VG - Vs Northen Rock - Charging Order

[Von Greenbach]

I noticed this on another thread re Nat West trying to obtain a CO

 

should I write to the solicitors who have done the land registry search and quote the Mercantile v Ellis case?

 

Does anyone know about the case mentioned?

[FunkyFox]

Morning VG,

 

Mercantile v Ellis applies where you are subject to a Court Order to pay by installments and you have not defaulted on the order. In such a case the court cannot/should not make an order for enforcement by way of a charging order final. In your situation they applied to have the judgment redetermined to payment forthwith. As you (obvioulsy) have been unable to pay the forthwith amount they have been able to apply for in enforcement.

 

Whilst Mercantile v Elllis does not directly apply in your case it would be worth adding to your arguements above to perhaps make them more persuasive that whilst it does not apply in your case, you were on a DMP and as such NR should not have applied to have the claim redetermined to allow for an interim CO in the first place and that the whole thing is very shabby.

 

You should also mention that you were not notified of the redetermination hearing and as such did not get an opportunity to put forward your arguements as to why you should be allowed to continue on the DMP.

 

You should also mention you health and why that makes you vunerable, any GP or other letter to support this would be useful too. It does not need to go into excessive personal detail, just enough to demonstrate that you are vunerable and although you do not have children that the Local Authority would have responsibilty to rehouse you if you were forced from you home due to your illness.

 

In the abscence of a defence to the claim to appply for judgment to be set aside and considering the above your argument would be about as persuasive is it gets for the DJ to make the order NOT to grant the final CO. Please just be aware of implications of doing this (be careful what you wish for in other words) as I posted earlier and remember to include a part asking the judge if he must make the order final, that he does so with the conditions on no order for sale or further enforcement whislt you stick to the DMP. If the claimant is clearly only interested in securing some future security for their debt this should not bother them at all.

 

Finally, this may sound odd coming from the person who set up the petition against the use of Charging Orders BUT there are circumstances where, as long as the risk of an application for an order for sale is minimised (not that it would be succesful anyway) or removed entirely, a Charging Order can be the best solution for both a creditor and a debtor as a form of enforcement. Please do keep that in mind.

 

Good luck and just yell if needs be.

 

FF

[FunkyFox]

Just one other thought. Is the loan just in your name? If it is and the house is in joint names the other parties can also object, stating why they would be predujiced by any charging order or order for sale. Argumemens such as they put all of the deposit down, you are seperating, they pay all of the mortgage may all help.

 

It is also worth noting that if it is a sole debt on a joint mortgage they can only enter a restriction, not a charge. You would see this on the detail from Land Registry where it says something like 'notice of intiention to enter a restriction'. This makes the possibilty of an Order for Sale VERY unlikely and means that (and not a lot of people know this!!) that you do not even have to pay them from the proceeds of the sale of you home, only notify them that the sale has taken place. Ulitmately this is to protect those in situations where the other people on the deeds may be other friends,family or companies such as a Housing Association. In these cases your debt has nothing to do with them and they should not be caused detriment as a result of action taken against you. The paragraph below is from a senior Land Registry official.

 

Restriction

The restriction which can be entered on the register where a charging order is made against one of joint proprietors is in the following form :-

No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to

[name of person with the benefit of the charging order]

at

[address for service]

, being the person with the benefit of

[

an interim

] [

a final

]

charging order on the beneficial interest of

(name of judgment debtor)

made by the

(name of court)

on

(date)

(

Court reference.

…).

You are therefore correct in saying that when the Land Registry receives an application to register, for example a transfer, we will not ask to see the consent of the person who has the benefit of the charging order. We will only want a certificate from the applicant for registration or his conveyancer that the person who has the benefit of the charging order has been given written notice of the transfer.

If both joint owners sell the land to a third party the restriction will be cancelled when the transfer to the purchasers is registered.

Orders for sale of the property

The case of Midland Bank plc v Pike and another [1988] 2 All ER 434 is authority for the proposition that a person entitled to a charging order on the share of a co-owner was entitled to apply for an order for the sale of the land pursuant to section 30 of the Law of Property Act 1925.

Section 30 of the Law of Property Act 1925 was repealed by the Trusts of Land and Appointment of Trustees Act 1996. Sections 14 and 15 of that Act now cover the situation where an order for sale is applied for. The case of Mortgage Corporation v Shaire and others 2001 4 All ER 364 discusses the factors to be considered by the court in deciding whether to grant such an order when application is made by a person who has a charge against the interest of one of joint owners.

 

SO I hope this gives you some comfort especially if the debt is in sole names, with a joint mortgage.

 

As always any queries just ask. FF:)

[Von Greenbach]

Hi FF

 

Thanks so much for your knowledge and advice, I am finding some comfort with the way you're explaining things.

 

I have a joint mortgage, and joint DMP, but this loan is in my name, my OH also has a NR loan, yet strangely, earlier this year NR accepted there DMP arrangement until the end of the year 2009, we have written confirmation from them.

 

This is probably not relevant in my defence but I'll run it by you if I may, earlier this year I was receiving harassment from NR re constant telephone calls, this created havoc with my medical condition, I wrote to them informing them I would report them to the regulatory authorities if the calls did not cease, the calls eventually ceased, but I can't help think the action they are now taking is some kind of “Pay back time” especially as they've accepted my OH share of the DMP.

 

Edit: I just double checked, on the acceptance letter re my OH DMP, it states "Without Prejudice" I guess I can't use it then?

Edited December 2, 2008 by Von Greenbach
Further info

[FunkyFox]

I think in any event NR should be made to explain if at all possible why they failed to accept your DMP when all you other creditors did and they did for your other half. I would however, whenever possible, stay clear of emotional, unsubstatiated comments. Judges don't tend to like them. If you stick to the facts and ask direct questions and make concise points it makes it far far easier for the judge to make a fair and correct determination of what is presented. Easier said than done but good if you can pull it off all the same.

 

So taking into consideration everything in the thread is it still your intention to try and contest the final CO, even considering what I have said previously about possible other enforcement action? Do you mind if I ask again, is it the fear of an order for sale rather than the charging order itself that is motivating your actions in this matter.

 

Glad I was able to be of some assistance.

 

FF

[Von Greenbach]

Thanks FF, this is an indication of the defence I intend to submit, I wonder if someone can review it and let me know if needs tweaking,

 

Dear Sir/Madam,

 

Re: Company:

Defendant:

Court:

Date:

Claim No:

REF:

 

I am giving notice that I object to the Charging order being made final and I intend to attend the hearing at the above date and court.

 

My objections are;

In the latter part of 2007, I ran into severe financial difficulties I sought help from the Citizens Advice Bureau, due to the waiting list for a money advisor, CAB suggested I contact Consumer Credit Counselling Service, (which I did) my I&E was taken and based on that a Debt Management Plan (DMP) was set up with all my creditors in November 2007.

 

I have kept up all payments to date, within the DMP I was paying Northern Rock £xxx per month.

 

After Northern Rock obtained a County Court Judgement regarding my debt I was ordered to pay instalments of £20.00 per month which I have kept up to via Standing Order from my Bank Account.

 

I understand that according to a case called Mercantile Credit Co Ltd v Ellis in 1987, a charging order should only be made if the payments on a judgement are in arrears.

 

Northen Rock are also aware that my Debt Management Plan, administered by the Consumer Credit Counselling Service has a number of Creditors;

Creditor

Name

Payment

 

This Month

Payments

To Date

Current

Balance

I'm in a joint DMP (debt management plan) which has been manageable for over 12 months, all other creditors have accepted this plan.

 

To my knowledge no other creditors have been notified re the action being taken by NR and granting a CO will show favouritism over the others.

 

CCCS who manage my DMP informed Northern Rock of the available funds for them on a monthly basis, Northern Rock rejected this offer, and a CCJ was awarded in my absence, I received no notification of any such hearing and therefore was unable to put forward my arguments why I should be allowed to continue on my DMP.

 

I believe Northern Rock are in breach of OFT guidelines, which clearly state:

 

Deceptive and / Or Unfair Methods.

 

2.8 Examples of unfair practices as follows:

 

C: Refusing to deal with appointed or authorised appointed third parties, such as, Citizens Advice Bureau, Independent Advice Centre’s, or Money Advisor's.

 

D: Contacting debtors directly and bypassing their appointed representatives.

 

[This relates to OFT above] Although I informed NR about my health issues, they have continued to by pass my appointed representative CCCS and contact me directly.

 

I have suffered with a psychotic / psychiatric condition for over 30 years, I'm on daily medication for this condition, I informed Northern Rock in the early part of 2008 about my medical condition and that harassment by their agents was playing havoc with my condition, it's clear my health issues have no concern to Northern Rock due to the action they are taking.

 

A charging order in favour of one creditor would give Northern Rock unfair priority over my unsecured creditors.

 

As you can see I already have a payment arrangement in place with all my other creditors via the Consumer Credit Counselling Service, this would be upset if such an order was awarded.

 

This debt that Northern Rock are requesting a Charging Order for is in my name but our home is owned jointly and therefore, granting a charging order would be unfair on my partner.

 

Statement of Truth

 

I, XXXXXXXXXXXXXXXX, believe the above statement to be true and factual.

 

Signed .....................

 

Date XXXX 2008

 

[FunkyFox]

Hi VG, looking good I will think it over. Do you mind me asking what equity there is in your property?

 

You should also get your partner to write to the court objecting against it as it would unfairly predujice them should they want to sell the house for example and all other creditors had accepted the joint DMP.

 

I will post back later.

 

FF

[42man]

If you have kept up the repayments, and they are doing this I would also request the judge order your costs too !! common sense says that you have kept up the repayments as agreed, this would seem to be slightly vexatious behaviour on their part ?! AND going against the OFT's guidelines too....my feeling is the judge won't allow this (especially in this climate)

[FunkyFox]

Hi 42Man, I agree, it is most unsavoury.VG has kept to his payment as per the DMP BUT NR got the CCJ redetermined to payment forthwith so the order would need to be changed back to installments. As it stands they are legally entirely correct in applying to enforcement. Moraly it sucks!

 

It will almost certainly depend on the Judge on the day and their view as to NR actions. It also raises the question (and sorry to keep harping on about this) of what happens if the charging order is NOT allowed. How will the claimant then decide to enforce the judgment?

 

FF

[FunkyFox]

Hi VG, important question.

 

Have you or CCCS notified NR at any time of your other creditors? If so does the application for the Interim Order they made on form N379 mention your other creditors. If not their application may be incomplete. CPR Practice Direction pt 73 states;

 

Application notice – rule 73.3

 

1.1

 

An application for a charging order must be made by filing an application notice in Practice Form N379 if the application relates to land, or N380 if the application relates to securities.

 

1.2

 

The application notice must contain the following information –

(1) the name and address of the judgment debtor;

 

(2) details of the judgment or order sought to be enforced;

 

(3) the amount of money remaining due under the judgment or order;

 

(4) if the judgment debt is payable by instalments, the amount of any instalments which have fallen due and remain unpaid;

 

(5) if the judgment creditor knows of the existence of any other creditors of the judgment debtor, their names and (if known) their addresses;

 

(6) identification of the asset or assets which it is intended to charge;

 

(7) details of the judgment debtor's interest in the asset; and

 

(8) the names and addresses of the persons on whom an interim charging order must be served under rule 73.5(1).

 

**If when the interim order was granted the court ordered service on all other creditors make sure you ask to see certificate of service for each creditor. It may also be worth checking to see that they have actually served them. When I checked with mine they had not served them at all**

 

This is backed up by the Practice Direction pt.73 which states

 

73.3

(4) The application notice must –

(a)

(i) be in the form; and

 

(ii) contain the information,

 

required by the relevant practice direction; and

 

Therefore if the application for the interim order is missing any of the above items it may be a point to challenge them on.

 

Furthermore did they serve notice of the interim order on your partner? This is covered in CPT regarding service of the interim order.

 

Service of interim order

 

73.5

 

(1) Copies of the interim charging order, the application notice and any documents filed in support of it must, not less than 21 days before the hearing, be served on the following persons –

(a) the judgment debtor;

 

(b) such other creditors as the court directs;

 

© if the order relates to an interest under a trust, on such of the trustees as the court directs;

 

(d) if the interest charged is in securities other than securities held in court, then –

 

(i) in the case of stock for which the Bank of England keeps the register, the Bank of England;

 

(ii) in the case of government stock to which (i) does not apply, the keeper of the register;

 

(iii) in the case of stock of any body incorporated within England and Wales, that body;

 

(iv) in the case of stock of any body incorporated outside England and Wales or of any state or territory outside the United Kingdom, which is registered in a register kept in England and Wales, the keeper of that register;

 

(v) in the case of units of any unit trust in respect of which a register of the unit holders is kept in England and Wales, the keeper of that register; and

 

 

(e) if the interest charged is in funds in court, the Accountant General at the Court Funds Office.

 

 

(2) If the judgment creditor serves the order, he must either –

(a) file a certificate of service not less than 2 days before the hearing; or

 

(b) produce a certificate of service at the hearing.

 

Failure to do any of the above could render their application incomplete and inadequate and be a reason for it to be refused. Be aware it does not guarantee anything. In one of my cases it was adjourned 3 times, each time the court ordered the claimants solicitor to serve notice on all my other creditors and each time they failed. By the 3rd time I nearly got held up in contempt!

 

Finally CPR is very specific about how you must object to the application for the final charging order it is covered here...

 

Further consideration of the application

 

73.8

 

(1) If any person objects to the court making a final charging order, he must –

(a) file; and

 

(b) serve on the applicant;

 

written evidence stating the grounds of his objections, not less than 7 days before the hearing.

 

(2) At the hearing the court may –

(a) make a final charging order confirming that the charge imposed by the interim charging order shall continue, with or without modification;

 

(b) discharge the interim charging order and dismiss the application;

 

© decide any issues in dispute between the parties, or between any of the parties and any other person who objects to the court making a final charging order; or

 

(d) direct a trial of any such issues, and if necessary give directions.

 

 

(3) If the court makes a final charging order which charges securities other than securities held in court, the order will include a stop notice unless the court otherwise orders.

(Section III of this Part contains provisions about stop notices.)

 

(4) Any order made at the hearing must be served on all the persons on whom the interim charging order was required to be served.

 

This means that you and your partner must send your documents objecting to the application for final CO 7 days min prior to the hearing and be sent to the claimant (served) and the court (filed) in both cases.

 

If you do everything correctly in the first place it will help things to go in your favour, rather than looking like a deperate amateur. Generally Judges like to see someone who has made an effort to do things right.

 

I appreciate there is a lot of information here but it all relevant to your situation and may help you (I hope).

 

BTW when is the hearing scheduled for?

[Von Greenbach]

Hi VG, looking good I will think it over. Do you mind me asking what equity there is in your property?

There was 12 months ago, it todays current climate I expect we are about equal.

You should also get your partner to write to the court objecting against it as it would unfairly predujice them should they want to sell the house for example and all other creditors had accepted the joint DMP.

OK, I'll do that, I'm going to concentrate on my defence for now, prior to sending it off, I'll get my OH to complete an objection.

[Von Greenbach]

If you have kept up the repayments, and they are doing this I would also request the judge order your costs too !! common sense says that you have kept up the repayments as agreed, this would seem to be slightly vexatious behaviour on their part ?! AND going against the OFT's guidelines too....my feeling is the judge won't allow this (especially in this climate)

 

Hi 42Man, I agree, it is most unsavoury.VG has kept to his payment as per the DMP BUT NR got the CCJ redetermined to payment forthwith so the order would need to be changed back to installments. As it stands they are legally entirely correct in applying to enforcement. Moraly it sucks!

I'm having difficulty understanding these 2 posts (Sorry if I sound stupid) could someone please explain them in a little more detail?

[Von Greenbach]

Hi VG, important question.

 

Have you or CCCS notified NR at any time of your other creditors? If so does the application for the Interim Order they made on form N379 mention your other creditors. If not their application may be incomplete. CPR Practice Direction pt 73 states;

 

On this question alone, no, I haven’t informed NR of my other creditors, at this stage I cannot confirm if CCCS have, I would take it that they HAVE, when this first kicked off, CCCS submitted a defence confirming my monthly payments to NR, CCCS informed me they had sent NR an up to date I&E, this would have shown my other creditors, I will ring CCCS tomorrow for confirmation if you wish.

[FunkyFox]

On this question alone, no, I haven’t informed NR of my other creditors, at this stage I cannot confirm if CCCS have, I would take it that they HAVE, when this first kicked off, CCCS submitted a defence confirming my monthly payments to NR, CCCS informed me they had sent NR an up to date I&E, this would have shown my other creditors, I will ring CCCS tomorrow for confirmation if you wish.

 

 

 

Thats up to you really. I was just trying to give you anything that could enahnce your chances of achieving the outcome your want. If the claimant has not submitted a complete application (i.e. mentioned you other creditors if they knew about them) as required by Civil Procedure Rules then that could help you.

[FunkyFox]

I'm having difficulty understanding these 2 posts (Sorry if I sound stupid) could someone please explain them in a little more detail?

 

I was trying to point out to 42man that whilst you have stuck to the DMP as NR got the judgment redeterminned to payment forthwith they are legally entilled to apply for the charging order, although morally it sucks.

 

I do agree however that in the current climate you have a far greater chance of succeeding than you would have done 12 months ago.

 

Also worth noting, OFT guildlines are just that, guidelines and not law. They may help you to demonstrate a claimants behaviour has been aggresive but this alone is not a reason for a judge to order in your favour.

[Von Greenbach]

Thats up to you really. I was just trying to give you anything that could enahnce your chances of achieving the outcome your want. If the claimant has not submitted a complete application (i.e. mentioned you other creditors if they knew about them) as required by Civil Procedure Rules then that could help you.

 

Also worth noting, OFT guildlines are just that, guidelines and not law. They may help you to demonstrate a claimants behaviour has been aggresive but this alone is not a reason for a judge to order in your favour.

OK, so where I refer to OFT guidelines in my defence above, should I omit that paragraph?

[FunkyFox]

No I would keep it in. It all helps to demonstrate NR's sloppy behaviour in all of this. It does no harm to include, just don't rely on it.

[Von Greenbach]

In answer to post 73, when the interim order was granted, I wasn’t aware it was an interim order; I only received a redetermination from the court which I forwarded onto CCCS.

 

This is what happened next; I received a couple of spam letters from 2 debt agencies stating that as I had received a CCJ they would be willing to assist with my financial difficulties, I had no idea a CCJ had been granted, so I called the court to check, and was informed as the creditor had refused my offer, they are automatically awarded the case, which in turn creates a CCJ, I’ve never received anything from the court regarding a CCJ apart from the redetermination letter.

[Von Greenbach]

I appreciate there is a lot of information here but it all relevant to your situation and may help you (I hope)?

FF, you’ve given me a lot of advice which is slowly sinking in, however, I’m having difficulty trying to get my head round post 73.

BTW when is the hearing scheduled for?

It's set for the end of January 2009.

[Von Greenbach]

Hi VG, important question.

Have you or CCCS notified NR at any time of your other creditors? If so does the application for the Interim Order they made on form N379 mention your other creditors. If not their application may be incomplete. CPR Practice Direction pt 73 states;

Application notice – rule 73.3

 

1.1

 

An application for a charging order must be made by filing an application notice in Practice Form N379 if the application relates to land, or N380 if the application relates to securities.

 

1.2

 

The application notice must contain the following information –

 

(5) if the judgment creditor knows of the existence of any other creditors of the judgment debtor, their names and (if known) their addresses;

 

(the names and addresses of the persons on whom an interim charging order must be served under rule 73.5(1)

I think I understand the above, so when NR 1st applied to the court, they should have included my other creditors on there application, am I right, if so, will the court tell me if they have done?

**If when the interim order was granted the court ordered service on all other creditors make sure you ask to see certificate of service for each creditor. It may also be worth checking to see that they have actually served them

I’m going to ring the court today and check.

Furthermore did they serve notice of the interim order on your partner? This is covered in CPT regarding service of the interim order

Service of interim order

 

73.5

 

(1) Copies of the interim charging order, the application notice and any documents filed in support of it must, not less than 21 days before the hearing, be served on the following persons –

(a) the judgment debtor;

 

(b) such other creditors as the court directs;

 

© if the order relates to an interest under a trust, on such of the trustees as the court directs;

 

(d) if the interest charged is in securities other than securities held in court, then –

 

(i) in the case of stock for which the Bank of England keeps the register, the Bank of England;

 

(ii) in the case of government stock to which (i) does not apply, the keeper of the register;

 

(iii) in the case of stock of any body incorporated within England and Wales, that body;

 

(iv) in the case of stock of any body incorporated outside England and Wales or of any state or territory outside the United Kingdom, which is registered in a register kept in England and Wales, the keeper of that register;

 

(v) in the case of units of any unit trust in respect of which a register of the unit holders is kept in England and Wales, the keeper of that register; and

 

(e) if the interest charged is in funds in court, the Accountant General at the Court Funds Office.

 

(2) If the judgment creditor serves the order, he must either –

(a) file a certificate of service not less than 2 days before the hearing; or

 

(b) produce a certificate of service at the hearing

Which section above relates to my partner?

Finally CPR is very specific about how you must object to the application for the final charging order it is covered here.

Further consideration of the application

 

73.8

 

(1) If any person objects to the court making a final charging order, he must –

(a) file; and

 

(b) serve on the applicant;

This means that you and your partner must send your documents objecting to the application for final CO 7 days min prior to the hearing and be sent to the claimant (served) and the court (filed) in both cases.

I didn’t think I was obliged to inform Evershed’s (NR) of my defense

If you do everything correctly in the first place it will help things to go in your favour

I have 8 weeks prior to my hearing; this will give me sufficient time to fully understand the legal references you’re quoting.

I apologise in advance if you have to repeat anything you’ve already stated, unfortunately it doesn’t sink in right away, but with 8 weeks to prepare, it will eventually.

Just to clarify and keep on top of this FF, the defense I’ve created in post 69, that’s OK is it? and all I’m doing now is adding to that defense with the details within this post (hope that makes sense)

[FunkyFox]

Hi VG, Civil Procedure Rules are very specific about what is required. You will need to file and serve 7 days before the hearing. That does mean anyone objecting has to send their objections to the court and the claimant within the 7 days. It stops any suprises on the day and the outcome being delayed or worse still your objections not being taken into account.

 

Its good to see you have plenty of time. It will help you get things together and straight in your own mind as to the basis for your case. Much better that way.

 

I am tied up for a while but I will pop back soon to try and offer some further advice. Your document is looking good. If you add anything else to it post it up and others can offer advice too.

 

FF

[Von Greenbach]

I have a thread already running in the legal forum, yesterday Fred Basset mentioned to someone about default notices being invalid, so I'm just checking, is this DN correct?

 

The reason I ask, it says on it "Before date shown" there is no date shown, the only date on it was the date it was sent out by computer, which I've deleted.

Link deleted

 

Edited December 4, 2008 by Von Greenbach
Trying to insert link

[rory32]

The link doesn't work.

[Von Greenbach]

Hello rory, I don't think I'll ever get to grips with this photobucket business, I'll try again

 

http://i372.photobucket.com/albums/oo166/WhatsUp_bucket/NR.jpg

[postggj]

the default notice has to give 14 days to rectify the default

thats time starts 2 days after the date of the letter to allow time for service

 

you are correct that a date to rectify the breach is not shown and i believe this date needs to be underlined to be valid

 

default notice does not comply and is crap