Judge Milwyn Jarman's order of 28 October 2009
A carpenter from Bridgend has won a five-year stay on any repossession proceedings against him by his lender.
Peter Bentley challenged the right of Blemain Finance, who specialise in second loans secured on a home, to repossess him.
He claimed that his contract with them involved an unfair relationship that was illegal.
The lender also agreed to charge no further interest and cut his repayments from £550 to just £150 a month.
Mr Bentley's financial problems started when his mother died in 2007 and he was forced to work part-time to look after his father, who was suffering from Alzheimer's.
He took out a secured loan in February 2007 for £40,000 to try to alleviate his financial problems.
But his caring responsibilities meant he had to slash his working hours from 48 hours a week to just 19, leading to a big drop in income, and he fell behind with his repayments.
Although his father moved to a care home for the last eight months of his life, and died in January 2009, Mr Bentley was unable to increase his loan re-payments significantly because the recession meant that by that time he could not work longer hours.
Mr Bentley said that Blemain then started chasing him for the repayment of his loan, which had ballooned to £47,000 by the time of this month's High Court hearing in Cardiff.
"Blemain were very aggressive and were not prepared to listen," he said.
"I was in a state of panic."
Mr Bentley was represented in the proceedings by lawyers CCCL, employed by the claims management company Cartel Client Review.
"The relationship between the parties was an unfair one within the meaning of Section 140A of the 1974 Consumer Credit Act," argued Andrew Settle of the law firm.
Mr Bentley's lawyers claimed that Blemain had lent the money to him irresponsibly, taking advantage of his naivety, vulnerability and desperation.
The High Court order was made by Judge Milwyn Jarman.
The parties agreed that in exchange for Mr Bentley withdrawing his argument that there had been an unfair relationship under the Act, and in exchange for agreeing not to pursue that legal argument against Blemain again, the finance firm agreed:
• to re-write the secured loan account, cutting the repayments to £150 a month
• not to levy any interest, charges or legal costs "whatsoever."
Blemain's repossession claim was dismissed and it cannot enforce repayment of the loan by this method for five years.
After that, it can be enforced by repossession, but only if there are at least 12 months' arrears on the new level of payments, ie £1,800.
'Substantial financial settlement'
"Mr Bentley fell behind with his loan payments," said a Blemain spokesman.
"However, the matter was resolved before it went to court and we agreed to give him further time to repay what he owed.
"For the avoidance of doubt there has been no court decision on this case as a satisfactory arrangement was agreed," the spokesman added.
Carl Wright of Cartel Client Review put a different interpretation on the outcome.
"Peter Bentley was offered a substantial financial settlement, to ensure the case was not heard by the High Court," he said.
"It is believed to be the first time a mortgage and loan lender has offered a client a legal undertaking not to repossess the client's home.... for the sole purpose of preventing a judge in the High Court from setting a legal precedent against their lending practices."
In September, a judge in South Shields let a woman off an £8,000 credit card debt, also represented by Cartel Client Review.
The judge agreed that Lynne Thorius had been mis-sold a payment protection insurance policy when she first took out the card, and this meant there was an unfair relationship under the law between her and the card company MBNA.