The defendant entered into a credit agreement with an international bank which was a “regulated agreement” within the meaning of the Consumer Credit Act 1974. Subsequently, the claimant company sued the defendant for the outstanding balance on the account and interest. Its case was that it was the assignee of the bank’s rights and that, before the assignment, the defendant had failed to pay the monthly instalments as required by the agreement; he had failed to remedy the breach following service by the bank of a default notice pursuant to section 87(1) of the 1974 Act; and the bank had terminated the agreement, with the result that the entire balance fell due. The claimant did not disclose or put in evidence the exact notice that, on its case, the bank had served on the defendant, or any exact facsimile copy of that notice. It instead produced a document in the form of a default notice, which was referred to as a “reconstitution”, and which was said to contain all the information required by section 87(1). It also adduced evidence of archived comment records of the bank. From that secondary evidence, the deputy district judge inferred that the notice sent by the bank was, so far as relevant, in the form of the “reconstitution”. The issues raised by the defence included whether any default notice had been served and, if it had, whether it was in the form required by the statute. The deputy district judge found in favour of the claimant on both issues. The defendant appealed against the finding that the notice was in the prescribed form. The judge dismissed the appeal, holding that such a finding had been open to the deputy district judge on the evidence before him. The defendant issued a further appeal, on the ground that the claimant’s cause of action depended upon service and expiry of a notice in a form prescribed by statute, and in such a case a judge was not entitled to infer that the notice was compliant with the formal requirements of the statute without having a copy of the notice. It was wrong of the judge to rely upon the archived comment records of the bank, when the claimant should have provided the primary evidence, namely the original default notice itself.
On the defendant’s appeal—
Held, appeal dismissed. It could not be laid down as a rule of law or practice that the creditor under a regulated agreement which bore the burden of proving, on the balance of probabilities, the service and expiry of a notice which complied with sections 87 and 88 of the Consumer Credit Act 1974 could only achieve that by production of the original notice. Such a rule was contrary to authority, insupportable in principle, hard to apply, and calculated to generate unjust results. The best evidence rule no longer applied; secondary evidence could be admitted and relied on, and the weight to be attributed to it would depend on all the circumstances of the case. That was all consistent with the modern approach to evidence. Yet the rule contended for would reintroduce and go beyond the rigidity of the best evidence rule. The debtor would escape in every case where the original was not produced, however good the explanation for failure to produce it, and however compelling the secondary evidence. For example, the debtor would escape even if the creditor had a convincing witness of impeccable character who could say from his own experience or observation that the document was completed with scrupulous adherence to all the prescribed requirements, and personally delivered to the debtor. In the digital age it might be hard clearly to identify and draw rigid distinctions between an “original” document and “secondary” evidence, since it was common knowledge that computer systems commonly generated a range of different documents from the same digital information. Points such as those carried still more weight when one considered that there were many forms of legal proceeding that required the service of a statutory notice in a prescribed form. Proceedings under the 1974 Act did not have any special or distinctive characteristics that placed them in a category that was all their own, or limited in scope. Accordingly, the implications of adopting a rule such as that proposed would seem to be very far-reaching indeed. However, it was not to be suggested that there was any rule to the opposite effect; that district judges should always find secondary evidence sufficient to establish the creation and service of a compliant statutory notice. Nor was it suggested that, as a rule, it was acceptable for creditors suing under regulated agreements to rely on secondary evidence. District judges would demonstrate a healthy common-sense approach to the specific evidence adduced by the party bearing the burden of proof, and the inferences that could properly be drawn in all the circumstances of the particular case. In the present case, the deputy judge took a critical and analytical look at the documentation, and produced a carefully reasoned assessment of it. Viewed as it should be, as an evaluation of the weight to be attributed to relevant and admissible evidence, and the inferences that should be drawn from that evidence, the judge did not make any error of principle, nor was his decision irrational (paras 38–42, 45, 47, 48, 49).
Thomas Brennan-Banks and Joanna Connolly (Solicitor-Advocate) (instructed by Joanna Connolly Solicitors, Liverpool) for the defendant.
Richard Jones QC and Philip Mantle (instructed by Howell Jones Solicitors) for the claimant.