Aberdeen man’s £600,000 claim against bank over laptop legal battle rejected

A consumer from Aberdeen whose legal dispute over the purchase and return of a laptop 18 years ago spawned a litigation which ended up in the UK Supreme Court has failed in a £600,000 action against the bank which he claimed “annihilated” his credit rating. Richard Durkin, 46, who was eventually awarded just £8,000 damages following his appeal to the Supreme Court, raised an action against HSBC Bank seeking decree for payment of £300,000 as reimbursement of his legal costs and a further £300,000 to buy a family home in Aberdeen, which he had been unable to do because of his adverse credit rating. However, the Inner House of the Court of Session refused his appeal after ruling that the sheriff at Aberdeen and the sheriff principal were correct to uphold the bank’s plea of “res judicata” and dismiss the action because Mr Durkin was seeking to “re-litigate” issues which were the subject of the first action. Lady Paton, Lord Drummond Young and Lord Malcolm heard that Mr Durkin bought a laptop computer from a branch of PC World in Aberdeen in December 1998. He paid a £50 deposit and signed a £1,499 credit agreement with HFC – which later became a part of HSBC – for the remainder. Mr Durkin wanted the computer to have an inbuilt modem and he claimed he was told that he could take the item home, unseal its box and inspect the equipment and that if it did not have an internal modem it could be returned and his deposit would be refunded. The item did not have the required modem but when he tried to return it the next day a PC World manager refused to accept his rejection, and in due course the bank insisted upon payment under the credit agreement. Mr Durkin told the bank what had happened, but it relied upon PC World’s assertion that the rejection of the item was invalid and subsequently issued a default notice. Mr Durkin raised an action in Aberdeen Sheriff Court against PC World and the bank claiming that he was entitled to reject the goods and that the contracts with them had been validly rescinded. He also claimed damages of £250,000 for the impact on his creditworthiness, and the fact that it prevented from buying him a home in Spain. He was awarded £116,500 and was unsatisfied with that amount, so he appealed to the Court of Session, but the court rejected his appeal and allowed a cross-appeal by the bank on the merits of the claim and on the damages. “From substantial success before the sheriff, Mr Durkin’s appeal to the Court of Session resulted in complete failure against the bank,” Lord Malcolm said. Mr Durkin appealed to the UK Supreme Court, which held in 2014 that the First Division erred in reversing the sheriff’s decision on the merits of the action. The justices restored the sheriff’s award of £8,000 for general damages, but held that the court had no jurisdiction to interfere with the decision on the other heads of loss. Mr Durkin remained “considerably aggrieved” by the outcome and raised a fresh claim at Aberdeen Sheriff Court, which was dismissed because he was seeking to re-litigate matters decided in the earlier litigation – a decision upheld by the sheriff principal, prompting a further appeal to the Inner House. Delivering the opinion of the court, Lord Malcolm said: “It is clear that the new action is an attempt to re-litigate matters decided adversely to the pursuer in the previous action, plus an added claim for reimbursement of legal expenses incurred in the course of those proceedings. “The latter claim is plainly irrelevant. The UK Supreme Court ruled on how the expenses of the first proceedings were to be dealt with, and if Mr Durkin is out of pocket, that is a loss which must lie where it falls. “As for the first part of the claim, Mr Durkin seeks greater damages than he achieved first time around, again by reference to the impact of the entries in the registers and his inability to purchase a new and better family home, albeit this time in Aberdeen, not Malaga. Once more the loss is said to have been caused by the issuing of the wrongful default notices to the agencies. “It is true that the underlying nature of the wrongful act (or delict) has been re-categorised as described above, but this does not change the essential issue in dispute, nor the nature of the action. “Whether attributable to negligence or to a fraudulent and/or malicious desire to harm the pursuer, the fact is that the court is now being asked to reverse the determination in the first action as to the extent of the recoverable losses caused by the bank’s conduct. Mr Durkin’s opportunity to recover damages for that matter arose in the first action. That the court is being asked to revisit that issue demonstrates that the plea of res judicata is well founded.” He added: “It is likely that Mr Durkin will find it difficult to reconcile himself to this decision; but if he reflects on how he would react had he enjoyed complete success in the Supreme Court and then faced a new action seeking restoration of the decision of the Inner House, he might understand the rationale of our law on res judicata.”