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Harry May

Default Notice Re-Issue

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If a default notice is invalid due to penalty charges or overstated amount or not allowing 14 days to remedy breach should that be enough to strike out their claim. And if so can the claimant then re-issue a new default notice correcting the wrongly stated items, even if this is two years later!

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no In short, the claim will be reduced to just the arrears, See Woodchester v Swayne.

 

 

dx


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Dx,

 

Just to clarify do you mean that they cannot re-issue?

 

Harry

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An ineffective default notice will prohibit the Claimant recovering all those things on which the service of an effective default notice is dependant. In short, the claim will be reduced to just the arrears, See Woodchester v Swayne.

 

By when proceedings have commenced the Claimant will have terminated the agreement. The language of a default notice is framed on the basis there is a current agreement. That language is prescribed. If the Claimant terminated the agreement, to deliver an effective defalt notice will involve the fiction the agreement is current and never terminated. It would also involve the Claimant reinstating unilaterally. The debtor would be unlikely to agree to reinstatement if to do so would cure the Claimant's difficulties.

 

x20

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So the debtor can only owe the arrears? The balance must be written off?


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By when proceedings have commenced the Claimant will have terminated the agreement. The language of a default notice is framed on the basis there is a current agreement. That language is prescribed. If the Claimant terminated the agreement, to deliver an effective default notice will involve the fiction the agreement is current and never terminated. It would also involve the Claimant reinstating unilaterally. The debtor would be unlikely to agree to reinstatement if to do so would cure the Claimant's difficulties.

 

Beautifully put X20.

 

So the debtor can only owe the arrears? The balance must be written off?

 

Yes. Any valid Arrears due before Termination are still owed, that's assuming they do still posses a properly executed Regulated Credit Agreement.

 

However, the Balance which was not yet due, is lost. This is because their option to seek early Payment of a Debt not yet due (the Balance), went out of the window the second they Terminated on the basis of an Invalid or non-existent Default Notice.

 

In effect, they wrote PARACHUTE on the Pilot's Lunch Box and jumped out of the Plane with it, saying that'll do.

 

Cheers,

BRW

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Hi Harry May,

 

There's loads of information on my thread about this. MBNA (via Restons) are taking me to court with an ineffective Default Notice, although they don't even have a CCA either !!!!

 

x20 has written some brilliant letters for me in reply to Restons. See my thread 'StayingCalm vs Abbey with no CCA' from about link 141 onwards.

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/145452-stayingcalm-abbey-no-cca-8.html

 

Hope this helps

 

Regards

sc

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quote the following from Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561)

 

 

Quote:

SCHEDULE 2

FORM OF DEFAULT NOTICE BEFORE A CREDITOR OR OWNER CAN BECOME ENTITLED, BY REASON OF ANY BREACH BY THE

DEBTOR OR HIRER OF A REGULATED AGREEEMENT, TO TERMINATE THE AGREEMENT, DEMAND EARLIER PAYMENT OF ANY

SUM, RECOVER POSSESSION OF ANY GOODS OR LAND, TREAT ANY RIGHT CONFERRED ON THE DEBTOR OR HIRER BY THE

AGREEMENT AS TERMINATED, RESTRICTED OR DEFERRED OR ENFORCE ANY SECURITY

Regulation 2(2)

Details of agreement

 

1

A description of the agreement sufficient to identify it.

 

Parties to agreement

2

(1) The name and a postal address of the creditor or owner.

(2) The name and postal address of the debtor or hirer.

 

Details of breach of agreement and action required to remedy, or pay compensation for, the breach

3

A specification of:--

(a) the provision of the agreement alleged to have been breached; and

(b) the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

© if the breach is capable of remedy, what action is required to remedy it and the date, being a date [not less than

fourteen days] after the date of service of the notice, before which that action is to be taken; or

(d) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and

the date, being a date [not less than fourteen days] after the date of service of the notice, before which it is to be paid.

 

relevant case law is this too...

 

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


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If the Claimant discontinues because they new the Default Notice was invalid could they issue fresh procedings and issue a new Default Notice.

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Hello mberman!

 

See Post #4 above!

 

They key being if they have either Terminated the Account by Letter, or have Terminated the Agreement by their actions, then the Agreement is no longer live.

 

I say, by their actions, and that would mean they have Demanded Full and early Payment of a Balance that was otherwise not due, thus confirming they regarded the Agreement was Terminated by their actions as opposed to by saying it was Terminated via a Letter.

 

The key issue is when Payments are due.

 

Routine Monthly Payments are due as of the date they fall due, and once you go past that date unpaid, they become Arrears.

 

Arrears on any Monthly Payments are also due there and then, because the Arrears will be based on missed Payments that had already become due for Payment.

 

However, the main Balance is not due, as the Agreement will not require that to be Paid whilst you are making Monthly Payments, even if you miss some and turn them into Arrears.

 

The situation only comes to a head when the Creditor gets fed up of missed Payments/Arrears, and issues a Default Notice to say what needs to be Paid by when or else.

 

The or else will be their Right to Terminate the Agreement and Demand early Repayment of the main Balance.

 

To allow them to ask for the whole lot, they must follow s87/s88 otherwise, if they go ahead and Terminate or Demand Full Payment (that being effective Termination by their actions) without a valid Default Notice, then they end up Terminating without any of the benefits of s87.

 

s87 is what allows them to seek early Payment of an amount that was, until Termination, only Payable in the future.

 

Blow s87/s88 and they have no live Agreement to Default a 2nd time, and are left without any of the s87 benefits. All they can then ask for is any valid Payments that were due before Termination.

 

If they go to Court and it is shown that their Default Notice is invalid and they have Terminated the Agreement/Account, then they have no way to go back and issue a 2nd Default Notice, as there is no live Account left to re-Default.

 

They could only do that if they re-activated the Agreement, and they can't do that by themselves...they'd need you to agree to it.

 

...and I doubt you would be willing to agree to that!

 

I hope this helps.

 

Cheers,

BRW

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Thanks BRW,

 

The problem is they discontinued but intend to issue fresh proceedings and new default notices. They have admited that the reason they discontinued was that the Default Notice was technically inaccurate! So could the fact that they have admited the Default Notice is invalid be enough to terminate any contract between both parties even though it has not gone through the Court.

Edited by mberman

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Hello mberman!

 

The problem is they discontinued but intend to issue fresh proceedings and new default notices. They have admitted that the reason they discontinued was that the Default Notice was technically inaccurate! So could the fact that they have admitted the Default Notice is invalid be enough to terminate any contract between both parties even though it has not gone through the Court.

 

I think the key issue is if they either told you the Agreement had been terminated, or they Demanded Full Payment.

 

A Termination Letter is perfect, as that is concrete.

 

However, if they have, at any stage, demanded Full Payment of a sum that was otherwise not due if the Agreement was still live then, by this action they have effectively declared the Agreement ended; because if it was still live, they would have no Right to demand Full Payment of a sum not otherwise due because the live Agreement allowed you to Pay the main Balance off in small Monthly Payments stretching out into the future.

 

If the Original Court Claim states that they want the lot, plus interest, then I think that is as good a confirmation as any that they regarded the Agreement as being Terminated before they tried to haul you into Court. The fact that it never made Court is not important, you have their Claim Form that Demanded Full Payment, and that is as good as a Termination Letter if ever there was one.

 

That is your evidence that the Agreement is Terminated, and on a date that preceded Court. That date could be the Date they first asked for Full Payment, or the Date of the Claim if that was the first time they asked.

 

Either way, the Agreement was clearly dead at that point.

 

To say they will now go back and issue a Fresh Default Notice is going to present them with a problem. How can they pick a date in the future by which time you have to Remedy the Default, if the Account is already closed?

 

As Surfaceagentx20 has said so well:

 

By when proceedings have commenced the Claimant will have terminated the agreement. The language of a default notice is framed on the basis there is a current agreement. That language is prescribed. If the Claimant terminated the agreement, to deliver an effective default notice will involve the fiction the agreement is current and never terminated. It would also involve the Claimant reinstating unilaterally. The debtor would be unlikely to agree to reinstatement if to do so would cure the Claimant's difficulties.

 

I'm sure they will think they can do this, but when the facts are pointed out to them in front of a Judge, I think they will look rather foolish.

 

I suspect they only said they would go back and issue a fresh Default Notice as a passing spiteful comment to try and undermine your confidence. However, if they do elect to try it on with a Brand New Default Notice applied to a closed Account, then I think you will now know how to respond to that.

 

A New Default Notice can only be issued if...

 

(1) The Agreement is still live and was not Terminated. That cannot be the case in view of their Demand for Full Payment.

 

(2) The Agreement has been re-activated. That cannot happen unless both sides to the Agreement agree, that's why it's called an Agreement. You would not agree to that, so the Agreement can't be re-activated once Terminated, and certainly not by one party to the Agreement just so that they can fix their own mistakes.

 

If they do come back, then start getting your Counter-Claim and demand for Costs ready!

 

Cheers,

BRW

Edited by banker_rhymes_with
Clarity

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Many thanks BRW,

 

In fact they discontinued but the Judge allowed me to file my counterclaim so I wanted to add something about fresh proceedings and issuing new default notices. I was going to put something like this!

 

The Claimant admits that the Default Notice is invalid thus terminating any contract with the Defendant. It is the intention for the Claimant to issue fresh proceedings and to issue a new Default Notice However as there is no contract between both parties due to the invalid Default Notices the Defendant would ask the Court to strike out any future claim to issue fresh proceedings and the issue of new Default Notices in the future. As this could be seen as an abuse of process.

 

 

I have looked cannot find a termination letter but in their Particulars of claim they do state that The Claimant therefore claims the balance due under the agreement. I understand what you are saying but how could I use it to put in my counterclaim to my advantage!

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Hello mberman!

 

I think you need to concentrate on two things, i.e. the fact that they have clearly Terminated the Agreement when they demanded Full Payment, and the fact that they did so on the back of an invalid Default Notice, thus denying themselves any of the benefits of s87. Click the Link below to read what any Section within the Act says:

 

Consumer Credit Act 1974

 

Below is the Paragraph that I added to a recent Defence (with underlying thanks to Surfaceagentx20 whose words I have mangled), to make it clear the nasty bankers concerned could not simply go back in time to fix their Default Notice mistakes:

 

Finally, an invalid Default Notice cannot be remedied by simply issuing a new Default Notice. The Claimant may not serve a second effective default notice in prescribed form post-termination of the agreement. Any such second default notice will necessarily state a date by when I would be required to comply after which in default the agreement would terminate. The second default notice would therefore contain the fiction that the agreement endured when that cannot be the case, as it was terminated on 18/06/2008. Terminating an Agreement on the back of a defective Default Notice, simply confirms the undeniable truth that Termination of the agreement by the Claimant was carried out in circumstances which then prohibited them from enjoying the benefits of Section 87, namely the opportunity to seek early Payment of a sum that was, prior to Termination, only payable in the future.

 

I'd use something like the above, but change the Date to match the Date of their Claim Letter. Or the Date of any earlier Letter if they asked for Full Payment before the Claim.

 

I regret I'm not familiar with your Claim/Counter-Claim, but have you sent them a s77-79 CCA Request and Subject Access Request, or have you used a CPR 18 Request once the Court Claim was issued to get the same sort of details?

 

I'm hoping there that you may yet be able to uncover some more useful information via Subject Access Request or via CPR 18 Request. If you have not yet used CPR 18, then it may be an idea, unless they have not yet issued a new Claim, in which case CPR 18 may not be applicable if no Court Action on their part is actually live at the moment. In that case, Subject Access Request would be the one to use for now.

 

Others may join in here, but the above is my own suggestions. The key is that the invalid Default Notice is 50% of the issue, the other 50% is the Termination. Put them together and they are ham strung, all they can ask for would be any valid Arrears that were due before Termination.

 

I say this, because the proposed Paragraph you stated in the last Post seemed to be mainly concentrating on the Invalid Default Notice, and didn't say enough about the fact that they had Terminated. That Termination is the key to denying them any s87 benefits (as they neglected to bring along a valid Default Notice when they Terminated), and it's also the key to denying them any right to go back and issue a new Default Notice (as the Account is close/dead/Terminated/t*ts up).

 

You may also be able to add a Counter-Claim for Unlawful Rescission of Contract!

 

Remember, an Agreement Regulated by the Consumer Credit Act 1974 binds them as much as it binds you. They can't just wake up one morning having a really bad underpants and wig day and elect to Terminate and extract themselves from the Agreement by lunchtime.

 

This is what s87/s88 is all about, and if you have done something wrong, then these are the steps they must follow to allow them to warn you, ask you to be good, and if you don't, then they can extract themselves from the Agreement that otherwise binds them every bit as much as it binds you.

 

If they elect to jump out of the Agreement Plane without a Default Notice Parachute and s87 Boots, then that could be an even bigger problem for them, because when they crash to earth, you can then start beating them around the buttocks with a Compensation Stick:

 

Furthermore, the 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 an unlawful rescission of contract which would not only prevent the Court from enforcing any alleged debt that was otherwise only payable in the future, but would give me a right to Counter-Claim for damages, see Kpohraror v Woolwich Building Society [1996] 4 All ER 119.

 

Cheers,

BRW

Edited by banker_rhymes_with
Clarity
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Thanks again,

 

I will slot your quote in and change the date as I need to fax it off today!

 

I just wanted something to add re: the default notice so thanks again for your prompt reply. :)

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you can then start beating them around the buttocks with a Compensation Stick.

 

OUCH !!! ;-)

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subbing

 

Milly X


CAPITAL ONE (O/H!): Won £1864.63 including contractual :D

GE MONEY: WON £266.00

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I have a feeling that certain discrepencies with a Default Notice can be enforced by a judge.

 

I told the judge today about Nationwides mistake in not giving 14 days and by issueing a default notice whilst themselves being in default of a cca request and he said SO WHAT?!!! and then proceeded to list the claim to fast track!

 

I must conclude he is willing to ignore these issues!:evil: Why try them otherwise?

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Hello GO'S!

 

I have a feeling that certain discrepancies with a Default Notice can be enforced by a judge.

 

It sounds like your Judge has overlooked a few issues.

 

Like most of the Consumer Credit Act 1974!

 

Cheers,

BRW

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I'm not clear precisely who we are advising on this thread and where we are with GO'S's case. Evidently yesterday the Judge was dealing with assembling a set of directions to bring his case on for trial. If I am right, whether or not a creditor had complied strictly with the provisions of the Consumer Credit Act 1974 were off limits for the Judge at that time if it involved an assessment of the merits of the case.

 

If GO'S wishes the court to consider the merits and try the case summarily he may make an application for summary judgment. An application for summary judgment is made under CPR 24 and is appropriate where one party is able to show the other party's case has no real prospect of succeeding at trial and that therefore it is pointless in holding a trial.

 

Unless the case is decided summarily, the case will go to trial.

 

x20

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Sorry surfaceagent, I meant my post as a reply to the original question posed.

 

They seem to have a similar situation where their default notice is like mine but the judge said so what?

 

Obviously I'll have to argue my case at trial, I was just taken aback when the judge said so what?

 

From what I gather a judge could still allow a default notice to stand even if the notice states 14 days were not allowed to remedy the breach, that's what I was trying to put across.

 

Forgive me.

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No worries GO'S.

If a default notice is prepared and delivered so as to create a situation where less than 14 days is expressed to be available for the debtor to meet the requirements of the DN, the DN is ineffective. The DN is a powerful tool in the creditor's armoury though it was created within a statutory framework designed to provide consumer protection. As such the DN must pass the requirements of section 88 Consumer Credit Act 1974.

 

The period of 14 days is an express requirement of section 88(2). Once upon a time it said not less than 7 days was required. Then in late 2006 Parliament decided 7 days was insufficient and decided that the period of time should be not less than 14 days. If in 2006 Parliament had thought that 13 days or less was required, Parliament would have said so. When Parliament fixed the period as one which 'must not less than 14 days' that is what it meant and it is impossible to imagine in law that a DN is effective where the period is less than 14 days.

 

I am afraid this smacks of an example of a DJ's ignorance, failure to grasp the law or simply not being directed to the specifics of the statute. He might be on the ball when it comes to Landlord and Tenant work and if that were so I doubt he would, for example say a Landlord's section 21 Housing Act 1988 notice was effective where 6 weeks rather than two calendar months notice was given to the tenant.

 

Wherever a DJ is leaning towards declaring a DN effective where it plainly is not, let him know (as politely and deferentially as humanly possible) that if he carries on leaning that way, you will require him to set out his reasoning as part of his judgment and that you want him to spell out his reasoning so that it forms part of the record for appeal purposes. That should sharpen him up a bit.

 

x20

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