Invalid Default Notices

[emandcole]

Ah, makes sense! Have read in sample defences about putting the claimant to strict proof it was sent under L of P Act.

 

Must be pretty important then and surely another arrow to fire off?

[emandcole]

Would I be right in thinking that if an agreement is still "alive" the borrower needs to agree to the assignment?

If that is the case, then could it be extrapolated from that, that if the borrower is not "invited" to agree to the assignment, that the agreement is terminated?

 

Interesting one Bill. Would we have to rely completely on this supposed right to tranfer being in the terms and condions applicable at the time of opening?

 

Good question as many people, including me, have discovered banks (as one example) are unable to provide T&C's applicable to older accounts. As they can't provide them that would surely put into question any contractual 'right' to assign or transfer anything?

 

Easier one to answer perhaps if the T&C's are unavailable but not much help for newer agreements :-|

[haggis1984]

Assignments are dealt with under section 136 of the Law of Property Act 1925 (I know, sounds crazy)

 

S.

 

Aww b*lls.

 

My mates doing building surveying. She was trying to explain this to me like 2 years ago when she started the course. I was like 'naaa naa' credit card debt can't come under the law of property.

 

Actually, im not gonna tell her she was right

[diddydicky]

Would I be right in thinking that if an agreement is still "alive" the borrower needs to agree to the assignment?

If that is the case, then could it be extrapolated from that, that if the borrower is not "invited" to agree to the assignment, then the agreement is terminated?

 

doesn't it say in most T & C's that they can assign the debt without your permission?

[Bigdebtor]

I've just googled and got the whole L of P Act 1925 using its title. This section 136 is on Page 10 and just talks about "express notice in writing" - nothing about recorded delivery that I can see. However if the notice of assignment didn't come with the SAR (and the OC confirms nothing else on file) then surely we can infer it wasn't sent - so is not in force?

[haggis1984]

136 Legal assignments of things in action

(1)Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—

(a)the legal right to such debt or thing in action;

(b)all legal and other remedies for the same; and

©the power to give a good discharge for the same without the concurrence of the assignor:

Provided that, if the debtor, trustee or other person liable in respect of such debt or thing in action has notice—

(a)that the assignment is disputed by the assignor or any person claiming under him; or

(b)of any other opposing or conflicting claims to such debt or thing in action;he may, if he thinks fit, either call upon the persons making claim thereto to interplead concerning the same, or pay the debt or other thing in action into court under the provisions of the M1Trustee Act, 1925.

(2)This section does not affect the provisions of the M2Policies of Assurance Act, 1867.

[F1(3)The county court has jurisdiction (including power to receive payment of money or securities into court) under the proviso to subsection (1) of this section where the amount or value of the debt or thing in action does not exceed [F2£30,000].]

[Bill Shidding]

Hi DD,

 

doesn't it say in most T & C's that they can assign the debt without your permission?

 

I would imagine it does say that. As emandcole said -

 

As they can't provide them (t&c's) that would surely put into question any contractual 'right' to assign or transfer anything?

 

I am fairly confident I read "somewhere" that whilst an account/agreement is "live" the creditor needs to ask. Maybe perhaps to give the borrower the opportunity to settle before the assignment? I will have another look.

 

Bear in mind that what a creditor says in the T&C's, isn't necessarily legal!

[egg-sterminator]

doesn't it say in most T & C's that they can assign the debt without your permission?

DD/Shadow this is a bit of thread but just talked to professorgbr, his solicitor via Brunnel franklins called him to say they concider all his enforcable cases are no longer safe on the back of the wakeman judgement as the after event ins. can not now be in place . Have you heard anything ?

[haggis1984]

DD/Shadow this is a bit of thread but just talked to professorgbr, his solicitor via Brunnel franklins called him to say they concider all his enforcable cases are no longer safe on the back of the wakeman judgement as the after event ins. can not now be in place . Have you heard anything ?

 

Dont see the harm in this - seems like the CMCs have made poor choices for the test cases and made a hash of the proceedings anyway.

 

As the bank charges issue wouldve been better without the OFT getting involved to justify their bloated budget it seems that the enforceabillity issue would be best served without big CMCs getting involved.

[egg-sterminator]

Dont see the harm in this - seems like the CMCs have made poor choices for the test cases and made a hash of the proceedings anyway.

 

As the bank charges issue wouldve been better without the OFT getting involved to justify their bloated budget it seems that the enforceabillity issue would be best served without big CMCs getting involved.

like or dislike of cmc's is irrelivant personally i'm of the later . Point is what in the ruling could make them give up on 5 cards 6 or more years old all with ppi and return of fees payed ? is it issolated or across the board including other cmc's remember they have some very good council .

[Pumpkinhead]

Have been reading this and related threads with great interest. Can you please confirm something for me?

 

Am I correct in believing that if you receive an invalid DN and this is followed by a letter demanding the full balance (after the required amount of time and you not having taken remedial action etc) that this DOES NOT count as termination?:-?

 

I am thinking of situations where I've NOT received a letter that uses the wording"termination of account" or closure of account but just demands the full payment.

 

If no actual termination letter received, is it better to just let sleeping dogs lie or more advantageous to send off SARs to the Creditors concerned?

 

Thoughts appreciated.

[nks22]

My understanding is that a demand for full payment is termination as the lender is indicating that the option of regular repayments under the original credit agreement is no longer available.

[welshperson3]

My understanding is that a demand for full payment is termination as the lender is indicating that the option of regular repayments under the original credit agreement is no longer available.

 

One party to a agreement cannot terminate without the other the other party's agreement.

 

So this is only the offer of termination it is up-to you whether u wish to accept it or not.

 

Termination occurs when you accept the offer.

 

wp3

[vint1954]

Have been reading this and related threads with great interest. Can you please confirm something for me?

 

Am I correct in believing that if you receive an invalid DN and this is followed by a letter demanding the full balance (after the required amount of time and you not having taken remedial action etc) that this DOES NOT count as termination?:-?

 

I am thinking of situations where I've NOT received a letter that uses the wording"termination of account" or closure of account but just demands the full payment.

 

If no actual termination letter received, is it better to just let sleeping dogs lie or more advantageous to send off SARs to the Creditors concerned?

 

Thoughts appreciated.

The demand for full ballance is a clear intention not to perform by the creditor.

 

If your default notice is invalid, then you must accept their unlawful rescission in writing.

[diddydicky]

One party to a agreement cannot terminate without the other the other party's agreement.

 

So this is only the offer of termination it is up-to you whether u wish to accept it or not.

 

Termination occurs when you accept the offer.

 

wp3

 

One party to an agreement cannot UNLAWFULLY terminate without the other party's agreement

[welshperson3]

One party to an agreement cannot UNLAWFULLY terminate without the other party's agreement

 

lawfully or unlawfully one party cannot terminate only a court can do that

[bradfordlad]

Does the same apply then if the demand for payment of the full balance is via a county court claim form? I've had 1 or 2 letters from solicitors asking for the full balance owed, and now received claim form with the full balance stated in the particulars of claim.

 

I never received a specific Termination Letter though. I ask because my DN is apparently defective.

Cheers,

 

BL

[diddydicky]

lawfully or unlawfully one party cannot terminate only a court can do that

 

with respect i think you need to read up a bit more,

 

If you are breach of the agreement the creditor may serve upon you a DEFAULT NOTICE giving you the opportunity to remedy the alleged defect,

 

if the default notice is valid and you fail to comply the creditor can and will "take the next step" as authorised in s 87 and either/or terminate, demand full payment of sums not yet due

 

If you attempted to take the matter to a court you would need to fill out a particulars of claim in which you state the legal basis for asking a court to rule on the matter

 

the creditor (if not the court itself upon reading your application and supporting documents) would strike out your claim

[diddydicky]

Does the same apply then if the demand for payment of the full balance is via a county court claim form? I've had 1 or 2 letters from solicitors asking for the full balance owed, and now received claim form with the full balance stated in the particulars of claim.

 

I never received a specific Termination Letter though. I ask because my DN is apparently defective.

Cheers,

 

BL

 

yes, the main benefit of the agreement (if not the only one) to the debtor is the ability to use money and repay it in monthly amounts of his own choosing (subject to a minimum)

 

therefore if the creditor removes that "benefit" from you you are at a serious disadvantage

 

you cant get any more certain that he has unlawfully repuidate the agreement than trying to take you to court to pay all those sums that were not yet due to be paid under the agreement, can you?

 

He can only lawfully do that by complying with s87/8 of the CCA otherwise any attempt to do so is an unlawful repudiation

 

so if accept it before he discontinues and starts again with a new DN

 

once you have accepted the unlawful repudiation the agreement no longer endures and the creditor cannot then issue a new DN

[nks22]

lawfully or unlawfully one party cannot terminate only a court can do that

The court doesn't terminate the agreement but it needs to be satisfied that termination has taken place. If a creditor has failed to follow the correct procedure (i.e. issued a legitimate DN and given the debtor the required time to remedy the breach) it will have lost its right under s87 to have repayment of the debt enforced by a court. (My understanding, anyway.)

[haggis1984]

The court doesn't terminate the agreement but it needs to be satisfied that termination has taken place. If a creditor has failed to follow the correct procedure (i.e. issued a legitimate DN and given the debtor the required time to remedy the breach) it will have lost its right under s87 to have repayment of the debt enforced by a court. (My understanding, anyway.)

 

There are the Consumer Credit) Enforcement, Default and Termination notices) Regulations 1983 which specifically adress the issue of default - im unsure how these tie in with the CCA though.

[Pinky69]

You are right nk and that is what it says in Kpoharor.

 

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 gives rise to a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119

[welshperson3]

with respect i think you need to read up a bit more,

 

If you are breach of the agreement the creditor may serve upon you a DEFAULT NOTICE giving you the opportunity to remedy the alleged defect,

 

if the default notice is valid and you fail to comply the creditor can and will "take the next step" as authorised in s 87 and either/or terminate, demand full payment of sums not yet due And this is were the judge comes in

 

If you attempted to take the matter to a court you would need to fill out a particulars of claim in which you state the legal basis for asking a court to rule on the matter

 

the creditor (if not the court itself upon reading your application and supporting documents) would strike out your claim As i have not yet written any POC i can only assume you seen what i would write in your Cristal ball, on that point could you tell me whether i won or lost the case.

 

wp3

[diddydicky]

wp3

 

I think i must be using the wrong aftershave today- i thought i was giving you advice, not an argument- my apologies

 

If you defend against a creditor suing you following a lawful termination of a lawful agreement your defence would have to contain the legal authority on which you base the proposition that "only a court can terminate an agreement"

 

the same authorities would need to be stated in your POC if you instigated proceedings against the creditor on the basis that they were not allowed to terminate the agreement having complied with s87/8

 

That is how i know what would/would not be in your POC - no crystal ball needed

 

this is the authority for the creditors powers to lawfully terminate the agreement and/or claim sums not yet due

 

87. Need for default notice. — (1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a)

to terminate the agreement, or

(b)

to demand earlier payment of any sum, or

©

to recover possession of any goods or land, or

(d)

to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e)

to enforce any security.

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

88. Contents and effect of default notice. — (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 [F114] 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 [F114] days have elapsed.

(3) The default notice must not treat as a breach failure to comply with a provision of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1)) if the [F114] days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.

(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it [F2and any other prescribed matters relating to the agreement].

[F3(4A) The default notice must also include a copy of the current default information sheet under section 86A.]

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid.

Annotations:

Amendments (Textual)

F1

Words in s. 88(2)(3) substituted (1.10.2006) by Consumer Credit Act 2006 (c. 14), ss. 14(1) , 71(2) (with Sch. 3 para. 10); S.I. 2006/1508, art. 3(2) , Sch. 2

F2

Words in s. 88(4) inserted (16.6.2006) by Consumer Credit Act 2006 (c. 14), ss. 14(2) , 71(2) (with Sch. 3 para. 10); S.I. 2006/1508, art. 3(1) , Sch. 1

F3

S. 88(4A) inserted (1.10.2008) by Consumer Credit Act 2006 (c. 14), ss. 14(3) , 71(2) (with Sch. 3 para. 10); S.I. 2007/3300, art. 3(3) , Sch. 3

89. Compliance with default notice. If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88(1)(b) or © the breach shall be treated as not having occurred.

 

 

If you can show me the legal authority for your proposition that "only a court may terminate an agreement" i may well have to concede to you as i have not seen such an authority before

Edited January 27, 2010 by diddydicky

[welshperson3]

who puts they're interpretation on what you have written above ?

 

1 you ?

2 the lender?

3 the judge ?

 

if i was pushed into a guess personally i would go for 3

 

wp3