TFG Security Limited v Howard Shade & Anor

TFG Security Limited v Howard Shade & Anor

The defendants are estopped from denying that the loan was for business purposes due to their declarations and the claimant's reliance. The loan agreement and mortgage are enforceable. The default interest rate above industry standard (4% vs 3%) and the increased exit fee are unfair; the court reduces the default interest to 3% and the exit fee to £1,276. No other unfairness or penalty is found. Possession is ordered; quantification of sums due is adjourned.

Parties
Claimant: TFG Security Limited; First Defendant: Howard Shade; Second Defendant: Jayne Shade
Jurisdiction
England and Wales
Judgment Date
22 January 2019
Procedural Posture
Civil Property/contract / Trial Judgment
Outcome
Possession order granted; loan agreement and mortgage enforceable; certain terms varied for unfairness; quantification of sums due adjourned.
Legal Topics
Enforceability of Loan Agreements, Regulatory Compliance, Unfair Contract Terms, Penalties in Contracts, Unfair Relationship Under Consumer Credit Act
Contract Law Property Law Consumer Credit Enforceability of Loan Agreements Regulatory Compliance Unfair Contract Terms Penalties in Contracts Unfair Relationship Under Consumer Credit Act

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Parties

TFG Security Limited

Claimant

Howard Shade

First Defendant

Jayne Shade

Second Defendant

Procedural Posture

Civil Property/contract / Trial Judgment

Legal Issues

  1. 1 Whether the loan agreement and mortgage are unenforceable due to regulatory failings under the Financial Services and Markets Act 2000 and Consumer Credit Act 1974
  2. 2 Whether the terms of the loan agreement are unfair or constitute penalties
  3. 3 Whether the relationship between the claimant and defendants is unfair under section 140A of the Consumer Credit Act 1974

Ratio Decidendi

The defendants are estopped from denying that the loan was for business purposes due to their declarations and the claimant's reliance. The loan agreement and mortgage are enforceable. The default interest rate above industry standard (4% vs 3%) and the increased exit fee are unfair; the court reduces the default interest to 3% and the exit fee to £1,276. No other unfairness or penalty is found. Possession is ordered; quantification of sums due is adjourned.

Court Disposition

Possession order granted; loan agreement and mortgage enforceable; certain terms varied for unfairness; quantification of sums due adjourned.

Orders

  • Possession of the charged property granted to the claimant.
  • Default interest rate reduced to 3% on unpaid balances.