The parties entered into a fixed sum credit agreement in 2005 whereby Southern Pacific Securities loaned Mr and Mrs Walker the sum of £17,500. In addition to the loan a “Broker Administration Fee” of £875 was advanced to Mr and Mrs Walker to enable them to pay for the arrangement of the loan. Interest was payable on the Broker Administration Fee at the same rate as on the loan of £17,500. The credit agreement set out the “Amount of Credit” as £17,500 and the “Total Amount Financed” as £18,375 being the total of the loan and the Broker Administration Fee.

The appeal to the Supreme Court concerned the meaning of “credit” and “charge for credit” in the CCA and, in particular, Section 9(4) of the CCA which states that an item entering into the “total charge for credit” shall not be treated as credit, even though time is allowed for its payment.

The Supreme Court unanimously dismissed the appeal. Although the Broker Administration Fee of £875 was advanced to the Walkers and repayable with interest, it was part of the total cost of, or charge for, credit and therefore could not be treated as part of the credit itself. The amount of credit was therefore correctly stated and the agreement was enforceable.