On 3 September 2019, the High Court handed down judgment in Promontoria (Henrico) Limited v Samra [2019] EWHC 2327 (Ch). The customer challenged the relationship arising out of the agreement as being unfair under the unfair relationship provisions in Sections 140A to 140C of the Consumer Credit Act 1974 (the CCA) because of (a) the assignment of the agreement from Clydesdale Bank plc to Promontoria (Henrico) Limited and (b) a claim that the lender gave a positive indication about future lending to the customer. It also considered the impact of the reversed burden of proof under Section 140B(9) of the CCA.
The Court decided the relationship arising out of the agreement between the lender and the customer was not unfair. The Court had real concerns over the customer’s evidence (see, for example, paragraph [24] of the judgment). But ultimately it did not consider the issues raised, after deciding “it was not necessary to go through the list of factors [set out in Deutsche Bank (Suisse) SA v Khan [2013] EWHC 482 (Comm)] in every case, or particularly useful to do so in a case such as this where the allegations of unfairness are somewhat diffuse” (see paragraph [94] of the judgment), meant there was any unfairness in the relationship.
The Court’s decision on the burden of proof is, however, important. It decided (see paragraph [26]) that:
“This … does not however mean, in my judgment (and Mr Hill did not contend) that where Mr Samra makes allegations of fact on which he relies he does not have the burden of proving them to the normal civil standard. The onus placed on the creditor is as to the relationship between it and the debtor, and does not have the effect that factual allegations made by Mr Samra must be accepted unless they can be positively disproved by contrary evidence.”
Now the High Court has given such a clear view on the burden of proof, it must now follow that the position is clear: a customer must prove the facts he says create unfairness arising out of the relationship and (once proven) the burden then shifts onto the lender to prove those facts (as proven) do not mean the relationship is unfair to the customer.