Seculink Limited v Eren Salih
[2023] EWHC 1706 (KB)
CBI Property Projects Limited v Tripipatkul & Tripipatkul
15 October 2024
[2024] EWHC 3080 (Ch)
High Court
A company lent money, with a higher interest rate if the borrower defaulted. The borrower argued this was unfair. The judge said it wasn't, because the higher rate was fair given the increased risk of the lender not getting their money back. The borrower tried to add new evidence of a secret payment, but the judge said they should have found that evidence earlier.
Key Facts
- •CBI Property Projects Limited (creditor) lent £1.4 million to Tripipatkul & Tripipatkul (debtors) with an 8% interest rate, increasing to 12% upon default.
- •The loan was secured by a charge over a property.
- •Default occurred, and the 12% interest rate applied, resulting in the amount owed exceeding the security value.
- •The debtors appealed the trial judge's decision that the relationship was not 'unfair' under section 140A of the Consumer Credit Act 1974.
- •The debtors sought to introduce fresh evidence of a secret commission paid to their accountant by the creditor.
Legal Principles
Unfairness under section 140A of the Consumer Credit Act 1974.
Consumer Credit Act 1974, section 140A
Guidance on fairness from *Deutsche Bank Suisse (SA) v Khan and Others* [2013] EWHC 482 (Comm).
*Deutsche Bank Suisse (SA) v Khan and Others* [2013] EWHC 482 (Comm)
Penalty clauses and their enforceability.
Not explicitly cited, but discussed in relation to the 12% default interest rate.
Burden of proof in demonstrating fairness under section 140A.
Implicit in the case, discussed in relation to the creditor's evidence.
Rules for admitting fresh evidence on appeal (Ladd v Marshall factors).
*Ladd v Marshall* [1954] 1 WLR 1489; *Hamilton v Al Fayed* [2001] EMLR 15
Bribery and secret commissions, and their effect on contracts.
*Fiona Trust & Holding Corporation v Privalov* [2010] EWHC 3199 (Comm)
Outcomes
Permission to appeal refused.
The court found no real prospect of success on the grounds of appeal, and the fresh evidence was inadmissible.
Grounds of appeal rejected.
The 12% default interest rate was held to reflect a legitimate commercial interest in increased risk after default, even with existing security. The burden of proof on fairness was held to be met by the creditor's evidence.
Application to admit fresh evidence refused.
The evidence could have been obtained with reasonable diligence before trial; the debtors failed to pursue relevant disclosure requests and could have sought evidence from their own agent.