The High Court has refused, at this stage, Friends First Finance Limited’s claims for the return of a Porsche, payment of an outstanding balance and damages for its alleged wrongful detention. The court found that the hire-purchase agreement on which those claims were based did not comply properly with the Consumer Credit Act 1995. It invited the parties to make submissions on possible modification of the agreement.
The judgment, delivered by Ms Justice Iseult O’Malley on 2 May 2014, concerned a second car in proceedings that originally covered two vehicles. At the end of the hearing, the court had already given an ex tempore judgment concerning the other car and ordered the defendant to pay the amount outstanding under that agreement. The ruling in this judgment dealt with the separate Porsche dispute.
The defendant’s wife entered the original hire-purchase agreement for the Porsche in 2007. The judgment records a cash price of €216,000, reduced by an €86,000 part-exchange, with €130,000 financed. The agreement set the “half price” at €122,226.06. After the couple’s marriage encountered difficulties, the defendant began making payments and sought to take over his wife’s interest. She later consented in writing to assign her rights and obligations to him.
A new agreement, dated August 2010, described the cash price and credit as €87,274.62. Friends First said that figure represented the amount remaining under the original agreement, less outstanding interest. The defendant stopped paying in November 2011. Friends First terminated the agreement in February 2012, when it said €58,154 remained due, and demanded both payment and return of the car.
The judge found that the defendant intended to take over his wife’s interest and that the company’s file showed this was understood by staff. She rejected his account that he signed the new agreement in blank believing it was an assignment, and was not inclined to accept that he had not received a copy. Those conclusions did not resolve the enforcement claim in the company’s favour.
The judge found the new agreement defective because its stated cash price was not the price at which the car could be bought without credit; it reflected the outstanding amount on the earlier agreement. She also found that no new advance had been made, despite the company’s stated explanation of the consideration. In her view, the new agreement reset the point at which the statutory “half rule” could be used, despite €186,299.09 already having been paid under the arrangements. She considered the failure deliberate, rather than a clerical error, and said it may have misled the defendant about his rights.
The court refused the company’s requested reliefs at this stage. It did not make a final order determining the parties’ rights under a modified agreement. Instead, it proposed hearing realistic submissions on its powers under section 66, including modification, while leaving the company’s right to appeal open.