‘Promontoria v Samra’: High Court Unfair Relationship case

HHJ Cooke, sitting as a High Court judge, has handed down judgment in Promontoria (Henrico) Ltd v Samra [2019] EWHC 2327 (Ch). Thomas Samuels represented the claimant debt purchaser. This was the consolidated trial of two claims for possession of commercial properties provided by the defendant, Mr Samra, as security for business overdraft facilities. Mr Samra’s first defence was that the assignment by the original bank to the claimant was not proven on the face of the deed of assignment and accompanying documentation. His second defence was that there was an ‘unfair relationship’ under the Consumer Credit Act 1974 (the “CCA”) because of inter alia the bank’s failure to honour a ‘common intention’ that the facilities could be paid down over a 15 year term.

The Judge dismissed both lines of defence and granted possession to the claimant. At [26] he noted that the onus on the claimant (pursuant to CCA section 140B(9)) did not mean that where Mr Samra made allegations of fact, he did not have the burden of proving them to the normal civil standard. The onus placed on the creditor was as to the relationship between it and the debtor, and did not have the effect that factual allegations made by Mr Samra must be accepted unless they can be positively disproved by contrary evidence.

At [81] the Judge found there was no ‘common intention’ that the bank would be willing to give Mr Samra facilities for a further 10 years in 5 years’ time. Insofar as the bank may have given any indication of its attitude to property lending in 2007, from which Mr Samra formed such a hope or expectation, in the absence of any commitment by the bank to offer those facilities, it was not unfair for the bank not to do so when its commercial strategy changed.

At [95], to the extent that the bank sought to persuade Mr Samra to agree interest rate hedging, there was no indication there was anything unfair in such persuasion. The bank offered him improved terms if he agreed hedging, but the terms otherwise available were not made artificially strict, so as to force Mr Samra to accept. Mr Samra knew what hedging involved.

Judgment available here: Promontoria v Samra