the benefit of the loan and the security to another company, then called North Mount Securities Limited. That company has changed its name and is the Claimant, London North Securities Limited.

2. The loan was expressed to be of £5,750 at an APR, assuming no variation, of 34.9% per annum. The security given by the legal charge was over the Defendants' home, 49 Gosforth Road, Southport. This was already subject to two prior mortgages: the first in favour of Birmingham Midshires Building Society and the second to Pioneer Mutual Insurance Company Limited. Both of these dated from 1986 when the Defendants had bought the house. By 1989 the Defendants were in arrear on both prior mortgages, though on the second only to a very modest amount. They wanted to spend money on improving their house but they would not be able to borrow more money from a bank or building society. Accordingly they responded to an advertisement in the press for non-status lending. This led them eventually to enter into the credit agreement and legal charge and to commit themselves to additional monthly instalments of £146.94 per month.

3. They were unable to keep up the payments due on the credit agreement. The Claimant brought possession proceedings against them in 1990 and obtained a suspended possession order. Thereafter there were many applications to enforce the order and attempts to resist enforcement. The Defendants were still in possession of the premises in 2003 when for the first time they received advice that there might have been a defence to the claim for possession under the credit agreement.

4. Eventually on 4th February 2004 the original possession order was set aside and permission was given to the Defendants to defend the claim on terms. The case came on for trial in the Southport County Court, but sitting in Liverpool, in October 2004 before His Honour Judge Howarth. By then the Claimant claimed that over £140,000 was due even calculating the sums at a concessionary interest rate of 27%, but with monthly compounding, and including some £43,000 for legal costs, with ...

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