Debts over six years old

[rory32]

I can see we have been talking at cross-purposes. I had in mind a simple agreement to repay the whole of a loan on a fixed date.

Ahha it all becomes clear now

Would this letter about bank chargesbe seen as an aknowlegement of the debt?

As sequenci states it would depend on the contents of the letter.

The basic requirements of an acknowledgment are that it must be in writing and signed by the debtor or his agent. In this context ‘signed’ means in manuscript and not typed (see Firstpost Homes Limited v Johnson [1995] 1 WLR 1567).

The vital characteristic of an acknowledgement is that it must amount to an unequivocal admission that the debt remains due: Surrendra Overseas Ltd v Government of Sri Lanka [1977] 1 WLR 565. The court must construe the alleged acknowledgment as a whole – the creditor will not be allowed to pick and choose those parts of a document which suits it, while ignoring others.

An acknowledgment need not quantify the debt due, it is sufficient that the amount owed may be ascertained by extrinsic evidence: Dungate v Dungate [1965] 1 WLR 1477. However, a document which admits all the facts necessary to give rise to liability, but in which the debtor denies that he is in fact liable, will not amount to an effective acknowledgement.

To be effective, the denial must amount to a denial of liability for all times and all purposes: Bank of Baroda v Mahomed [1999] Lloyds Rep Bank 14.

However a statement by the debtor that he is unable to pay the debt “at the moment” will constitute an acknowledgement because it amounts to an admission that the liability exists.

[rory32]

Indeed you are but the terms of the contract may mean that action cannot be brought at that stage. The terms may state that there has to be a couple of missed payments before the action can be brought, this is certainly usually the case in regulated agreements.

Could you please clarify on what you base this opinion? The LJ's opinions on such matters have been well documented and would appear to be in conflict with yours.

[sequenci]

Originally Posted by rory32

Could you please clarify on what you base this opinion? The LJ's opinions on such matters have been well documented and would appear to be in conflict with yours.

'It has always been held that the statute runs from the earliest time at which an action could be brought'

- Reeves v Butcher [1891] 2 QB 509

[Evader]

The problem with one party being able to rely on a contract provision to trigger the limitation (by stating for example that no action can be taken until the [for example] Default Notice expires) is that that term is subject to interpretation and rules of law. The debtor could argue the clause restricting the right of the Creditor to take action, is for example unclear and ask the court to ignore the clause completely.

If the Creditor could do what is being suggested then what stops a term such as "There shall be no legal proceedings initiated until the Debtor has missed two payments and the Creditor sees it fit to do so". However such clauses would be subject to the Unfair Contract Terms Regulations...

Any thoughts?

[rory32]

Bristol & West v Bartlett [2002] EWCA Civ 1181; [2003] 01 EG 69) / West Bromwich BS v Crammer [2003] EWHC 2618 / Scottish Equitable plc v Thompson [2003] 07 EG 137, CA; [2003] All ER(D).