Ive dealt with a number of claims under the Consumer Credit Act for various things, unfairness, unfair terms, breach of statutory duty, unlawful repossession etc, and the most notable cases are the landbanking ones.
In a nutshell, Land Banking is where a company buys agricultural land and sells it to unsuspecting consumers for overly inflated prices promising that the land will get residential planning permission and will return up to ten times the investment. Sadly, these claims are nearly always false, but consumers get sucked in by the salesmen.
The good news is, if you’ve been scammed and you’ve paid any monies on your credit card such as a deposit over £100 then you may be able to bring a claim under s75 Consumer Credit Act 1974 against the credit card provider.
Further, if the salesman used misrepresentation to sell the plots, then limitation may not be an issue, even if the plots were purchased over 6 years ago.
Here is a Judgment of District Judge Andrews from the Central London County Court from a recent landbanking claim that we succeeded on, against Canada Square Operations (Formerly Egg Banking)
JUDGMENT 6th April 2017
DEPUTY DISTRICT JUDGE ANDREWS:
1. This is the case of the Claimant and Canada Square Operations Limited, formerly trading as Egg Banking Plc.
2. The Claimant seeks to recover damages from the defendant in respect of the cost of a lease of a plot of land at Rettendon Common near Chelmsford, which was purchased from Hamilton Bentley & Partners Ltd (HB). This was in March 2007.
3. The purchase was financed in part (that being the price of the deposit of £520) by the Claimant using a credit card issued by Egg Bank Plc. The remainder of the total price of £8,520 was funded by way of a bank loan and utilising savings.
4. Surprisingly, the Claimant used the same solicitor as HB to act for her on the purchase of the lease. This usually should not happen. The Solicitors’ Regulatory Authority might consider this to have been wrong, for the solicitors of HB to also act for Staple Inn Partnership, i.e. to act for both the seller and the purchaser for the conveyancing transaction. In any event, the Claimant took no independent advice, legal or otherwise.
5. The initial negotiations for the contract for the sale of the lease were made between HB’s sales representative Mr John Oakes and the Claimant over the telephone, and we have heard from the Claimant who gave evidence today under oath that Mr Oakes indicated that it was a good deal for her with a high potential return, a percentage up to five hundred per cent, i.e. in return for her investment.
6. The Claimants sets out her allegations upon which she relies as regards to representations made by the Defendant in this matter in paragraph two of her Particulars of Claim. I will not read them all out again; we all know what they are.
7. The Claimant was interested in the offer and was sent brochures setting out what HB would do to obtain planning permission to enable the land in which her plot was situated to be used for housing development.
8. Planning permission was required (amongst other things) due to the fact that the land was in the greenbelt surrounding Chelmsford. The planning application it would appear was never made and HB subsequently went into liquidation.
9. The Claimant claims that HB had breached the contract for the sale of the lease by not making the application for planning permission. After consideration of all the evidence and the submissions that I have heard today, I find that HB did in fact breach the said contract.
10. As the Claimant used her credit card to fund part of the purchase, she has the same right of action that she had against HB against the successors to Egg Bank Plc, i.e. Canada Square Operations Limited. This right was given to her by way of section 75 of Consumer Credit Act 1974 and I am satisfied that the purchase is of debtor-creditor-supplier agreement and the regulated agreement.
11. The Defendants argue inter alia (amongst other things) that the claim is statute barred due to the fact that it was issued out of time, arguing that the Claimant’s period to issue proceedings extended up to or around 2013 and as a result, the Claimant is now barred from pursuing her claim due to the effect of the Limitation Act 1980.
12. In response, the Claimant argues that she was not aware of the breach until July 2010 when she received the letter from Mr Stephen Todd of HB who advised her that litigation was in the process of being pursued against Staple Inn Partnership.
13. Mr Stephen Murrell who was a director of HB was also (perhaps surprisingly) a partner with Staple Inn Partnership. That was the firm of solicitors who carried out the conveyancing to which I have referred above. I have heard that he was subsequently struck off by the Solicitors’ Regulatory Authority following a decision of the Solicitors’ Disciplinary Tribunal. We are not aware of the grounds.
14. When asked under cross-examination today why she failed to make inquiries of HB as to the progress of the application for planning permission, the Claimant said that she relied upon the representations of HB as set out in the brochures and those originally made by Mr John Oakes.
15. The brochure said it could take some years to get planning permission, six years possibly, so effectively the Claimant basically says she was just awaiting developments. I accept that the plot owners were discouraged by the brochure to make inquiries of the local planning authority. That is understandable perhaps, if one is seeking to obtain planning permission for a whole field (as we have here), which is what HB were seeking to do, but of course they could not have forbidden any of the plot owners from making such a request to the local planning authority for some news as to the application..
16. Nor did the Claimant make any inquiry of HB directly. The Claimant and her husband (unfortunately for them both) had personal financial difficulties at the time and (as she said) almost lost their house. I sympathise with them in that respect, but one would have thought that in those circumstances the Claimant would have perhaps concluded that an inquiry should be made as to her investment because, of course, if it was moving along and planning permission was being applied for, or indeed, possibly, if it had been granted, then she may have had some funds coming in which could have relieved the family’s financial situation, but she did not make any such inquiry.
17. It is accepted that the Court proceedings were not issued until 16th November 2015, which appeared to be circa two years out of time.
18. The Claimant seeks relief from the effects of the Limitation Act by relying on section 32 of that Act, arguing that she was a victim of fraud; fraudulent misrepresentation on the part of HB, and that therefore her limitation period would only have commenced at the time she thought something was wrong, which would have round about 2nd July 2010 when she received a letter from HB’s director, advising her of the difficulties with the solicitor.
19. Section 32 of the Limited Act states that the limitation period shall not begin until the Claimant has discovered or could have discovered, by any diligent enquiry on her behalf, that there was a problem; i.e. that there was a fraud being perpetrated on her. This could have been achieved by the Claimant by looking on-line to ascertain if a planning application had been made or by making inquiries with HB. These things she failed to do.
20. However, I find that the Claimant was taken in by HB and relied entirely upon their representations as to the complexity and the length of the time as to when the planning application would be made. She had no knowledge that the planning application had not been made or, for that matter, was not going to be made. But was there fraud? Had HB set out to deceive? Had HB no reasonable belief that they could obtain planning permission to convert the land in the green belt to residential?
21. The expert’s report prepared by Paul Wilson says not. I have had no evidence from the Defendants to contrary, i.e. that Mr Wilson is incorrect.
22. It is for the Claimant to prove her case that HB breached the contract and that the Defendants therefore by the application of the Consumer Credit Act, are liable to pay her damages. It is also necessary for the Claimant to prove that she was the victim of a fraudulent misrepresentation to enable her to rely on section 32 of the Limitation Act. On the balance of probabilities, I find for the Claimant in both respects. I, therefore, give judgement for the Claimant.
Discussion ensued with regard to a point about statutory construction.
23. Thereby there was fraud by HB and therefore it flows that HB were the agents and made representations, antecedent or otherwise, in respect of the transaction and therefore Canada Square Operations Limited are liable to pay the damages.
End of judgment