Not upheld: Section 75 Consumer Credit Act claims (misrepresentation and breach of contract), breach of fiduciary duty, unfair credit relationship complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr F purchased a Fractional Club timeshare membership for £10,889 in September 2012, financed by a loan from the Lender. In June 2019, more than six years later, Mr F raised Section 75 claims alleging misrepresentation and breach of contract by the Supplier, and claimed the Supplier breached a fiduciary duty by failing to disclose commission arrangements. The ombudsman found the misrepresentation claim was time-barred under the Limitation Act 1980, there was insufficient evidence of breach of contract as timeshare availability was expressly subject to demand, and the Supplier did not owe a fiduciary duty under Supreme Court precedent. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the Section 75 misrepresentation claim was time-barred under the Limitation Act 1980, as the cause of action accrued at the Time of Sale (23 September 2012) and the claim was not notified to the Lender until 24 June 2019, exceeding the six-year limitation period. It was therefore fair and reasonable for the Lender to reject this claim. Regarding the breach of contract claim, the ombudsman found insufficient evidence that the Supplier breached the Purchase Agreement, as timeshare availability was expressly subject to demand and Mr F successfully used his membership on multiple occasions. On the fiduciary duty claim, the ombudsman applied the Supreme Court's ruling in Johnson that the Supplier did not owe Mr F a fiduciary duty, and the commission level (10% of loan amount) was not disproportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website