Invalid Default Notices

[postggj]

A Tale Of A Dodgy Default Notice Is Excerlent By Surfacegent

[Pinky69]

I wouldn't rely on the argument for date of receipt in court in this case but that is just my personal point of view.

[cosalt]

In my case I am hoping that the fact that the arrears amount stated is over 10% charges is enough to render it defective.

[cerberusalert]

glad i found this thread

 

situation to ponder

 

if a default notice is invalid for what ever reason

not laid out in the correct format

time limit, etc etc

 

the creditor then goes on to trash your credit file

 

now being the default is crap. the creditor can only then claim the arrears if at court stage

 

CAN THE DEFENDANT PUT IN A CLAIM FOR DAMAGE TO CREDIT FILE, BEING UNLAWFULlY DEFAULTED

 

IME TALKING £1000 DAMAGES PLUS VALUE OF THE DEFAULT

 

THE WOOLWICH JUDGEMENT IME QUOTING ON THIS

 

mightbat least get the creditor to withdraw or agree removel of any default

 

just shooting from the hip on this

 

Failure of a Default Notice or Termination Notice to be accurate not only invalidates such notice (Woodchester Lease Management Services Ltd V Swain & Co NLD 14 July 199 but it is an unlawful rescission of contract which would not only prevent the court enforcing any alleged debt (Wilson V First County Trust Ltd [2003] UKHL 40, Wilson V Robertsons (London) Ltd [2006] EWCA Civ 1088, Wilson V Pawnbrokers [2005] EWCA Civ 147) - but would also give the claimant a claim for damages in the sum of £1000 (Kpophraror V Woolwich Building Society [1996] 4 All ER 119).

[vint1954]

glad i found this thread

 

situation to ponder

 

if a default notice is invalid for what ever reason

not laid out in the correct format

time limit, etc etc

 

the creditor then goes on to trash your credit file

 

now being the default is crap. the creditor can only then claim the arrears if at court stage

 

CAN THE DEFENDANT PUT IN A CLAIM FOR DAMAGE TO CREDIT FILE, BEING UNLAWFULlY DEFAULTED

 

IME TALKING £1000 DAMAGES PLUS VALUE OF THE DEFAULT

 

THE WOOLWICH JUDGEMENT IME QUOTING ON THIS

 

mightbat least get the creditor to withdraw or agree removel of any default

 

just shooting from the hip on this

Also have a look here for damages

 

RICHARD DURKIN v. DGS RETAIL LIMITED+HFC BANK PLC, 26 March 2008, Sheriff J K Tierney

[cosalt]

This is great news, out of my many creditors, not one has sent a correct DN.

 

I have one question, if the creditor is made aware that the DN is invalid, will they still continue to court as although they can not claim the balance they can get the arrears ?

 

Cosalt

[postggj]

I Believe The Lousy Default Notice Only Works If A Court Claim Has Begun

[Pinky69]

They might if they know they can claim the arrears but as I said most don't know. I think they would be unlikely to raise court action when they have unlawfully rescinded the alleged account because you could then make a counter claim against them for damages.

[vint1954]

This is great news, out of my many creditors, not one has sent a correct DN.

 

I have one question, if the creditor is made aware that the DN is invalid, will they still continue to court as although they can not claim the balance they can get the arrears ?

 

Cosalt

They need to terminate, following faulty DN.

[cosalt]

They need to terminate, following faulty DN.

 

Most of mine have been terminated, I am aware if they have not they could just re-issue the default notice.

[AA99]

Until it goes to court, they can re-issue a correct default notice and demand the full balance, so do not bring this their attention. A defective DN should be kept up your sleeve until it is brought to court and they can then only demand the arrears, with no charges, etc, added

[willtheywontthey]

have we clarification what defines when an account is 'terminated' - in laymans terms??

[AA99]

have we clarification what defines when an account is 'terminated' - in laymans terms??

 

 

Again, it's not usually done properly, I believe it is when you receive a Notice of Assignment which clearly states that it has been sold/legally assigned to someone else:confused: The majority of those appear to be defective too:eek:

[Pinky69]

Once an account has been terminated (confirmed by termination letter) following on from an unlawful DN, they cannot issue another DN as there is no account to issue one on - it has been rescinded. Going to court is irrelevant.

I've let the firms I am about to sue know they have caused unlawful rescission and that is a legal fact that cannot be changed. I did so for pre-court negotiations, which a court expects you to do before lodging proceedings.

[diddydicky]

Also have a look here for damages

 

RICHARD DURKIN v. DGS RETAIL LIMITED+HFC BANK PLC, 26 March 2008, Sheriff J K Tierney

 

blimey, from 50 quid to 116,000!!

 

all i can see on reading that is "fornicate me"!!

[diddydicky]

Until it goes to court, they can re-issue a correct default notice and demand the full balance, so do not bring this their attention. A defective DN should be kept up your sleeve until it is brought to court and they can then only demand the arrears, with no charges, etc, added

 

It is not quite correct to say that they can re issue the dn until they go to court

 

the contract(agreement) basically give the debtor ONE major benefit- and that is to be able to borrow money and repay it in monthly amounts of his own choosing (subject to minimum)

 

If the creditor takes any action which removes that benefit (of the agreement) and demands that the balance is now due and payable then he has rescinded the contract(agreement)

 

he either does so lawfully (by following the set procedures) or he does so unlawfully,

 

if he does it unlawfully then the law tolerates law breaking- however the creditor can no more end the agreement unlawfully by writing to you (or acting in such a way ) and saying he is no longer prepared to honour the agreement than you can by telling him to bog off!!

 

the aggreived party can insist that the other party honours the agreement (he is deemed to have taken this course if he does or says nothing but carries on as if nothing has happened)

 

OR

 

he can accept the unlawful action by the other side and agree that the other party has clearly indicated that the relationship has broken down and therefore accept the unlawful rescission .

 

However he must communicate that he has done so to avoid it being said that he has allowed the agreement to endure

 

he can do so by writing or speaking to the creditor and telling him so- or he can demonstrate by his actions (not making payments etc) that he has accepted the unlawful rescission.

 

IMO therefore the date of termination is not when the offending party seeks to say it is but when the aggrieved party makes the decision to ACCEPT the unlawful termination

 

this sequence of events may happen long before any court action is commenced but the termination cannot be undone by the creditor simply issuing a new DN

 

if you wish to use the defective DN in court you would have had to have advised the court and the other side in advace of the hearing of this - you cannot just do a "perry mason" and "spring it on them in the middle of the proceedings"

 

there is a lot to be said for clearly itemising well in advance of court proceedings what the creditors failings are for two main reasons

 

first- it may well dissuade them from throwing good money after bad in proceedings

 

secondly, it is important when the court considers costs applications that you can show that the other side were made well aware of the failings in advance and they should have dealt with the issues prior to court (see BOS V robert Mitchell for a good example)

Edited September 29, 2009 by diddydicky

[Gazza112]

Hi All

 

I don't know weather this will be of any help, as i was in Court only yesterday. But according to the District Judge dealing with my account, the Notice of Assignment hast to be correct to the last penny.

Meaning the DF has to be valid, the creditor also needs a fall set of statements from day one when the account was taken out. With a breakdown of all charges and how they came to the figure what's on the DN and Notice of Assignment.

 

Gaz

[Pinky69]

That's good to now and very helpful Gazza.

[vint1954]

blimey, from 50 quid to 116,000!!

 

all i can see on reading that is "fornicate me"!!

And Durkin only asked for £8k

[pedross]

Hi All

 

I don't know weather this will be of any help, as i was in Court only yesterday. But according to the District Judge dealing with my account, the Notice of Assignment hast to be correct to the last penny.

Meaning the DF has to be valid, the creditor also needs a fall set of statements from day one when the account was taken out. With a breakdown of all charges and how they came to the figure what's on the DN and Notice of Assignment.

 

Gaz

 

This is very helpful Gazza

 

I would be interested to know more information and the end result of your case. Was your notice of assignment and DN correct to the penny or was it thrown out for being incorrect.

 

It is always interesting to hear about actual cases and judges comments.

 

Pedross

[vint1954]

It is not quite correct to say that they can re issue the dn until they go to court

 

the contract(agreement) basically give the debtor ONE major benefit- and that is to be able to borrow money and repay it in monthly amounts of his own choosing (subject to minimum)

 

If the creditor takes any action which removes that benefit (of the agreement) and demands that the balance is now due and payable then he has rescinded the contract(agreement)

 

he either does so lawfully (by following the set procedures) or he does so unlawfully,

 

if he does it unlawfully then the law tolerates law breaking- however the creditor can no more end the agreement unlawfully by writing to you (or acting in such a way ) and saying he is no longer prepared to honour the agreement than you can by telling him to bog off!!

 

the aggreived party can insist that the other party honours the agreement (he is deemed to have taken this course if he does or says nothing but carries on as if nothing has happened)

 

OR

 

he can accept the unlawful action by the other side and agree that the other party has clearly indicated that the relationship has broken down and therefore accept the unlawful rescission .

 

However he must communicate that he has done so to avoid it being said that he has allowed the agreement to endure

 

he can do so by writing or speaking to the creditor and telling him so- or he can demonstrate by his actions (not making payments etc) that he has accepted the unlawful rescission.

 

IMO therefore the date of termination is not when the offending party seeks to say it is but when the aggrieved party makes the decision to ACCEPT the unlawful termination

 

this sequence of events may happen long before any court action is commenced but the termination cannot be undone by the creditor simply issuing a new DN

 

if you wish to use the defective DN in court you would have had to have advised the court and the other side in advace of the hearing of this - you cannot just do a "perry mason" and "spring it on them in the middle of the proceedings"

 

there is a lot to be said for clearly itemising well in advance of court proceedings what the creditors failings are for two main reasons

 

first- it may well dissuade them from throwing good money after bad in proceedings

 

secondly, it is important when the court considers costs applications that you can show that the other side were made well aware of the failings in advance and they should have dealt with the issues prior to court (see BOS V robert Mitchell for a good example)

Agreed,

 

And from x20

 

My fellow Caggers, back to the general issue ..

 

May be it was my doing or we've just hung on to this word 'termination' like Rotweillers. The thing is, at least as I see it is, that where a creditor seeks early repayment or the return of goods following service of an ineffective DN, he is by his words and conduct expressing in clear terms that he is no longer willing to perform the essential obligations he promised to provide under the credit agreement. True, these words and conduct ride on the back of the debtor's failure to perform the debtor's essential obligations. But in this event the creditor has only to follow the procedure laid out in the Act and Regulations. And the Act says unless and until he has met the requirements of the Act and the Regulations, he acquires no such entitlement. Accordingly, to withdraw from the debtor the right to pay sums due by instalments or withdraw the right to continue with possession of the goods is to withdraw in breach of the statutory code which regulates the agreement.

 

The withdrawal of the debtor's rights may in one person's parlance be the same as the creditor's termination of the agreement. Just like 'default' in the words of one person may amount to 'breach' in the words of another. Or 'repudiatory breach' in the language of lawyer A is 'renunciation' in the language of lawyer B. Let's say though, for the purpose of the stream of thinking which follows, that strictly and legally speaking, withdrawal of these rights in default (or breach) isn't a termination of the agreement and that for termination strictly so called to have occured, the creditor miut have served a notice of termination. Does that mean therefore that the creditor's withdrawal and demand for early payment and/or return of goods is something the court can waive? Something the debtor can be expected to have understood was a mistake and unintended? That it is of no consequence?

 

I've got Chitty on Contracts General Principles (26th Edition) (1991). A bit out of date but good enough on General Principles I would have thought. And I'd thought I'd open it. Always a good idea when examining the contractual relationship of parties. Interestingly, 'termination' does not have an entry of its own in the umpteen page index at the back. It says in relation to Renunciation (and if you look up Repudiatory Breach it refers to to the same page number) that:

A renunciation of a contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligastions under the contract in some essential respect. An absolute refusal by one party to perform his side of the contract will entitle the other party to treat himself as discharged, as will also a clear and unambiguous assertion by one party that he will be unable to perform when the time for performance should arrive. Short of such an express refusal or declaration however, the test is to ascertain whether the action or actions of the party in default are such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. The renunciation is then evidenced by conduct. Also, the party in default 'may intend in fact to fulfil (the contract) but may be determined to do so only in a manner substantially inconsistent with his obligations' [Federal Commerce & Navigation Co Limited v Molena Alpha Inc (1979)] or may refuse to perform the contract unless the other party complies with certain conditions not required by its terms. In such a case, there is little difficulty in holding that the contract has been renounced.

 

If one party evinces an intention not to perform or declares his inability to perform some but not all of his obligations under the contract, then the right of the other party to treat himself as discharged depends upon whether the non-performance of those obligations will amount to a breach of a condition of the contract or deprive him of substantially the whole benefit which it was the intention of the parties that he should obtain from the obligations of the parties under the contract then remaining unperformed.

 

The renunciation must be made quite plain. In particular where there is a genuine dispute as to the construction of a contract, the courts may be unwilling to hold that an expression of intentino by one party to carry out the contract only in accordance with his own erroneous interpretation of it amounts to a repudiation and the same is truew of a genuine mistake of fact or law.

The demanding of early payment is to my way of thinking the immediate withdrawal of consent to all the remaining credit provided for under the agreement. Further, that it substantially deprives the debtor of the prime benefit he was to derive under it. Such a demand constitutes a breach of the regulated agreement save where it is demanded in compliance with the Act. If the demanding of such things is not tantamount to the creditor terminating the agreement, it is, nonetheless in my opinion, the creditor's renunciation of it. in consequence and in my opinion, the debtor may fairly regard himself as discharged from the agreement.

 

Chitty has this to say:

 

Consequences of Discharge - Effect on Contract

It has become usual to speak of the exercise by one party to treat himself as discharged as a 'recission' of the contract but as Lord Porter pointed out in Heymans v Darwin limited (1942):

'To say that the contract is rescinded or has come to an end or ceased to exist may in individual cases convey the truth with sufficient accuracy, but the fuller expresion that ther injured party is thereby absolved from future performance of his obligations under the contract is a more exact description of the position. Strictly speaking, to say that on acceptance of the renunciation of a contract the contract is rescinded is incorrect.'

This statement was unanimously approved by The House of Lords in Johnson v Agnew (1980) where Lord Wilberforce emphasised that this so-called 'recission' is quite different from recission ab initio as may arise for example in cases of mistake, fraud or lack of consent. It has also become usual to speak of the contract as having been 'terminated' or 'discharged' by the breach. Again however, these expressions may be somewhat misleading for they might suggest that the contract ceases forv all purposes to exist in that event. Such an approach was indeed adopted by the Court of Appeal in Harbutt's Plastercine Limited v Wayne Tank & Pymp Co (1970) so as to prevent the party in default from relying on an expemtion clause inserted in a contract which had been 'terminated' by breach. But this case was overruled by the House of Lords in Photo Production limited v Securicor Transport limited (1980). The true position was there stated to be, where the innocent party elects to terminate the contrsct, ie to put an end to all primary obligations of both parties remaining unperformed - that (per Lord Diplock) '(a) there is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay money compensation to the other party for the loss sustained by him in consequence of their non-performance in the future and (b) the unperformed primary obligations of that other party are discharged.'

Given Diplock's statement of the position, may be to describe the agreement as 'terminated' following the events we are describing is, to adopt the words of Lord Porter, '.. to convey the truth with sufficient accuracy.'

 

FURTER.

I am yet to be persuaded that in the context of a regulated consumer credit agreement and the receipt of an express notice or activity on the part of the creditor consistent with termination, that the agreement does not terminate unless and until the debtor signifies by word or deed that he accepts termination. The damned notice of termination says what it says.

 

For sure in those cases where the termination amounts to the anticipatory breach of the agreement by one of the parties to that agreement the law says the innocent party should elect either to accept the termination or inform the terminating party that he requires them to perform their obligations owing under the agreement. But we're not concerned with an anticipatory breach by the creditor. It's not as if the creditor having agreed to give credit has then decided not to loan after all. What the creditor is doing is calling in the loan he has already made ahead of the time when it would ordinarily have been repaid.

 

But in a regulated consumer credit agreement, what in reality can the court genuinely expect the innocent, ordinary and unsophisticated debtor to a consumer credit agreement, who is strapped for cash, do in response to the demands of the creditor? Write a letter saying 'I accept your repudiatory breach of contract'?. Of course not. Well I say of course not. That is a ludicrous expectation to hold. Was the Court of Appeal ever concerned to ascertain in Woodchester v Swayne & Co that Swayne had accepted Woodchester's termination on the back of their ineffective DN? Mais non. Swayne & Co had done nothing. Swayne & Co were a firm of solicitors in Cardiff for crissake. Yet they still were treated to the benefits of the Act as one intended for the protection of consumers. Swayne were, according to claue 9.1 of the terms of the agreement between Woodchester and Swayne, in repudiatory breach of contract, entitling Woodchester to immediately terminate the agreement. But all the same, Kennedy LJ held that the provisions of section 87 dictated what Woodchester were required to do in order for Woodchester to become entitled to claim early payment and demand the return of the photocopier let on hire under the agreement. This was regardless of what the agreement said.

 

Indeed in the context of activity, if Swayne & Co had paid some money to Woodchester they would have done themselves a favour because those payments would have been applied to the credit of the arrears.

 

I appreciate that counsel for banks are currently advancing that the absence of some clear acceptance on the part of the debtor operates to negate the meaning and intent of the creditor's express termination. The latest clever arguments seem to be that a DN is not required at all where the agreement has no fixed duration. But that's counsel pushing at the boundaries and thinking out the box in a novel way. All good lawyers do that. They invent and shape their arguments to distinguish their case from those which suggest they're on a loser so as to suit the requirements of their client. They have no idea as they're inventing and shaping that the argument they've conjured will succeed. But they sigh with relief when they appreciate their opponent is a LiP.

 

I do not buy in to the notion that unless the debtor is active or inactive in a way somewhat different to the way he was active or inactive prior to the termination, that the agreement has endured despite the delivery of an express notice of termination, or despite activity on the part of the creditor which is in keeping with the creditor having terminated the agreement. Remember this : when Woodchester v Swayne was first decided, before it got to the Court of Appeal, Assistant Recorder Higginbottom found for the creditor on the basis that

 

"A default notice served under Section 87 and Section 88 is not rendered defective merely because the action indicated as required to be taken to remedy the breach is in fact over and above the action necessary to remedy that breach."

 

The Assistant Recorder did not add 'and because the debtor had failed to serve a notice of acceptance of termination or had conducted itself in a way different to the way it had conducted itself before termination or before the creditor behaved as if the creditor had terminated.'

 

Kennedy regarded the Assistant Recorder's judgment 'as a model of clarity'. But he still found the decision was wrong. He held quite the reverse to the Assistant Recorder. He held the DN was rendered defective because the action indicated as required to be taken to remedy the breach was in fact over and above the action necessary to remedy that breach. He did not qualify that view by saying it was reached owing to the activity or inactivity of the debtor or that his view would have been different depending on what activity or inactivity there may have been on the part of Swayne & Co. As we know, because Swayne got hit with a judgment for the actual arrears, Swayne did nothing.

 

Woodchester v Swayne is still good law. Swayne & Co did the right thing. They were well placed to do the right thing. They were a firm of lawyers. The right thing they did was to appeal the decision. The result speaks for itself.

 

x20

[Gazza112]

This is very helpful Gazza

 

I would be interested to know more information and the end result of your case. Was your notice of assignment and DN correct to the penny or was it thrown out for being incorrect.

 

It is always interesting to hear about actual cases and judges comments.

 

Pedross

 

 

Allthough my case was dismissed yesterday, i did have a dodgy DN also a Dodgy Notice of Assignment. But i never got to use it as i said my case was chucked out owing Howard Cohen not sending in the original Documents on the day.

 

But in my case my Default notice for example was issued on the 9th which was a friday and remedy date the 26th and was posted second class.

First postal day for that would of been the 12th allowing 4 working days, which would of come to the 16th. So they never left 14 clear days to remedy the breach.

 

The best part in my case is they sold it to CL Finance on the 22nd, defecting the Default notice once and for all.

But i must stress as to what the Judge said to me yesterday, they need the complete accounts from that account and a breakdown to get to the figure in both the DN and Notice of assignment.

 

So not only they breached both legal forms, MBNA even breached the Data protection act for allowing a third party to look at my data 4 days before they should have.

 

Hope this helps

 

 

Gaz

[pedross]

Thanks Gaz

 

It helps a lot, you have made some really interesting points.

 

Did you deal with this yourself or had you got a solicitor representing you because you were lucky to have judges comments like that.

 

I am a bit confused about breaching the data protection act though I don't see why it needed to reach the termination date to pass the data on. I would have thought once they sold the debt they would have also sold all the rights at the same time including your agreement to process your data. I could be wrong about that though.

 

Anyway you have done really well that is a good result, well done.

 

Pedross

[diddydicky]

Thanks Gaz

 

It helps a lot, you have made some really interesting points.

 

Did you deal with this yourself or had you got a solicitor representing you because you were lucky to have judges comments like that.

 

I am a bit confused about breaching the data protection act though I don't see why it needed to reach the termination date to pass the data on. I would have thought once they sold the debt they would have also sold all the rights at the same time including your agreement to process your data. I could be wrong about that though.

 

Anyway you have done really well that is a good result, well done.

 

Pedross

 

hi pedross! - up late again?

[Gazza112]

Thanks Gaz

 

It helps a lot, you have made some really interesting points.

 

Did you deal with this yourself or had you got a solicitor representing you because you were lucky to have judges comments like that.

 

I am a bit confused about breaching the data protection act though I don't see why it needed to reach the termination date to pass the data on. I would have thought once they sold the debt they would have also sold all the rights at the same time including your agreement to process your data. I could be wrong about that though.

 

Anyway you have done really well that is a good result, well done.

 

Pedross

 

 

Hi Pedross

 

No, i did this on my own with the help from all the caggers on this site.

It does sound daunting when you start out, as you don't know where to start i was the same.

On the data protection law, no one is allowed your data the data are with you and the creditor when you take out a card.

In this case it was broken by 4 days, where a third party had access to that account.

 

 

Gaz