The Office of Fair Trading v Ashbourne Management Services Ltd & Ors [2011] EWHC 1237 (Ch) (27 May 2011)

The Office of Fair Trading v Ashbourne Management Services Ltd & Ors [2011] EWHC 1237 (Ch) (27 May 2011)

Ashbourne's standard form agreements, when offering payment by instalments for a fixed minimum term, constitute regulated consumer credit agreements under the Consumer Credit Act 1974. The agreements are not properly executed and are unenforceable without a court order. Terms requiring payment of the balance of the minimum term upon early termination are unfair under the Unfair Terms in Consumer Contracts Regulations 1999. The defendants' practices of demanding early repayment and registering defaults constitute unfair commercial practices under the Consumer Protection from Unfair Trading Regulations 2008.

Citation
[2011] EWHC 1237 (Ch)
Parties
Claimant: The Office of Fair Trading; Defendant: Ashbourne Management Services Ltd; Defendant: John Clayton-Wright; Defendant: Dawne Clayton-Wright
Jurisdiction
England and Wales
Judgment Date
27 May 2011
Procedural Posture
Claim for Enforcement Order Under Enterprise Act 2002 / Judgment
Outcome
Claim allowed
Legal Topics
Unfair Terms in Consumer Contracts, Consumer Credit Agreements, Unfair Commercial Practices, Regulated Agreements, Enforcement Orders
Consumer Protection Contract Law Credit Law Unfair Terms in Consumer Contracts Consumer Credit Agreements Unfair Commercial Practices Regulated Agreements Enforcement Orders

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Parties

The Office of Fair Trading

Claimant

Ashbourne Management Services Ltd

Defendant

John Clayton-Wright

Defendant

Dawne Clayton-Wright

Defendant

Procedural Posture

Claim for Enforcement Order Under Enterprise Act 2002 / Judgment

Legal Issues

  1. 1 Whether Ashbourne's standard form gym membership agreements are regulated consumer credit agreements under the Consumer Credit Act 1974
  2. 2 Whether the agreements contain unfair terms under the Unfair Terms in Consumer Contracts Regulations 1999
  3. 3 Whether the defendants engaged in unfair commercial practices under the Consumer Protection from Unfair Trading Regulations 2008

Ratio Decidendi

Ashbourne's standard form agreements, when offering payment by instalments for a fixed minimum term, constitute regulated consumer credit agreements under the Consumer Credit Act 1974. The agreements are not properly executed and are unenforceable without a court order. Terms requiring payment of the balance of the minimum term upon early termination are unfair under the Unfair Terms in Consumer Contracts Regulations 1999. The defendants' practices of demanding early repayment and registering defaults constitute unfair commercial practices under the Consumer Protection from Unfair Trading Regulations 2008.

Court Disposition

Claim allowed

Orders

  • Enforcement order granted restraining Ashbourne and its directors from using or recommending standard form agreements that are not properly executed regulated consumer credit agreements.
  • Order restraining use of unfair terms requiring payment of balance of minimum term upon early termination.