Saxby Finance Ltd v Baker [2025] EWHC 2919 (KB)

Mr Christopher Loxton (instructed by Spector Constant & Williams LLP) for the Appellant.

Introduction

• Ms Baker is a qualified barrister and self-employed legal practitioner. She had obtained a commercial loan from Saxby Finance Ltd (‘Saxby’). It fell overdue for repayment. Saxby brought a County Court action for recovery of the debt, seeking a money order and possession of the property on which the loan was secured. The Judge found the parties to have been in an ‘unfair creditor/debtor relationship’ for the purposes of the Consumer Credit Act 1974, and exercised consequential powers to make a limited money order against Ms Baker for an amount substantially less than the outstanding debt claimed.

• Ms Baker had brought a counterclaim against Saxby in data protection, alleging the disclosure of personal financial information to a third party. The Judge found in her favour, and awarded damages.

• The Judge awarded Ms Baker 15% of her costs overall.

• With the permission of the High Court, Saxby appeals (a) the Judge’s finding that the parties were in an unfair creditor/debtor relationship, (b) the quantum of the money order and (c) the costs order.

• Ms Baker resists the appeal against the finding of an unfair relationship, and applies for permission to appeal (a) the quantum of the money order, (b) the quantum of the data protection damages award and (c) the costs order. I heard her application on a rolled-up basis at the hearing of Saxby’s appeal.

• Civil Procedure Rule 52.21(3) provides that an appeal court will allow an appeal where the decision of the lower court was (a) wrong or (b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court. ‘Wrong’ in this sense does not mean simply that the judgment can be or is disagreed with. It means the trial judge made a decision which was not properly open to him, for example because it proceeded from an analysis disclosing error of law or fact, amounted to a finding of fact not properly available on the evidence, was insufficiently reasoned, or involved an exercise of discretion outside the properly available range.

Saxby’s Unfair Relationship Appeal

• Saxby has permission for the following first two grounds of appeal: (1) the Judge was wrong to conclude that Ms Baker had sufficiently pleaded her defence/case on the alleged unfair relationship and (2) the Judge was wrong to find that the relationship between the parties was unfair.

(a) Legal Framework

• Section 140A of the Consumer Credit Act 1974 (‘the Act’) provides as follows:

140A Unfair relationships between creditors and debtors

(1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—

(a) any of the terms of the agreement or of any related agreement;

(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;

(c) any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).

(2) In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).

(3) For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.

(4) A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.

…

• Section 140B of the Act sets out the powers of a court consequential on finding an unfair relationship. Section 140B(9) also provides that where a debtor in debt recovery proceedings ‘alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary‘.

• The Supreme Court has given recent guidance on how this regime operates, in the leading judgment of Lord Leggatt JSC in Smith v Royal Bank of Scotland [2024] AC 955 at [12]-[25]. Of particular note for present purposes is the emphasis at [19] that the key question for a court is whether the relationship is unfair, rather than whether it was unfair – that is, the quality of the relationship must be assessed overall as at the time of the determination. The court must consider the whole of the relationship and its history ([23]), and all possible sources of unfairness, limited only by a court’s assessment of relevance ([22]). It must make ‘a very broad and holistic assessment to decide whether the relationship between the creditor and the debtor is unfair to the debtor‘.

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