West Bromwich Building Society Lose Tracker Mortgage Case
West Bromwich Building Society Lose Tracker Mortgage Case at Appeal Court
At LettingFocus we supported Property118 all the way – and we were the first people they credited in their press release which gave news of the result. We attended both the day at the High Court (see link) and the Court of Appeal. We do not have a mortgage with West Brom but we were outraged by the injustice of what they did – and could see a precedent being set if they were also to be allowed to get away with this. Congratulations to Mark Alexander for the work in organising the class action.
Three years ago, landlords could never believe that a lender would try to implement something that was so blatantly wrong.
And the case puts the FOS and the FCA in a very bad light indeed. They failed to help affected borrowers, leaving to them to have to go through an arduous court process – indeed all the way to Appeal Court to get justice.
Landlords will now wish to take on the Skipton and the Bank of Ireland who have in the past got away with similar hikes. These lenders should do the honourable thing and pay back what they owe from their own illegally hiked rates. But if they don’t, I am sure Mark Alexander and the team from Cotswold Barristers will also be coming for them soon. I understand that the Bank of Ireland case is even more outrageous.
For all mortgage lenders, they will now realise that they cannot renege on validly and fairly entered into contract terms. I hope the Council of Mortgage Lenders is also watching.
Note, that “The West Brom” (as they like to style themselves) singled out landlords with three or more properties – clearly they must have known that what they were doing would have fallen foul of fair contract rules, which would arguably apply to smaller landlords who may be deemed to be consumers. A smarter business (or one not already struggling financially perhaps) might have considered whether that fact alone pointed to the fact that what they were proposing to do was wrong and then not gone ahead!
It is a great result and congratulations to Mark Alexander of Property 118.
Property 118 is now organising to take the fight to other lenders, with the Skipton and the Bank of Ireland probably to be next in line. You can sign up here:
http://www.crowdfunder.co.uk/property118-action-group
We must say well done to the “Daily Telegraph” who were almost unique among the national broadsheets in highlighting the injustice of what West Brom had done.
Past background on this story here, (covering up to the earlier High Court loss):
https://www.lettingfocus.com/blogs/2015/02/west-bromwichs-tracker-rate-victory-cost-2000-million/
We are very pleased for Mark Alexander. I am sure a little celebration will be planned once Mark has finished his press interviews. I look forward to sharing a few drinks with him.
For those wishing to enjoy a read of the full judgement of the Appeal Court judges, you can see it here – and the quote below is a telling snippet from the judgement. (Note the Appeal Court case was heard by Lord Leveson (of press enquiry fame) with Lady Justice Sharp and Lord Justice Hamblen):
http://www.bailii.org/ew/cases/EWCA/Civ/2016/496.html
As put to Mr Cox QC in oral argument, one way of testing whether clauses can be “fairly” or “sensibly” read together is by seeking to put them together in a single clause. Such a clause would be to the effect that the variable rate is to be the Bank of England Base Rate plus a premium of 1.99%, subject to the Lender’s right to vary that rate at any time for broadly specified or unspecified “valid” reasons in accordance with clause 5 of the Mortgage Conditions. Faced with such a clause a reasonable borrower would understandably question what was being agreed and whether there was any obligation to provide the product described in the Offer Document. The answer would be that the Lender is only agreeing to provide such a product unless and until he decides to vary the rate and that accordingly he is effectively under no obligation to provide it. That is negation; not modification or qualification.”
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