Sheriff Appeal Court allows appeal but dismisses claim in dispute over sums due in car finance dispute

About this case:

• Citation:
  [2026] SAC (Civ) 26
• Judgment:
  External link
• Court:
  Sheriff Appeal Court
• Judge:
  Sheriff Principal S F Murphy KC

Santander Consumer (UK) plc raised an action against Ramunas Dikmone, now deceased, seeking to reclaim the sum of £10,532.26 plus interest from 24 October 2020 onwards, less a deduction which resulted in the overall sum claimed being £2,283.40. It was argued by the appellant that the sheriff’s decision was vitiated by an error as to whether a credit intermediary had been an agent of the appellant, which resulted in an unsustainable finding as to when it had notice of the alleged defects.

The appeal was heard by Sheriffs Principal Sean Murphy and Gillian Wade, with Appeal Sheriff Iain Fleming. Tosh, advocate, appeared for the pursuer and appellant while Heaney, advocate, appeared for the defender and respondent.

Contrary to objection

In October 2018 Mr Dikmonas purchased a used Audi Q7 he located at a dealership in Berkshire via a conditional sale agreement with Santander. A credit intermediary, Orange Motor Finance Ltd, was used to complete the transaction. While driving it back home to Dundee he discovered various faults with the vehicle and concluded that it had been in an accident at some point, contrary to representations made to him by the dealership. He complained to Orange Finance and to the dealership in December 2018 and January 2019, and on 29 May 2019 he wrote to the appellant via his solicitor to notify it that he would cease making payments.

Santander raised a claim for the remaining balance payable under the agreement in September 2019. Following the commencement of the claim, the vehicle was returned to the appellant and sold at auction. The proceeds of sale were applied to the balance due with the net sale proceeds of £1,739.75 paid to Mr Dikmonas. On 27 September 2022, the sheriff issued his judgment, concluding that Mr Dikmonas was entitled to exercise his final right of rejection, the defects having been identified within six months of sale, applying the statutory presumption under section 19(14) of the Consumer Rights Act 2015.

For the appellant it was submitted that the alleged representations made to Mr Dikmonas had no basis on record and were not established on the evidence. The sheriff had erroneously concluded that Orange Finance was an agent of the appellant contrary to an objection raised at the onset of the proof, which he used to hold that the appellant became aware of the issues with the vehicle in February 2019. Additionally, no finding had been made that Mr Dikmonas had requested a repair or replacement or that this was impossible, therefore the sheriff erred in holding that he was entitled to exercise the final right to reject under section 24 of the 2015 Act.

The respondent submitted that cogent and convincing evidence had been given to the sheriff by two motor engineers, Mr Forrest and Mr Bathgate, and section 24 was not engaged because Mr Dikmonas had not opted for replacement or repair. However, it was conceded that the finding that Orange Finance was an agent of Santander was wrong, and therefore the first intimation of any issue to the appellant was on 29 May 2019.

Serves no purpose

Delivering the opinion of the court, Sheriff Principal Murphy said of the main error in the sheriff’s decision: “His judgment contains no explanation for his finding that Orange Finance acted as an agent of the appellant in relation to its contract with the respondent. The sheriff therefore also erred in holding, at finding in fact [22], that the respondent had reported defects on numerous occasions to the appellant, as those reports had, in fact, been sent to Orange Finance. It follows that the first contact between Mr Dikmonas and the appellant was the letter sent by his solicitor on 29 May 2019 to indicate his rejection of the vehicle.”

Considering the final right to rejection, he noted: “While it is clear from the statute that the consumer may select one of the remedies available to him, and only one, the final right of rejection can only operate after the seller has had an opportunity to repair or replace the goods, which did not occur in this case. That remains the case regardless of whether the consumer has sought to proceed to exercise the right of rejection as their first remedial option.”

The appeal was therefore allowed. However, the court considered that the return of the vehicle to the appellant and its subsequent sale at auction had implications as to whether any interest had accrued on the sums due and convened a further hearing to consider the matter. This issue was considered by Sheriff Principal Gillian Wade, Temporary Sheriff Principal Brian Mohan, and Appeal Sheriff Fleming, with the respondent’s executrix dative, Renata Dikmone, absent from process.

On that point, Sheriff Principal Wade said: “In this context declarator serves no such purpose and does not achieve a practical result. The appellant recovered the vehicle and auctioned it. All sums due were recovered more than 5 years ago, prior to the closing of the Record and well before the diet of proof. The respondent is deceased and no longer engaged in the process. On any view the counterclaim and the associated cross-appeal now fall to be refused for want of insistence.”

Decree in the terms sought by the appellant was accordingly refused, with the appellant thereafter assoilzied from the relevant parts of the counterclaim and the remainder dismissed for want of insistence.