Sheriff Appeal Court orders refund of online car sale deposit under consumer regulations

About this case:

• Citation:
  [2026] SAC (Civ) 43
• Judgment:
  External link
• Court:
  Sheriff Appeal Court
• Judge:
  Sheriff Principal Gillian A Wade KC

The appellant sought to recover a deposit paid to the respondent car dealer after a discrepancy concerning road tax led him to withdraw from an online car sale. After the sheriff dismissed his claim as obviously having no real prospects of success, he appealed to the Sheriff Appeal Court.

The appeal was heard by Sheriff Principal Gillian Wade KC, with the appellant appearing in person and the respondent absent.

Non-refundable deposit

In December 2024, the appellant paid the respondent vehicle dealer a deposit of £99 to reserve a Citroen car for a period of five days. A week after paying the deposit, having discovered that the road tax applicable to the car was higher than advertised, the appellant informed the respondent that he no longer wished to purchase the car.

Shortly thereafter, the appellant asked for the return of the £99 deposit. The respondent refused. It adverted to clause 5.2 of its terms and conditions, which state, so far as material: “A non-refundable deposit of £99 (for online reservations) … is required to secure the vehicle for a period of 5 days. This deposit will only be refunded if the vehicle is found not to be as described at the time of inspection or delivery.”

Raising a simple procedure claim at Dunfermline Sheriff Court, the appellant argued that the deposit had been advertised as refundable on the respondent’s website and that the respondent had misrepresented the road tax payable for the vehicle. In response, the respondent submitted that its terms and conditions formed the basis of a contract between the parties. That contract provided expressly that the deposit was non-refundable and, in any case, gave exclusive jurisdiction to the courts of England and Wales.

In support of his case, the appellant lodged various pieces of documentary evidence, including a screenshot from the respondent’s website advertising a Peugeot car subject to a “£99 fully refundable deposit”. In written submissions, he alleged that the terms and conditions relied on by the respondent, “conveniently dated March 2024”, had been added to the respondent’s website after the commencement of court proceedings.

Those arguments notwithstanding, the sheriff dismissed the claim ex proprio motu on account of its “obviously” having “no real prospect of success”. On appeal, the appellant argued inter alia that the sheriff erred in law by failing to apply the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, misinterpreting the contractual term under which the deposit was fully refundable and failing to account for the respondent’s misrepresentation of the vehicle’s road tax position.

Consumer entitled to insist upon refund of deposit

Assessing as pars judicis the question of jurisdiction, Sheriff Principal Wade began her judgment by evaluating the effect of the terms and conditions’ purported conferral of exclusive jurisdiction on the courts of England and Wales: “Clause 13.1 can have no effect. Section 15B(2)(a) [of the Civil Jurisdiction and Judgments Act 1982] entitles the appellant to bring a claim in the courts for the place where he is domiciled. The parties can only contract out of that rule after the dispute has arisen and if other conditions are met per section 15B(6)(a). Agreements which confer exclusi[ve] jurisdiction (such as Clause 13 of the Terms) have no legal force if they are contrary to section 15B(6). Accordingly Clause 13 is of no legal effect and this court has jurisdiction as a result of section 15B(2)(b) of the 1982 Act.”

Turning to consider the application of the 2013 Regulations, she continued: “On the assumption that the respondent did provide the appellant with the required information and it was clear to the appellant that he was under an obligation to pay the entire contract price the appellant was obliged to complete the purchase of the vehicle subject to his 14 day cancellation rights in accordance with Regulations 29 to 34 of the 2013 Regulations. The effect of Regulation 33(1)(a) is that in the event of cancellation, any obligations incumbent upon the parties fell away. In turn, the appellant was entitled to insist upon a refund of the deposit as a payment received from the appellant pursuant to the cancelled contract.”

Regarding the sheriff’s decision to dismiss the claim ex proprio motu as obviously having no real prospect of success, Sheriff Principal Wade added: “For the power to have been exercisable, the appellant’s refundability claim and misrepresentation claims must have obviously been lacking in substance … Clause 5.2 of the Terms could amount to a contract term which is unfair (as it causes a significant imbalance in the parties’ obligations to the detriment of the consumer) having regard to the all the circumstances existing including the conflict terms per section 62 of the 2015 Act. Additionally, in the event of an ambiguity in a consumer contract then the meaning that is most favourable to the consumer should prevail (section 69 of the Consumer Rights Act 2015) … [F]or all of the foregoing reasons, it cannot be said that the appellant’s refundability claim obviously had no real prospects of success in light of the respective position of the parties and the evidence available to the sheriff.”

Reaching the same conclusion in respect of the appellant’s misrepresentation claims, she continued: “[T]here was a clear factual discrepancy between the parties … [I]t cannot be said the appellant’s misrepresentation claim had no real prospects of success. The appellant offered to prove a misrepresentation had occurred and that further vouching was awaited and the sheriff erred in law by placing the bar of real prospects too high. It is worth noting that, in this context, an alternative would have been for the sheriff to exercise his powers to pause the case rather than determining the merits in light of the appellant’s position.”

The appeal was accordingly allowed, with the court ordering that the deposit of £99 be refunded in full.