Process for a Statutory Demand - **WON**

[smt37]

Hi,

 

Please could someone set out what the creditor should be doing before issuing a SD for a credit card debt?

 

I was sent a default notice by the OC followed by a notice of assignment supposedly from the OC, (which had actually come from the DCA). Then, after a million phone calls, letters threatening CCJ, bankruptcy etc. a SD arrived.

 

I understand that the entity serving the SD needs to send a default notice first, not rely on the OC's one. Is this correct?

 

Thanks

 

SMT37

[tendogs]

Evening smt37

 

Who is the DCA?

 

Dogs

[smt37]

Hi Dogs,

 

It's First Credit for a CitiFinancial CC.

[tendogs]

Hi again, thought it might be CapQuest, they seem to be sending these out by the bucketful. How did the SD arrive? First class, second class, recorded or process served?

[tendogs]

I’m not absolutely sure about an order of service with reference to defaults and statutory demands. I THINK that a statutory demand can be issued at any time as it’s just a case of sending the creditor the form, no solicitor needed, so it’s a cheap thing to do and often scares the debtor into paying up, hence its growing popularity.

 

The creditor needs to be able to prove service so if it has come to you by first or second class post it’s unlikely that they will follow through with it, because it is a very expensive process to pursue.

 

They are fairly easy to have set aside and you have 18 days in which to do this and it would be prudent to get this done. There are a number of threads on the forum that will take you through the process of having it set aside. If you can’t find one I’ll look in tomorrow evening and point you in the right direction.

 

Dogs

[smt37]

Hi Dogs,

 

It came second class franked mail. I still have the envelope. I've applied for the set-aside and the hearing is later this month. I'm trying to prepare a defence, so wanted to be sure about the order of service. I read here somewhere that there must be a Default, a notice of intention and then the SD (served properly). If the default has to be delivered by the DCA, then they have done all three incorrectly - never mind the lack of CCA.

[42man]

Have you sent a request for a copy of your Consumer Credit Agreement if not then do it ASAP !!!

 

And you must totally dispute the debt on the form 6.4 and affadavit....

 

This may help you...

 

Then add the fact that they have not sent the CCA and are in default of your request

 

Say that you received the SD in the post by second class and thereby you believe it has not been served properly...

 

Say that you have not received any default notices, no notices of assignment

 

You believe that the alleged debt could contain a substantial amount of charges too....

 

You might find this useful....

 

I am totally disputing the debts claimed by First Credit

 

1.2 I believe there are no executed signed Consumer Credit Agreements, If they had been able to supply these agreements then they would have done so already

 

1.3 Under section 78 (1) of the Consumer Credit Act A formal written request for any true copies of signed consumer credit agreements was sent to First Credit Ltd. via recorded delivery on the (date) – to date they have not sent any copies of any Consumer Credit Agreements and are in default of that request (1) – (see attached documents labelled 1)

 

SECTION 78 (1) CONSUMER CREDIT ACT

 

(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

 

(a) the state of the account, and

 

(b) the amount, if any, currently payable under the agreement by the debtor to the creditor, and

 

© the amounts and due dates of any payments which, if the debtor does not draw further on the account, will later become payable under the agreement by the debtor to the creditor.

 

 

The Consumer Credit Act in section 78(6) States that

 

(6) If the creditor under an agreement fails to comply with subsection (1)—

 

(a) he is not entitled, while the default continues, to enforce the agreement; and

 

(b) if the default continues for one month he commits an offence.

 

2 -. I believe that, at the time the creditor has brought this demand on the basis of the assertion in a sworn statement that a liquidated sum was payable at the time. I do not believe that they knowingly misled the court, but at no time was the credit agreement provided in evidence, and I have not been supplied with a copy of the credit agreement despite my legal rights.

 

2.1 -. If the agreement is, as I expect, non existent or unenforceable, then the respondent was in error when it stated that a liquidated and legally enforceable sum was due to the respondent at the time the statutory demand was issued.

 

 

 

REFERENCE TO CASE LAW

 

• As the creditor has not provided the credit agreement Wilson v First County Trust Ltd [2003] UKHL 40 states that:
  ‘….the effect of the failure to comply with the requirements of the Consumer Credit (Agreements) Regulations 1983 was that the entire agreement ………….. was unenforceable. The statutory bar on its enforcement extended to First County Trusts's right to recover the total sum payable on redemption, which included the principal as well as interest.’
  

SUMMARY OF WILSON v FIRST COUNTY TRUST LTD (2003) UKHL 40

 

THE WILSON CASE MADE IT CLEAR THAT IN THE EVENT OF NO ACCEPTABLE CONSUMER CREDIT AGREEMENT THEN THE CREDITOR COULD NOT RECOVER MONIES OWED UNDER ORDINARY CONTRACT LAW REGARDLESS OF WHETHER THEY COULD PROVE THE DEBT EXISTED OR NOT – THIS WAS THE DECISION OF THE HOUSE OF LORDS AND SHOULD THEREFORE BE BINDING IN THIS COURT

The law states that without a prescribed agreement the courts may not enforce under 127(3) and

 

1.In the case of Dimond v Lovell [2000] UKHL 27, Lord Hoffmann said , at page 1131:-

 

“Parliament intended that if a consumer credit agreement was improperly executed, then subject to the enforcement powers of the court, the debtor should not have to pay.”

 

2.Sir Andrew Morritt, Vice Chancellor in Wilson v First County Trust Ltd [2001] EWCA Civ 633 said at para 26 that in the case of an unenforceable agreement:-

 

“The creditor must…be taken to have made a voluntary disposition, or gift, of the loan monies to the debtor. The creditor had chosen to part with the monies in circumstances in which it was never entitled to have them repaid;”

I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul) paragraph 29

” The court's powers under section 127(1) are subject to significant qualification in two types of cases. The first type is where section 61(1)(a), regarding signing of agreements, is not complied with. In such cases the court 'shall not make' an enforcement order unless a document, whether or not in the prescribed form, containing all the prescribed terms, was signed by the debtor: section 127(3). Thus, signature of a document containing all the prescribed terms is an essential prerequisite to the court's power to make an enforcement order.”

 

 

It must also be noted that the agreement must contain the prescribed terms.

 

Consumer Credit Act

 

8.2 What if prescribed terms are missing or incorrect?

 

s127(3) provides that the court may not make an enforcement order unless a document containing all the prescribed terms of the agreement was signed by the debtor

 

If therefore any of the prescribed terms is missing, or incorrect, the agreement is not enforceable against the debtor, and the court is precluded from making an enforcement order.

 

 

 

 

 

 

 

 

 

 

 

 

 

(N.B - For the avoidance of doubt the 2006 Consumer Credit Act does not change the above legislation……

 

The Consumer Credit Act 2006 (Commencement No. 2 and Transitional Provisions and Savings) Order 2007 (No. 123 (C. 6))

Citation

1. This Order may be cited as the Consumer Credit Act 2006 (Commencement No.2 and Transitional Provisions) Order 2007.

Interpretation

2. In this Order “the 2006 Act” means the Consumer Credit Act 2006.

Commencement

3. — (1) The provisions of the 2006 Act specified in Schedule 1 shall come into force on 31st January 2007.

(2) The provisions of the 2006 Act specified in Schedule 2 shall come into force on 6th April 2007.

Transitional Provisions

4. Subject to article 5, section 1 of the 2006 Act shall have no effect for the purposes of the 1974 Act, in relation to agreements made before 6th April 2007. (cont)

5. Section 1 of the 2006 Act shall have effect for the purposes of the definitions of “debtor” and “hirer” in section 189(1) of the 1974 Act wherever those expressions are used in—

a)

sections 77A, 78(4A), 86A, 86B, 86C, 86D, 86E, 86F, 129(1)(ba) 129A, 130A and 187A of the 1974 Act;

(b)

section 143(b) of the 1974 Act in respect of an application under section 129(1)(ba) of that Act; and

©

section 185(2) to (2C) of the 1974 Act insofar as it relates to a dispensing notice from a debtor authorising a creditor not to comply in the debtor's case with section 77A of that Act,

in relation to agreements made before 6 April 2007)

 

DEFAULT NOTICE

 

 

The Need for a Default notice

 

• Notwithstanding the above, it is also drawn to the courts attention that no default notice required by s87 (1) Consumer Credit act 1974 has been attached to the petition.
  

• 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
  

• Notwithstanding the above points, 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 and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237)
  

• Service of a default notice is a statutory requirement as laid out in sections 87,88 and 89 Consumer Credit Act 1974. Section 87 makes it clear that a default notice must be served before a creditor can seek to terminate the agreement or demand repayment of sums due to a breach of the agreement. therefore without a valid default notice, I suggest the claimants case falls flat and cannot proceed and to do so is clearly contrary to the Consumer Credit Act 1974
  

• Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but give me a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119
  

The Defendant denies that he is liable to the Claimant as alleged in the Particulars of Claim, /at all. It is averred that the Claimant has failed to serve a Notice of Assignment in accordance with section 136(1), of the Law of Property Act 1925, in respect of the alleged debt. The amount detailed in the Claimant’s claim, which is likely to include penalty charges, which are unlawful at Common Law, Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd [1915], under The Unfair Contract Terms Act 1977 and The Unfair Terms in Consumer Contracts Regulations 1999. Accordingly, the inclusion of penalty charges in the purported Notice of Assignment renders it entirely legally unenforceable. The Claimant has failed to comply with section 136(1) of the Law of Property Act 1925, by furnishing a Notice of Assignment in respect of that which is denied, that is inaccurate, W.F.Harrison and Co Ltd v Burke [1956].

The defendant requires sight of the notice of assignment of the debt. In addition the defendant requires proof of service of the Notice of Assignment in accordance with s196 of the Law of Property Act 1925 which is required to give the claimant a legitimate right of action in their own name since it appears this is an assigned debt. the reason the defendant requests this information is inter alia to clarify the dates are correctly stated on all documents , the defendant notes that if there are errors in the assignment it may be rendered in effectual in law per W F Harrison and Co Ltd v Burke and another - [1956] 2 All ER 169

 

 

2 -Perfection of the assignment.

 

2.1. I have never received a notice of assignment according in all respects with s136 of the Law of Property Act 1925

 

2.2 I respectfully submit to the court that steps to ensure service of a notice of assignment are only adequate if the requirements of s196 of the law of property act 1925 are complied with regard to either (a) personal service or (b) postal service.

 

The requirements for service via the post are

 

Law Of Property Act (1925) s196

.

Regulations respecting notices.

 

1 Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business, office, or counting-house, and if that letter is not returned by the postal operator (within the meaning of the Postal Services Act 2000) concerned undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.

 

2 - It is noted that the claimant has, at no time, provided evidence that the notice of assignment was sent via registered post, and if “sent” via any other method, the notice was not sufficiently served

 

3 -. I did not receive any notice of assignment in the format prescribed by law and served in the prescribed manner from the respondent, and I have asked the other members of my family if they signed for such a document; they have assured me that they did not.

[42man]

And also do not forget to add your costs which are £9.75 per hour (I think) + mileage + postage + parking...by doing this it will discourage them to keep issuing stat demands as it will become expensive for them to keep going to court...

[smt37]

Thanks 42man. That's brilliant. However, it looks like I won't need it for now. First Credit have written to me explaining that they will not be attending court and have requested the court to make an order setting aside the SD and make no order as to costs - because they can't produce a copy of the agreement and payment history from the OC.

 

I will still go prepared anyway. I assume that the costs bit means I can't claim anything?

[MONX]

Thanks 42man. That's brilliant. However, it looks like I won't need it for now. First Credit have written to me explaining that they will not be attending court and have requested the court to make an order setting aside the SD and make no order as to costs - because they can't produce a copy of the agreement and payment history from the OC.

 

I will still go prepared anyway. I assume that the costs bit means I can't claim anything?

 

 

I have my hearing on Monday (really nervous) and I also rec a letter from the DCA saying that they "will allow the SD to be set aside" and that they were not attending the hearing. They have said in the letter to the court that we should both bear our own costs! The fact that they served the SD and then pulled out of the hearing means that you can still claim costs. You still had to do your research, postage etc etc.

 

I am hoping the judge will see that Ive had to do a lot of work to research and understand legislation, forms etc in order to defend myself that (s)he will award my costs. The worst he/she can say is no, and if he/she says yes the DCA's Im dealing with may think twice about sending any more SDs.

[smt37]

Good Luck Monx. I guess I will too try and persuade the Judge that their scare tactics have meant I have had to spend a lot of time and energy researching my legal rights to prepare an argument for the set-aside, plus the day off work (loss of a day's holiday) and that their abuse of process should be noted by awarding me my costs . I don't think that's unreasonable. In addition, they have not complied with my request under the CPR to provide all documents relating to the hearing.

[42man]

GO FOR YOUR COSTS....tell the judge that these statutory demands are being issued like confetti, I think, that in your case as the statutory demand hasn't been 'served' then it is an abuse of the process (you can kindly ask the judge to check this)

[42man]

You can't use the CPR18 as this only applies for a CCJ....Statutory demands come under the Insolvency Act....if you wanted disclosure in a stat demand or bankruptcy situation, you could ask the judge to order the otherside to full disclosure (statements, agreements, etc etc..)OR you could send a CCA request or a SAR off..(sar for the original creditor)....

[tendogs]

Monx & smt It's counter-intuitive not to ask for costs, you have been placed in this position by the DCAs and have been forced to respond and take time to defend yourself. Make them pay, and good luck.

 

Dogs

[MONX]

Thanks for the wishes of good luck!

 

I feel very nervous this weekend and must admit that I am drinking a glass (or two) of wine in the hope that it aids sleep as I haven't been having much of that since the SD landed on my doorstep.

 

I am defintately going for the costs. So should you smt37. I thank my lucky stars that I found this site before I sent a letter to the DCA offering to make a payment on a debt that no longer exists (statute barred)!

[smt37]

Good luck Monx.

 

 

Just out of interest, this is the letter I got from 1st Crud:

 

http://i391.photobucket.com/albums/oo352/smt37/1stcrud_0001-2.jpg

Edited September 8, 2008 by smt37
Photobucket hitch!

[surfaceagentx20]

That letter you got from 1st Credit is so clearly mass-produced.

 

x20

[miaow99]

Talk about yanking your chain... I suspect I will be receiving one of these from these jokers, so I'll save this thread for reference.

 

I wonder how many BR proceedings they actually go through with?

[tifo]

I wonder how many BR proceedings they actually go through with?

 

Not many. It costs real money to do so.

[smt37]

OK. just got back from court.

 

The set aside was granted - but no costs allowed

 

The court administrators messed up with the timing. They sent me a letter telling me the hearing was at 3pm and they booked it for 2pm. The Judge had already granted the application at 2:10pm because neither of us had turned up - In fact I was in the waiting area at 2:30pm...

 

I eventually got squeezed in (there was another 3pm waiting outside) and they were clearly in a big hurry.

 

The Judge said that the court had received a letter from 1st Crud and as they had no objections to the set aside he was granting it. I asked if I could claim for costs because I had to prepare anyway and the Judge said to me "on what basis?". I showed him a prepared Costs as Litigant in Person and he almost laughed. He told me that the Litigant in Person route was only suitable for a defence, not an application to set aside. I explained that I had prepared myself anyway because 1st Credit's letter said "...To satisfy the Court as to the debt being due it will be necessary to seek copies of the agreement and payment history from the original creditor. This may not be possible before the hearing." I was worried that they might be able to get it. Also, the court received the letter, but didn't tell me that the hearing was cancelled or that the application to set aside was being granted without a hearing on the basis of the letter being received, so I had to assume it was going ahead and I had to prepare myself fully anyway.

 

The Judge told me that I had wasted my time!

 

I told him that I felt annoyed that they had used this route, in full knoweldge of the fact that the debt was disputed and he told me basically that the Court hearing was not there to discover the legality of the debt because the Respondent had already agreed to the set-aside.

 

We ended with him saying "OK?" and me saying "Fine. At least I'm prepared for the CCJ they will undoubtedly apply for now".

 

I left with mixed feelings. At the end of the day, I won, but I'm annoyed at not getting costs because I've spent hours preparing and had to take two days off work - once for the filing and swearing of the affidavit and once for today.

 

At least I can hit them with the £450 FOS costs now when I complain.

[42man]

Amazing.....this goes to show just how different judges can be....did you see these by the way ?

 

http://www.consumeractiongroup.co.uk/forum/dca-legal-successes/156970-omg-connaught-first-credit.html

 

http://www.consumeractiongroup.co.uk/forum/dca-legal-successes/103839-cca-1st-credit-connaught.html

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/135078-me-1st-credit-stat.html

[42man]

I am pleased the stat demand was kicked into touch though !!! well done....i'll change the title of the thread too...

[smt37]

Thanks for all your help - I felt very well prepared at least. I was a bit annoyed that they didn't turn up because I never got to say my piece!

[Having_A_Knightmare]

SMT37 great news but shame about the costs.

 

Just proves its a lottery with Judges.

 

HAK

[surfaceagentx20]

Congratulations on the inevitable result achieved. I'm sorry to say and see the DJ missed an open goal opportunity to award you costs in the mistaken belief he had no power to do so. He was most certainly wrong because he did.

 

Section 1 of the Litigants in Person (Costs and Expenses) Act 1975 plainly enables a county court to award costs in civil proceedings before it. The rules of court in that section would be the CPR and whereas the CPR does not generally apply to insolvency proceedings (the Insolvency Rules do), the CPR costs rules are applied to civil proceedings by virtue of the Insolvency (Amendment) (No. 2) Rules 1999 which introduced into Chapter 7 of the 1986 Rules, rule 7.33 in the following terms:

 

7.33. Application of the CPR

Subject to provision to inconsistent effect made as follows in this Chapter, CPR Part 43 (scope of costs rules and definitions), Part 44 (general rules about costs), Part 45 (fixed costs), Part 47 (procedure for detailed assessment of costs and default provisions) and Part 48 (costs — special cases) shall apply to insolvency proceedings with any necessary modifications.

 

Next time somebody will remind him.

 

x20