MBNA Default Notice/CCA

[surfaceagentx20]

If the DN arrived today requiring compliance by 19 September, hang on to it tightly and keep your fingers crossed MBNA soon terminate.

 

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[surfaceagentx20]

That was the second thought which came into my head.

 

The first one was that I couldn't read any part of the documents you posted. They need to be larger.

 

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[surfaceagentx20]

MBNA have today served a DN. Today is 6 September. Their DN says they require you to comply with it by on or before 19 September. For the DN to be effective it must comply with section 88 of The Consumer Credit Act 1974. The Act requires the creditor to give you not less than 14 days after service to comply with the DN. Thus, to comply, it must require you to comply by a date no later than 20 September, not 19 September.

 

A DN which does not comply with section 88 does not entitle the creditor to any of the rights in section 87(1).

 

If they terminate, that ends the agreement and you are released from any future obligations under it. Likewise MBNA are left holding a terminated agreement with none of the rights under section 87(1).

 

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[surfaceagentx20]

Section 88 says this:

 

(1) The default notice must be in the prescribed form and specify—

(a) the nature of the alleged breach;

(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

© if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

 

(2) A date specified under subsection (1) must not be less than 14 days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those 14 days have elapsed.

 

So it is clear. The date must not be less than 14 days after the date of service of the DN, not the date of some letter or the date they put it in a letter box. Even if the letter was sent first class on 4 September, deemed service would be the second day after posting, ie 6 September. Your evidence, should this ever get into a future dispute, will be the DN was served on 6 September.

 

Enjoy the rest of your weekend!

 

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[surfaceagentx20]

Thank you both Martin and Surfaceagent - it has been a very stressful day as RBS are now taking husband to court and have had to deal with that as well! (Marriage vows - for richer, for poorer;)) You have put my mind at rest and I will write a letter to MBNA reminding them that they cannot invoke a DN whilst account in dispute x x x (PS but it has been a learning curve today - can now use Photobucket so not a wasted day!)

 

OMG, for Pete (and Fred's) sake don't write to MBNA telling them they've gone wrong with the DN. Someone at MBNA might just take a look at the DN and withdraw it!

 

You do not want MBNA to withdraw this priceless DN!

 

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[surfaceagentx20]

Hi Fred.

 

I see no reason why a creditor could not withdraw its DN at any time up to the day on which the creditor terminates the agreement.

 

Another way of looking at this is to ask the flip of the question: 'Can the creditor be compelled to do the things it says it will do in the DN if the debtor defaults on it?'

 

People with rights can not be forced to exercise them. Such people may exercise them as they choose. Thus, I do not take the view a creditor can be compelled by the debtor to enforce its rights under s 87(1) where the DN meets the requirements of s88 and the debtor has not complied with; even less so where it does not meet the requirements of s88 wherefore the creditor has no rights.

 

So important therefore to stay mum.

 

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[surfaceagentx20]

Why then if that is the case do the courts allow the Claimant to "cure" a defective DN during court proceedings?:-?

 

That's very interesting Tinkerbell. Can you quote a decided case where the court permitted a Claimant to cure a defective DN during the course of proceedings?

 

I don't know of one and in the absence of having a decided case on this point brought to my attention, I have held to the view that if the facility to cure was available, why then did the Claimant in Woodchester v Swayne never once seek this remedy?

 

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[surfaceagentx20]

Insolvency proceedings, including statutory demands are covered by the Insolvency Rules 1986. IR 12.10 says:

 

Service by post

(1) For a document to be properly served by post, it must be contained in an envelope addressed to the person on whom service is to be effected, and pre-paid for either first or second class post.

 

(1A) A document to be served by post may be sent to the last known address of the person to be served.

 

(2) Where first class post is used, the document is treated as served on the second business day after the date of posting, unless the contrary is shown.

 

(3) Where second class post is used, the document is treated as served on the fourth business day after the date of posting, unless the contrary is shown.

 

(4) The date of posting is presumed, unless the contrary is shown, to be the date shown in the post-mark on the envelope in which the document is contained.

 

IR 12.11 says:

Subject to Rule 12.10 and Rule 12.12, CPR Part 6 (service of documents) applies as regards any matter relating to the service of documents and the giving of notice in insolvency proceedings.

 

Please note the above rule is a general rule and does not override the requirements of IR 6.3 and 6.11, so that there is no ordinary provision for service of a statutory demand to be deemed to occur where service is by post. For more on the postal delivery of SDs by post, read here.

 

The webpage I linked to in some thread a month or so ago and referred to by BRW was concerned with new CPR Part 6 and as far as I recollect was concerned with changes to CPR 6 in relation to the service of Claim Forms.

Before 1 October 2008, CPR 6.7 dealt with deemed service in the following way.

 

6.7 Deemed service

(1) A document which is served in accordance with these rules or any relevant practice direction shall be deemed to be served on the day shown in the following table

 

Method of service: First class post (or an alternative service which provides for delivery on the next working day) - Deemed day of service: The second day after it was posted.

 

(2) If a document is served personally-

(a) after 5 p.m., on a business day; or

(b) at any time on a Saturday, Sunday or a Bank Holiday,

it will be treated as being served on the next business day.

 

(3) In this rule-

“business day” means any day except Saturday, Sunday or a bank holiday; and

“bank holiday” includes Christmas Day and Good Friday.

 

Thus under old CPR 6, a document posted on a Friday would be deemed served on the second day after it was posted. The rule in such a scenario provided that the deemed date of service was a Sunday. It lead to the ridiculous situation that a document posted on a Friday was deemed served on a Sunday, but where it was personally handed to the recipient on a Sunday, it was not deemed served until the day following, ie, on the Monday. The rule was reinforced by the decision of the Court of Appeal in Anderton v Clwyd County Council [2002].

 

This has now changed. The following parts of CPR 6 are relevant to the topics under discussion as follows:

 

6.2 Interpretation

In this part

(a) 'bank holiday' means a bank holiday under the Banking and Financial Dealings Act 1971 in the part of the UK where service is to take place

(b) 'business day' means any day except, Saturday, Sunday, a bnk holiday Good Friday or Christma Day.

 

6.14 Deemed Service of the Claim Form

A claim form served in accordance with this Part is deemed to be served on the second business day after completion of the relevant step under rule 7.5(1).

 

In regard to postal delivery, CPR 7.5(1) says:

First class post ..or other service which provides for delivery on the next business day - Step required: Posting ..

 

6.26 Deemed Service

A document other than a claim form, served in acordance with these Rules or any relevant practice direction is deemed to be served on the day shown in the following table

 

Method of service: First class post (or other service which provides for delivery on the next business day) - Deemed date of service: The second day after it was posted .. provided that day is a business day; or if not, the next business day after that day.

 

As for second class post, CPR 6 deals with all the permissable methods of service of documents including claim forms. It is silent as to service by second class post and therefore service by second class post is not a permissable method of service.

 

As for the position on service between 1985 and 1 October 2008, the single most influential factor on the rules regarding the service of documents in civil proceedings has been the introduction of the CPR on 26 April 1999. In the post I made earlier and referred to by BRW, whilst I began that post with the Interpretation Act 1978 and the 1985 Practice Direction, in light of the fact that it is almost ten years since the CPR was introduced I can't see any practical purpose in dealing with the situation of service as it was prior to April 1999 save to say that in those days, service was governed by Rules of the Supreme Court Order 10 which out of interest provided that delivery of a writ by first class post was deemed served 'unless the contrary is shown', on the seventh day after the date on which it was sent with weekends, Christma, Good Friday and bank holidays taken out of the equation.

 

For the rule concerning the computation of time, see CPR 2.8.

 

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[surfaceagentx20]

Somehow or other, most likely for reasons connected with age or bovine spongiform encephalopathy, I figured we were talking about statutory demands and documents to be served in civil proceedings. Which is a pretty hard thing to do where the thread is entitled default notice, but hey, I managed it. So ignore all that guff at the start of my post dealing with SDs and half of the stuff about new CPR 6.

 

I promise to talk about DNs.

 

Consumer Credit Act 1974 section 176 says:

 

(1) A document to be served under this Act by one person ( “the server ”) on another person ( “the subject ”) is to be treated as properly served on the subject if dealt with as mentioned in the following subsections.

(2) The document may be delivered or sent by post to the subject, or addressed to him by name and left at his proper address.

(3) For the purposes of this Act, a document sent by post to, or left at, the address last known to the server as the address of a person shall be treated as sent by post to, or left at, his proper address.

 

Interpretation Act 1978 section 7 says:

Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

 

In my view, that remains the position in relation to the service of DNs whether before or after 1 October 2008. The effect is that the service of a DN will be deemed to be effected at the time at which the letter would be delivered in the ordinary course of post.

 

The question on what date service will be deemed effected requires answers to three things:

 

[1] What was the date of posting. That date will not be a date pre-dating the date of issue of the DN and in my view the court will be ready to accept the DN was posted on the day it was issued, though that it was in fact posted on that day would in my opinion be capable of rebuttal on evidence showing the contrary.

 

[2] What was the method of posting?

 

[3] What was the time at which the letter would be delivered in the ordinary course of post given the method of posting?

 

In my view the Practice Direction issued by the Senior Master in 1985 is the most helpful. For a start, in terms of first class post it coincides with the most up to date thinking as now appears in 'new' CPR Part 6. Next, it deals with second class post, the DCAs favoured method.

 

Thus I would say, subject to evidence rebutting service, a DN issued today, Monday 1 December, will be treated as served on Wednesday 3 December if sent by first class post and on Friday 5 December if sent by second class post. If issued on Friday, 5 December will be treated as served on Tuesday 9 December if sent by first class post and on Thursday 11 December if sent by second class post.

 

Consumer Credit Act 1974 section 88(2) says:

A date specified under subsection (1) must not be less than 14 days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those 14 days have elapsed.

 

Thus, if the notice was issued and posted first class post today 1 December 2008, service would be deemed on 3 December 2008 and the date specified in the DN as the date on which the creditor may take action if the DN is not complied with must be a date no earlier than 18 December 2008.

 

Have I got my brains back?

 

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[surfaceagentx20]

BRW,

I have found the Pratice Direction here.

 

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[surfaceagentx20]

Damn, that link doesn't work either.

 

Still, the text looks like this:

 

Council Tax Manual - Section 3 - Appendix 3.6 - Service of documents by post

 

Appendix 3.6 - Service of documents by post

 

All Text Amended

1. Interpretation Act 1978, Section 7
 

This states:-


"7. Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

2. Practice Direction

 

Service of Documents - First and Second Class Mail

 

"With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1.
Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.
2.
To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-
(a)
in the case of first class mail, on the second working day after posting;
(b)
in the case of second class mail, on the fourth working day after posting.
"Working days" are Monday to Friday, excluding any band holiday.
3.
Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.
4.
This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

8 March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division

 

 

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[surfaceagentx20]

Muscat, Where the DN is ineffective for whatever reason, the best course the debtor can take is to do nothing other than pray on his knees that the creditor will terminate the agreement. Most times the prayer is answered.

 

Rather than repeat myself I invite you to take a read of this thread, in particular post no11 which deals with the succesful conclusion to legal proceedings based upon a defective DN. The post goes on to discuss the position reached where the creditor terminates and involves my opinion as to the legal consequences. My opinion was not tested in court, but was sufficiently persuasive to cause the creditor to decide not to have it tested in court. You might think that fact alone would suggest the opinion I express was an opinion shared by the creditor's lawyers.

 

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[surfaceagentx20]

You may not receive a notice entitled 'TERMINATION NOTICE', but what you will get is a letter demanding payment of the entire balance. The delivery of such a letter was most likely envisaged in the language of the default notice. Further, the delivery of such a letter demanding complete repayment is inconsistent with the maintenance of a current credit agreement where perhaps you are allowed to repay a minimum sum at monthly intervals.

 

Rather, it's one of the section 87(1) list of things a creditor can do only where there has been non-compliance with a DN. Making demand for early payment is next on the list after termination.

 

Implicit in the delivery of such a letter is the fact the creditor has terminated.

 

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