Invalid Default Notices

[bustthematrix]

what he cannot do however (IMO) is serve a second DN "post termination"

DD Could you please clarify exactly at what point(s) you consider that "termination" has taken place?

[basa48]

Long live CAG, Long live freedom of opinion!!! lol

 

Indeed, but let's not forget this forum is populated by people with debt problems. Some of those problems will be major and can be completely disruptive to peoples lives. Then they find themselves harried by unscrupulous debt chasers. Many caggers are not the seasoned campaigners who regularly visit and post here, some will be terrified and stressed.

 

It is easy when highly stressed and looking for solutions to latch onto any twig floating by that looks like a solution - then the next poster comes along a steals the twig. Who wouldn't lash out at anyone who appears to be taking away any hope.

 

But at the end of the day we have to accept it is all too easy to believe our own press and that we are right. IMO better to see alternative arguments, even if we think them wrong and prepare to fight them. After all some of those arguments will be used against us.

[IdaInFife]

spot on basa,

 

There is a thread where apart of the caggers defense was that the DN did not allow enough time for remedy - Judge dismissed this as the claimant quoted parts of the cca and stated that service of DN's did not apply from posting but from the date on the DN. But the cagger did not know how to respond.

 

I know it's not the same but this helps us to try and find answers to arguements.

[pt2537]

trouble is, if good members arent looked after, they leave, if good members are attacked by others and not defended they leave,

 

such is life.

 

On the default notice point,

 

the view seems to be that the statute prevents termination if a valid notice isnt served, now de minimis does apply to notices, so, its difficult to say what will invalidate the notice sufficiently and what wont. We have unhelpful cases such as Manni Investment Ltd v Eagle Star Life Insurance Co [1997] AC 749 which deals with notices of assignment and what should be allowed even if the notice is bad etc, so a lot of lenders do rely on this case.

 

We also have the view that if the lender cannot terminate by failing to comply with s87(1) then the agreement must remain live there is no inbetween, its alive or dead, thats the view of many counsel.

 

so if its alive, the lender is denied the rights conveyed by s87(1) and if its dead and he has terminated according to the statute then he has the rights.

 

On thing i think people miss, is the application for a time order, i do not know of one on here where a debtor has asked the court to allow more time to pay, or used the unfair relationships provisions to get more time to pay, there are plenty of unfairness cases on here

[pt2537]

http://www.letlink.co.uk/case-law/notices/mannai-inv.-co-ltd-v-eagle-star-life-assurance-co-ltd-1997.html

 

This sets out the principals in manni,

 

Its something that i see lenders relying on more and more,

[emandcole]

We also have the view that if the lender cannot terminate by failing to comply with s87(1) then the agreement must remain live there is no inbetween, its alive or dead, thats the view of many counsel.

 

so if its alive, the lender is denied the rights conveyed by s87(1) and if its dead and he has terminated according to the statute then he has the rights.

 

 

Hi PT. In reference to the above I believed that the law will tolerate such breaches in, as in this case, the termination of a credit agreement. The creditor may still terminate the contract with no effort made to issue a default notice at all, however this doesn't negate the fact that the termination has still happened - it's just that there are then implications for not having followed the requirements of the law, in this scenario the creditor being prevented from enforcement via the court to recover the debt due to their unlawful repudiation/failure to observe prescripted guidelines that are after all in place primarily to protect the consumer from such bad practice.

 

With that as my understanding can you offer any insight into how the 'rock and a hard place' scenario results that you detailed above? Seems to conflict with the concept that the law does allow contract breaking as the alternative results in the situation you describe. Thanks...

[pt2537]

Hi PT. In reference to the above I believed that the law will tolerate such breaches in, as in this case, the termination of a credit agreement. The creditor may still terminate the contract with no effort made to issue a default notice at all, however this doesn't negate the fact that the termination has still happened - it's just that there are then implications for not having followed the requirements of the law, in this scenario the creditor being prevented from enforcement via the court to recover the debt due to their unlawful repudiation/failure to observe prescripted guidelines that are after all in place primarily to protect the consumer from such bad practice.

 

With that as my understanding can you offer any insight into how the 'rock and a hard place' scenario results that you detailed above? Seems to conflict with the concept that the law does allow contract breaking as the alternative results in the situation you describe. Thanks...

Law is developing all the time, certainly the common law is, and what you have to remember is there is little reported authorities on these points, certainly in the context of the CCA.

 

Yes, under ordinary contract law you are right, however a statute was put in place for protection of the consumers, and if you read the Crowther report, protection was really to ensure that there was INFORMATION, hence the prescribed form of certain things etc.

 

The problem here, is that , the statute sets out circumstances where action cannot be taken until X Y And Z occur. Now statute is the willl of Parliament and Parliament is the supreme law maker in this land, therefore, the common law should not over turn statute, so here we have your example, but your example suggests that the statute can be defeated by a common law breach, it cannot.

 

When you look at this logically, the statute puts in place a number of things which must be done before a regulated agreement can be terminated. If it is not "done" in the manner set out then the termination cannot occur and if it does not become terminated, then what happens to it? well the opinion of many barristers whom i speak to, is the court will simply say, that the agreement remains live, as the right to terminate cannot be available if the breach isnt dealt with in accordance with the statute.

 

It is expected that the courts will give some clarification when Brandon hits the COA, and i would suggest that this case may hit the Supreme Court if Amex lose.

 

However, until we get there, we are stuck with County Court Cases.

[pt2537]

this is jkust the view i have had from a number of barristers btw, it is not my view, but i would say that a District Judge may find such arguments palatable

[postggj]

What i cant understand is the law is the law

 

written into statute

 

so how are judges able to interpret breaches themself and give there own decison

 

the whole point of statute law is that it is written into stone,

 

just like a judgement in the high court, the lower courts cannot overturn

[emandcole]

Thank you

 

Touch frustrating though, its clear their intention is to end the arrangement, especially when a DCA has been involved demanding full sums. So, developing this on if statute must be adhered to without exception (as the termination cannot have occurred due to the failed DN) how is de minimus allowed for a DN that is incorrect due to inaccurate sums demanded, seems a bit two sided. We have Woodchester of course with the 38% inaccuracy but that was fairly exceptional I guess.

 

Also, with the proviso that they can just have another go at defaulting you and terminating you anyway is there any point in actually having a default system if it is clearly weighted towards the creditor? Seems contrary to the 'sophisticated organisations versus the unassuming consumer' thinking that perhaps led to the concept of the consumer being the main protected party. Where did the consumer protection go? How about case law that supports the argumument that 'a man has responsibility for what he signs and allows into the hands of another' - can't recall the case law but you'll know the concept, you're entitled to believe what a reputable (ha ha) organisation gives you believing they'll act on it.

 

Rambling a bit so apologies here but common sense would lead me to the argument surrounding acceptance of an unlawful repudiation/rescission, thus preventing the creditor from being able to have another go. With your info about statute being the highest authority does contract law then allow the injured party to accept, thus removing the option to 'keep at it' until they get the default notice and termination process correct? If that were the case then acceptance would become essential, thus removing any doubt that you allowed the contract to endure etc. Am I way off the mark here?!

[emandcole]

What i cant understand is the law is the law

 

written into statute

 

so how are judges able to interpret breaches themself and give there own decison

 

the whole point of statute law is that it is written into stone,

 

just like a judgement in the high court, the lower courts cannot overturn

 

 

Yes perfect, that's where much of my confusion lays. One rule here, one rule there depending on who's not playing golf that day. Either 'it is', either 'it isn't'. This de minimus appears to be a 'do what you want' card.

[postggj]

Ignorence is no defence

 

that goes for the creditor as well as the debtor

[pt2537]

Post,

 

you are forgetting there are rules of interpretation available to judges,

 

The Mischief Rule,

 

The Golden Rule

 

The Litteral Rule

 

all of these are allowed to the judges to interpret statutes, so while its set in stone, it still needs interpretation.

 

Take the sign "no ball games" if can be interpreted in a number of ways depending on your view

[Bill Shidding]

Hi Ida,

 

There is a thread where apart of the caggers defense was that the DN did not allow enough time for remedy - Judge dismissed this as the claimant quoted parts of the cca and stated that service of DN's did not apply from posting but from the date on the DN. But the cagger did not know how to respond.

 

I also had this at my trial about U/R and a dodgy DN.

 

The counsel for the claimant relied upon "Norton v Ellam". That case was about a promissory note, and the date of signing a promissory note is the date on which the note becomes effective. When that case came before the court (1887) I expect that it was customary for both parties to be present (in person) at the signing of the agreement.

 

Postage would not have been a factor in that instance.

 

The cca74 clearly states "14 days after service" not "14 days after signing". However, this didn't stop my judge from agreeing with him!

 

Also, a reference to the CPR service requirements was not deemed as relevant either.

 

As this "relied upon DN" was reconstructed and later deemed "not sent" by the judge, the service point wasn't a top priority for me, so I let them run with it.

 

Although a reference to the interpretation act should have been enough to see that submission off alone.

 

Bill

[Bill Shidding]

Hi PT,

 

On thing i think people miss, is the application for a time order, i do not know of one on here where a debtor has asked the court to allow more time to pay

 

Yes, I agree with this. A time order is an underused option when the debtor has no real chance of defending the claim.

 

However, a time order (on a loan) can only be granted when the agreement is still "live" or if the initial period agreed for the repayment of the loan (eg 36 months) has not expired. That is also from my judge.

 

Could you confirm/deny that a debtor is not required to comply with an illegal/unlawful/non-compliant notice? (In reference to brandon.)

 

When you look at this logically, the statute puts in place a number of things which must be done before a regulated agreement can be terminated. If it is not "done" in the manner set out then the termination cannot occur and if it does not become terminated, then what happens to it? well the opinion of many barristers whom i speak to, is the court will simply say, that the agreement remains live, as the right to terminate cannot be available if the breach isnt dealt with in accordance with the statute.

 

In that instance, what happens about the POC? If the creditor has claimed that the agreement was terminated correctly on the POC, and the court decides that it hasn't, surely the original cause of action has gone?

Which should lead to re-issue under a different POC (as peterbard stated), and leaving the defendant to chose to defend or admit? (I know this doesn't happen, but it should !).

 

Bill

[cab1ne]

Mmmmm,

so a creditor sends you a dodgy DN.

the creditor then sends you a TN.

the creditor then sends the boys round and and repo's the car.

the creditor then takes you to court for the remaining balance.

 

the creditor argue's and the judge agrees, the dodgy DN invalidates the TN.

Ermm "what about the repo".

 

where in the act doe's it say that a creditor has to "terminate" an agreement to,

(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.

 

i can't see were it say's after a DN a creditor must "terminate" to do "B" "C" "D" or "E"

 

cab

[pt2537]

well

actually, there are protections in place in s90-91 for this issue, if the car is repo with more than one third of the repayments paid. There is case law, Chartered Trust vs Pritcher which deals with repo and what is "informed consent" if the notice is bad then informed consent is not given and hey presto, you win

 

 

The danger, which must at all costs be avoided, is that a one size fits all approach is developed, you must apply the law to the facts of each case, and then look at what you have and the arguments available

 

Id also say, where in the act does it say a termination notice is required? a default is sufficient,

[cab1ne]

well

actually, there are protections in place in s90-91 for this issue, if the car is repo with more than one third of the repayments paid. There is case law, Chartered Trust vs Pritcher which deals with repo and what is "informed consent" if the notice is bad then informed consent is not given and hey presto, you win

 

 

The danger, which must at all costs be avoided, is that a one size fits all approach is developed, you must apply the law to the facts of each case, and then look at what you have and the arguments available

 

Id also say, where in the act does it say a termination notice is required? a default is sufficient,

 

thanx for the info paul (Chartered Trust vs Pritcher), i will read it in full.

 

i shall stick to the "ACT"

 

cab

[cab1ne]

"oh" and i forgot to mention,

 

if less than a third is paid but they repo'd off private property (your drive), would s92 come into play

 

cab

[pumpytums]

Hmm very interesting,

so basically as PT has said a valid DN MUST be issued before an account/agreement can be terminated or sums not yet due are requested.

 

So if a company demands money/attempts termination without issuing a valid DN then they have no legal right and the simple fact that the DN is invalid should stop them in their tracks. But can't they then just say oops sorry here is a valid DN and another termination notice / MCOL claim form.

 

So what's stopping a DCA or OC repeatedly taking an individual to court.

 

1st Time no DN

 

2nd time DN invalid due to form, date etc

 

3rd you get the picture

 

Would I be allowed in the first 2 attempt and subsequent ones to claim damages? At the end of the day the owner has broken the terms of the agreement namely to act within the CCA 1974. They have clearly DEMANDED money without issuing a DN or a valid one.

 

Would the following stop them ?

 

Discontinuance and subsequent proceedings

 

38.7

 

A claimant who discontinues a claim needs the permission of the court to make another claim against the same defendant if –

(a) he discontinued the claim after the defendant filed a defence; and

 

(b) the other claim arises out of facts which are the same or substantially the same as those relating to the discontinued claim.

 

The facts would be the same MR/MRS X defaulted on an agreement signed under CCA 1974 with Y. The Defendant failed to abide by the DN etc.

 

 

At the end of the day if the OC/DCA makes repeat attempts am I not be harrased in some way?

 

It seems to me that DCA's/OC can ignore the CCA until they need to.

 

If a OC clearly breaks terms in their own T&C that must be worth something?

 

The CCA shields us as they must do certain things before doing others but thats where it seems to stop. Do we then move into common/contract law for damages due to the breach?

If I break the agreement the OC/DCA is allowed (if they do it right) to claim back everything get a CCJ - charging order etc. But if they break the agreement what do I get? Another day in court?

 

Obviously if I can prove my damages equal the sums outstanding then I'm happy.

 

Pumpytums

Edited September 27, 2010 by pumpytums

[pumpytums]

Post,

 

you are forgetting there are rules of interpretation available to judges,

 

The Mischief Rule,

 

The Golden Rule

 

The Litteral Rule

 

all of these are allowed to the judges to interpret statutes, so while its set in stone, it still needs interpretation.

 

Take the sign "no ball games" if can be interpreted in a number of ways depending on your view

 

That's really interesting PT,

so basically a judge is allowed to determine the statutes and apply them so for example (in keeping with this thread) A DN allowed 14 from service. The DN would clearly not stick to the relevant SI's but providing the creditor did nothing terminate/demand sums no due the under the mischief rule it could be taken as been valid. The DN though not fully complying is in it's essence is. Namely it allows the debtor 14 days though a specific DATE is not given. If the creditor attempted something in the 14days after service the judge could say that the debtor has been treated unfairly. The statute allows 14days the creditor said they would allow 14 days and they did not.

 

In not issuing a DN the judge IMHO would say that the debtor has been treated unfairly. In using the Mischief rule a judge may say that the CCA 1974 was to stop unscrupulous money lenders demanding money back. If no DN was issued the Creditor has behaved like an unscrupulous money lender. I would hope that a judge would then look at the creditors actions and the debtors after the fact. For example points to the creditor if they clearly accepted their wrong doings, froze all interest and made a easy payment plan for the debtor. Points off if they basically did nothing continued charging interest and behaving as if nothing had happened.

 

If the creditor then goes ahead again an issues a invalid DN I would hope it would be game over for them. Not only have they behaved in a shocking manner but given a second chance they bog it up again they are unfit and undeserving of any damages that they may be due under the debtors default.

 

I feel therefore in the light of certain occurrences should we say that the debtors and creditors action are paramount. Law it seems a big wibbly wobbly ball, if the creditor has behaved in a manner that is unfitting of their position as a large financial institution then that's points in our favour.

 

I'm actual now redressing my payments to my creditors if they have behaved like the above loan sharks I will of course point this matter out to them I will then attempt payments to them if they reject my proposals that's more fool them.

 

If I was to make a attempt at payment proposals would "Without Prejudice save as to Costs" prevent the proposal been used as admission of the debt? Without admission of liability would be better

 

By admission I mean to start the 6 year clock again. No that I never borrowed or spent it.

 

Pumpytums

Edited September 27, 2010 by pumpytums

[basa48]

It seems to me that DCA's/OC can ignore the CCA until they need to.

Pumpytums

 

All consumer credit agreements MUST be regulated by the Consumer Credit Act. There is no deviation from this otherwise why enact it? We could all use the quicksand of common/contract law.

 

Only if a situation is not mentioned in the CCA can we resort to common/contract law. I haven't found such a situation yet.

 

All judges can do is interpret the intent of the CCA where it is interpretable (if such a word exists).

[Guest]

imo, there is not much room re stat. interpretation re 'neccessary', 'must be in the prescribed form and specify' etc ie, a dn is necessary (if by reason of any breach a cr seeks .....etc), and it must be in the prescribed form etc.

thing is, there is no stat remedy for a breach of s87/88! so, the cts are left to their 'own devices' as such, with regard to common law, equity, any statute, cpr, etc!?

Edited September 28, 2010 by Ford
typo

[basa48]

OK so failure to issue a valid DN denies the lender his entitlement to terminate or demand earlier payment of sums.

 

But how then do we describe the lenders obvious failure to perform the contract (i.e. provide credit)? Is that not a repudiation in common law (Having now departed from under the umbrella of the regulatory legislation)?

[Guest]

imo. yes, to 'lawfully' terminate/demand earlier sums (technically). so, yes the issue of repudiation, rescission for breach (unlawful termination) etc is relevant, as has been discussed on cag.

failure to comply with cca is a breach. as there is no stat remedy, q is what effect this has in practice in the circumstances? is it material or minor?

Edited September 27, 2010 by Ford
typo