Johnson v FirstRand Bank Ltd (London Branch) (t/a MotoNovo Finance) [2024] EWCA Civ 1282 (25 October 2024)

Johnson v FirstRand Bank Ltd (London Branch) (t/a MotoNovo Finance) [2024] EWCA Civ 1282 (25 October 2024)

Car dealers acting as credit brokers owed claimants a disinterested and fiduciary duty when arranging finance. Payment of commission by lenders was secret or insufficiently disclosed in Hopcraft and Wrench, making lenders primary wrongdoers. In Johnson, partial disclosure negated secrecy but not informed consent; lender liable as accessory for breach of fiduciary duty. Statutory claim under Consumer Credit Act 1974 succeeded for Johnson based on misleading and inadequate disclosure.

Citation
[2024] EWCA Civ 1282
Parties
Appellant/claimant: Marcus Gervase Johnson; Respondent/defendant: Firstrand Bank Limited (London Branch) T/A MotoNovo Finance; Appellant/claimant: Andrew Wrench; Appellant/claimant: Amy Louise Hopcraft; Appellant/claimant: Carl Hopcraft; Respondent/defendant: Close Brothers Limited
Jurisdiction
England and Wales
Judgment Date
25 October 2024
Procedural Posture
Second Appeal (consolidated Appeals) / Court of Appeal Judgment
Outcome
Appeals allowed
Legal Topics
Secret Commission, Fiduciary Duty, Disinterested Duty, Accessory Liability, Disclosure, Rescission, Unfair Relationship, Consumer Credit Act 1974
Consumer Credit Contract Equity Agency Financial Regulation Secret Commission Fiduciary Duty Disinterested Duty +5 more

Case Brief

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Parties

Marcus Gervase Johnson

Appellant/claimant

Firstrand Bank Limited (London Branch) T/A MotoNovo Finance

Respondent/defendant

Andrew Wrench

Appellant/claimant

Amy Louise Hopcraft

Appellant/claimant

Carl Hopcraft

Appellant/claimant

Close Brothers Limited

Respondent/defendant

Procedural Posture

Second Appeal (consolidated Appeals) / Court of Appeal Judgment

Legal Issues

  1. 1 Whether car dealers acting as credit brokers owe a disinterested or fiduciary duty to consumers when arranging finance and receiving commission
  2. 2 Whether commission paid by lenders to brokers was secret or partially disclosed
  3. 3 Whether lenders are liable as primary wrongdoers or accessories for payment of secret or partially disclosed commissions

Ratio Decidendi

Car dealers acting as credit brokers owed claimants a disinterested and fiduciary duty when arranging finance. Payment of commission by lenders was secret or insufficiently disclosed in Hopcraft and Wrench, making lenders primary wrongdoers. In Johnson, partial disclosure negated secrecy but not informed consent; lender liable as accessory for breach of fiduciary duty. Statutory claim under Consumer Credit Act 1974 succeeded for Johnson based on misleading and inadequate disclosure.

Court Disposition

Appeals allowed

Orders

  • Rescission of credit agreements in Hopcraft and Wrench
  • Repayment of commission to claimants