Mitsubishi HC Capital UK PLC · DRN-6252944

The complaint Mr R complains about the way Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance (‘Novuna’) handled his claim for a refund. Mr R has been represented by his wife Mrs R during the claims and complaints process. Any references to Mr R will include information, evidence, and correspondence that has come from, or received by, Mrs R. What happened This complaint is about how Novuna handled a claim for breach of contract under section 75 of the Consumer Credit Act 1974. Whilst Novuna refunded Mr R the cost of the flooring (which is the subject matter of the claim) purchased from a business I’ll refer to as ‘T’, it (Novuna), declined to award any of the costs associated with removing the faulty flooring. It has also declined to refund Mr R the cost of the original fitting. Our investigator upheld this complaint. Novuna disagreed with our investigator’s view, so the matter was passed to me for a decision. Novuna said as the latest report from an independent expert (the ‘expert’) had shown there was no manufacturing faults, it wouldn’t be held liable for the costs being claimed by Mr R. I issued a provisional decision in which I said I was intending to uphold this complaint. Mr R said, via his representative, that whilst he accepts the outcome in principle he wasn’t happy about the structure of the redress. He also said he wanted me to increase the amount of compensation for the distress and inconvenience caused to him by Novuna. Novuna disagreed with my provisional decision reiterating, amongst other things, that it shouldn’t be liable to refund Mr R anything apart from the cost of the (faulty) flooring which it has already done. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Although a number of issues have been raised, this decision only addresses those issues I consider to be materially relevant to this complaint. This isn’t meant as a discourtesy to either party – it simply reflects the informal nature of our Service. I’ve reconsidered everything including the further submissions by both Mr R and Novuna. However, my decision remains that I’m upholding this complaint for the same reasons as set out in my provisional decision which are as follows. Briefly summarised, section 75 of the Consumer Credit Act 1974 (‘section 75’) says that where a consumer uses certain types of credit - and that includes the fixed sum loan Mr R obtained from Novuna - to purchase goods and/or services and there’s a misrepresentation and/or breach of contract by the supplier (who I’ll refer to as ‘T’), the consumer will have a ‘like’ claim against the provider of finance (Novuna) as they would against the supplier. There are other conditions, but I’m satisfied these conditions have been met in the circumstances of this complaint. What I’m reviewing here is whether Novuna has acted fairly in declining Mr R’s section 75 claim. In essence, I’m looking at the claims handling. I’m not a court so whilst I’ve had regard to the law including the Consumer Rights Act 2015 (satisfactory quality etc), I’m not making a finding on

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whether there has actually been a breach of contract. However, I do think Novuna needs to fairly and reasonably conclude whether to accept liability under section 75 (and to what extent). The flooring which was found to be defective by T (the supplier), was purchased under a supply only contract a cost of just over £2,000. Whilst T did arrange for the fitters to lay the flooring, this was under a separate arrangement and Mr R paid the fitters cash of £917.63 for this service. However, after the floor was laid the first time, it was established by T that there was a fault with the flooring itself (i.e. not the fitting), so T arranged for fitters to attend at Mr R’s property to remove parts of the old flooring and lay new flooring. This all happened soon after the flooring was laid in early 2024. But, in around June/July 2024, Mr R discovered parts of the flooring was still defective. From what I can see T agreed there remained a problem with the quality of the flooring. In an email dated 23 July 2024, T told Mr R that (all typographical/grammatical errors are in the original email): “Thank you for letting me visit your property to inspect your flooring…This is the second time we have fitter the flooring and as the product has come in faulty again with the manufacture, i have agreed with my regional manager we are happy to refund your order, unfortunately at this currant time [T] are not refund any orders due to the filing of content to apply administrators to the business…If this process is avoided we will get this reimburse to you as soon as we can , if unfortunately [T] do not survive l would recommend righting to the finance company with this email to see if they can action anything for you…”. So, from what I can see, T’s agent confirmed that the problem with the flooring was a manufacturing issue, so it agreed to refund Mr R. However, it appears it failed to do so as a result of being in administration. When the matter was passed to Novuna in, or around, July/August 2024, it agreed to refund the cost of the flooring. So, Novuna cancelled the loan agreement and refunded Mr R all the payments he’d made under the agreement. I think this was fair. But Mr R said there were costs associated with having to remove and replace the flooring. And he also wanted the cost of the fitting of £917.63 refunded as he was going to have to pay for a new fitting. Initially Novuna said it wouldn’t cover this cost as it was a supply only contract, so it wasn’t liable to pay for these remedial works or the fitting costs. There’s no dispute that the fitting was paid for separately and wasn’t part of the supply contract. However, the fact this was a supply only contract doesn’t mean that Novuna can’t be held liable for losses associated with the removal and re-fitting of the flooring. In my view, these are direct losses as they flowed naturally from the breach. It was clear if the flooring needed to be removed and replaced, that there would be a cost to doing this such as removing (and replacing) skirting and removing (and replacing) anything that was fitted on top of the flooring after it was fitted. I think T, and by extension, Novuna should reasonably have accepted liability for costs that naturally flowed from the breach rather than just the cost of the flooring. From what I can see, Novuna seemed to have changed its position on this and agreed to pay for associated costs (although it’s unclear if it agreed to refund the cost of the original fitting) but it told Mr R to obtain suitable quotes. I can see that Mr R’s quote was from a trader (‘trader1’) who quoted £2,845 in October 2024 (‘quote1’). However, this didn’t include some of the works that needed to be done so trader1 returned to Mr R’s property and carried out another assessment. A new quote issued by trader1 on 13 April 2025 (‘quote2’) showed that the works would actually be around £6,427 (excluding VAT). Trader1 said the reason for this change was as follows: “Please find attached the updated quotation. This includes all necessary reinstatement of the areas once the new floor has been re-fitted. Unfortunately, the removal of the pinned and glued skirting will likely damage the existing boards and decorated walls. To address this, I have incorporated remedial works into the package to ensure a like-for-like finish.”

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Novuna weren’t satisfied with this explanation due to the price difference between quote1 and quote2 from the same trader. And given the significant change in price, I don’t think Novuna was acting unfairly or unreasonably when it asked Mr R for other quotes. However, Mr R was finding it difficult to obtain another two quotes from other traders. He did manage to obtain one other quote (‘quote3’) from another provider (‘trader2’). This quote was dated 2 August 2025 and was for £6,179.52. So, in my view, quote3 supported that quote2 wasn’t an unreasonable assessment of the likely costs involved. I should note here that neither quote2 nor quote3 included VAT, so I consider the likely end figure would be 20% higher than the respective quotes. Novuna was still unhappy with this so, asked Mr R to obtain a quote from another provider. I’ve seen evidence of his efforts to try to obtain more quotes. I consider Mr R had made reasonable efforts that this point to provide evidence of the likely cost. Given Novuna were liable to pay any direct costs that naturally flowed from the breach, and it had already been provided with two quotes from separate traders, I think if it wanted another quote, it needed to arrange for this to happen which it eventually did in early 2026. I consider the onus was on Novuna to obtain any further quotes particularly as the two latest quotes provided by Mr R were for around the same price (i.e. between £6,000 to £6,500). I can see that the quote from the independent expert instructed by Novuna in early 2026 (‘quote4’) correlates with the other last two quotes obtained by Mr R (£6,490 excluding VAT and £7,788 inclusive of VAT). So, this assessment simply supported Mr R’s claim. I’ve reviewed the expert report (the ‘report’) upon which quote4 was based. Due to this report saying the following: “Poor fitting – click joints not being properly engaged while fitting…Undulations in the subfloor causing planks to flex and break the joints”, Novuna asked the expert to confirm if there were any manufacturing faults. The expert said no to this question. But the expert didn’t expand on why they thought this was the case. Despite this, Novuna went back to its original decision which was that it wasn’t accepting liability to pay any costs related to the remedial works. However, I don’t think Novuna has acted fairly here. Whilst the report may point to some fitting issues, T had attempted the first repair in its role as supplier. So, any fitting issues could simply have been a result of the repairs that needed to be carried out to fix the quality issues. Further, T, as part of its assessment, had taken photos of the faulty parts of the floor showing what needed to be replaced. These photos were taken within a few months of the fitting whereas the assessment made earlier this year, was two years after the fitting. I also note Mr R only agreed for T to replace the faulty parts of the flooring (rather than the whole floor) because T said it would guarantee the fitting costs for another two years – T then carried out the repairs, in, or around, March 2024. After this there was still a problem with the quality of the flooring which was confirmed by T in its email from July 2024. Novuna told me T wasn’t the manufacturer. And indicated this meant T’s assessment of it being a ‘manufacturing fault’ should carry less weight than if it comes directly from the manufacturer. But T may have been in touch with the manufacturer who in turn could’ve confirmed there was a manufacturing issue. T may also have had more claims in relation to this particular flooring, and this is why it concluded it was a manufacturing issue. T also visited Mr R’s property and inspected the flooring. As suppliers in flooring, I think it could reasonably have been classified as ‘experts’ and qualified to make an assessment of what it thought was the issue. And as I said above, T inspected the flooring within a few months of the fitting (which it had arranged after the first fault) whereas the expert instructed by Novuna, inspected it two years after the fitting. So, any new issues could simply be due to normal wear and tear. In any event, I think the role of the expert instructed by Novuna was to simply identify the likely costs involved in resolving the breach. And as I explained to Novuna, what I’m assessing here is the claims handling. And given Novuna had indicated to Mr R that it would agree to cover direct costs with suitable quotes and put him to the trouble of obtaining those quotes (which he did), I consider it should cover the costs of the works.

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I’ve noted all of Novuna’s other arguments such as questioning the issues about why Mr R fitted skirting knowing the flooring would need replacing inferring that he didn’t take sufficient steps to mitigate his losses. Novuna also questions why quote1 dated 31 October 2024 shows trader1 saying the cost would be in the region of £6,500 when this figure (for the same trader and date) later showed the quote at just under £3,000. In terms of the latter issue, Mr R says he doesn’t know why this happened, but he was able to provide the original quote (quote1) which was just under £3,000. He also obtained a second quote from trader1 and a third from trader2, so I think he has done enough to provide quotes that show the likely cost of remedial works here. I also can’t criticise Mr R for fitting skirting after the floor was fitted. I don’t think there’s any evidence of Mr R being aware of the faults that happened for a second time. Or that he didn’t try to mitigate his losses. But this appears to be very much a side issue. The point here is that the flooring was fitted. And for a second time it was found to not be of satisfactory quality. T said this was due to a manufacturing issue. And I consider the losses Mr R is seeking to claim, naturally flow from the breach. So, I think Novuna should reasonably pay Mr R the costs he is claiming. As well as covering the remedial works costs, I’ll be asking Novuna to pay Mr R an additional £500 on top of the £120 it has already paid him for the way it handled his claim. I consider Novuna could’ve settled this matter much sooner and the delays along with requests for more quotes, has caused Mr R unnecessary stress and inconvenience. Novuna indicated to me that the delays were due to our Service’s involvement. But our investigator issued their view in August 2025 upholding the complaint. After this point, Novuna was still requesting more quotes. And after instructing its own independent expert which wasn’t until early 2026, which was more than a year after Mr R submitted his claim, it said it was no longer going to be liable to pay any of the costs of the remedial works. I don’t think this was fair for the reasons set out above. And based on everything I’ve seen, I’m satisfied that Novuna handled this claim unfairly because it caused Mr R avoidable delays and inconvenience in the way it handled things. As noted above, both Mr R and Novuna disagreed with certain aspects of my provisional decision. Mr R has expressed unhappiness about the structure of the redress. But I think it’s reasonable and fair for Novuna to have to only pay costs for which there is suitable evidence to show it has been used for its intended purpose. Further, I think it’s reasonable to put a time limit on how long this remains open to Mr R to claim for. So, I’ve put a time limit of one year for Mr R to make his claim and also limited any liability for the remedial works to £7,788 inclusive of VAT that Novuna will have to pay Mr R. This is in line with the latest quote which was in February 2026. Whilst I know this isn’t the way Mr R wants the redress to be paid, if he disagrees with this outcome, he doesn’t have to accept my findings and may pursue this matter through alternative means, such as court (taking appropriate advice), should he wish to do so. Mr R said that I should increase the level of compensation for the distress and inconvenience caused to him by Novuna. But I remain satisfied that a total of £620 fairly compensates him here. I’ve fully considered Novuna’s further arguments such as there being no debtor-creditor-supplier link between it and those who carried out the original fitting. However, it has presented similar arguments to this previously which I fully considered as part of my provisional decision as outlined above. To be clear, I’m not awarding Mr R the fitting costs because there was something defective about this. I’m awarding him the fitting costs because he will need to once again pay for the fitting costs which he wouldn’t have to pay for if there was no breach of contract in terms of the flooring itself. I also note Novuna said it is entitled to continue with its investigations. But the point here is that if Novuna wanted an independent expert to review things, it could’ve done this much sooner. Instead, it accepted liability at an early point and made sure Mr R didn’t pay for the defective flooring. In my view, it also had to fairly consider any other direct costs linked to replacing the (defective) flooring. T had already attempted a repair which didn’t work, and Mr R wanted to replace the flooring after the last attempt to fix things failed. So, I consider Novuna

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should reasonably have considered the costs involved in this as it is only a result of the breach that the remedial and additional fitting cost became necessary. In terms of the remedial works, the latest quote show this is for: removing the toilet pan and vanity unit in W.C to allow flooring to be uplifted; uplifting the existing LVT flooring to kitchen, hall, W.C. and lounge and removing from site; supplying and fitting new softwood skirting to these areas; priming and painting new skirting to match existing woodwork as closely as possible; re-painting walls with one coat of paint to match existing as closely as possible; reinstating the toilet pan and vanity unit then finishing with white sealant; and to safely dispose of waste materials. Novuna will be entitled to pay any trader employed to carry out these works directly on presentation of an invoice and it will only be liable to pay any such trader up to the latest quote figure of £7,788 (inclusive of VAT). I note Mr R said costs are due to go up via his trader. However, as this latest quote is from February 2026 and is higher than the quotes provided by Mr R, I’m satisfied that it will be fair and reasonable to base the upper limit amount for Novuna’s liability on the latest quote. Putting things right To put matters right Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance needs to take the following steps: • Pay Mr R an additional £500 for the distress and inconvenience it has caused. This £500 is in addition to the £120 already paid to Mr R. • When Mr R has paid for the new flooring and shows suitable evidence of this as well as suitable evidence of arranging for the fitting of the flooring by a trader, Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance will then be liable to refund Mr R the cost of the original fitting which was £917.63. This means Novuna won’t be liable for any new fitting costs for the new flooring (and to be clear, it doesn’t have to pay for new flooring). • Pay Mr R the cost of the remedial works associated with the removal of the flooring (with suitable evidence from a trader who is employed to carry out those works). Mr R will have to provide invoices with the bank details (or other methods of payment) from the trader and Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance will need to pay the funds directly to the trader. I understand the works need to be carried out in two stages, and Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance can pay the trader directly at each stage. Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance will only be liable to pay up to £7,788 (inclusive of VAT) in total for any remedial works caused by removing and re-fitting the new flooring (and this excludes the cost of the new flooring and fitting of this new flooring). Mr R will need to make his claim (with suitable invoices) within one year from the date of this decision. My final decision My final decision is that I’m upholding this complaint and require Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance to carry out the steps I’ve set out above under ‘Putting things right’. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 28 April 2026. Yolande Mcleod Ombudsman

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