Invalid Default Notices

[Duffers Mum]

Johnny - don't forget to be reasonable on your costs too, sometimes Judges have been known to deny costs because they have been too high...I put in for approx £130 with my SD from 1st Cretins.

[johnnybgood]

can I claim back the SAR that I sent to the original creditor?

 

Johnny

[Undercover-Elsa]

Yes

[Undercover-Elsa]

I'm assuming you have copies of the relevant CCA regs?

If not there are some good links in the first post on my thread here:

http://www.consumeractiongroup.co.uk/forum/showthread.php?200901-Anatomy-of-a-Default-Notice

[basa48]

if there is a clause in the agreement allowing the creditor to sell the account- by what authority do you say that a debt which is sold to by the creditor- is then automatically terminated? where in the original agreement does it say that upon such a sale the agreement terminates?

 

An unlawful termination would only occur in such circumstances (IMO) if the person or company to whom the asset (for it IS an asset) was not properly licenced or capable of carrying on the same obligations as the original creditor.

 

based on your statement- you are saying that once a creditor sells an agreement- it ceases to be an asset!

 

Sorry - you are right, the act of assignment isn't termination. I had assumed the date for remedying the DN had long passed and the agreement would have automatically terminated (as most DNs state the agreement will be terminated if the default isn't remedied).

 

PS: What if the T&Cs don't have a clause allowing transfer of rights and duties and the account is sold?

[johnnybgood]

Thanks for the info Elsa, is there a fee for aplying to have the SD set aside?

 

Johnny

[johnnybgood]

Just phoned the court to make sure I can take my set aside app there and they inform me that its the wrong court, and gave me the right court to take it to

does this make any difference to the rules of the demand?

 

Johnny

[pumpytums]

Hi Johnny,

it probably means the court on the SD doesn't handle bankruptcy. It's another point to you in getting it set aside.

 

Pumpytums

[itsamomentintime]

hello can anyone answer a question please? do penalty charges included on a DN make the DN defective?

[The GodMother]

hello can anyone answer a question please? do penalty charges included on a DN make the DN defective?

 

From what l remember when this question was asked ages ago its yes but dam if l can find the thread.

[johnnybgood]

hi Pumpytums, the court that they put on the SD does handle SD's but is not for my area and is 10 mile away..

the other court that I have to use is 7 mile away..and they said they may not accept it if it has the other courts name on..

 

Johnny

[mabel2010.]

Hi, I have a default from Lloyds TSB for a Master Card, the date of the agreement is early 2003, the date of the default is Nov 2006. The debt was sold to Arrow Global in Sept 2009, they now have the default on my Credit File, this has been causing no end of problems as I am a director of a company and any credit or contracts that the company apply for it brings up my default and the application fails.

 

I have disputed the debt since May 2006, I sent all the standard letters off here (could'nt remember my old account details to log in) back in May, June July 2006, Got all the way up to sending a N1 then droppped it due to work commitments.

 

I have been in contact with Lloyds, Arrow and their solicitors (I use this term lightly) Fairfax.

 

Seem to be going round in circles, any advice would be great.

 

Thanks in advance

[basa48]

Hi, I have a default from Lloyds TSB for a Master Card, the date of the agreement is early 2003, the date of the default is Nov 2006. The debt was sold to Arrow Global in Sept 2009, they now have the default on my Credit File, this has been causing no end of problems as I am a director of a company and any credit or contracts that the company apply for it brings up my default and the application fails.

 

I have disputed the debt since May 2006, I sent all the standard letters off here (could'nt remember my old account details to log in) back in May, June July 2006, Got all the way up to sending a N1 then droppped it due to work commitments.

 

I have been in contact with Lloyds, Arrow and their solicitors (I use this term lightly) Fairfax.

 

Seem to be going round in circles, any advice would be great.

 

Thanks in advance

 

How did the default arise? If you didn't remedy it in the time given then it is correctly recorded on your CRA files and won't 'fall off' for 6 years.

 

Unless there is a very powerful argument the default was incorrectly recorded you will struggle to get it removed. Plus even if you do have a good argument it could take years and a great deal of expense to remove it.

 

Sorry!

[welshperson3]

have a look at this (dicky hope you like it)

 

Garside v Black Horse Ltd & Ors [2010] EWHC 190 (QB) (12 February 2010)

 

from paragraph 26

 

 

By virtue of section 10(7) of the 1973 Act, the implied term that the goods are of satisfactory quality is a condition as distinct from a warranty. This means that any breach of the term amounts to a repudiatory breach of contract entitling the innocent party – if he so chooses – to accept the repudiation by rejecting the goods. However, he loses this right to reject and thereby treat the contract as repudiated if he elects to affirm the contract and acts upon that election. Once an election to affirm has been made and communicated to the other party, then it is irrevocable. "Waiver by election is final and so has permanent effect" (Chitty on Contracts 30th ed. vol.1., para 24-008 citing Motor Oils Helles (Corinth) Refineries SA v Shipping Corp of India [1990]1 Lloyds Rep 391, 398);

 

 

On these facts, his Lordship held that up to that point

‘it cannot possibly be said .... that [G] with the requisite knowledge did anything which could

amount to an affirmation of the contract or the right to reject had been lost by the mere

passable of time

 

 

 

WP3

[welshperson3]

hello can anyone answer a question please? do penalty charges included on a DN make the DN defective?

 

 

HOPE THIS ANSWERS YOUR QUESTION.

 

[56] Mrs Rankine also asserts that there are errors in the form of the default notice and that the sums quoted were incorrect because they included default charges which were unfair. By her witness statement she makes further contentions as to alleged inaccuracies in the figures quoted.

[57] The default notice is dated 20 December 2005. In my judgment, it cannot invalidate a default notice if elements of the sums claimed in that notice are subsequently found to be irrecoverable by virtue of other legislation, such as the Unfair Terms in Consumer Contracts Regulations 1999. The obligation imposed on the lender is to state the sums due on the face of the agreement. To impose any other requirement would remove any certainty from the process, since it would require lenders to anticipate and calculate, in advance, a court’s likely view as to a fair sum to levy in respect of default charges. This is a virtually impossible task which Parliament cannot have intended that lenders would have to carry out when issuing default notices.

[58] In my judgment, Mrs Rankine was deliberately seeking to be perverse and untruthful in seeking to avoid a substantial debt despite having all the benefits of equipment she expects the credit company to pay for on her behalf. Her behaviour in court was perverse, argumentative and obstructive.

[59] Conclusion

[60] In my judgment, the claims by the Rankines do stand dismissed and the claim by Tesco and counterclaim by HFC be allowed .

wp3

[diddydicky]

have a look at this (dicky hope you like it)

 

Garside v Black Horse Ltd & Ors [2010] EWHC 190 (QB) (12 February 2010)

 

from paragraph 26

 

 

By virtue of section 10(7) of the 1973 Act, the implied term that the goods are of satisfactory quality is a condition as distinct from a warranty. This means that any breach of the term amounts to a repudiatory breach of contract entitling the innocent party – if he so chooses – to accept the repudiation by rejecting the goods. However, he loses this right to reject and thereby treat the contract as repudiated if he elects to affirm the contract and acts upon that election. Once an election to affirm has been made and communicated to the other party, then it is irrevocable. "Waiver by election is final and so has permanent effect" (Chitty on Contracts 30th ed. vol.1., para 24-008 citing Motor Oils Helles (Corinth) Refineries SA v Shipping Corp of India [1990]1 Lloyds Rep 391, 398);

 

 

On these facts, his Lordship held that up to that point

‘it cannot possibly be said .... that [G] with the requisite knowledge did anything which could

amount to an affirmation of the contract or the right to reject had been lost by the mere

passable of time

 

 

 

WP3

 

thats s very interesting- thanks

 

the judgement confirms that waiver by election is permanent

 

however it still leaves open the question as to what the effect of silence is

 

in general terms one party cannot simply unilaterally end and agreement unlawfully- therefore IMO the law would consider it totally unreasonable that a party to an agreement should have to go to the trouble or expense- every time the other party threatened to repudiate- to either seek advice or to have to formally hold the other side to the contract- clearly the law intends that if one party attempts unlawfully to extract itself from an agreement-the silence of the innocent party is sufficient to show that they intend that the agreement endures and the lawbreaker is kept to the agreement-

 

it is therefore evident (and shown in various cases) that where a performing party Elects to accept the lawbreakers actions- that he must positively demonstrate, by words or deeds- that he has done so

 

the lawbreakers act must be in respect of a major part of the contract or agreement and not some de minimus matter- in order for the performing party to accept the repudiation.

 

The acceptance of the unlawful repudiation does not in itself terminate the agreement- it simply relieves the performing party of their own continuing obligations under the agreement which then- due to neither party performing- leads to a situation whereby the contract or agreement endures- but it still remains- since the performing or inbjured party then reserves rights under the agreement to sue for damages

 

 

thus although this judge states that " time may not be of the essence" other judges have indeed done so - i would suggest that a failure to demonstrate acceptance of an unlawful repudiation over a long period of time would more likely be taken by a court to mean that you had elected to NOT accept the unlawful repudiation.- unless i suppose if you could show that you were ignorant of the fact of having to do so- or were unaware that the UR had occurred

 

If any payments or acts which are commensurate with continuing performance of the agreement on the part of the injured party-were made after he is made aware of the unlawful repudiation - that would then make it much harder for the Injured party to plead that he had not elected to hold the creditor to the agreement

 

for instance it would be very wise to ensure that the creditor was made aware (in writing) that any payment to him after an unlawful repudiation was clearly in respect only of the amount of genuine arrears that were outstanding.

Edited August 31, 2010 by diddydicky

[means2anend]

thus although this judge states that " time may not be of the essence" other judges have indeed done so - i would suggest that a failure to demonstrate acceptance of an unlawful repudiation over a long period of time would more likely be taken by a court to mean that you had elected to NOT accept the unlawful repudiation.- unless i suppose if you could show that you were ignorant of the fact of having to do so- or were unaware that the UR had occurred

 

 

Well DD is this not the precise situation that debtors find themselves in of an unlawful rescission in thecontext of invalid dn's

 

m2ae

[Guest HeftyHippo]

when dealing with repudiation, it is the law of contract that applies.

 

when one party breaks the contract, the other party has the option of holding the party to the contract, or can choose not to be bound by the contract themselves. In the latter, it is important to make the party know that you are not bound by the contract. If you don't, the other party can assume you wish the contract to continue. That situation applies when a contract runs over a period of time and there is a hiccup during its term. ie you agree to have your van fleet valeted every week, and one week the valet doesn't do them, or only does the insides and leaves the outsides. If you say nothing, it is assumed that you wish the contract to continue.

 

However, if that party still does not honour its part, the situation is one of continuing repudiation, and they cannot expect you to honour your part. So, in the case of the valet, if he misses out one week, and you tell him to stop messing about and carry on as usual, and he then disappears for a few weeks, the fact that he broke the contract again after you accepted his earlier breach does not mean he can expect payment for the work he didnt do ie expect you to honour your side.

 

In our circumstances, when a bank says they have closed the account, and will not honour cheques, ATM transactions, or credit card transactions, there is nothing we can do to force them to.

 

In such a case, when they close the account and end the agreement, if we accept or not, will not change their mind. The agreement is ended whether we accept it or not. Even if we wish to continue the agreement, and honour our side from that moment, their position will not change, they will not honour transactions. If you add our lack of knowledge about these legal matters, we have a lot of leeway. You could argue for instance, so what if you did not accept the repudiation? Would it have changed the banks position? Would the bank have acted differently if they suspected you knew about repudiation? Did the bank at any time actually honour any terms of contract before it terminated, such that they could argue that you accepted the change to the agreement? ie, you accepted (affirmed) that your bank account now had a different agreement - that they would not honour any transactions.

 

When they close the account, it isn't as if there are some changes to the account that restrict your use of it, ie, your cheque book now has 10 cheques not 25, and your card only guarantees then up to £25 rather than £100, you can now only get £50/day from the ATM, rather than £500, or your credit card limit is now £3000 rather than £5000. No, the whole account has gone, no cheques, no ATM card, no credit card.

 

Would any reasonable person believe that you actually intended to keep an account, and honour your side of the contract when you were not allowed to make any transactions? Would anyone accept that because you did not write to accept their repudiation, that you actually accepted that you account now had completely different terms, and that whilst you still had to abide by your contractual terms, teh bank didn't have to? Ie, the bank would not provide any banking services at all, but you were still contracted to them as if they had?

 

There is plenty of stuff on the www about continuing repudiation, have a look at

http://www.inhouselawyer.co.uk/index.php/contract/7474-understanding-repudiatory-breach

 

I'm not saying that contract and repudiation are not important to identify and point out to the bank, just that the situation regarding acceptance is not so clear cut. If you don't accept the repudiation, and 8 months later the bank reinstates the account and agreement, then may claim that because you didn't accept or identify any repudiation, then you actually accepted the new terms (ie a useless account) and they were modifying the terms again. They may have a point. However, has anyone ever known a bank reinstate an agreement once they close it? Although a timely acceptance may prove useful, it isn't the end of the world if you don't. In my case, 2 banks closed accounts and didn't tell me! I didn't have any chance to accept the closure for several months! Even after acceptance, the banks' behaviour doesn't change.

Edited August 31, 2010 by HeftyHippo

[patrickq1]

looking at the above W it looks like this could be used in a vast amount of circumstances, i am on the MORTGAGE EXPRESS and it seems that the building societies are repudiating contracts by use of receivership and interfering with contracts also, so i am wondering if this is the case it would be possible then to repudiate the contract and also litigate for losses ?

patrickq1

[Guest HeftyHippo]

not sure what you mean, but the party that repudiates CANNOT litigate as he is in the wrong.

 

there maybe clauses in a contract that give a right to end the contract but that is not repudiation, which is breaking of the terms of contract so severe that the other party has the right to consider the contract ended.

 

in our cases, repudiation happens (usually) because the bank withdraws services and ends the account without following the relevant clauses of the CCA which is there to protect the consumer. If we break the terms (default) they must issue a Default Notice BEFORE they an take further action. Many DNs are defective and so they then close the account without complying with the CCA, hence they repudiate.

 

 

and yes, this is an area of contract law, and may apply when ever there is a contract.

[pumpytums]

I had an account sold to a DCA, the DCA proceeded with litigation they then discontinued and handed it back to the OC.

 

The OC then decided that the account was still active and continued to add interest and even PPI payments. It's a shame that when the OC/DCA terminated the agreement without issuing a DN, I accepted their unlawful rescindment of the agreement in writing. I telephoned them and told them that no contract existed between us as they had confirmed in writing that the new owner (DCA) did in fact hold all rights and duties to the account and were not simply threat monkeys. The DCA in word and deed had decided to end the agreement. I'm currently awaiting their response to my complaint.

 

 

The OC even thought that they could indeed issue a DN after the account was terminated and sums not get due were demanded.

 

Their terms and conditions even state regarding demanding the full balance "Before making any demand we will take all the steps we are required to take by law for your protection" so yes they are allowed to demand the full sum providing the abide with the Consumer Credit Act 1974 which states that a DN is necessary before a account may be terminated or sums not yet due requested.

 

If I agreed that a contract still existed between us then they could indeed issue a DN and then proceed to request the full balance. Shame then that I won't be doing that any-time soon.

 

They are also unable to play the waiting game and take me to court just for the arrears in say 3-4 years as arrears indicate that an agreement/contract still exists which it doesn't.

 

 

Pumpytums

[Guest HeftyHippo]

congratulations pumpty you must be one of the extremely rare cases where a bank closes ends an agreement and then decides to reopen it.

 

however, have they acknowledged that there is no arrears? has your default been removed?

[pumpytums]

There are arrears but not much they are more than welcome to litigate for them. I will then counter-claim my PPI, charges and their DSAR failure in return. Not sure if I can claim for repudiatory breach of agreement as I understand it it's one or the other i.e the agreement terminates arrears are owed only or I affirm that I want the agreement to continue and then claim damages.

 

I haven't checked on the default the DCA bless them decided to put one on my CRF. If it's still there it adds extra ammo to my case should they decide to go down that route.

 

Pumpytums

[DontPushMe]

If the OC terminates an agreement by asking for the full outstanding amount without following the CCA regulations and thus causes a repudiatory breach then the innocent party, i.e. the debtor can terminate the contract. That I understand but what happens when the innocent party terminates the contract. What happens to the outstanding debt? Is it written off? Or does it just become unenforceable? What happens to any goods purchased with the money acquired under the terminated agreement? Are these forfeited to the OC? Termination and damages I can understand but what happens to the loose ends I cannot.

 

DPM

[pumpytums]

If the OC terminates an agreement by asking for the full outstanding amount without following the CCA regulations and thus causes a repudiatory breach then the innocent party, i.e. the debtor can terminate the contract. That I understand but what happens when the innocent party terminates the contract. What happens to the outstanding debt? Is it written off? Or does it just become unenforceable? What happens to any goods purchased with the money acquired under the terminated agreement? Are these forfeited to the OC? Termination and damages I can understand but what happens to the loose ends I cannot.

 

DPM

 

This explains it quite well :-

 

http://www.inhouselawyer.co.uk/index.php/contract/7474-understanding-repudiatory-breach

 

At-a-glance GUIDE

The effect of a repudiatory breach is that the innocent party gains the right to choose whether to either affirm the contract or to terminate.

If the innocent party elects to terminate they are released from performance of their obligations under the contract and from any obligation to accept further performance by the party in breach.

If the innocent party elects to affirm the contract, they remain obliged to perform their duties under the contract, but can seek damages.

Prior to making their election the innocent party must continue to perform their part of the contract.

Affirmation may be express or implied.

Affirmation is generally irrevocable.

It is possible for an innocent party to lose the right to terminate (for example by acceptance of goods or passage of time).

 

The performance of their obligations been to repay monies lent under a Consumer credit agreement. The debt still exists but in my view now becomes unenforceable due to the creditors breach. I think you would be hard pressed to convince anyone that the debt can simply disappear. I'm unsure if they are allowed to put a big D on my CRF as the creditors rights went with the contract to report my performance.

 

They can legally claim any arrears owing as at that point the contract was still binding to both parties. At the point of UR however the debtor elects to terminate the agreement due to the creditors breach. In my case the failure of the creditor to follow laws laid down by parliament and breaking their own terms and conditions.

 

I hope this helps. This is how I see it.

 

Pumpytums