What are NR up to? **WON**

[tomterm8]

Please see my PM for detailed advice (I've CC'd a couple of site helpers as well).

 

This is the kind of defence I was talking about.

 

DEFENCE

 

On the DATE, a request was made under the civil procedure rules to obtain a copy of a credit agreement that the alleged debt refers to. It was sent by DELIVERY METHOD to the Claimant’s Solicitors. In response the claimant provided a copy of an unsigned document that does not comply in all respects with the consumer credit act 1974 s61 (signing of agreements) and is rendered unenforceable via s174(3) of the consumer credit act 1974

 

I deny that there has been any failure to make payment in accordance with the alleged contract. The Claimant has failed to produced a copy of a properly executed credit agreement and in the absence of such an agreement, which conforms to sections 60 and 61 of the Consumer Credit Act 1974, I aver that no agreement has ever existed for there to have been any failure to make said payment.

 

It is denied that any Default Notice in the prescribed format was ever received and the Defendant puts the Claimant to strict proof that said document in the prescribed format was delivered to the defendant.

 

In respect of that which is denied, during the period in which the Account was operating the claimant debited numerous charges to the Account in respect of purported breaches of contract on the part of the Claimant and also charged interest on the charges once applied. The defendant understands that the claimant contends that the charges were debited in accordance with the terms of the contract between itself and the Claimant.

 

I contend that:

 

a) The charges debited to the Account are punitive in nature; are not a genuine pre-estimate of cost incurred by the claimant; exceed any alleged actual loss to the claimant in respect of any breaches of contract on the part of the defendant; and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Claimant which exercises the contractual term in respect of such charges with a view to profit.

 

b) The contractual provision that permits the Claimant to levy such charges is unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations (1999) and the common law.

 

 

Accordingly I put the Claimant to strict proof that every charge and collection charge made to the account was valid and lawful. I aver that any default notice sent would have included these charges.

 

I put the claimant to strict proof that any default notice sent to me was valid. I note that to be valid, a default notice needs to be accurate in terms of both the scope and nature of breach. If the claimant sent a default notice that includes unlawful charges, this default notice is invalid under English law for the reason that it is inaccurate and so the claimant may not seek to enforce this debt.

 

Further, the claimant states that I have refused to pay sums due under agreement. In its particulars of claim, it has not explained under what terms of any agreement these sums were due and I put the claimant to strict proof that said monies are due.

[tomterm8]

You are unlikely to get the account info. you require without a S.A.R - (Subject Access Request) to NR.... although without a CCA, the account is unenforceable anyway. Having said that though, I am a little confused by there claim that the loan comes under CCA, 1974.... since I also thought it only covered loans £25k and under . In order to cover yourself, it might be worth considering a S.A.R - (Subject Access Request) to NR in order to see all the data held on you, which should include statements in relation to this account. That way, you could go along the unlawful charges route and reject any Default Notice that they claim to have sent you, as being invalid..... should this be necessary.

 

Any thoughts on this anyone ?

 

 

Agreements made after the 2006 act are not restricted to less than £25,000. This agreement, however, was made when that restriction applied, and so never was a agreement regulated by the consumer credit act in the definition applicable.

 

I am coming to the conclusion, however, after a little reading that if the original credit agreement clearly and prominantly contained the phrase "This agreement is regulated by the consumer credit act 1974" , then there would be a very strong case that you were entitled to rely on that representation and that they should be estopped in equity from claiming otherwise.

 

Such an argument might very well find its way to the house of lords, but I believe the case law from similar situations is very strong on this point.

[tomterm8]

I would absolutly advise you not to do this without talking to the national debt line. In particular, if you have other debts, i would suggest the most you could honourably do is to offer pro rata payment on an unsecured debt, after any secured payment was made.

 

since you have already placed your house up for sale, i would suggest they are unlikely to successfully obtain reposession, but again you can talk to the national debt line.

 

What is your equity situation - positive or negative?

[tomterm8]

I've asked a few people to have a look in to the thread.

[tomterm8]

Is it something I said why I am getting no response?

 

No, you're getting no response because I've drafted something, and sent it to about five site helpers and several moderators for comments...

 

This is an unusual application, and we want to get it right.

[tomterm8]

Response to Application

 

 

In X County Court Applicant(APPLICANT)

Between and Your Name(RESPONDANT)

 

 

 

1. This response is provided to refute the application provided by the claimant.

 

2. With regard to the short summary of the application, the claimant requests permission to enforce the alleged agreement under section 65 (a) of the consumer credit act 1974 in the absence of any copy of the consumer credit agreement.

 

3. No such provision of the act exists.

 

4. It is respectfully submitted that the section of the consumer credit act the Claimant refers to in paragraph 2 reads:

 

65.

Consequences of improper execution.

—

(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

(2)

A retaking of goods or land to which a regulated agreement relates is an enforcement of the agreement.

5. I note that, in making an application under this section the claimant must admit that the agreement is improperly executed.

 

6. The consequences of improper execution are set out in the consumer credit act 1974 s127 (Please note, in schedule 3 s11 of the Consumer Credit Act 2006 sets out saving that section 15 of the consumer credit act 2006 is not retrospective)

 

Enforcement orders in cases of infringement.

— (1) In the case of an application for an enforcement order under—

(a)section 65(1)(improperly executed agreements), or

(b)section 105(7)(a) or (b)(improperly executed security instruments), or

©section 111(2)(failure to serve copy of notice on surety), or

(d)section 124(1) or (2)(taking of negotiable instrument in contravention of section 123),

the court shall dismiss the application if, but (subject to subsections (3) and (4)) only if, it considers it just to do so having regard to—

(i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and

(ii) the powers conferred on the court by subsection (2) and sections 135 and 136.

(2) If it appears to the court just to do so, it may in an enforcement order reduce or discharge any sum payable by the debtor or hirer, or any surety, so as to compensate him for prejudice suffered as a result of the contravention in question.

(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

(4) The court shall not make an enforcement order under section 65(1) in the case of a cancellable agreement if—

(a)

a provision of section 62 or 63 was not complied with, and the creditor or owner did not give a copy of the executed agreement, and of any other document referred to in it, to the debtor or hirer before the commencement of the proceedings in which the order is sought, or

(b)

section 64(1) was not complied with.

(5) Where an enforcement order is made in a case to which subsection (3) applies, the order may direct that the regulated agreement is to have effect as if it did not include a term omitted from the document signed by the debtor or hirer

7. With regard to s61(1)(a) the provisions of the act are set out as such:

Signing of agreement.

— (1) A regulated agreement is not properly executed unless—

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and

8. It is respectfully submitted that either The Consumer Credit (Agreements) Regulations 1983 or The Consumer Credit (Agreements) (Amendment) Regulations 2004 No. 1482 are the regulations applicable to the form of the agreement("The agreement regulations") . In the absence of the credit agreement, it is not entirely possible to determine which the relevant regulations are, although for the purposes of this argument this is in my view immaterial.

 

9. In seeking an enforcement order, or permission to enforce the agreement, the applicant is put to strict proof that the credit agreement contained all prescribed terms (these being defined by Reg 6(1) as being specified in Sch 6 of the agreement regulations for the purposes of s61(1)(a) and s127(3))

 

10. In seeking an enforcement order, or permission to enforce the agreement, the applicant is put to strict proof that the credit agreement fulfilled the requirements of s61(1)(a)

 

11. In my view, in the absence of proof by the applicant, the court is precluded from issuing an enforcement order by way of s. 127(3) of the Consumer Credit Act 1974. The attention of the court is drawn to Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch) thus:

 

'What the 1974 Act does is put in place a bright line over which the parties, and in particular the lender, must not step…’

12 I would respectfully submit that In Wilson v First County Trust Limited [2003] UKHL 40; 4 All ER 97, the House of Lords made it clear that the draconian effects of the Consumer Credit Act 1974 where loan agreements were struck down by the courts as unenforceable were (assuming that the courts had jurisdiction to consider the Convention compatibility of the Act) a legitimate exercise of Parliament's powers in this field. Lord Nicholls said:

"72. Undoubtedly, as illustrated by the facts of the present case, s 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

73. The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach. Infringement of statutory requirements rendered the loan and any security unenforceable. So did the Hire-Purchase Act 1965, although to a lesser extent. This approach was roundly condemned in the Crowther report ...

'It offends every notion of justice or fairness that because of some technical slip which in no way prejudices him, a borrower, having received a substantial sum of money, should be entitled to retain or spend it without any obligation to repay a single penny.'.

74. Despite this criticism I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, to decide that compliance with certain formalities is an essential prerequisite to enforcement of certain types of agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumersadequately. Persons most in need of protection are perhaps the least likely to participate in court proceedings. They may well let proceedings go by default.

75. Nor do I have any difficulty in accepting that moneylending transactions as a class give rise to significant social problems. Bargaining power lies with the lender, and the social evils flowing from this are notorious. The activities of some lenders have long given the business of money lending a bad reputation. Nor, becoming more specific, I do have any difficulty in accepting, in principle, that Parliament may properly make compliance with the formalities required by the 1974 Act regarding 'prescribed terms' an essential prerequisite to enforcement. In principle that course must be open to Parliament. It must be open to Parliament to decide that, severe though this sanction may be, it is an appropriate way of protecting consumers as a matter of social policy. In making its decision in the present case Parliament had the benefit of experience gained over many years in the working of the 1927 Act and the hire-purchase legislation, and also the views of the Crowther Committee. Further, it must be open to Parliament so to decide even though the lender's inability to enforce an agreement will not assist a borrower who consents to the enforcement of the agreement in ignorance of the true legal position."

13 I further note that in the absence of a copy of the credit agreement, the court can not meaningfully determine whether, and to what extent, the improper execution of the credit agreement was prejudicial to the debtors’ interest with regard to s127(1). Further, it is my belief that the burden of proof on any enforcement action is upon the creditor to show that some default or breach of the credit agreement has taken place. I do not see how the court can determine whether such default took place in the absence of such an agreement.

 

14 Further, it is clear that no obligation exists upon the court to grant any order for enforcement unless the court determines that it is just to do so, and I respectfully submit justice in this case requires the claimant to prove that some term of the agreement was breached.

 

15. The applicant, in paragraph 3 mentions draw downs. The applicant is put to strict proof that these took place. In any case, I believe such draw downs are not relevant for the purpose enforcement under s127 and 65 since as Lord Nicholls states in his speech ([2003] UKHL 40):

 

31. These restrictions on enforcement of a regulated agreement are for the protection of borrowers. They do not deprive a regulated agreement of all legal effect. They do not render a regulated agreement void. A regulated agreement is enforceable by the debtor against the creditor. It seems, for instance, that a borrower may insist on making further drawdowns under a regulated agreement even though the agreement is unenforceable against him. Further, section 173(3) expressly permits consensual enforcement against a borrower. A borrower may consent to the sale of a security or to judgment. Moreover, the creditor is entitled to retain any security lodged until either an application for an enforcement order is dismissed or the court makes a declaration under section 142 that the agreement is not enforceable. That is the effect of sections 113(3) and 106.

16 In respect of paragraph 4 of the application, the fact I made payments to the account is irrelevant. The lack of a document that is enforceable under s127 does not prevent me doing so. I was entirely entitled to do so, even if the agreement was otherwise rendered enforceable by law, as stated in paragraph 15.

 

17 In respect of further allegations made in paragraph 4 of the application I would refer to Wilson & Anr vs Hurstanger Ltd[2007] EWCA Civ 299

 

11. Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated consumer credit agreements". Some of this information mirrors the terms prescribed by schedule 6, but some does not. Contrasting the provisions of the two schedules the Judge said:

33. In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the court can identify within the four corners of the agreement.

Those minimum provisions combined with the requirement under section 61 that all the terms should be in a single document, and backed up by the provisions of section 127 (3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated

. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement. More detailed requirements, which are designed to ensure that the debtor is made aware, so far as possible, of specified information (including information contained in the minimum terms) are to be found in Schedule 1.

I agree. The discretionary power under section 65 (1) to order enforcement of an agreement which does not comply with schedule 1 may be exercised on terms discharging the debtor from having to pay any sum payable under the agreement (section 127 (2)).

18. The idea that the existence of unsigned terms and conditions, even if originally embodied in a credit agreement (which I deny) can be sufficient to provide an enforceable credit agreement under s127(3) seems to be against all precedent. I respectfully submit the purpose of an application under s65(1) is to allow the court to enforce an agreement improperly executed under schedule 1 of the Regulations, not to remove the requirement of the creditor to prove the existence of a document containing the prescribed terms set out in schedule 6 of the regulations.

 

19. For the avoidance of doubt, I do not possess a credit agreement for this account, and since it is several years ago I have no recollection of the content of any agreement signed, or indeed of ever signing an agreement.

 

20. I have no legal training, and in common with almost all consumers at the time the agreement was made I had not read or understood the requirements of the consumer credit act or associated regulations. I therefore cannot say whether such an agreement complied with these requirements. I put the applicant to strict proof that a document compliant with the requirements of the Consumer Credit Act 1974 exists, or has ever existed.

 

Statement of truth -

I YOUR NAME believe the above statement to be true and factual to the best of my knowledge

Signed

(Type, but dont sign your name)

[tomterm8]

You will have to make sure all fonts etc are consistant - the text box sometimes removes spaces & changes fonts when copying from word.

 

And of course, read it over and ask any questions.

[tomterm8]

Cool, a good result.