Invalid Default Notices

[Peterbard]

HI Sorry BD just noticed this quote in your last post

“Court would support debtor's position on this. Debt "remains due" but doesn't need to be paid - the same thing as "disappearing" for all practical purposes“.

Do you seriously believe this. That a court would support the none payment of a debt?

It wasn’t long ago that the supreme court revoked section 127(3-5) because it did this.

Something about contravening the creditors human rights under article 6.

The court may support the position that the correct documentation has to be produced before the agreement can be enforced, the court may be impatient with the creditor and make him re file the complaint in extreme circumstances but that is all.

Peter

[postggj]

quote frm peter

 

There is no penalty for issuing a faulty default notice, other than that the creditor cannot temrminate and ask for accelerated payments. If there was it would have to be mentioned in the act and it isnt.

 

 

ime sitting on the fence on this one for the time being as i am totally engrossed in this

 

what is your view on an account being defaulted on a dodgy default notice, then the creditor being the oc or dca starting a court claim

 

now by my understanding, to start a court claim the account has to be terminated

 

can you confirm that statement

[Peterbard]

Peter my responses are in bold above.

 

You have missed out vital parts of my point (about TN's) in your response which completely change the situation - and could confuse the casual reader into thinking the creditor could continue to issue new DN's NO MATTER WHAT.

 

THAT IS NOT TRUE - as I have responded above.

 

To answer your previous point - I believe the focus of this thread has ALWAYS been to help debtors understand how to get back on an even keel as quickly and in as stress-free a manner as possible - using the mistakes of the creditor wherever possible to best advantage.

 

IMHO fancy legal arguments, labels, partial and confusing answers do not contribute to this key and overriding aim.

 

BD

Hi

 

Unfortunately the court is apt to use legal aguments what do you do.

 

The legal argument is section 87 says the creditor cannot issue a termination notice if he does not give a DN. Nothing about anyone accepting anything, no default no termination therfore nothing preventing him from reissuing a default.

 

Peter

[Bigdebtor]

HI Sorry BD just noticed this quote in your last post

“Court would support debtor's position on this. Debt "remains due" but doesn't need to be paid - the same thing as "disappearing" for all practical purposes“.

Do you seriously believe this. That a court would support the none payment of a debt?

I do not think the court would have any option. If the TN was issied without a vaid DN first then only the arrears would be due. The CCA 1974 and subsequent laws are very clear on this.

It wasn’t long ago that the supreme court revoked section 127(3-5) because it did this.

Something about contravening the creditors human rights under article 6.

The court may support the position that the correct documentation has to be produced before the agreement can be enforced, the court may be impatient with the creditor and make him re file the complaint in extreme circumstances but that is all.

ONLY IF NO TN ISSUED BY CREDITOR AND ACCEPTED BY DEBTOR. THEY CAN'T RE-ISSUE A COMPLIANT DN AFTER A TN as there is then NO agreement in force on which to issue a further notice of default. Simples.

Peter

 

Peter

 

You still seem to be ignoring the importance of any TN issued after a dodgy DN - see bold above.

 

BD

[Peterbard]

[/b]

 

Peter

 

You still seem to be ignoring the importance of any TN issued after a dodgy DN - see bold above.

 

BD

Sorry BD could have sworn i have said this before.

 

If no correct default notice is issued then no termination by virtue of default can take place, the very fact that the default is inafective invalidates the termination so the account is still active.

Peter

[postggj]

that is why i allways state you do not tip off the creditor of a dodgy default notice untill an n1 claim has been issued by the fact if a claim has been issued, the agreement must have been terminated

 

now if the creditor withdraws the claim.

the creditor would be prohibited from bringing further action by virtue of part 38 discontinuance

[Bigdebtor]

Peter

 

Forget S 87. I believe the ordinary law of contract takes over when the creditor "offers" to terminate and the debtor "accepts".

 

In layman's terms the situation could unfold as follows:

 

Creditor: I realise I can't (legally) really issue this TN as the DN was dodgy - but how about us just calling it quits?

Debtor: Fair enough. I accept. We are now quits. No more agreement.

Creditor: Eh - but can you pay me all that you owe me now?

Debtor: Sure. I owe you arrears to date (possibly minus an amount of damages for your early termination). Can you confirm how much the arrears are up to date of termination?

Creditor: That's not what I meant. Let's forget about the termination - didn't mean it. I'll just issue another DN now.

Debtor: No - yo can't. We both agreed to terminate. A deal's a deal. Tll me the arrears and I'll work out what I need to pay after you tell me.

Creditor: I've made a mistake. That's not what I want. I'll screw up your credit rating if you don't play ball with me.

Debtor: Tough. Report me to the CRA's as much as you like.

 

I hope that clears up the matter once and for all?

 

BD

[postggj]

double post

[Bill Shidding]

Hi Peterbard

 

Hi

There is no reason why after the correct notice is issued the agreement cannot be enforced.

 

Why should there be.

 

Because a knowledgeable cagger would have "accepted" the original renounciation. Upon what agreement could a creditor issue a further DN?

 

Presumably there was a default, presumably the default was not remedied, the creditor is intitled to reclaim hes money, at least the court will think so.

 

The creditor is only entitled to reclaim "his money" upon serving the appropriate notices. Open ended agreements are/will be subject to Sec 98A, when that section is enacted. I 'm not sure if that section will be retrospective anyway.

The clause to non-default terminate an agreement is usually included when a creditor wishes to terminate when a fraud is suspected.

Nobody can predict what a judge will think.

 

Try using unlawful resision as a defence in court and you will see how rediculous it is.

 

I did, the judge didn't think it was "rediculous" and neither did the QC wannabe from a large chambers in London (3 Paper Buildings), who turned up for the creditor in a small claims case in Sussex. A big gun to kill off a LIP!. I failed on the "technicality" that my continuing non-performance was not deemed as "acceptance". The creditor didn't win either, because the DN they relied upon was deemed (by the judge) to be "not sent" ie faked.

 

I won't lose if there is a next time.

 

Apologies for using red, not trying to antagonise just differentiating between comments.

Bill.

 

Peter

 

It wasn’t long ago that the supreme court revoked section 127(3-5)

 

Revocation was not retrospective. It wasn't the supreme court, it was CCA2006.

 

Brandon is an illustration of this if the time element of the default is misquoted the court will ignore the technical error and ask was the remedy paid within the 14 days irrespective of what it says on the notice. If not why not.

 

A very bad "decision" on the judges part. Under what statute or precedent is a person compelled to comply with an unlawful/illegal notice? None that I can think of. Hopefully Brandon(?) will appeal or a different judge will over-rule it.

However, I realise the courts will be/are reluctant to upset their favourite customers.

 

Bill

Edited September 20, 2010 by Bill Shidding

[Bigdebtor]

that is why i allways state you do not tip off the creditor of a dodgy default notice untill an n1 claim has been issued by the fact if a claim has been issued, the agreement must have been terminated

 

I don't disagree - but I do think the debtor can accept (or reject if he's silly) the TN on the back of the dodgy DN as I have outlined above. His acceptance confirms the agreement is terminated - by mutual consent. If he doesn't accept the TN then perhaps the OC can continue to issue as many DN's - dodgy or otherwise - as he wants.

[diddydicky]

This is all pure fantassy.

 

I am not even going to waste any more time on it.

 

Just do me a favour and imagine yourself in a court room saying this stuff.

 

YOur undersanding is just to far removed from reallity for me to even start to argue sensibly with you.

 

Please everyone else look at the lastt posts on this thread look at the evidence not the reteric.

 

Peter

 

well pardon me- but that is EXACTLY what i HAVE done!! (and so far succeeded)

 

as i said in an earlier post which you chose to ignore Restons- who are one of the more aggresive sols acting for creditors- have conceded as much in writing to the court

 

i have tried to look at your posts on various topics afresh but they keep drawing me back to the belief that you have a hidden agenda -

 

 

 

the following are from chitty, and from decided high court cases- respectively and have been argued many a time in court-

 

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.

 

 

 

 

 

 

"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".

[per Lord Wilberforce in Gallie v Lee (1971)]

 

'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'

[per Scott LJ in Norwich & Peterborough Building Society v Steed (1992)]

 

as i said before- show me the legal authority for the CCAtaking precedence over contract law- or the part of the CCA which permits a creditor to be in "temporary repudiation" of his obligations- whilst he serves a correct DN

[diddydicky]

The operative bit is "continue to pay" - i.e. NOT have to pay the lot outstanding straight away - UNLESS on the back of a CCA-compliant DN which can only be issued AFTER the debtor has defaulted. To demand full payment straight away without issuing any DN - or after issuing a dodgy DN - destoys the creditor's right to have the balance repaid AT ALL (apart from arrears less damages) either in one go or over time.

 

Getting REAL again - anyone who has had a DN probably knows they CAN'T continue to draw more credit and thus increase the creditor's potential loss or risk of loss - BUT UNLESS the creditor jumps through the correct hoops, the debtor does not need to repay the whole balance any faster than agreed - and if the creditor screws up then he could be off the hook with no need to pay another penny. It doesn't matter what it's correct label actually is - unlawful or illegal, 0 rescission, termination or repudiation. What matters is the effect on the debtor - off the hook - and we shouldn't try to have such a clear message confused by semantics or pedantic wordsmithery.

 

A Bank overdraft is different - repayable on demand even if always kept within its terms.

 

BD

 

 

PB is well aware (but chooses for some reason not to be so) that most credit card agreements contain a clause which allows the creditor to vary or withdraw the credit limit at any time - this is perfectly reasonable and clearly if the debtor was struggling with his payments- or even if he was not- but it came to the notice of the creditor that the debtor was struggling with other debts- was about to be made redundant etc etc- it would clearly be not unreasonable for the creditor to restrict or curtail further borrowing...........this has nothing to do with terminating the agreement....

 

there may well in some agreements be a clause which allows either party to terminate an agreement by giving notice....... it is a matter of opinion however whether such a clause:-

 

a/ allows a creditor to use it when the debtor is in arrears - which then puts the creditor in the position where he can only terminate or demand eariler repayment in accordance with s87/8 (this is after all an act for consumer protection)

 

b/ "substitute" the reason for terminating from s87 when he messes up for the other

 

c/ whether in fact the CCA intends that where a creditor terminates an agreement by such a clause- and where the debtor is not in arrears- that this then entitles the creditor to claim earlier repayment of sums that were incurred and not yet due during the previous currency of the agreement

 

One of (if not THE) major benefit of a revolving credit agreement to the debtor- is the ability to budget for repayments at his own pace and amounts of his own choosing (subject to an agreed minimum payment) - and not be subject to immediate recall of those loan sums

 

had the debtor intended that he would be subject to "payment on demand" then clearly he would have arranged a bank overdraft - and at much more preferable rates than the credit card

 

Brandon i believe is in the process of being appealed- it was a peverse decision in any event in this respect and flies in the face of the intent and purpose of the CCA

[diddydicky]

Hi

Yes as i said the court will not enforce a faulty DN.

 

BUt it does not mean the debt will just go away.

 

There is no reason why after the correct notice is issued the agreement cannot be enforced.

 

Why should there be.

 

 

 

Presumably there was a default, presumably the default was not remedied, the creditor is intitled to reclaim hes money, at least the court will think so.

 

Try using unlawful resision as a defence in court and you will see how rediculous it is.

 

Peter

 

 

i don't think anyone who has been on the forum any length of time-beleives that a debt will "go away"- indeed most of us realise that even if we win the day in court and show the debt to be "legally unenforceable" - still the debt does not "go away" (except in some exceptional circumstances where the court has deemed the lending to have been "gifted" to the debtor- we will not go there)

 

Based on your logic- there would be no need of a consumer credit act- since what you are proposing is that the creditor is not punished or answerable financially in respect of breaking the terms of the agreement or the provisions of the legistlation (CCA) covering the agreement and that it is impossible for the creditor to step outside of the act and into general contract law- and that therefore his credit agreements are "imune"

 

what utter tosh!

[Undercover-Elsa]

Totally agree, DD, Bill. The theory that the termination following a faulty DN is invalid therefore the agreement endures, allowing the Creditor to keep reissuing till he gets it right (I could knock up a word perfect DN in 5 minutes..why can't they???!!!) is flawed.

It's well documented throughout all areas of law that a contract CAN be wrongly terminated following incorrect procedures, and the party terminating has to take the consequences. The terminations stands, it is not invalid.

It's more generally known as "wrongful termination".

Eg if an employer terminates an employees contract without following the correct procedure it is wrongful termination. It's not invalid or ineffective because of his error. The employee is sacked. He leaves, goes on Jobseekers Allowance, can't pay his bills, loses his house. Unless of course he invokes the law of contract and sues them for repudiatory breach and wrongful dismissal.

The CCA refines and supplements common and contract law , but if a situation arises which is not specifically defined in the statute, then common/contract law is still there to protect the consumer.

If a DCA comes onto your property, forces his way into the house and won't leave, yes you can use the CCA and report him to the OFT but you have a far more effective remedy under common law and torts.

Similarly, in going to court, both you and the creditor have certain choices in how and on what basis you sue or defend, whether you rely on the actual consumer contract or common/contract law.

On a slightly different vein Shell admirably demonstrated this choice by choosing to terminate a contract via the terms of the contract, instead of by pleading repudiatory breach, which in the circumstances they had every right to do.

It cost them millions in lost damages.

[pumpytums]

How about this then. A well known OC sells an account the new owner promptly takes me to court previously in writing I had informed both the OC and the new owner no DN was issued.

 

So hasn't the new owner now committed attempted fraud? As it's been said that they are not allowed to demand sums not yet due without first issuing a valid DN? And as someone stated on here they are not allowed to terminate without issuing a valid DN. So by demanding money are they not committing fraud they are more than aware that they are not allowed to demand money yet they did.

 

For example I send you a letter demanding £1000. I have no right to the £1000 but I demand it. You write to me stating I'm very sorry I don't owe you £1000. I then take you to court, in court you ask "I'm sorry I don't understand how I owe you £1000 can you provide evidence?" You ignore my request and attempt to get summary judgement. The judge they says can you please provide evidence of the £1000. At which point I discontinue.

 

Would I be done for fraud?

 

I would hope so. If I had stated I'm really sorry I made a mistake would I be let off? How about if I sent 1000 such demands out would I still be let off?

 

2Fraud by false representation

 

(1)A person is in breach of this section if he—

 

(a)dishonestly makes a false representation, and

 

(b)intends, by making the representation—

 

(i)to make a gain for himself or another, or

 

(ii)to cause loss to another or to expose another to a risk of loss.

 

(2)A representation is false if—

 

(a)it is untrue or misleading, and

 

(b)the person making it knows that it is, or might be, untrue or misleading.

 

(3)“Representation” means any representation as to fact or law, including a representation as to the state of mind of—

 

(a)the person making the representation, or

 

(b)any other person.

 

(4)A representation may be express or implied.

 

(5)For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

 

3 Fraud by failing to disclose information

 

A person is in breach of this section if he—

(a)dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

 

(b)intends, by failing to disclose the information—

 

(i)to make a gain for himself or another, or

 

(ii)to cause loss to another or to expose another to a risk of loss.

 

4Fraud by abuse of position

 

(1)A person is in breach of this section if he—

 

(a)occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,

 

(b)dishonestly abuses that position, and

 

©intends, by means of the abuse of that position—

 

(i)to make a gain for himself or another, or

 

(ii)to cause loss to another or to expose another to a risk of loss.

 

(2)A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

I believe the OC therefore may way have attempted fraud under not one but three sections of the fraud act 2006. They certainly delayed me intentionally by taking 7 months for my DSAR so I had concrete proof that no DN was issued. Up to the release of that data it was my word against theirs.

 

So in not issuing a valid DN and I then inform them of their mistake in then proceeding to court is it not now a criminal matter rather than a civil one? I have clearly informed them of their mistake and for them to continue I clearly see it as fraud. It certainly ticks the boxes in the above fraud act.

 

Should I contact the police? discuss

 

Pumpytums

[diddydicky]

the two words to be intersted in are DISHONESTLY and INTENDS

 

the answer to your question is NO, there is no criminal offence

 

i suggest, ( with respect) that you forget about fraud and concentrate on defending the matter

[pumpytums]

Cheers DD,

I was just throwing something into the mix. I have no intention of crying "Fraud". It was just to prove a point If a OC knows that they have no right to claim money yet they do are they behaving dishonestly? or are they just mistaken?

 

Some of the comments on here have irritated me (not yours may I add).

 

Pumpytums

[Gallahad]

DD & Elsa as well thought through and logical as your responses are I cannot help but think they merely turn in to wasted effort in this case.

I also get the feeling of a hidden agenda with PB but either way the old adage of "There are none so deaf as those that choose not to hear

comes to mind.

G

Edited September 20, 2010 by Gallahad

[diddydicky]

they probably are- but is important for novice/new caggers to be re assured that all is not lost

[Peterbard]

Totally agree, DD, Bill. The theory that the termination following a faulty DN is invalid therefore the agreement endures, allowing the Creditor to keep reissuing till he gets it right (I could knock up a word perfect DN in 5 minutes..why can't they???!!!) is flawed.

It's well documented throughout all areas of law that a contract CAN be wrongly terminated following incorrect procedures, and the party terminating has to take the consequences. The terminations stands, it is not invalid.

It's more generally known as "wrongful termination".

Eg if an employer terminates an employees contract without following the correct procedure it is wrongful termination. It's not invalid or ineffective because of his error. The employee is sacked. He leaves, goes on Jobseekers Allowance, can't pay his bills, loses his house. Unless of course he invokes the law of contract and sues them for repudiatory breach and wrongful dismissal.

The CCA refines and supplements common and contract law , but if a situation arises which is not specifically defined in the statute, then common/contract law is still there to protect the consumer.

If a DCA comes onto your property, forces his way into the house and won't leave, yes you can use the CCA and report him to the OFT but you have a far more effective remedy under common law and torts.

Similarly, in going to court, both you and the creditor have certain choices in how and on what basis you sue or defend, whether you rely on the actual consumer contract or common/contract law.

On a slightly different vein Shell admirably demonstrated this choice by choosing to terminate a contract via the terms of the contract, instead of by pleading repudiatory breach, which in the circumstances they had every right to do.

It cost them millions in lost damages.

 

Sorry but we are talkimg about contract regulated under the CCA.

 

So most of your points are invalid.

 

Section 170

Lookit up

 

It also applies to sanctions following abreach in the form of the DN as per Rankin

[Peterbard]

Peter

 

Forget S 87. I believe the ordinary law of contract takes over when the creditor "offers" to terminate and the debtor "accepts".

 

In layman's terms the situation could unfold as follows:

 

Creditor: I realise I can't (legally) really issue this TN as the DN was dodgy - but how about us just calling it quits?

Debtor: Fair enough. I accept. We are now quits. No more agreement.

Creditor: Eh - but can you pay me all that you owe me now?

Debtor: Sure. I owe you arrears to date (possibly minus an amount of damages for your early termination). Can you confirm how much the arrears are up to date of termination?

Creditor: That's not what I meant. Let's forget about the termination - didn't mean it. I'll just issue another DN now.

Debtor: No - yo can't. We both agreed to terminate. A deal's a deal. Tll me the arrears and I'll work out what I need to pay after you tell me.

Creditor: I've made a mistake. That's not what I want. I'll screw up your credit rating if you don't play ball with me.

Debtor: Tough. Report me to the CRA's as much as you like.

 

I hope that clears up the matter once and for all?

 

BD

 

no

 

Zoned out on the first sentance when you said forget about section 87,

realised then what the value of the rest would be

Edited September 20, 2010 by Dodgeball

[Peterbard]

 

Hi where to start.

The inclusion of the new regulations in the CCA next year are there to clarify the existing rights of the creditor to terminate an open ended agreement.

The appeal in Brandon is not because of the termination this is an accepted fact.

Yes we all know that the repeal of section 127(3) was not retrospective that was not the point.

Yes the creditor can most certainly issue another DN he would have to re file and give time to remedy so he may not want to but yes.

You think he looses entitlement to his money because of what could be a typo.

Peter

 

 

 

 

 

 

Revocation was not retrospective. It wasn't the supreme court, it was CCA2006.

 

 

 

A very bad "decision" on the judges part. Under what statute or precedent is a person compelled to comply with an unlawful/illegal notice? None that I can think of. Hopefully Brandon(?) will appeal or a different judge will over-rule it.

However, I realise the courts will be/are reluctant to upset their favourite customers.

 

Bill

 

 

Hi where to start.

The inclusion of the new regulations in the CCA next year are there to clarify the existing rights of the creditor to terminate an open ended agreement.

The appeal in Brandon is not because of the termination this is an accepted fact.

Yes we all know that the repeal of section 127(3) was not retrospective that was not the point.

Yes the creditor can most certainly issue another DN he would have to re file and give time to remedy so he may not want to but yes.

You think he looses entitlement to his money because of what could be a typo.

Peter

[Peterbard]

DD & Elsa as well thought through and logical as your responses are I cannot help but think they merely turn in to wasted effort in this case.

I also get the feeling of a hidden agenda with PB but either way the old adage of "There are none so deaf as those that choose not to hear

comes to mind.

G

 

Yes hidden agenda again, annoying when i keep being proven correct though isnt it?the only thing hidden here is a knowledge of what you are talking about.

 

Peter

[Peterbard]

quote frm peter

 

There is no penalty for issuing a faulty default notice, other than that the creditor cannot temrminate and ask for accelerated payments. If there was it would have to be mentioned in the act and it isnt.

 

 

ime sitting on the fence on this one for the time being as i am totally engrossed in this

 

what is your view on an account being defaulted on a dodgy default notice, then the creditor being the oc or dca starting a court claim

 

now by my understanding, to start a court claim the account has to be terminated

 

can you confirm that statement

 

Sorry p missed you post

 

Yes i believe the ccount must be terminate in order to alter the repayment period. This presents no problem though, if the default is defective so is the default termination.

 

Peter

[Wolfy]

Can anyone help with an opinion on this situation please. Credit Card company A issues an invalid default notice and then terminates the account on the back of this. They then sell/assign the debt to company B who then take action through the courts. Can they then just issue a new DN as they have purchased an account which was terminated before they bought it? Especially as, from what Peter is saying, if the default were rectified on the second DN then the agreement would have to continue including the rights to use the credit card?