Invalid Default Notices

[Capricorn1601]

just for the record, how many de minimus mistakes make a de maximus?

[diddydicky]

just for the record, how many de minimus mistakes make a de maximus?

 

i de pends on de judge at de time!

[Artie44]

the default notice was invalid because it is dated (friday) 4 December 2009 and therefore even if posted first class would have been deemed delivered (served) Tuesday 8th December

 

I have a technical query about the delivery timescale. I see that if it is posted on a friday the weekend does not count for delivery. What if it is posted on saturday 1st class, is the first day Monday and the second day (tue) the delivery day?

[diddydicky]

if it is posted on saturday then it is the same as if it was posted on the friday-

it will be deemed to have been delivered on the second working day after the day of posting

 

since saturday is not a working day- it will be deemed to have entered the postal system on monday- the same as if it had been posted on the friday

 

tuesday is taken as the day of service

 

also note that UK mail do not collect mail on a saturday.

[Kayyak]

Reading with interest, (I'm new to this forum) I've had a DN, due to remedy the breach by 25 March, but today, I have received a letter from the DCA dated 22 March, stating they now own the debt. I will write to the OC to accept their unlawful recsission and will also send a letter to the DCA (recorded delivery of course - I'm learning).

 

As I am new to this, I have not sent a SAR or CCA. Should I do this now or not. Is this matter closed due to the unlawful termination of contract.

 

I have one big problem in that I have signed recent letters to the OC with I & E details. (wish I found this site ages ago)

[artis]

Hi All

 

Can somebody help, I received a default notice from Royal Bank of Scotland for a unarranged over draft served under Section 87 (1) of the consumer credit act. Majority of it it fee's they've added on is the default notice enforceable?

 

thank you

[BeauBrummie]

Hi All

 

Can somebody help, I received a default notice from Royal Bank of Scotland for a unarranged over draft served under Section 87 (1) of the consumer credit act. Majority of it it fee's they've added on is the default notice enforceable?

 

thank you

 

Hi artis,

 

You should start your own thread here :

 

http://www.consumeractiongroup.co.uk/forum/newthread.php?do=newthread&f=170

 

And scan the DN onto your new thread with some background detail of your case. Remove all identifying information and you should get more help for your particular situation then.

 

Good Luck

 

Beau

[welshperson3]

hay DD if you got any spare time have a look at this thread,

 

Default Notices and Court dates...Please Help

 

the guy just about managed to get a set aside on a faulty DN, now he is defending the original claim, after reading his thread i think he could do with all the help he can get.

 

wp3

[Bigdebtor]

Reading with interest, (I'm new to this forum) I've had a DN, due to remedy the breach by 25 March, but today, I have received a letter from the DCA dated 22 March, stating they now own the debt. I will write to the OC to accept their unlawful recsission and will also send a letter to the DCA (recorded delivery of course - I'm learning).

 

 

I take it you have not had any Notice of Assignment from the OC? - This should have been sent registered post (but never is). If your credit rating is already shot then ask the DCA for a copy of the NoA and CCA - suspending payments until you get these - as all you now owe is lawful arrears less any compensation which you want to claim for their unlawful rescission. This will slow them down and help your cash flow meantime - but screw up your credit rating.

 

BTW which OC and DCA are you talkng about?

 

Are you due back unfair charges and associated interest? If so I think this will make the arrears on the DN wrong which I think will also kill it.

 

Vint and Diddydicky are the guys to confirm this last bit.

 

BD

[egg-sterminator]

if it is posted on saturday then it is the same as if it was posted on the friday-

it will be deemed to have been delivered on the second working day after the day of posting

 

since saturday is not a working day- it will be deemed to have entered the postal system on monday- the same as if it had been posted on the friday

 

tuesday is taken as the day of service

 

also note that UK mail do not collect mail on a saturday.

Hi Diddy just an update on a mercer dn for bcard . as you said i exepted their termination when full amount was demanded the DN as you pointed out didn't leave required 14 days . looked on experian today amount owed 0 settled and no default ? i must be dreaming they havn't contacted me for a while but they never give up this easily ? do they ?

[The GodMother]

Hi Diddy just an update on a mercer dn for bcard . as you said i exepted their termination when full amount was demanded the DN as you pointed out didn't leave required 14 days . looked on experian today amount owed 0 settled and no default ? i must be dreaming they havn't contacted me for a while but they never give up this easily ? do they ?

 

Take a screen print of that and make sure you print it off and have it in storage on your comp.

[diddydicky]

yep as GM has said- they make mistakes all the time so heres hoping

 

more likely however is that they have flogged it off- but its looking good at the moment

[charlie*]

DD.... you wrote a great letter for me last week.... about a DN where the Termination letter was dated ONE day later.

 

Just one question, then it's going in the post... would it be advisable

to mention in the letter that their Term/Letter is dated just one day after the DN or should I leave it for them to work out?

 

Many thanks

 

charlie

[The GodMother]

leave it for them to work out. They are not the brighest light bulb in the boxe so they will have to work it out

[diddydicky]

spot on- unless you want to offer your services as their legal adviser at one third of their lawyers rates!!

 

use the mushroom method with your opponents

 

(keep em in the dark and feed em with a load of sh*t)

[bradfordlad]

Sorry to hijack your thread, but I need to ask DD a quick question

 

DD - with regard to a defective DN, is there any limit on when you can "accept" their unlawful recission? The reason I ask is that I'm being pestered by Bank of Ireland's solicitors, and their court claim has been stayed until a couple of days ago (problem with them not sending me CCA). Before they start getting funny again, am I too late to say "I know I used the defective DN in my defence, but actually I've just learned that the defective DN means you've unlawfully rescinded the contract, and I accept your unlawful recission"

 

I've been paying them a bit each month as a gesture of goodwill, so could I say that they are payments to the arrears as quoted on the DN?

 

Thanks, and sorry again for butting in

 

BL

[diddydicky]

clearly it would look odd to do that at this stage so you need to argue the fact without actually writing to accept.

 

your argument will be that as the DN was not valid- it did not give the creditor entitlement to the benefits of s87

 

in other words he cannot terminate the agreement, nor claim early payment of sums not yet due under the agreement- if he did not first serve a VALID DN

 

therefore the creditor does not have a lawful cause of action for this part of his claim

 

Print these off and then sit down with a cuppa and a sarnie and read and re read to get the flavour and idea of what you will be arguing

 

the tale of a dodgy DN and i am sure you will come across links

 

try reading this -you need to learn it off by heart so that you know what you are saying

I have had difficulty in appreciating why the law would require the debtor to indicate his acceptance of the creditor's repuiatory breach of the agreement for some time. It doesn't stack up. Yet all the same, I acknowledge a repudiatory breach undoubtedly provides to the other party a right to either accept or reject the breach as terminating the agreement, being careful to make sure before acceptance that it is of a breach which is fundamental, not minor.

 

So I've gone back to the beginning to check assumptions etc.

 

An agreement is made up of terms and conditions. In a CCA, the terms and conditions are set out in the agreement. The Act regulates the agreement. [tick]

 

A debtor who fails to make instalment payments in accordance with the agreement commits a breach of it. [tick]

 

One term of the agreement will most likely say that in the event of the debtor failing to pay an instalment as and when it falls due will give rise to the creditor becoming entitled to certain rights, like the right to claim the immediate payment of those sums ordinarily payable in the future. The exercise of those rights are however regulated by the Act. We know what the regulations say. [tick]

 

The question is: If the creditor does not follow the regulations does that truly amount to a repudiatory breach of the agreement?

 

Here are some thoughts.

 

For a breach of a regulation to amount to a breach of the agreement requires adherence with the regulation to be incorporated as a term of the agreement. If a regulation forms no part of the agreement it can hardly be said that a failure to comply with that regulation represents a breach of the agreement. It's a breach of the regulation. Are the regulations implied as terms of the agreement, like for example, certain provisions of The Sale of Goods Act are by the authority of the Act incorporated as implied terms of agreements dealing with fitness for purpose etc. The Consumer Credit Act does not say expressly, that its provisions are incorporated as implied terms of agreements.

 

For a breach of a regulation to operate as a breach of an agreement it seems to me it would be necessary to persuade a court that the law intends that compliance with the regulations is to be treated as a term of any agreement the Act regulates. In other words, incorporation is implied even though the Act fails to say so expressly.

 

It seems to me that it is stretching the Act to say that its provisions are implied as terms of an agreement where the Act doesn't say so.

 

If I am right and this is up for debate, a breach of the regulations is simply that. Arguably it does not amount to a repudiatory breach of the agreement and accordingly there is no obligation upon the debtor to indicate his acceptance of that breach. On the contrary, the creditor will have terminated the agreement in breach of the regulations.

 

The 'cake and eat it' tag, although applied to debtors by creditors and some judges as well, is much more suitably applied to creditors.

 

The consumers are the people the Act was intended to protect. The creditors with their vast resources and so forth are the people who are supposed to be able to get things right. And Kennedy LJ was not slow to criticise and slap Woodchester down when they got their DN wrong.

 

This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If the hirer is said to have broken its terms, the hirer needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and the resources to give that information with precision. If he does not do so accurately then he cannot take what Mr Gruffyd conveniently referred to as "the next step".

 

Yet today, ten years on from Woodchester, the creditors have the audacity to claim that it was they that the Act was intended to protect and does so by providing that where they deliver a defective DN, a perpetuating facility exists by which they are at liberty to declare that their own unambigous statement in writing that the consumer's credit agreement had been terminated, was not such a statement at all. They say that under the Act, since they were incapable of producing a DN containing precise information, the termination which they initiated and communicated to the consumer was a nullity. And since that is so, huff the creditors, they say they are now able to issue a fresh DN and regain all of those entitlements which they binned by making a cock of the earlier DN in the first place. And further, that if they make a cock of the second DN and go on to terminate, well they can have a third attempt. And a fourth. In fact they say that the Act is so protective of them that they can keep on cancelling their termination notices and issuing DNs as many times as it takes to get things right.

 

Now who was it that was having his cake and eat it?

 

I now turn to the 'Kerr' judgment. The 'Kerr' judgment is the judgment of Kerr LJ sitting in the court of Appeal in the case of State Trading Corp of India Ltd v. M Golodetz & Co Inc Ltd (1989). The essence of the speech being:

 

that saying and doing nothing at all, other than a continuing failure to perform, cannot constitute an acceptance of a repudiation even if the grounds for such an acceptance then exist.

 

Two points:

 

1 the speech was made in the context of a continuing failure to perfrom. That is, a failure to perform where there exists a continuing obligation to perform.

 

2 'Kerr' was disapproved of by Lord Steyn in Vitol SA v Norelf Ltd

 

I go back again to post number 1026 in this thread where I quoted from Chitty, saying:

 

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 expression that the 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.'

 

In other words it is necessary to distinguish between a case where there is some obligation to perform and where the innocent party has been absolved from future performance.

 

The vast majority if not all of the reported cases on 'notice of acceptance' of a repudiatory breach are concerned with the common law requirement for the innocent party to communicate clearly and unequivocally its intention to treat the contract as discharged in the context where but for the innocent party's treatment of the contract as discharged, that innocent party was expected to make some performance for the benefit of the other party as if the contract endured.

 

It's time for a simple example. An example where you have to forget about consumer rights and The Sale of Goods Act. I go to my tailors (again). I select a moss coloured Harris Tweed for a jacket. I'm measured, informed of the price and told to come back in a week for a fitting. On my next visit I discover the tailor has made the jacket from a nasty pink linen. I try the jacket on, the tailor notes the sleeves are too long, I take it off again and am informed the jacket will be finished in another week's time. The production of a pink linen jacket is so fundamental a departure from what we agreed as to constitute the tailor's repudiatory breach of the agreement, giving me the right if I wish, to treat myself as absolved from any further duty under the agreement, ie absolved from the duty to pay the agreed price. On the other hand I might think the pink jacket would be most suitable for next months' chambers garden party.

 

When I am at the tailors I say nothing about the fact the jacket is pink and made of linen when it should be a manly Harris Tweed. I am silent on the matter that the jacket I tried on represented the tailor's repudiatory breach of the agreement. I indicate nothing and simply walk out the shop.

 

I don't show up the following week as I was supposed to. I do not take delivery of the jacket and I don't pay the price. I end up in court. I argue that the pink linen jacket represented the tailor's repudiatory breach of the agreement. I'm in difficulty on that one and the judge tells me so. He points to the fact that I failed to communicate my acceptance of the tailor's repudiatory breach. The tailor had gone on to alter the sleeves and finish the jacket without notice of accpetance of breach and thus in expectation that I would pay the price for the jacket. The judge tells me that if I had communicated my acceptance of the repudiatory breach I would have been saved. But since I didn't, I'm stuffed.

 

OK, so that's an example of where a notice of acceptance would have been a very good idea. Now let's look at what is going on in the minds of the creditor and consumer in a consumer credit agreement where the creditor writes to the consumer saying 'the agreement is hereby terminated give me all my money back' and where of course the creditor's DN served just seven day's earlier is consequently defective.

 

All the creditor thinks is 'I will send this letter to the consumer to terminate the agreement and demand all my money back.'

 

All the consumer thinks when he reads the letter is 'the creditor has terminated the agreement and wants all his money back'

 

The creditor and consumer are thinking alike. There is no confusion or misunderstanding. There is nothing which requires clarifying.

 

This is why I do not accept, or at least why I am having immense difficulty in appreciating why it is necessary in law for the consumer to write a letter back to the creditor saying 'I accept your termination' or do something which communicates acceptance of the termination, without which the termination is a nullity and in truth the consumer credit agreement endures. The letter back to the creditor is no more than an acknowledgment of receipt and a statement that the consumer understands the position of the creditor. Nothing else turns on it.

 

Ordinarily (but for this nonsense that the creditor can disregard his own termination notice and the acceptance of it and churn out another DN), the creditor does not adjust his position in light of the acceptance of termination. The creditor just bangs on with pursuing the consumer.

 

If we could have some case law in the context of consumer law rather than multi-million dollar international shipping contracts that may be more on the point. Lord Steyn in Vitol SA v Norelf Ltd (1996) a House of Lords decision in which 'Kerr' in State Trading was dissapproved, had a try. He said:

 

'I am satisfied that a failure to perform may sometimes signify to a repudiating party an election by the aggrieved party to treat the contract as at an end. Postulate the case where an employer at the end of a day tells a contractor that he, the employer, is repudiating the contract and that the contractor need not return the next day. The contractor does not return the next day or at all. It seems to me that the contractor's failure to return may, in the absence of any other explanation, convey a decision to treat the contract as at an end.'

 

 

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.

[AA99]

Dick, you are as mad as me

[AA99]

Regarding post #1874, I love your signature

 

I am not legally qualified, all opinions and advice are based on personal experience and common sense and are used at your own risk.

[dasby]

How should one respond to a creditor after termination where the DN specifies a breach of the agreement but the creditor has not yet provided the agreement in response to either a CCA S78 request or a SAR. I cannot know whether the DN is fundamentally defective as I do not have the agreeement to compare to it.

Is it necessary to wait to see if a valid agreement turns up later?

Edited March 25, 2010 by dasby

[Gallahad]

How should one respond to a creditor after termination where the DN specifies a breach of the agreement but the creditor has not yet provided the agreement in response to either a CCA S78 request or a SAR. Is it necessary to wait to see if a valid agreement turns up later?

 

Is your DN a faulty one?

[dasby]

It is ok on dates, has the OC and debtors name and address, the statutory wording is correctly underlined and made more prominent. The further action to be taken if the breach is not rectified is specified and unambiguous.

 

The balance and the arrears amounts are wrong as they include unlawful late payment charges. The breach is explained like this:

 

'We refer you to the above agreement which you have entered into with us. You are in breach of the terms of your Credit card agreement that requires you to pay the instalments specified on the dates that are due. You may remedy this breach by full payment of the arrears amount to us.'

 

Does the inclusion of unlawful charges and lack of reference to specific terms that have been breached make it fudamentally faulty?

Edited March 26, 2010 by dasby

[Gallahad]

It is ok on dates, has the OC and debtors name and address, the statutory wording is correctly underlined and made more prominent. The further action to be taken if the breach is not rectified is specified and unambiguous.

 

The balance and the arrears amounts are wrong as they include unlawful late payment charges. The breach is explained like this:

 

'We refer you to the above agreement which you have entered into with us. You are in breach of the terms of your Credit card agreement that requires you to pay the instalments specified on the dates that are due. You may remedy this breach by full payment of the arrears amount to us by full payment of the arrears to us.'

 

Does the inclusion of unlawful charges and lack of reference to specific terms that have been breached make it fudamentally faulty?

 

I think you will need diddiydicky to give his opinion on whether that constitutes a faulty DN. But generally speaking faulty DNs followed by termination are a backstop if court proceedings are eventually bought against you. So it is a waiting game I think.

G

[dasby]

any thought please Diddy?

[Bigdebtor]

The balance and the arrears amounts are wrong as they include unlawful late payment charges.

 

Does the inclusion of unlawful charges and lack of reference to specific terms that have been breached make it fudamentally faulty?

 

Diddydicky/Vint1954

 

Can you clarify if the DN is faulty if it has ANY unfair charges included in the stated arrears - or only if it includes charges imposed for payments withheld after they fail to provide CCA in response to £1 CCA request?

 

I think many of us need this point clarified.

 

Thanks

 

BD