£25,400 penalty charges claimed by NatWest

[yourbank]

I've see the news elsewhere on this so Askl put the caggers out of their misery and tell them the positive news

[The GodMother]

please can we have some type of clue to where Yourbank.

[askl]

The claim will be struck out unless NatWest provide the method of calculation of all the individual charges by 4 August - I'll post the exact wording once I've received the order that will follow today's hearing.

 

Overall the Claimant's representative was far brighter and better prepared and than previous incumbents.

 

Once again she used the old, "a list of the charges is the same as a break down of charges" and since the order offered the Claimant to provide either "the method of calculation, or the break-down". The judge disagreed.

 

And she used the Penalties bit from the OFT, however I had sufficient argument to defend that and the judge agreed the case should be struck out, but only after another 4 weeks as no sanction was mentioned previously - and again he is trying to tighten the wording so they don't wriggle this time.

[FlyboyAgain]

Result!

[The GodMother]

result

[caro]

A shame no sanction was mentioned before, but looks like you're well on the way to seeing them off.

 

Well done.

[askl]

A shame no sanction was mentioned before, but looks like you're well on the way to seeing them off.

 

Well done.

 

It wasn't for want of trying, but the previous judge refused to order a strike-out. This judge said he would......

[gandolfi]

Apologies for the delayed response....just read the updates.

 

Well done, askl

 

Sounds fantastic and you managed to tackle them in all directions. Looking forward to seeing what happens now.

 

I'd be interested to know your arguments against her use of the Penalties bit from the OFT. Please tell us more.

 

All best,

Gandolfi

[askl]

The Order came through today;

 

1. Unless the Claimant do by 4.00pm on Tuesday 04 August 2009 file and serve a Witness Statement explaining the method of calculation of all the individual charges made herein, the Claim for such charges and all interest there-on do stand struck out.

 

2. No order for costs.

[Rhia]

Subbing on this - just starting a case against NatWest to recover penalties from 88/92 - should be a long haul.

http://www.consumeractiongroup.co.uk/forum/business-claims-bank-charges/206046-rhias-attempt-1990s-charges.html

[The GodMother]

oh august the 4th is only 5 days away wondering if there has been any developments

[Bigdebtor]

oh august the 4th is only 5 days away wondering if there has been any developments

 

Has someone ripped out the end pages out of this story? I have read this all through this morning with mounting excitement and can't stand the suspense.

 

WHAT HAPPENED ON 4th August?

 

BD

[askl]

Apologies but I found more legal input at;

 

"Legal Beagls" sic - unfortunately the link won't paste.

www.legalbeagls.info/forums/showthread.php?p=128554#post128554

with the missing "e" in seagulls

Edited December 14, 2009 by askl

[middenmess]

link is only good if you register and log in.

[Bigdebtor]

Apologies but I found more legal input at;

 

"Legal Beagls" sic - unfortunately the link won't paste.

www.legalbeagls.info/forums/showthread.php?p=128554#post128554

with the missing "e" in seagulls

 

C'mon askl - please make it easier for your loyal readers. What happened?

 

BD

[gandolfi]

Hi AKSL

Please let us know what has happened in your case - it would be very useful to know more...a quick summary, if possible...?

 

(I'm not registered at the other site yet)

 

All best,

Gandolfi

[askl]

Sorry guys, since Supreme Court's conclusion I've been focusing on my arguments ahead of a hearing on 15 Jan were I have applied to strike out the Claim and the Claimant has applied to have my defence and counterclaim struck out.

 

Below is my draft Second Witness Statement which should fill in most of the gaps. Any suggestions are appreciated - however I need to file the statement 7 days before the hearing.

 

SECOND WITNESS STATEMENT OF

 

 

I will state as follows:-

 

• I am the Defendant at the above address and I make this Witness Statement believing the information is true and accurate.
  

• Throughout this Witness Statement I refer to copy documents now in an Exhibit marked DP2. Unless otherwise stated the contents of these documents are true and accurate.
  

• I make this Statement further to the Claimant’s Second Witness Statement of 4th August 2009 following the order of District Judge Jacey dated 7th July 2009.
  

Hearing to strike out Claim

 

• District Judge Jacey's orders on 7th July '09 that “Unless the Claimant do by 4.00pm on Tuesday 04 August 2009 file and serve a Witness Statement explaining the method of calculation of all individual charges made herein, the Claim for such charges and all interest there-on do stand struck out.” Although this is the fifth such order from four District Judges over more than one year, the Claimant has not explained the method of calculation. Therefore the Defendant asks that the Claim stands struck out as the District Judge orders.
  

• The Claimant’s Second Witness Statement fails to explain the method of calculation of charges and so does not comply with the Court Order. Instead in paragraph 19. it states “the charges that applied are standard charges set by the bank”. It then attaches Terms and Conditions dated August 2002 and a list of Tariffs dated December 2008, neither of these explains the method of calculation of the charges. Furthermore the charges in dispute occurred before the date of these documents therefore they have no relevance.
  

• I first disputed the charges in November 2000 when the Company’s bank account was well within the credit banking facilities provided in consideration for my £33,000 guarantee. I disputed the existence of the charges, but not their size as at that time I believed the bank when it said in its notices to me that “As dealing with unpaid cheques means extra administrative work, I have charged a fee of £30 to your account to cover these costs” see attachment xxx.
  

• It has only come to light within the past few years that NatWest materially misrepresented the costs of the “extra administrative work” in its notices see attachment xxxx [Yorkshire Bank]. This misrepresentation and the unlawfulness of these charges was not known about at the time the charges were first disputed and was not known for many years after the company ceased existence.
  

• In Claim number: 7QZI 5766 Kevin Fraser v Citifinancial Europe Plc, see attachment, the bank explains the method of calculation of its default fee. If Citibank can provide the method of calculation of its charges, so can NatWest.
  

• The Claimant reduced its personal account charges for bouncing cheques from £35 to £5 in October 2009 see attachment. Therefore the actual cost in 2001 unlikely be more than £5.
  

• It was established in Dunlop Pneumatic v New Garage [1915]AC 79 along with Murray v. Leisure Play [2005] EWCA Civ 963. If the charges claimed exceed the cost to the Claimant they are penalties and unenforceable under common law.
  

• The penalty charges to this account were exceptionally high and punitive. £1,942 of the Claim, or £11,878 after interest, was the Claimant’s charge for it not paying about 30 cheques. For instance on 4 September 2000 the Claimant sent two separate notices to the Company. The Claimant specified the charge on one notice was £82.50 for unpaid cheque numbers; 162, 171 and 172. The charge on the other notice was £55 once again for unpaid cheque numbers; 162 and 172. As can be seen two of the cheques were "bounced" on both notices and were therefore both charged £55 each on the same day. The same two cheques "bounced" again on separate occasions. On both notices it clearly states that the fee is to cover “extra administrative work”.
  

• At best sending two notices out on the same day for two identical cheques strongly suggests that very little administrative skill and time can be being applied, probably less than the £5 currently being charged. Therefore £27.50 per bounced cheque cannot possibly be proportionate for the "extra administrative work" as is stated on the notice. Put another way the total charge of £137.50 on this day must buy sufficient administrative time and skill, to ensure that multiple notices are not sent out showing the same cheques bouncing more than once on the same day.
  

• In another example a key cheque for £2,249 "bounced" on 1 March 2001 and then on another five separate occasions including two months later on 2 May 2001, costing a total of £180 plus interest thereon. As with most other occasions this cheque should have been paid as the account was within the overdraft facility limits and my guarantee of £33,000 more than covered the Company’s overdraft of £1,500 at that time.
  

• £1,681 of the Claim, or £9,334 after interest, was the Claimant’s charge for administering the account during the year it treated it as over its overdraft limit see exhibit xxxx. Again I dispute these charges and have refused to pay them as I do not believe that the account was over its limit and don't believe the charge accurately represent the cost of extra administrative work.
  

• The Claimant’s Second Witness Statement contains a material error in the calculation of interest on the charges as it fails to account for accumulated interest. In its calculation it has simply divided 29.5% by 365 days in the year, and then applied this over 1370 days. In practice the bank charges interest monthly based on the previous month’s balance including interest. Thus the first month was £3.08 as the bank rightly calculates, but the second month’s interest charge was £3.16 per day. The daily interest increased by December 2003 to almost £9 per day.
  

• The Claimant’s Second Witness Statement omits the balance on Account 60-50-58 44099622 which continues to have £5.52 in credit.
  

• The Claimant’s Second Witness Statement omits the Account 60-50-06 80550193 which was in credit by £55, when the company ceased to exist. The Claimant’s Second Witness Statement also omits all its charges to this account of £83.
  

• The Claimant’s Second Witness Statement also contains errors and omissions in its list of charges to Account 60-50-06 80531741 as follows;
  
  • 27 Jun '00 £27.50
    
  • 6 Mar '01 £30.00
    

 

• The corrected total of charges and interest thereon exceeds the balance of the corrected claim at 5th December 2003 by xxxx see attachment xxx.
  

 

Defence of the Claim

• The re-amended claim of £28,551.56 dated 28 February 2008 remains unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.
  

• The original claim of £12,637.40 dated 25 January 2007 remains unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.
  

• The first demand for payment on 27th October 2003 [see exhibit] of £12,122.15 is unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.
  

• The only balance supported in either of the Claims or Witness Statements is the £11,620.43 on 5th December 2003, in paragraph 26 to the Second Witness Statement. This is said to have been the balance at the time the guarantee was called up. This balance is supported by a bank statement for one account. However this amount fails to take account of the credit balances on Account 60-50-58 44099622 and Account 60-50-06 80550193.
  

• The two guarantees of £14,000 and £19,000 see exhibit xxxx both state clearly that the Guarantee is “in consideration” for the bank providing “time credit banking facilities” see exhibit xxxx. At the time of signing the guarantees this was understood to mean that the Claimant would provide the Company with a banking facility equivalent to the guarantee for the duration of the guarantee. The guarantees both sate in paragraph 4 to exhibit xx and yyyy “the guarantee shall be additional to any other guarantee or security now or hererafter held in respect of the liabilities hereby secured.”
  

• If it had been the intention of either the Claimant or myself to limit the credit facility to £19,000 we would have mutually agreed to terminate the £14,000 guarantee dated 20th June 2000 subject to this Claim. The Claim and Claimant’s Witness Statements remain silent on my second guarantee to the bank of £19,000 see exhibit xxx and its corresponding credit banking facility although it ask for payment under it on 27th October 2003 [see exhibit xxx]..
  

• The demand for payment under the guarantees in exhibit x demonstrates that the Claimant expected me to keep my side of the agreement.
  

• I entered into sales and purchase agreements on behalf of my company on the basis of my guarantees in the certain knowledge that a credit banking facility was in place. However within a few days of me signing the second guarantee on 24th October 2000, Company cheques started bouncing. I entered into dispute with the bank in November 2000 when I tried to force the bank to honour their side of the agreement.
  

• Because of the bank refusal to provide the agreed credit finance and the excessive penalty charges, the Company was forced to ceased trading in March 2001 and collected all remaining debts up to December 2001. There were no payments made after trading ceased.
  

• All bank borrowings were paid off except for the disputed bank charges and interest thereon. The amount paid to the bank exceeded the amount paid out of the bank by £1,351.05 see exhibit xxxx.
  

• As established in 12 above the Claim is for Charges and interest thereon, interest on charges being the greater figure in xxxx. The interest charge is contested as it was incorrectly applied at 29.5% on a simple basis, resulting in excess of 32% APR.
  

• In point 7. to its re-amended Claim the Claimant states Account 80531741 "From September 2000 11.00% PA up to £19,000.000 borrowing and then 29.5% PA in excess of this limit." Yet the bank incorrectly treated the account as over its £19,000 overdraft limit and charged excess interest. By example see page xxxx where bank charged £2,827.26 interest for the year to 31 September 2002 on a balance at 31 September 2001 of £8,715.34. That is an interest rate in excess of 32% PA.
  

• The Claim also includes 29.5% interest to judgement. This excessive rate is not justified in its witness statements and the delays up until August 2009 have all been caused by the Claimant’s refusal to provide documentation and court request to stay the proceedings pending the outcome of the OFT case, which it now concedes is irrelevant as this is a business account.
  

• In the event that the court is persuaded by the Claimant that it did not need to provide credit banking facilities in exchange for my guarantee and that the charges it made were fair and reasonable, then the Defendant asks for judgment for £3,943.91 being the sum of bank charges that constitute the entire Claim.
  

Counterclaim

• I counterclaim for loss of my personal earnings of £16,000 for a year from 2001. The bank took my £33,000 security without providing the corresponding and agreed finance. This meant I could not get finance for my Company elsewhere because my security was already tied to one bank. The damage caused by the bank breaking its contract was the lost of a year’s income. I believe the bank manager knew the damage the bank was causing me or at least should have done.
  

• Furthermore consideration should be given for the stress caused by the bank bouncing cheques when a facility was in place, pursuing me for unlawful penalty fees, charging excessive interest in excess of 32% per annum and using a debt collection agency which contacted friends, neighbours and my parents. And lastly the stress cause by the bank sending me personal data for another of its customers, see page to this statement for which I concluded that another customer must be in possession of the personal data that the claimant meant to send me.
  

Statement of Truth

I believe the facts as stated in these Particulars of Defence and Counterclaim are true.

Edited January 4, 2010 by askl

[Sunshine54]

hi AskI

an amazing read. many thanks for the update and very best wishes for success at court. It's unbelievable that this has continued to this stage.

S

[steven4064]

The Dunlop case is not relevant as the test case judge ruled that bank charges cannot be penalties (except in the cae of 2001 NatrWest charges - however, there is still no guarantee that a court would accept that these charges are penalties.) For Dunlop to apply, not only do the charges have to be over the bank's costs but they also have to be directly attributable to a breach of contract on your part.

[askl]

Thanks,

 

Andrew Smith says "14.

I consider first the NatWest 2001 conditions. The Relevant Term is the words that I have underlined in the following provision, which is included against the side-note “Using your Card”:

“You must only use your Card in accordance with these Conditions of Use and any operating instructions including the User Guide which we or our agents give you at any time. Such instructions form part of the contract between you and the Bank … You must not use your Card to go overdrawn on your Account unless we have previously agreed this with you. If you do go overdrawn without our agreement, you will be liable to pay interest for each day you are overdrawn on the total amount of the unauthorised borrowing together with our normal account charges. Full details of the interest and charges can be obtained from any branch of the Bank or from the reverse of your Account statement …”

 

My dispute with NatWest started in November 2000 after a NatWest Card payment caused the account to go overdrawn - while the card didn't result in a penalty for unpaid cheques, it was included in the £3.5 per day default charge. If it's of use I can scan the account.

 

Before anyone asks I've compared the personal and business account terms and they appear to be identical in all material respects.

[gandolfi]

I've compared the personal and business account terms and they appear to be identical in all material respects.

 

Hi AKSL

Thanks for posting the new info on your case. It looks like you've done a huge amount of work and I wish you all the best for the 15th. If you can get the Judge to recognise the fact that Natwest have failed to comply with previous requests and court orders for information that will allow you to fully particularise your defence, you will hopefully get their case struck out.

 

I'm very interested in your comparisons between the business and personal T&Cs - I still haven't been able to get copies of them despite numerous requests to Natwest. Do you have copies that I could see, or could you let me know how you got them? I'd really appreciate it. My case includes charges going back to 1995, so I need to pick out the contractual breaches that are connected to the charges from before they 'softened' their terms.

 

The relevance (or irrelevance) of the test case is difficult to manage within these arguments. I'm sure you have a grip on it, but it confuses me. On the one hand, Smith's lack of clarity allows us to argue for charges as penalties, but on the other hand, we (and now they) are saying that the test case was irrelevant to business accounts.

 

I'm following your thread with great interest and have everything crossed for you!

 

All best,

Gandolfi

[askl]

Hi, I've been reworking the above section, any help would be appreciated;

The High Court on 21 January 2009 concluded that NatWest’s contract was unique amongst bank contracts in that it was capable of being penal. Specifically; “You must not use your Card to go overdrawn on your Account unless we have previously agreed this with you”.

For example as can be seen on page 25 to the Claimant’s Second Witness Statement, on the 24 October 2000 the account stood at £657.42 when I understood that the bank had agreed to extend £19,000 additional credit finance in exchange for the £19,000 guarantee.

The card payment then went through on 30 October 2000 creating an overdraft. The bank broke the agreement to provide finance and instead it charged a penalty for what it considered a breach of its contract not to use the card to go overdrawn, see exhibit page 26.

[caro]

Hi, I've been reworking the above section, any help would be appreciated;

The High Court on 21 January 2009 concluded that NatWest’s contract was unique amongst bank contracts in that it was capable of being penal. Specifically; “You must not use your Card to go overdrawn on your Account unless we have previously agreed this with you”.

For example as can be seen on page 25 to the Claimant’s Second Witness Statement, on the 24 October 2000 the account stood at £657.42 when I understood that the bank had agreed to extend £19,000 additional credit finance in exchange for the £19,000 guarantee.

The card payment then went through on 30 October 2000 creating an overdraft. The bank broke the agreement to provide finance and instead it charged a penalty for what it considered a breach of its contract not to use the card to go overdrawn, see exhibit page 26.

 

I'll see if I can get an informed opinion for you on this.

[steven4064]

Arguments that charges on current accounts are penalties are dead in the water (except in one very special case). However, if you are saying a charge on a credit card is a penalty, that is an entirely different matter. IMHO charges on credit cards are penalties - often the T&Cs almost explicitly say so

[gandolfi]

Hi ASKL

Wondering how it went on friday...? Had everything crossed for you!

Hope all is OK.

Gandolfi