Durkin (Aberdeen Sheriff Court) v DSG Retail Ltd [2010] ScotCS CSIH_49 (15 June 2010)

Durkin (Aberdeen Sheriff Court) v DSG Retail Ltd [2010] ScotCS CSIH_49 (15 June 2010)

Section 75(1) of the Consumer Credit Act 1974 does not entitle a debtor who has rescinded a contract of sale to rescind the linked credit agreement with the creditor. The phrase 'a like claim' in section 75(1) refers to monetary claims (damages or restitution) and not to rescission of the credit agreement. The contracts are separate, and joint and several liability does not extend to rescission. The Sheriff Principal in United Dominions Trust Ltd v Taylor was wrong to hold otherwise. The appellant was not entitled to declarator of rescission of the credit agreement solely by virtue of rescinding the contract of sale.

Citation
[2010] ScotCS CSIH_49
Parties
Pursuer and Appellant: Richard Durkin; First Defenders and Respondents: DSG Retail Limited; Second Defenders and Respondents: HFC Bank PLC
Jurisdiction
Scotland
Judgment Date
15 June 2010
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From Sheriff Court
Outcome
Appeal refused; cross-appeal allowed in part; declarator of rescission of credit agreement refused; damages award reconsidered.
Legal Topics
Consumer Credit Agreements, Rescission of Contract, Joint and Several Liability, Damages for Injury to Credit, Interpretation of Section 75 Consumer Credit Act 1974
Consumer Law Contract Law Credit Law Consumer Credit Agreements Rescission of Contract Joint and Several Liability Damages for Injury to Credit Interpretation of Section 75 Consumer Credit Act 1974

Case Brief

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Parties

Richard Durkin

Pursuer and Appellant

DSG Retail Limited

First Defenders and Respondents

HFC Bank PLC

Second Defenders and Respondents

Procedural Posture

Civil Appeal / Appeal and Cross Appeal From Sheriff Court

Legal Issues

  1. 1 Whether rescission of a contract of sale entitles the debtor to rescind a linked credit agreement under section 75(1) of the Consumer Credit Act 1974
  2. 2 Whether the creditor is jointly and severally liable with the supplier for rescission claims under section 75(1)
  3. 3 Whether the appellant is entitled to damages for injury to credit and consequential losses

Ratio Decidendi

Section 75(1) of the Consumer Credit Act 1974 does not entitle a debtor who has rescinded a contract of sale to rescind the linked credit agreement with the creditor. The phrase 'a like claim' in section 75(1) refers to monetary claims (damages or restitution) and not to rescission of the credit agreement. The contracts are separate, and joint and several liability does not extend to rescission. The Sheriff Principal in United Dominions Trust Ltd v Taylor was wrong to hold otherwise. The appellant was not entitled to declarator of rescission of the credit agreement solely by virtue of rescinding the contract of sale.

Court Disposition

Appeal refused; cross-appeal allowed in part; declarator of rescission of credit agreement refused; damages award reconsidered.

Orders

  • Declarator that appellant rescinded credit agreement refused.
  • Damages award against second respondents (HFC Bank) set aside for reconsideration.