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Default Cementing the interpretation of Section 127(3) CCAct 1974(as amended)


© F A R Bennion Website: Francis Bennion -

Doc. No. 2003.061 JPN008L 167 JPN (2003) 773

Any footnotes are shown at the bottom of each page

Consumer Credit Act 1974 s 127(3)

As the draftsman of the Consumer Credit Act 1974 I would like to thank Dr Richard Lawson

for his interesting and well-argued article (30 August 2003) on Wilson v First County Trust

Ltd [2003] UKHL 40, [2003] 4 All ER 97.

Dr Lawson may be interested to know that I included the provision in question (section

127(3)) entirely on my own initiative. It seemed right to me that if the creditor company

couldn’t be bothered to ensure that all the prescribed particulars were accurately included in

the credit agreement it deserved to find it unenforceable, and that the court should not have

power to relieve it from this penalty. Nobody queried this, and it went through Parliament

without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed.

167 Justice of the Peace (2003) 773.

in order to cement the meaning of the above may we refer to the following :--


Lord Goff of Chieveley Lord Lloyd of Berwick Lord Hoffmann

Lord Hope of Craighead Lord Clyde






ON 19 JUNE 1997

House of Lords - Investors Compensation Scheme v. West Bromwich Building Society



The meaning of the language

The objection to the plain meaning is the inclusion of the words "for undue influence" after "rescission"; for any lawyer would know that there are other grounds on which the investor might claim rescission, for example, on the ground of misrepresentation. Why, therefore, should the draftsman have specifically included one of the grounds on which the investor might claim rescission, but not others?

We do not know the answer to this question. It may be that if one had access to the preliminary drafts of the Claim Form, or to the mind of the draftsman himself, the answer would emerge clearly enough. It may be that a claim for rescission on the ground of undue influence was, for some reason, uppermost in the draftsman's mind; so he put the words in. But we cannot go into the draftsman's mind. We having nothing to go on but the words he has used. The inclusion of undue influence is odd, but not so odd as to obscure the meaning. "Or otherwise" must relate back to "whether sounding in rescission." Any other construction would leave "whether" hanging in the air. So "or otherwise" covers claims in contract and tort. It is not limited to other grounds for claiming rescission. The drafting is slovenly. But I do not have any great difficulty with the meaning.

It is said that the plain meaning would make the words in brackets otiose. So indeed it would. But words in brackets are often otiose, especially brackets in the format "(whether . . . or otherwise)." They show that the general words which precede the parenthesis are not limited to any particular kind of claim, but cover all claims so long as they are claims for reduction of sums due.

What are the alternatives? Mr. Vos submits that section 3(b) means "any claims sounding in rescission (whether for undue influence or otherwise) in which you claim an abatement . . ." I agree with Evans-Lombe J. that such a construction does violence to the language. I know of no principle of construction (whether by reference to what Lord Wilberforce said in Prenn v. Simmons [1971] 1 W.L.R. 1381, 1384-1386 or otherwise) which would enable the court to take words from within the brackets, where they are clearly intended to underline the width of "any claim," and place them outside the brackets where they have the exact opposite effect. As Leggatt L.J. said in the Court of Appeal, such a construction is simply not an available meaning of the words used; and it is, after all, from the words used that one must ascertain what the parties meant. Purposive interpretation of a contract is a useful tool where the purpose can be identified with reasonable certainty. But creative interpretation is another thing altogether. The one must not be allowed to shade into the other………….
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