28/6/24
HOUSSEIN v LONDON CREDIT LIMITED [2024] EWCA Civ 721
The court reviewed principles applicable to penalties and default interest. The trial judge had not applied to correct test. He had not asked if the default rate (an additional 3% per month) was a secondary obligation, had not separately considered factors relevant to whether the lender had a legitimate interest in charging the default rate, wrongly considered the lender’s subjective intention, and had not asked whether the default rate was extortionate, extravagant and/or unconscionable in the light of any legitimate interest in charging it. Whether the rate was penal was remitted for reconsideration. If the default rate was penal, on its proper construction the credit agreement made no provision for any other rate so the lender would be left with a claim to statutory/equitable interest. The judge had also been wrong to make an issue based costs order without having considered which party was the overall winner and whether that party’s costs should be discounted. The judge had been entitled to refuse to order costs in the indemnity basis.
4/6/24
LARSSON v REVOLUT LTD [2024] EWHC 1287 (Ch)
The claimant was the victim of authorised push payment (APP) fraud by which he was induced by unknown fraudsters to pay funds from his UBS account to purchase non-existent shares. The payments were made to accounts opened in third party names with Revolut and then paid away. Claims against Revolut in contract and tort were struck out. Although the claimant also held an account with Revolut, there was no contractual basis for a duty of care owed by Revolut to him in relation to payments made by him from an account with another bank to an account with Revolut held by someone else [37]. Nor was there any duty of care in tort owed by Revolut to the claimant as a third party payer even if the claimant happened to be a customer of Revolut [49]. To impose such a duty would be a radical extension of a bank’s duties with significant consequences for banking law [58]. The fact that Revolut did block one payment made no difference [60]. A claim against Revolut for dishonestly assisting a breach of trust was not struck out. It was arguable that funds obtained by fraud were impressed with a trust. The claimant was, however, required to amend his claim to identify the individual within Revolut who he said had been dishonest [77].