Smith and another v Royal Bank of Scotland plc
[2023] UKSC 34
Canada Square Operations Ltd v Potter
15 November 2023
[2023] UKSC 41
Supreme Court
A bank didn't tell a customer about a big hidden fee on their loan. The customer sued years later. The court said the bank deliberately hid the fee, so the lawsuit wasn't too late. But the court said the bank didn't know it was breaking the rules by hiding the fee, so a second legal argument didn't work.
Key Facts
- •Mrs. Potter entered a loan agreement with Canada Square Operations Ltd (formerly Egg Banking plc) in 2006, which included a payment protection insurance (PPI) policy.
- •The agreement did not disclose that the defendant retained a substantial commission on the PPI policy (over 95% of the premium).
- •Mrs. Potter repaid the loan early in 2010.
- •In 2014, the Supreme Court case *Plevin v Paragon* established that non-disclosure of high commissions could render a credit agreement unfair under the Consumer Credit Act 1974.
- •In 2018, Mrs. Potter complained about the mis-sold PPI and received compensation, then consulted solicitors and learned about the undisclosed commission.
- •She brought a claim in 2018 to recover the commission, arguing that the limitation period was postponed under section 32 of the Limitation Act 1980.
Legal Principles
Section 32(1)(b) of the Limitation Act 1980 postpones the limitation period if a fact relevant to the plaintiff's right of action has been deliberately concealed.
Limitation Act 1980, Section 32(1)(b)
Section 32(2) of the Limitation Act 1980 states that deliberate commission of a breach of duty, in circumstances where discovery is unlikely, amounts to deliberate concealment.
Limitation Act 1980, Section 32(2)
Deliberate concealment under section 32(1)(b) requires intention to conceal, achieved either by active steps or by withholding information.
Cave v Robinson Jarvis & Rolf [2002] UKHL 18
'Deliberate commission of a breach of duty' under section 32(2) requires knowledge of the wrongdoing, not merely recklessness.
Cave v Robinson Jarvis & Rolf [2002] UKHL 18
Section 140A of the Consumer Credit Act 1974 allows for remedial orders if a creditor-debtor relationship is unfair due to creditor's actions or inactions; it doesn't impose a legal duty.
Consumer Credit Act 1974, Section 140A
Outcomes
The Supreme Court dismissed the defendant's appeal.
The defendant deliberately concealed the commission from Mrs. Potter under section 32(1)(b) by intentionally not disclosing it after section 140A came into force. Section 32(2) did not apply because the defendant did not know they were committing a breach of duty.