Written by John Kruse, one of the leading experts on Bailiff Law, this consumer friendly guide is essential reading for anyone who comes into contact with a bailiff.
The book is easy to understand and clearly explains the rights
a bailiff has, and also what they cannot do when collecting debts and repossessing goods etc.
Re: Response to request for claim to be struck out ** Revamped**
What Priestly1965 successfully used:
Court Hearing 19/01/07
Firstly can I state that I am not a lawyer and have not had the benefit of expert advice from a barrister. I brought this action after taking advice from the consumer action group who have an ongoing campaign against unfair bank and mortgage charges.
Please do not try to confuse me with legal jargon!
1) Breach
It is not disputed that I had a mortgage with the defendant
The mortgage was for a term of 25 years; it was redeemed before 25 years and is therefore a breach of contract
I accept the contention that redemption of the mortgage was provided for in the mortgage offer. The term provides that an early redemption charge was payable in the event of a redemption and thus represents a charge that is payable in the event of a breach of contract. The term merely anticipates a breach and does not represent the exercising of a right under the contract.
A term imposing an ERC is merely stating what charge will be paid if you breach the term by ending early.
A term which provides for a pre-determined fee in the event of a breach of contract must be a genuine pre-estimate of the losses incurred by the breach if it is to be deemed a lawful liquidated damages clause. If it is excessive it will be an unlawful penalty.
Case law: Bridge –v- Campbell Discount Co Ltd Dunlop Pneumatic Tyre Co Ltd –v- New Garage Motor Co
I redeemed this mortgage early on 02/06/05 and was charged £4253.09. If I had redeemed on 08/08/05 and had given 1 months notice then no charge would be payable therefore how can the actual costs have been £4253.09 for the sake of 2 months.
Mortgage companies offer a reduced rate in order to attract custom which is a calculated commercial decision. The risk involved should not be passed onto the consumer as this would be unreasonable under s.4 UCTA
2) Mortgage details
We sold our previous house to help us out of difficult financial circumstances. We had a poor credit file and the financial adviser only offered us one product from one lender (sub prime)
The deal was for a variable rate mortgage at 4% above the Libor rate – this was discounted by 1.5% until 01/04/04
This reduced rate was still excessive but we did not have a choice.
We redeemed the mortgage early as we still had not got out of our difficult financial circumstances and we needed to raise funds, furthermore we were in arrears with the mortgage as we couldn’t keep up to date with the payments after the discounted period ended and we were being pressured by the lender to clear the arrears, at this point they were threatening repossession proceedings. Our only available course of action was to re-mortgage!
The rates charged were as follows: 6.75 6.62 6.25 6.12 6.25 6.5 6.75 Discount period ended 8.25 8.75 9.0 8.87 9.0 8.87
3) OFT
The office of fair trading did a test case for excessive redemption fees and the research paper commissioned by them says:
A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the unfair terms in consumer contracts regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement.
Dr Skinner the researcher concluded that:
Redemption charges other than a reasonable admin fee are not justifiable in the case of variable rate loans.
Overhanging redemption charges – which continue to be levied after a fixed rate has ended, cannot be justified.
4) Successful claims
Successful ERC claims have been made against the following companies: Halifax Mortgages GMAC Alliance & Leicester Birmingham Midshires Nat West Home Loans Leeds & Holbeck CHL Mortgage Express Northern Rock London Scottish
Plus many claims are currently ongoing.
All of the above companies used maximum delaying tactics and all settled prior to the court hearing rather than setting a precedent by unsuccessfully defending at court, thus incurring time and costs.
5) Counter claim for costs
When this claim was started it was understood that as the claim was in the small claims court and was for less than £5000 then I would not be liable for the defendants’ legal costs in accordance with CPR 27.14
The defendant has indicated that their costs to date are £3091.80 and that I will be responsible for these.
This is intimidatory and it appears to be aimed at pressuring me to withdraw the claim and is therefore in direct conflict with the Civil Procedure rules.
I understand that the defendant cannot rely on a clause in a contract which is no longer in force.
Clause 17.1 in the mortgage terms is an unfair term under s.4 of the unfair contracts terms act 1977.
Such a term is unreasonable under s.11 of the act as even if my claim is successful the term would effectively deprive me of a remedy and indeed could leave me open to pay further costs.
6) Summary
To summarise: I have a valid claim, I followed procedure and won judgement by default as neither the defendant or their solicitors responded within the given time frame.
I do not feel that the defendant does have grounds for the judgement to be set aside or struck out.
If the court decides for the judgement to be set aside then the case should go to trial as I have a real prospect of being successful in this case.
The defendant should be responsible for their own costs as indicated above.
Response to request for claim to be struck out ** Revamped**
The Consumer Forums
