Last month one of our motor trader members attended Court to contest a Part 20 Claim brought against it by Santander under a finance agreement.
Since the Claim was for something less than £10,000 it had been listed for a small claims hearing, designed for litigants in person, where the no cost rule applies.
That said, the case was far from straightforward and the Motor Trader sensibly elected to instruct a barrister to represent its interests at the hearing. Both the Claimant Consumer and the Defendant Finance Company were legally represented before the Court such was the import and complexity of the matter.
The Vehicle, a BMW, was supplied in March 2015 (pre CRA 2015) by the Motor Trader to the Consumer after an MOT and a service and health check by a BMW main dealer, immediately prior to delivery.
Some 10 weeks and 1800 miles post-delivery, the Consumer reported a warning light to BMW.
The Consumer continued to drive the Vehicle for a further 50 miles before the engine failed.
It was found that the fault had been caused by a sheared bolt in the engine.
The Consumer claimed against the Finance Company that the Vehicle ought to have been fit for purpose at the time of its purchase. Section 14 of the Sales of Goods Act 1979 applied.
No independent expert evidence was available to the Court since permission had not been given for its use.
The evidence before the Court, from the motor trader, was that the Vehicle had been properly serviced and there were no issues with it at the time of delivery.
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The Judge found that the Vehicle was fit for its intended purpose at the material time.
On the evidence, the Judge rejected the argument by the Consumer that the fault had been underlying to some degree and found that the Vehicle was fit for purpose at the time of delivery, as required.
Accordingly, the Consumers primary claim against both Santander and our member failed, however, the Claim raised a further issue, which the Court was required to consider.
During negotiations pre-issue Santander had (wrongly) advised the Consumer that the Vehicle was not fit for purpose at the time of sale and that it would pay for any repairs not paid for by the Motor Trader. Subsequently, Santander said that the repairs were uneconomical and resiled.
The Consumer argued that he had brought his claim and incurred losses, in no small part, on the strength of what he had been told by Santander i.e. that the Vehicle was not fit for purpose.
Unfortunately, the Court was unable to order Santander to pay damages to the Consumer for breach of a compromise agreement, since on the facts no compromise had been identified.
Regardless, the Judge uncommonly invited the Consumer to apply for his costs against Santander under CPR 27.14, given its unreasonable conduct.
The Judge said Santander had been extremely unhelpful and wrong to make statements to the Consumer to the effect that the fault was present at the point of purchase and then retract its offer to pay on the grounds that it was “uneconomical”.
Further, Santander failed to advise or ensure that the Consumer understood that it was no longer supporting his position, as previously suggested.
Moreover, it failed to adduce or disclose expert evidence and potentially failed to pass on goodwill offers to the Consumer, which might have assisted him to make an informed decision as to how best to proceed with his claim.
The Judge expressed concern that Santander’s unreasonable conduct had prevented an earlier resolution and had some considerable sympathy for the Consumers predicament.
Given these exceptional circumstances, Santander were not only ordered to pay costs and witness expenses to our member but it was also ordered to pay the Consumers costs despite the fact that his claim against Santander had failed.
Sadly, in our experience, the arrogance and rank incompetence of the Finance Company in this case is not uncommon.
