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Oh Mr Ghopee.


God, we are told, loves a trier. Perhaps fortunately, the Court of Appeal takes a less emollient approach with an unlawful money lender who has been repeatedly featured on this site.

Ghana Commercial Finance Ltd v Sawyer & Anr [2014] EWCA Civ 489 [Not on Bailii yet. I’ve seen a transcript].

Ghana Commercial Finance is one of Mr Ghopee’s companies (See here and here and here and here for coverage of Mr Ghopee AKA Mr Gopee ). Mr Ghopee was and is director and controller of a large number of companies which had been making loans without a consumer credit licence or, in some few instances with a licence but in a form that was in significant breach of the requirements of the Consumer Credit Act 1974. The only company that had a licence was Reddy Corporation and that was revoked in 2011. One of the companies, Barons Finance Limited, is in liquidation and it appears that the Barons Finance loan book was transferred to other Ghopee companies (some at least after the service of the winding up petition, thus under challenge from the liquidator).

Most recently, Mr Ghopee was subject to the following order in the Mercantile Court, dated 29 January 2014:

I will therefore order that any claim in any County Court which falls within the terms of my Order of 19 July, as amended, which has not been notified to this Court by close of business on Friday 28 February 2014 will be struck out, or on that date, transferred to this Court and struck out. Any future claim within the terms of the Order of 19 July not brought in this Court will be on issue be transferred to this Court and struck out. Any applications for relief will be heard in this Court, not the County Court.

Notwithstanding any of this, Mr Ghopee was to be found pursuing this second appeal in the Court of Appeal, arising from the setting aside of possession orders and striking out of his possession claims in two joined cases in  the Medway County Court (though apparently appealed from the Birmingham Civil Justice Centre). Following a convoluted route, two claims in which Mr Ghopee as Ghana Commercial Bunks [sic] had gained possession orders, had come to appeal before HHJ Simpkiss on the basis that the loans were made under unlicensed credit agreements and therefore unenforceable. HHJ Simpkiss found:

firstly, that the agreement for a loan secured by a mortgage was a regulated agreement pursuant to section 8 of the Consumer Credit Act 1974. Secondly, he held that the claimants were not acting as agents for Reddy Corporation which did have a licence. Thirdly, he held, as was conceded that the claimants, Ghana Commercial Bunks and Barons Finance, were either unlicensed lenders or unlicensed credit brokers and, unless they obtained an order under section 65 of the Act from the court, or under section 40 of the Act from the Office of Fair Trading, the court had no power to make a possession order or a money judgment.

This was in July 2012. Mr Ghopee sought permission to appeal to the Court of Appeal and, in what can only be described as an undaunted if foolhardy manner (given that his cases in the Mercantile Court were falling apart around him in the meantime) pursued the appeal to oral permission. It availed him naught.

This is a second appeal. The question is, therefore, whether or not the appeal raises some important point of principle or practice, rather than the less exacting test of whether the appeal has a realistic prospect of success. I do not regard the appeal as satisfying either test. Neither Barons Finance, nor Ghana Commercial Bunks, which is as I understand it now named Ghana Commercial Finance Limited, was licenced to carry out Consumer Credit Act business. They were, accordingly, unauthorised lenders and, under section 40, the relevant Credit Agreements, which were regulated, were not enforceable in the absence of a decision of the Office of Fair Trading under section 40 of the Consumer Credit Act 1974, which has neither been made nor sought, despite the fact that the averment that they were unlicensed lenders has been clear on the face of the pleading since at least February 2011.

Mr Ghopee advanced various arguments. Firstly that the Judge below should have allowed an amendment to a claim for unjust enrichment because Dimond v Lovell [2002] 1 AC 384, which found against such a possible claim, could not stand after the introduction of the Human Rights Act. The trouble is, Mr Ghoppe had already tried that line in Barons Finance and Reddy Corporation v Amir Ul Haq [2003] EWCA Civ 595 and in that case, Dyson LJ

described that argument as misconceived. Such a conclusion as it seems to me applies with even greater force in a case where the agreement is not merely improperly executed but is one made with a creditor who lacks the requisite licence. In the Ul Haq case, Dyson LJ refused Barons Finance and Reddy Corporation permission to appeal.

The declaration of incompatibility in Wilson v County Trust [2003] All ER 229 had no force and there had been no parliamentary amendment.

Next Mr Ghopee threw in a hodgepodge  of grounds. None of which got him anywhere.

It was said in the notice of appeal as originally drafted that the result reached by the judge was procedurally irregular because of the nature of the pleadings in which it appeared to be being suggested that payment should be made of the outstanding principal. I regard that argument as misconceived for a number of reasons. Firstly, the defence denied that the claimants were entitled to any relief. The judge was entitled on the pleadings to reach that conclusion. Secondly, the fact that the defendant’s counterclaim sought relief in reliance on section 65 and section 140A, which would have involved or might have involved repayment, did not affect the nature of the relief applicable if the court held, as it did, that section 40 applied. Thirdly, if the remedy of unjust enrichment was not available in law, it was not open to the court to give it to any of the claimants. Fourthly, conducting Consumer Credit Act business without a licence is a criminal offence under section 39 and agreements made in that context are unenforceable under section 40. Criminality is a point which the court should take of its own motion, whatever the pleadings say. Some reference was made to the doctrine of estoppel. It does not seem to me that the claimants, who were carrying on business without the requisite licence and acting criminally can invoke the assistance of equity to enable them to recover the monies loaned. Lastly, reliance was placed upon the decision of HHJ Birtles where he found the loan agreement to be unenforceable but, nevertheless, ordered repayment of the principal and interest. The fact that there was another decision at the same level which reached a different conclusion does not mean that it was a decision which HHJ Simpkiss was bound to follow; the question is whether that other decision was right.

Mr Ghopee then sought an adjournment, apparently on the basis that a letter from the OFT to HHJ Mackie QC dated 5 February 2014 in the Mercantile Court proceedings set out a change in the law. Things then got a bit murky. The Court of Appeal found the relevant passage in HHJ Mackie’s judgment, not it was not provided by Mr Ghopee.

“It appears that trading without a CCA licence has the consequence that: a, loan agreements and any linked security entered into before 6 April 2007 where the court makes a declaration of unenforceability under section 140 of the Consumer Credit Act are rendered void; b, loan agreements and any linked security dated on or after 6 April 2007 cannot be enforced without an order of the OFT or the court (though the agreement/security continues to exist); c, unlicensed trading is (and taking enforcement proceedings without a licence may also be) a criminal offence.”

When Mr Ghopee was asked what this change in the law taking effect on 6 April 2007 was and how it impacted this case, he said “he did not have the necessary material with him and that it could be produced at any adjourned hearing”.

The Court of Appeal was not happy.

This appears to be manifestly unsatisfactory. Mr Stone, who has been present on behalf of the respondent this morning, informs me that a similar reference to 6 April 2007 was made at the hearing before HHJ Simpkiss, without Mr Gopee being able to indicate what exactly it was that had happened 6 April 2007 that made the difference. It is not clear to me what it is either. I suspect that it may be the fact that at some stage subsections (3) to (5) of section 127 of the Consumer Credit Act were repealed. That that is so appears from the fact that they are omitted from the current issue of the statutes and they are said to have been repealed by the Consumer Credit Act 2006.

If that is so, that is not of assistance to Mr Gopee, by reason of the fact that the principal problem that lies in the way of success on the part of the two lending companies is the fact that they were unlicensed suppliers of credit carrying on business in breach of section 39 of the Act and in circumstances where section 40 of the Act applied. Those sections remain in full force and vigour. That, as it seems to me, is the end of this point.

Mr Ghopee lastly complained he had been ambushed at the first appeal by the Defendants seeking to set aside the charges he had on their properties. This got very short shrift. It was the almost inevitable consequence of the Defendants’ arguments that the agreements were invalid under s.40 and s.65 of the Consumer Credit Act, so hardly an ambush.

Permission to appeal refused.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.


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