Christopher Berry v Black Horse Limited

Beverley Potter’s claim brought pursuant to section 140A of the Consumer Credit Act 1974 against Canada Square Operations Ltd. was originally heard in 2019 by Mr Recorder Rosen QC. He held that the running of limitation had been postponed by the operation of section 32 of the Limitation Act 1980. An appeal against his decision was dismissed by Jay J. A further appeal was dismissed by the Court of Appeal which gave permission for an appeal to the Supreme Court. The Supreme Court dismissed that appeal. In 2020, District Judge Stone sitting at Bodmin County Court found in favour of Karen Smith in her claim under the same legislation against Royal Bank of Scotland plc and an appeal was dismissed by HHJ Gore QC. The Court of Appeal allowed an appeal against his decision on the issue of when time started to run for the purposes of limitation. On 4 October 2023, the Supreme Court reversed the decision of the Court of Appeal. The question for me to decide is whether all of this was to naught because no limitation period in fact applied.

This is an appeal against the decision of District Judge Field sitting at Aldershot & Farnham County Court on 6 February 2024 by which she declared following a Fast Track trial that the claim was barred by the operation of the Limitation Act 1980 and dismissed the claim. The Claimant Mr Berry (the Appellant in this appeal) is represented by Mr Budworth of Counsel. The Respondent and the Defendant below, Black Horse Ltd, is represented by Mr Salzedo KC and Mr MacDonald of Counsel. None of the Counsel who appeared before me appeared below.

I heard oral submissions on 8 July 2026 and then reserved judgment. I did so because this appeal raises a point of profound significance. In short, the sole ground of appeal is that the District Judge’s decision was wrong because the Limitation Act 1980 does not prescribe a limitation period for claims brought pursuant to the provisions of sections 140A-C of the Consumer Credit Act 1974.

On 18 June 2005, now over 20 years ago, the Appellant purchased a Volkswagen Golf from a dealer variously identified as Car Giant and Twickenham Volkswagen. The cash price of the vehicle was £8,588.50. The Appellant paid a deposit of £500 and entered into a hire purchase agreement with the Respondent for the balance over a term of 48 months at a flat rate of 8% and a stated APR of 16.5%.

The arrangements for finance were made through the dealer acting as a credit broker. The Respondent paid the dealer commission totalling £935.80 made up of direct commission of £369.60, a ‘volume bonus’ of £404.43 and a ‘marketing support payment’ of £161.77. The first of these sums was paid under the terms of a Discretionary Commission Arrangement, a model now banned by the Financial Conduct Authority.

There is no evidence that the Appellant was informed either of the fact or of the amount of these commission payments. Just over 2 years after purchasing the vehicle he settled the balance outstanding on the finance agreement and subsequently sold the vehicle.

The Appellant’s claim was issued on 28 March 2023. The claim form (doubtless in an attempt to avoid paying the additional issue fee that would otherwise be due) baldly states that “The claim is not a claim for money”. It however acknowledges that the outcome is likely to be a return of monies to the Appellant. The particulars of claim seek rescission of the agreement on various bases that cannot now be pursued following the decision of the Supreme Court in Hopcraft v. Close Brothers Ltd. [2025] UKSC 33. However, in the alternative, the Appellant seeks a declaration that an unfair relationship within the meaning of section 140A of the 1974 Act existed between the parties, repayment of all sums paid pursuant to the agreement, an account and such other relief as may be just.

The issue of limitation was not lost on the Appellant’s Solicitors. The particulars of claim included a pre-emptive assertion at paragraph 40 that “the claim is not statute barred’. In paragraph 41 (although it is not clear whether this is by way of elucidation or alternative), reliance is placed on the provisions of section 32 of the 1980 Act. The defence denied liability generally. It asserted that the claim was barred by the operation of the 1980 Act, relying (by inference) on section 9. It denied that there had been any deliberate concealment for the purposes of section 32 and in the alternative asserted that the Appellant could with reasonable diligence have discovered the facts relevant to his claim. Finally, it was alleged that the claim was in the alternative barred by the equitable principle of laches.

When the matter came on for trial before the District Judge, a great deal of time was taken up in argument regarding elements of the claim that cannot now be pursued. It appears to have been common ground between the trial advocates that there was an applicable limitation period. Counsel for the Claimant contended that in relation to the unfair relationship claim it had not yet started to run but in the alternative placed reliance upon section 32.

The District Judge in her commendably clear ex tempore judgment held that the limitation period for a claim brought pursuant to section 140A was six years running from the end of the parties’ relationship. On that basis, primary limitation had expired. She further held that the Respondent had not concealed any material fact from the Appellant, still less had it done so deliberately. In any event, she held that the Appellant could with reasonable diligence have found out about the payment of commission during the running of time.

The appeal as originally drawn attacked various aspects of the District Judge’s decision. Of relevance, it challenged as perverse the District Judge’s findings on issues relating to the operation of section 32. I refused permission to appeal on paper. Due to an administrative oversight on the part of the Court, the Appellant’s request for oral reconsideration was not referred for consideration until January 2025. When it was, I listed the renewed application for permission to appeal with appeal to follow if granted on 25 February 2025. Before that hearing could take place, the parties agreed a stay of proceedings pending the decision of the Supreme Court in Hopcraft.

Following that decision, the Appellant sought to lift the stay and I relisted the matter. At the hearing on 20 November 2025, it became apparent that there was a dispute regarding the nature of the submissions placed before the District Judge. I therefore directed the Appellant to obtain a transcript of the hearing and gave permission for the parties to file further written submissions on the issue of deliberate concealment only with judgment being reserved. This was overtaken by the Appellant’s application dated 30 March 2026 to amend the grounds of appeal following the decision of the Supreme Court in THG plc v. Zedra Trust Company (Jersey) Ltd [2026] UKSC 6. On 21 May 2026, for reasons that I gave in a short judgment on that occasion, I gave permission to amend and permission to appeal on the sole ground identified above.

Until 6 April 2007, ‘fair dealing’ in the context of consumer credit was regulated by the extortionate credit bargains provisions of sections 137 to 140 of the 1974 Act. Section 138 classified a credit bargain as extortionate if it required the debtor (or a relative) to make grossly exorbitant payments or otherwise grossly contravened ordinary principles of fair dealing having regard to a number of specified factors. If an extortionate credit bargain was found to exist, a court had a discretion to reopen the credit agreement and in doing so, section 139(2) provided that:

“…the court may, for the purpose of relieving the debtor or a surety from payment of any sum in excess of that fairly due and reasonable, by order—

(a)

direct accounts to be taken…between any persons,

(b)

set aside the whole or part of any obligation imposed on the debtor or a surety by the credit bargain or any related agreement,

(c)

require the creditor to repay the whole or part of any sum paid under the credit bargain or any related agreement by the debtor or a surety, whether paid to the creditor or any other person,

(d)

direct the return to the surety of any property provided for the purposes of the security, or

(e)

alter the terms of the credit agreement or any security instrument.”

Section 140A as inserted by the Consumer Credit Act 2006 casts the net much wider. The question for the court now is whether the relationship between creditor and debtor is unfair to the debtor having regard to any of the terms of the agreement (or of any related agreement), the way in which the creditor has exercised his rights under the agreement and “any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).”

If an unfair relationship is determined to exist, the Court is empowered to make an order under section 140B which may do any of the following:

“(a)

require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);

(b)

require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;

(c)

reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;

(d)

direct the return to a surety of any property provided by him for the purposes of a security;

(e)

otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;

(f)

alter the terms of the agreement or of any related agreement;

(g)

direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.”

In two important respects, the powers of the Court are significantly wider that those formerly conferred by section 139(2). The first is that the Court is not limited in exercising its powers only to the purpose of relieving the debtor or a surety from payment of any sum in excess of that fairly due and reasonable. Secondly, the powers emphasised by underlining above are new and wide ranging.

Section 214 of the Insolvency Act 1986 confers on the court power to declare that a director or former director of a company that has gone into insolvent liquidation is liable to make such contribution (if any) to the company’s assets as the court thinks proper. That power is exercisable if it appears to the Court that the director concerned is guilty of wrongful trading as defined by section 214(2).

Section 994 of the Companies Act 2006 permits a member of a company to apply to the court by way of petition on the grounds of unfair prejudice. Section 995 also permits such petitions to be brought by the Secretary of State. The Court’s remedial powers are contained in section 996 which provides that:

“(1)

If the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of.

(2)

Without prejudice to the generality of subsection (1), the court's order may–

(a)

regulate the conduct of the company's affairs in the future;

(b)

require the company–

(i)

to refrain from doing or continuing an act complained of, or

(ii)

to do an act that the petitioner has complained it has omitted to do;

(c)

authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct;

(d)

require the company not to make any, or any specified, alterations in its articles without the leave of the court;

(e)

provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly.”

Section 8 of the Limitation Act 1980 governs actions on a specialty. It provides that:

“(1)

An action upon a specialty shall not be brought after the expiration of twelve years from the date on which the cause of action accrued.

(2)

Subsection (1) above shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act.”

Section 9 of the 1980 Act is expressed to govern time limits for actions for sums recoverable by statute. It provides that:

“(1)

An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.

(2)

Subsection (1) above shall not affect any action to which section 10 or 10A of this Act applies.”

Section 36 of the Act provides that neither of these time limits affects a claim for specific performance, an injunction or some other form of equitable relief save in specified circumstances.

Section 32 of the Act governs the postponement of the running of time in cases of fraud, concealment or mistake. It provides (emphasis supplied) as follows:

“(1)

Subject to subsections (3), (4A) and (4B) below, where in the case of any action for which a period of limitation is prescribed by this Act, either—

(a)

the action is based upon the fraud of the defendant; or

(b)

any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or

(c)

the action is for relief from the consequences of a mistake;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.

(2)

For the purposes of subsection (1) above, deliberate commission of abreach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”

In Rahman v. Sterling Credit Ltd. [2001] 1 WLR 496, a two judge Court of Appeal confronted head on the issue that confronts me, albeit in the context of section 139:

“What is the limitation period (if any) applicable to an application to the court under section 139?”

It concluded that a claim brought pursuant to that section was an action on a specialty within the meaning of section 8 of the 1980 Act and that accordingly the limitation period was 12 years running from the date of the agreement.

The ratio of this decision is to be found in Mummery LJ’s analysis (at page 501 of the report) of the decision of the Court of Appeal in Collin v. Duke of Westminster [1985] QB 581:

“In Collin's case, which was concerned with the exercise by a tenant of the statutory right of enfranchisement under the Leasehold Reform Act 1967, the Court of Appeal held that the cause of action which the tenant had under the Act derived only from statute and as such was a claim upon a specialty for which the appropriate limitation period was that of 12 years provided by section 8 of the Limitation Act 1980. Mr McDonnell cited Oliver LJ, at p 601, where he said:

“The obvious and most common case of an action upon a specialty is an action on a contract under seal, but it is clear that ‘specialty’ was not originally confined to such contracts but extended also to obligations imposed by statute.”

Oliver LJ continued, at p 602:

“It seems to me to be quite clear that in the instant case any cause of action which the applicant has derived from the statute and from the statute alone. Apart from the statutory provisions he could have no claim and it is only by virtue of the statute and the regulations made thereunder that there can be ascertained the amount of the purchase price to be paid under the statutory contract the terms of which can be gathered only from the sections of the Act and the Schedules.”

That reasoning applies to the statutory right of a borrower to make application to the court under section 139. The cause of action arises out of and only out of those provisions of the 1974 Act. Apart from those provisions Mr Rahman would have no right to have the loan agreement reopened in that manner.”

Mummery LJ expressed the view that the position might be different if Mr Rahman sought to recover monies, as opposed to being relieved of his obligations going forward. In such a circumstance:

“…an objection could be raised that section 9 applies. The limitation period would be six years.”

This, as we shall see, is an example of the ‘look and see’ approach to limitation; that the court should analyse the relief sought in order to determine the applicable limitation period.

In Nolan v. Wright [2009] EWHC 305 (Ch) it was submitted that Rahman was wrongly decided, having been based on a concession by Counsel. HHJ Hodge QC sitting as a judge of the High Court rejected that submission, holding that he was both bound by Rahman and that it was correctly decided. He was (at paragraph 14) supportive of the ‘look and see’ approach to limitation:

“…subsequent decisions…demonstrate that the applicable period of limitation may change depending upon the nature of the relief that is claimed. Speaking for myself, I have little difficulty in understanding why a shorter period of limitation may be appropriate where the relief sought is the repayment of sums previously paid by the debtor to the creditor rather than the future regulation of the loan relationship between them.”

Patel v. Patel [2009] EWHC 3264 concerned a personal loan agreement, the terms of which were such that a loan of £56,450 had with interest by trial become an alleged debt of over £6M. The debtor sought relief pursuant to sections 140A and B of the 1974 Act. George Leggatt QC as he was then noted that, in contrast to section 139, section 140B gave the court ‘wider and more flexible powers’. It was conceded in argument that a claim brought pursuant to section 140A was an action on a specialty. The issues were whether the 12 year limitation period affected the scope of the court’s enquiry into the relationship and when time began to run. Further support was offered for the view that the applicable limitation period could vary depending on the relief sought. It was held that:

“It follows, in my view, that an application under s.140B can be made at any time during the currency of the relationship arising out of a credit agreement, based on an allegation that the relationship is unfair to the debtor at the time when the application is made, or at any later time (as s.140A(4) expressly permits) until the expiration of the applicable period of limitation after the relationship has ended. (That period is 12 years except in so far as the relief sought is the recovery of money which has been paid by the debtor, in which case the effect of s.8(2) is that the six year period prescribed by s.9(1) of the Limitation Act applies.)”

In Potter v. Canada Square Operations Ltd [2023] UKSC 41 it was common ground that section 9 of the 1980 Act applied to the running of time for the purposes of a section 140A claim. The issue before each of the courts referred to in my introduction was the application of section 32. This involved consideration of a number of issues but amongst them was the meaning of the expression ‘breach of duty’ in section 32(2).

This issue had been considered in a number of previous cases. In Giles v. Rhind [2008] EWCA Civ 118 Arden LJ as she then was endorsed the view of Richards J at first instance in these terms:

“The essence of the judge's approach was to hold that the expression “breach of duty” in s 32(2) was merely the “obverse” of the expression “right of action” in s 32(1)(b), by which he meant legal wrongdoing of any kind, giving rise to a right of action… He reasoned that this was the position under s 26 of the Limitation Act 1939, and it was not the intention of the 1980 Act to limit the scope of the pre-existing law. The judge thus held that the expression “breach of duty” applied to any legal wrongdoing in contradistinction to a breach of duty in a tortious or contractual sense or in the sense of a breach of an equitable or fiduciary duty (which I will call “the narrower meaning”).

38.

With one qualification, I agree with the judge's conclusion. The qualification I would make is this. I do not consider that the expression “breach of duty” includes any legal wrongdoing whatsoever. In my judgment there must be a legal wrongdoing of a kind that can properly be raised in action to which s 32 applies. I will call this the “wider meaning” of “breach of duty”.

39.

My reasons, which I amplify below, for holding that the expression “breach of duty” in s 32 (2) includes a claim under s 423 of the 1986 Act may be summarised as follows:

a.

The wider meaning is a legitimate meaning of breach of duty.

b.

S 32(2) was enacted pursuant to the recommendations of the Law Reform Committee's report on limitation in 1977 and the court can look at that report to see the mischief to which s 32(2) was directed. That Committee did not recommend that the new provision be limited to some causes of action only.

c.

The general structure of the 1980 Act indicates that s 32(2) is consistent with the wider meaning.

d.

The expression “breach of duty” is used in s 11 of the 1980 Act but in a different context and so does not necessarily restrict the meaning of “breach of duty” in s 32(2).

e.

s 32 does not require the phrase to be given the narrower meaning.

f.

The narrower meaning does not promote any part of the statutory purpose of s 32.”

The broad question of whether section 140A imposed a duty on lenders was subsequently addressed by Lord Sumption in Plevin v. Paragon Personal Finance Ltd. [2014] UKSC 61. He held that:

“Section 140A, by comparison, does not impose any obligation and is not concerned with the question whether the creditor or anyone else is in breach of a duty. It is concerned with the question whether the creditor's relationship with the debtor was unfair. It may be unfair for a variety of reasons, which do not have to involve a breach of duty….

Paragon owed no legal duty to Mrs Plevin under the ICOB rules to disclose the commissions and, not being her agent or adviser, they owed no such duty under the general law either.”

When Potter reached the Court of Appeal ([2021] EWCA Civ 339), Rose LJ defined the issue to be determined in these terms (emphasis supplied):

“Did the creation of an unfair relationship within the meaning of section 140A amount to a breach of duty by Canada Square towards Mrs Potter for the purposes of section 32(2)?”

The Court rejected a submission that Plevin had established that there could be no relevant breach of duty and adopted the reasoning of Arden LJ in Giles. Rose LJ pointed to the fact that Lord Sumption’s comments in Plevin were not addressed to section 32(2).

In the Supreme Court, the issues had narrowed. In the discussion on section 32(1)(a), Lord Reed noted with apparent approval the dicta of Lord Sumption in Plevin. At paragraph 101 of the judgment, he went on to say this:

“It is also important to appreciate that the duty of disclosure which the Court of Appeal considered to be inherent in section 32(1)(b) is distinct from the duty which in most cases underlies the claimant's right of action. In most cases, the right of action will be based on the alleged breach of an obligation owed by the defendant to the claimant. (There are, of course, exceptions, of which the present case is an example: the claimant's right of action under section 140A of the 1974 Act arises as a result of conduct by the defendant which does not amount to a breach of an obligation owed to the claimant.)”

In the context of section 32(2), the Supreme Court in Potter was concerned only with the meaning of ‘deliberate’ in that section. Accordingly, the meaning of ‘breach of duty’ was not directly addressed. Lord Reed described Arden LJ’s decision on this issue in Giles as being a ‘serious question of interpretation’ (at [142]).

In Smith v. Royal Bank of Scotland plc [2023] UKSC 34 it was common ground before the Supreme Court that the six year period prescribed by section 9 of the 1980 Act applied because the Claimant was seeking a financial remedy. The issue was that of when that time started to run. In his review of sections 140A and B, Lord Leggatt said this (at [25]) regarding their scope:

“Fifth, as well as requiring the court to make a very broad and holistic assessment to decide whether the relationship between the creditor and the debtor is unfair to the debtor, the legislation also gives the court, where a determination of unfairness is made, the broadest possible remedial discretion in deciding what order, if any, to make under section 140B. Section 140B gives the court an extensive menu of options from which to select but says nothing at all about how this selection may or should be made. On the face of the legislation the court's discretion is entirely unfettered. It is, I think, clear that the court is not in these circumstances required to engage in the kind of strict analysis of causation, loss and so forth that would be required, for example, in deciding what remedy to award in a claim founded on the law of contract or tort. Some constraint is, however, imposed by consideration of the general purpose of an order under section 140B. In principle, the purpose must be to remove the cause(s) of the unfairness which the court has identified, if they are still continuing, and to reverse any damaging financial consequences to the debtor of that unfairness, so that the relationship as a whole can no longer be regarded as unfair.”

Later in his judgment, Lord Leggatt noted (at [47]) that “…a claim for relief under section 140B of the 1974 Act is not based on any breach of legal duty and cannot be analysed in the same way.” He went on to review the authorities on section 139, including Rahman. He observed (at [49]) that it was hard to see the logic in the existence of differential limitation periods depending upon the remedy sought. He considered that section 140A must be considered to have been enacted in part to address the problems created by this line of authority.

The Supreme Court in THG was concerned with limitation as it applied to unfair prejudice petitions pursuant to section 994 of the Companies Act 2006. The Court of Appeal, in deciding that section 9 applied if the right to bring a claim was statutory and the only relief sought was monetary, had overturned what is described as 40 years of ‘received wisdom’.

In their joint lead judgment, Lord Hodge and Lord Richards began by reviewing the meaning of ‘An action upon a specialty’ in section 8 of the 1980 Act. This turned primarily on a consideration of the decision in Collin. The Court identified two constructions of that decision which it categorised as the ‘narrow Collin view’ and the ‘wider Collin view’. The narrow view is that section 8 applies only to enforcement of obligations created by a statute. The wider view is that section 8 applies to any claim which can only be brought under a statutory provision.

The Supreme Court concluded that the narrow Collin viewwas the correct one. On this basis, the Court of Appeal in both THG and in Rahman was wrong to have adopted the wider view as the basis for its decision. Rahman was not however formally overruled as the Court had not been invited to do so and had not heard argument on whether the decision could be justified on some other basis.

In applying this finding to section 994, the Supreme Court said this:

“116.

Sections 994–996 of the CA 2006 do not create any substantive obligations. Directors are, of course, subject to fiduciary obligations, and breach of those obligations may found a petition for relief under sections 994–996, but those sections do not impose those obligations. The sections, in appropriate cases where the breach of such obligations results in unfair prejudice to members, enable members to obtain such relief as the court thinks fit. … Relief is also commonly sought where there is no breach of an enforceable obligation, but where a state of affairs exists as regards a company that results in or constitutes unfair prejudice to one or more members. In short, sections 994–996 exist to provide relief in respect of a state of affairs.”

On that basis, section 8 was held to have no application.

The Court moved on to consider the application of section 9. It noted that the wording of that section was capable of ‘casting a wider net’ than ascertained statutory debts and approved earlier cases that had held that claims for unascertained sums due under a statute were also caught. However:

“137.

A claim under section 994…is not a claim to enforce a liquidated or unliquidated obligation arising under a statute but is a claim that the court should make such order as it thinks fit for giving relief in respect of the matters complained of. The court has the widest possible discretion as to the orders it may make, examples of which are listed in paragraphs (a)-(e) of section 996(2).

…

146.

The court's order may provide for the payment of a specified sum, by way of compensation or otherwise, but that is not a sum "recoverable by virtue of" sections 994–996. The respondent's obligation to pay it arises only by virtue of the court's exercise of its very wide discretion. The petition might request a monetary remedy, but it does not follow that the court will consider that to be the appropriate order to make.”

The Court adopted the views of Lord Leggatt at paragraph 49 of Smith regarding the absurdity of differential limitation periods. It deprecated the ‘look and see’ approach as being an “…evaluative process…particularly ill-suited to deciding whether an action is time-barred”. It rejected as even more impractical an alternative ‘wait and see’ approach in which the application of limitation would be decided when the relief had been determined. It concluded that:

“155.

For these reasons, we consider that section 9 of the 1980 Act does not apply to a petition under section 994, even if it does include a request for monetary relief. We consider that claims under statutory provisions which confer a wide discretion as to remedy are not claims to which section 9 applies. For these reasons also, we consider that Priory Garage, Hill v Spread Trustee and Rahman were wrongly decided as regards section 9 of the 1980 Act.

…

156.

… There is no warrant however for applying sections 8 or 9 of the 1980 Act to causes of action in which the court is given a wide discretion as to the nature of the relief which it may give, such as under section 994–996 of the CA 2006.”

Mr Budworth adopted the skeleton argument prepared by Jonathan Butters and Thomas Westwell of Counsel in support of the application for permission to amend the grounds of appeal. He argues that there is no authority binding on me on the issue in question. Rahman and Nolan were decisions on section 139. In all of the subsequent decisions relating to section 140A, it was assumed or conceded that a primary limitation period existed.

He argues that I should follow and apply the decision of the Supreme Court in THG. A claim under section 140A is not an action upon a specialty. Like sections 994 – 996 of the 2006 Act, sections 140A-C of the 1974 Act create no substantive obligations but instead exist to provide relief in respect of a state of affairs. Similarly, it is not by parity of reasoning in THG a claim that falls within section 9, even if in reality the only claim is for money.

In oral argument, he sought to rely upon extracts from Hansard recording the debates in the House of Lords on the Financial Services & Markets Bill as demonstrating the appreciation of the impact of THG in the context of section 140A. He also referred me to a commentary written by Fred Philpott in the New Law Journal. With respect to him, I did not necessarily find any of this to be of particular assistance.

He argued that there was no basis for any assumption that Parliament would have had Rahman in mind when enacting section 140A. Section 140A was an entirely new provision which widened the scope of both unfairness and remedy. The 1980 Act was (by its own terms) not all encompassing. There were species of claims (including for example those seeking rescission of contracts) which were free of any limitation period. He acknowledged that it was unusual for the assumption that there was a limitation period to have persisted through so many decided cases, but appeal courts only decide the issues that are placed before them. Assumptions about the law cannot change what is legally correct or cut against what was decided in THG.

He took me through the analysis of Collin in THG and argued that Rahman could no longer be regarded as good law. What he described as the ‘limited analysis’ behind that decision was based squarely on the wider Collin view. He argued that there is no material distinction between the provisions of the 2006 and 1974 Acts. The court enjoys a similarly wide discretion in both cases. Neither an unfair prejudice petition nor an unfair relationship claim entitle the claimant to any particular relief (or indeed any relief), even if well founded.He acknowledged the general public interest in preventing stale claims but noted that the Supreme Court in Smith and THG did not consider this to be a matter of concern.

In reply, Mr Salzedo KC argues in his printed case that it was prior to THG ‘settled law’ that the 1980 Act applied to claims brought pursuant to section 140A. He relies in this respect on the question that the Supreme Court posed itself in Smith and the answer that it gave:

“1.

What is the time limit for applying to the court for an order under section 140B of the Consumer Credit Act 1974 to remedy unfairness in the relationship between a creditor and a debtor?

…

2.

…The period of limitation begins to run only when the relationship ends and expires after six years.”

He notes that this proposition of law was the one advanced to the District Judge below and is the position adopted by the FCA for the purposes of its Motor Finance Consumer Redress Scheme.

Had there been any room for doubt, that doubt would have revealed itself in one or other of the cases referred to in this judgment. It is startling, he argues, that the Supreme Court in Smith and Potter wasted a considerable amount of time on deciding points that have no value. It is striking that none of the eminent Counsel or Judges in those cases appears to have appreciated the point now urged upon me by the Appellant.

Turning to THG, he notes that the outcome restored the long standing received wisdom as to the state of the law in the context in which it was decided. Whilst the Supreme Court determined that the wider Collin view was incorrect, it specifically elected not to overrule Rahman. The decision does not address section 140A, nor did it consider Nolan or Patel. It was not suggested in THG that either Smith or Potter had proceeded on a fallacious basis. Two of the Judges in THG (Lords Hodge and Briggs) had been a member of the panel in Smith and Lord Hodge had also sat on Potter. In short, I remain bound by Rahman and Patel, and Smith and Potter constitute persuasive authority.

Even were I to have a free hand, there are he argues important distinctions between the unfair prejudice and unfair relationship regimes. A cause of action for unfair prejudice arises as soon as the relevant conduct takes place. By contrast, a cause of action for unfair relationship does not accrue until the end of the parties’ relationship (Smith) or indeed when a determination of unfairness is made. Furthermore, the discretion under Section 996 is truly untrammelled with the forms of relief being examples only. By contrast, the only discretion enjoyed by the court under Section 140B is whether to grant relief. If so, it is restricted to a menu of options.

The first of those options, an order for the return of moneys paid, is purely a creature of statute and is (where the relationship has ended) the only practicable relief. It is therefore correct, he argued, to characterise any monies awarded to claimants as ‘recoverable by virtue of’ section 140B. On this basis, section 9 of the 1980 Act applies. This is a rational outcome, given that the running of time is postponed until the end of the relationship.

As an alternative, Mr Salzedo developed an argument that section 140A does create an obligation imposed by statute. He relies in this respect on the decision of the Court of Appeal in Potter, applying Giles, arguing that the Court found that the creation of an unfair relationship was a breach of duty on the part of lenders to act fairly towards their customers. If correct, this would be sufficient to bring such claims within the narrow Collin view.

In oral argument he largely followed and supplemented the points made in his skeleton. He contended that the unfair relationship provisions were formulated by Parliament specifically with an eye to the running of time, relying in this respect on the analysis of the developments in the legislation in Smith at paragraphs [48] – [53].

He took me to the dicta of George Leggatt QC in Patel as set out above. He contended that there was no evidence that the dicta relating to section 9 was the result of a concession and that this was therefore binding authority on the application of that section. Similarly, whilst it had not been argued that no limitation period applied in Smith, he did not accept that there had been any concession that it did.

As regards THG, he argued that the decision in so far as it related to section 8 was strictly obiter. He drew my attention to section 995 of the 2006 Act as demonstrating that wider issues (including the interests of others) were in play in unfair prejudice cases, whereas unfair relationships concerned only the parties to them. He drew my attention to the reference to Pratt v. Cook, Son & Co (St Paul’s) Ltd. [1940] AC 437. He pointed out that the reasoning in that case was not the subject of criticism or challenge in THG and could be applied equally to unfair relationship claims. He directed my attention in this respect to the dissenting judgment of Lord Burrows.

In reply, Mr Budworth submitted that the dicta in THG was not obiter simply because the point was academic. It would be wrong to speculate what might have been in the minds of the Supreme Court as regards the previous decisions. Neither section 140A nor section 996 gave rise to a duty or obligation to act fairly. The existence of the public intervention provisions of section 995 of the 2006 Act did not amount to a material distinction.

I begin with two preliminary observations. It is not in doubt that as a matter of general policy the law strives to prevent stale claims. I am also in no doubt that Parliament intended that (save to the extent that it provides otherwise) the 1980 Act should as far as possible be a comprehensive code governing the time limits for bringing actions at common law.

It must however be recognised that not all claims are subject to limitation periods – THG provides one example and another is to be found in section 214 of the 1986 Act. Furthermore, the application of limitation periods is not the only way in which stale claims are controlled. In Smith Lord Leggatt noted that:

“58.

The regime under sections 140A-C of the 1974 Act is not unique in treating the consequence of delay in bringing proceedings as a matter governed partly or even wholly by an exercise of judicial discretion rather than a statutory time limit. There are some types of claim which are not subject to any statutory period of limitation at all. One example is a claim for specific performance, where the only control for delay is the discretion to refuse relief by applying the equitable doctrine of laches: P&O Nedlloyd BV v Arab Metals Co (No 2) [2006] EWCA Civ 1717, [2007] 1 WLR 2288. Another example is a petition for relief under sections 994 to 996 of the Companies Act 2006...

59.

A similar discretionary approach applies in deciding whether to make an order under section 140B in a case where, although the claim is not time-barred, in view of delay by the debtor in making a claim and the reasons for the delay, the court considers it unfair in all the circumstances for the debtor to obtain the relief sought.”

In the final paragraph of his concurring judgment, Lord Hodge addressed the concerns expressed by the Respondent that theoretically there was no long stop date for unfair relationship claims and that banks may therefore be exposed to stale claims.

“The answer to this concern, to my mind, lies in the discretion which Parliament has given the court in relation to the appropriate remedy, if any, which it chooses to give. If a debtor sits on his or her hands in knowledge of the relevant facts, it would be, as Lord Leggatt states, inconceivable that a court would think it just to make an order under section 140B of the 1974 Act.”

In THG, Lord Hodge noted that several Commonwealth jurisdictions

“…do not appear to have encountered significant difficulty from the absence of a statutory limitation period in relation to such claims and from treating delay by the petitioner in initiating an application to the court as a factor militating against the grant of a remedy in the exercise by the court of its discretion under the relevant company legislation”.

My second preliminary observation relates to judicial precedent. In the adversarial system that operates in England and Wales, courts exist to try the issues that are placed before them on the parties’ statements of case. The general rule was recently expostulated by Males LJ in HITEX & ors. v Uniserve Ltd. [2025] EWCA Civ 1212 in these terms:

“48.

It is a basic principle of our adversarial system of civil justice that the parties identify in their pleadings the case which they seek to advance so that the issues for decision are clear, that evidence and submissions are directed to those issues and need not be concerned with other matters, and that the judge decides the issues thus identified and gives judgment accordingly. The principle was explained by Lord Justice Dyson in Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041, para 21, in a passage applied in Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287, [2021] BCC 640:

'In my view the judge was not entitled to find for the claimant on the basis of the third man theory. It is fundamental to our adversarial system of justice that the parties should clearly identify the issues that arise in the litigation, so that each has the opportunity of responding to the points made by the other. The function of the judge is to adjudicate on those issues alone. The parties may have their own reasons for limiting the issues or presenting them in a certain way. The judge can invite, and even encourage, the parties to recast or modify the issues. But if they refuse to do so, the judge must respect that decision. One consequence of this may be that the judge is compelled to reject a claim on the basis on which it is advanced, although he or she is of the opinion that it would have succeeded if it had been advanced on a different basis. Such an outcome may be unattractive, but any other approach leads to uncertainty and potentially real unfairness.'

…

50.

A judge is of course entitled to raise with the parties a point which they appear to have missed, and to decide the case on that basis, provided that the parties are given a fair opportunity to deal with it, whether by adducing evidence or by making submissions…”

It is of course right that courts will not generally decide cases on the basis of an evidently false premise or an unsustainable proposition of law, even if that proposition is adopted by both parties. However, by the time that cases reach the higher courts, the issues will be closely defined, often by senior Counsel. In such circumstances, it is not necessarily surprising that those courts will not ‘look under the hood’ to see whether some basic misunderstanding of the applicable law exists.

This is all the more so where the basis underlying the issues for decision appears to have been one that reflected the current understanding as to the law. Whilst therefore the situation that confronts me is unusual, even exceptional, it is not inconceivable. A settled understanding of the law clearly carries some weight but it is not decisive. As the leading judgment in THG notes:

“A settled practice, or widespread belief, is not the same as an authoritative decision on the meaning of provisions of the 1980 Act.”

The next question to be addressed is whether I am bound by any of the previous decisions relied upon by the Respondent. In my judgment, I am not. So far as Rahman is concerned, there are two points to be made. Whilst Rahman was not explicitly overruled in THG, it was held to have been incorrectly decided on the basis of the narrow Collin view. Secondly, Rahman was a decision on section 139 of the Act, not the much broader provisions of section 140B.

Patel was a decision on the wider powers conferred by section 140B. The claimant’s case was limited to the proposition that the claim was barred by the operation of section 8 of the 1980 Act (at [58]) and, as I have noted, it was conceded by the defendant that that section applied (at [61]). The issue before the Court was when time began to run.

On the basis of the court’s decision, the claim for relief was in time under section 8 and therefore a fortiori it would have been in time if section 9 had applied. In my judgment, the reference to the application of the six year period in paragraph 65 of the judgment is plainly obiter. It is also an application of the ‘look and see’ approach deprecated in Smith and THG.

In my judgment, the submission that Section 140A gives rise to a statutory duty not to act unfairly cannot be sustained in the face of the dicta in Plevin as apparently endorsed in Potter and restated in Smith. Giles involved, as Lord Reed noted in Potter, an issue of interpretation; what did ‘breach of duty’ mean in the context of section 32? To put it another way, had there been a breach of duty “…in Limitation Act terms”? (per Males LJ in Potter at [193]).

Although not part of my decision as I did not hear argument upon it, I note the recent decision of Dexter Dias J in R. (Barclays Bank UK plc v. Financial Ombudsman Service Ltd. [2026] EWHC 1555 (Admin) that sections 140A/B do not impose any positive duty, or ‘corrective responsibility’, on financial institutions to actively correct any unfairness or take steps to mitigate it.

How (if at all) should THG be applied to what the leading judgment referred to as the “…in some measure analogous…” provisions of the 1974 Act? It has been suggested that there is some distinction to be drawn in terms of the breadth of discretion. It is true that the discretion conferred by section 994 of the 2006 Act can properly regarded as being unrestricted save of course by rationality and context. It is also true that Section 140B does not ostensibly give the court quite the same degree of latitude.

It is however extremely difficult to see what form of relief could be sought that could not be catered for by the widely drawn menu of options in that Section and in particular by the power to “require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement.” In my judgment, the discretion was properly categorised as being the ‘widest possible’ in Smith.

There is in my judgment no material distinction on this basis, nor do I consider that the intervention provisions of Section 995 provide such a distinction. Furthermore, I fail to follow how the differing dates for the inception of a cause of action between the 1974 and 2006 Acts bears on the issue in hand. I do not see how the fact that Pratt was not overruled in THG assists the Respondent. Pratt was an example of a claim that properly fell within the scope of the narrow Collin view – see THG at [110].

In my judgment, the true relevance of THG is not in the breadth of the discretion but in the essential nature of the jurisdiction. Sections 140A and 994 (and 214 of the 1986 Act) are all ‘state of affairs’ provisions. They entitle a litigant to bring a claim on the basis that the manner in which they (or a third party) have been dealt with give rise to unfairness or wrongfulness within the meaning of the legislation (whether or not some separate breach of a contractual, tortious or statutory duty has occurred). They empower the Court in the exercise of a wide discretion to decide whether to remedy the unfairness or wrongfulness and if so, how. On the basis of the analysis of sections 8 and 9 of the 1980 Act in THG and an application of the narrow Collin view, these claims are not actions on a specialty or to recover a sum due by virtue of an enactment regardless of the relief sought. There is no need to ‘look and see’.

On this basis, claims of this kind (including claims under section 140A) are not in my judgment governed by the provisions of the 1980 Act. Instead, the control mechanism for claims that are stale lies in the breadth of the court’s discretion. Claims properly to be regarded as being affected by laches in the equitable sense - where the claimant has sat on their hands in circumstances where they knew or ought to have known that they had been the victim of unfairness - cannot expect to benefit from the exercise of the court’s wide discretion. In my judgment, the enquiry may well raise very similar issues to those that arise under section 32, albeit that the assessment may be less technical and more holistic. It may also be that courts will regard the limitation periods set by the 1980 Act (particularly that set by section 9) in what are in substance retrospective compensation claims to be a useful yardstick.

It is tempting to say that the District Judge’s findings in relation to section 32 might justify dismissing this appeal on the basis that her decision could be upheld on a different ground. There has however been no Respondent’s Notice on this basis and on reflection it would not be the right approach. The District Judge was not addressing herself to the correct test and may, or may not, have come to the same decision had she done so.

It does however seem to me that the District Judge had all the evidence she required in order to reach a decision. I will accordingly allow the appeal and set aside the District Judge’s order. I intend to remit the matter to the District Judge for a rehearing with further submissions on the issue of delay only. I will leave the parties to agree and/or suggest directions for this further hearing.

Neither party made any secret of their intention to appeal this decision regardless of the outcome given the potential ramifications. Had it lain within my power to grant permission to appeal on the basis provided for by CPR52.6(1)(b) I would have done so. I am however prohibited from doing so by CPR52.7 and accordingly permission must be sought from the Court of Appeal. It is to be hoped that the issue will receive authoritative treatment at an early date.