Invalid Default Notices

[Gallahad]

That would appear to be very logical to my limited brain WP

G

[diddydicky]

Hi

Don’t think this has been properly answered

The Brandon case found that the exact timing of the period to remedy (14)days did not have to be observed. The judge said that since no enforcement action had been taken within the period ,that there was no prejudice to the debtor.

In answer to the earlier question I think that a termination that was served only 10 days after the default would still be considered enforcement and this ruling would not effect it the fauly DN would still prevent enforcement.

The issue of unlawful rescission was not addressed basically because there is no issue never was.

The case was an appeal against a summary judgment, the claimant has to now apply for the right to appeal again this he has and we should here the result in December.

The issue of this case is whether the default period has to be exactly adhered to as stated on the notice before action can continue in court nothing else

During the case common ground comments where made regarding the termination of agreements and the fact that this can be done at any time in the life of the agreement as long as the creditor mentions it in the agreement.

Worth a read.

Peter

 

 

clearly what seems not to have been properly argued is that there would have been prejudice to the debtor

 

the debtor is hardly likely to be able to immediately stump up several months arrears as demanded in a DN - otherwise he would not have had a problem with individual monthly payments

 

given less than 14 days (i have some dns that gave only 5 days- i have a TN dated 2 days before the creditors own faulty DN deadline..................the debtor may well "throw in the towel" in any attempts to seek legal advice or to try to get the funds together to satisfy the DN

 

it seems to me that this was not likely to have been argued

[diddydicky]

Hi

Thought i had ben here before , rememger this? posted it a while ago on here, it was just before i recieved all the abuse for being correct again.

I know not supposed to mention it

What do you want a medal Peter

Nope an appology would be nice but i am not going to get one again

 

Peter

 

 

 

 

Peter

 

as many times as you continue to bring this up and distort the facts- so i will again correct you

 

most of the folk (me included)who were having a pop at you were not in the slightest bit interested in the debate on the subject matter- but in you continuing to call another cagger a liar when he said he had a case runnning and which he was unable to give full details due to confidentiallity you even called him a liar when he went as far as naming the court concerned

 

you have said in the past that it is behind you- yet it is ALWAYS you who keeps dredging it up- then moaning and whinging to the site team that people are having a pop at you

Edited October 8, 2010 by the_shadow
Removed URL from quoted text

[Gallahad]

Nail on head comes to mind DD:!:

G

[welshperson3]

If a creditor states something in a faulty DN then i think this apples.

 

 

172 Statements by creditor or owner to be binding

(1) A statement by a creditor or owner is binding on him if given under—

section 77(1),

section 78(1),

section 79(1),

section 97(1),

section 107(1)©,

section 108(1)©, or

section 109(1)©.

[basa48]

If a creditor states something in a faulty DN then i think this apples.

 

 

172 Statements by creditor or owner to be binding

(1) A statement by a creditor or owner is binding on him if given under—

section 77(1),

section 78(1),

section 79(1),

section 97(1),

section 107(1)©,

section 108(1)©, or

section 109(1)©.

 

Except read 172(3)

 

the court may direct such relief (if any) to be given to the creditor or owner from the operation of subsection (1) or (2) as appears to the court to be just

[diddydicky]

but this cannot be used to excuse anything said by the creditor- else the point of the clause would be lost

 

the court will (should) have regard to the effect upon the debtor of what is said by the creditor

 

the act requires the creditor to spell out precisely what the debtor has done wrong and what needs to be done to correct it- and the consequences if he fails to do so,

 

therefore the claimant would be hard put to claim releif (IMO) that he

 

1/ could not get the DN right

 

2/ unlawfully terminated/demanded repayment in full when he was not entitled to do so

 

 

3/ was in any event and by other law- bound by his (written) word!!

 

a very good point to have made and use in court WP3

[Bill Shidding]

Hi LA,

 

 

Well let's take their word for it then.

 

Not regulated by the SRA, not listed by the Law Society. One name is a BSc, the other is an LL.B. That doesn't make them solicitors. The guy might have a BSc in home economics.

 

I would suggest that at best they are paralegals and nothing more.

 

Frettful has received threats from this "practice"; why not confirm that they are lawfully empowered to make them?

 

LA

 

I agree with your summary.

My post was to direct frettful to the information.

I was in no way legitimising this "firms" credentials or their legal position.

 

Bill

[basa48]

Hi

IMO there is a fundamental flaw in the argument as I see it. Section 87 says “before the creditor CAN” not the creditor must before he terminates.

It seems to me that if he does not issue a compliant DN he cannot terminate, no matter what letter he sends the agreement will remain active .

He then is free to just issue a corrected notice.

This experience is I must say borne out by personal experience, where a debtor successfully sued a creditor when goods were retrieved following a dodgy default /termination.

The action was for conversion as the default was not compliant so the termination was not valid

Peter

 

See PB my problem is this - if a creditor issues an invalid DN and then terminates following it, you would say the termination is not effective because the creditor needed to issue a valid DN before he could enjoy the benefits of s87 i.e. terminate. You argue that therefore the agreement is still running and creditor can go on to issue a second (or third or fourth etc) DN in order to effect a valid termination (and demand all his money back).

 

However, it is generally the case that a creditor will cease to perform (i.e. provide credit in return for regular repayment) the instant the DN is issued and continue after the 'ineffective' termination.

 

So whatever the legality of the DN or the effectiveness of the termination, it is an inescapable fact the agreement is terminated and moreover it is the true intention of the creditor to terminate as demonstrated by their on going non performance.

 

Now to my mind it is inescapable fact that the creditor has repudiated by terminating where there was no entitlement to do so.

[frettful38]

How excellently put basa48, you have made complete sense and have answered many a question swimming around in whats left of my brain on this subject.

[diddydicky]

which is the answer that should be accepted by a court

 

one has to ask therefore what prompted the judge in amex v brandon to throw that common sense out

 

 

lets hope that the def gets permission to appeal and is succesful

[pt2537]

See PB my problem is this - if a creditor issues an invalid DN and then terminates following it, you would say the termination is not effective because the creditor needed to issue a valid DN before he could enjoy the benefits of s87 i.e. terminate. You argue that therefore the agreement is still running and creditor can go on to issue a second (or third or fourth etc) DN in order to effect a valid termination (and demand all his money back).

 

However, it is generally the case that a creditor will cease to perform (i.e. provide credit in return for regular repayment) the instant the DN is issued and continue after the 'ineffective' termination.

 

So whatever the legality of the DN or the effectiveness of the termination, it is an inescapable fact the agreement is terminated and moreover it is the true intention of the creditor to terminate as demonstrated by their on going non performance.

 

Now to my mind it is inescapable fact that the creditor has repudiated by terminating where there was no entitlement to do so.

 

Ok,

 

You fail to perform the contract by failing to make the payments in accordance with the terms of the contract

 

are you not the one signalling an intention not to perform the contract?

 

So, creditor issues a Default notice and demands that you repay due to your breach of contract, given that he has no need to issue a default if your not in breach.

 

If the default is not valid for a defect more than a de minimis breach, then the view of most counsel is that the lender CANNOT terminate as he is barred by the statute from doing so. The act is clear that there is no sanction civil or criminal but for that provided by the act itself. So, if the default is not valid there can be no termination.

 

This seems to be the view of the judiciary at large also, im aware of a number of reported cases where the judge has taken the view there can be no termination, i speak to a number of solicitors who are fighting CCA cases up and down the country.

 

The default notice point will be clarified soon enough as there is a High Court case on the go on that point,

[GeoffreyAlby]

Ok,

 

You fail to perform the contract by failing to make the payments in accordance with the terms of the contract

 

are you not the one signalling an intention not to perform the contract?

 

So, creditor issues a Default notice and demands that you repay due to your breach of contract, given that he has no need to issue a default if your not in breach.

 

If the default is not valid for a defect more than a de minimis breach, then the view of most counsel is that the lender CANNOT terminate as he is barred by the statute from doing so. The act is clear that there is no sanction civil or criminal but for that provided by the act itself. So, if the default is not valid there can be no termination.

 

This seems to be the view of the judiciary at large also, im aware of a number of reported cases where the judge has taken the view there can be no termination, i speak to a number of solicitors who are fighting CCA cases up and down the country.

 

The default notice point will be clarified soon enough as there is a High Court case on the go on that point,

 

 

Any idea when the High Court case is going to give a judgement?

[pt2537]

Any idea when the High Court case is going to give a judgement?

soon

 

but after conference with a couple of the top consumer credit barristers who have been involved in cases which went to Court of Appeal and Lords, the view coming back is the repudiation argument will never get off the ground, just look at the legal definition of repudiation

 

You withhold payment, or fail to pay per the contract you are in breach of contract, the party signalling the intention to no longer perform is YOU, so how does the lender repudiate?

 

Chitty on contract doesnt provide the answer, Tritel doesnt, Halsburys doesnt, infact whereever you look i dont think you will find the answer

[diddydicky]

Ok,

 

You fail to perform the contract by failing to make the payments in accordance with the terms of the contract

 

are you not the one signalling an intention not to perform the contract?

 

So, creditor issues a Default notice and demands that you repay due to your breach of contract, given that he has no need to issue a default if your not in breach.

 

If the default is not valid for a defect more than a de minimis breach, then the view of most counsel is that the lender CANNOT terminate as he is barred by the statute from doing so. The act is clear that there is no sanction civil or criminal but for that provided by the act itself. So, if the default is not valid there can be no termination.

 

This seems to be the view of the judiciary at large also, im aware of a number of reported cases where the judge has taken the view there can be no termination, i speak to a number of solicitors who are fighting CCA cases up and down the country.

 

The default notice point will be clarified soon enough as there is a High Court case on the go on that point,

 

 

the sooner the better

 

 

yes although the debtor is first in breach- the CCA is an act for the protection of the consumer and not one to give equality to both parties as in normal contract law - it specifically recognises that the parties to the agreement are not equal and so gives special preference to the debtor to be able to be in breach (usually arrears) and states that the creditor may not "Elect" as an injured party to a general contract may do- but instead insists that the debtor be given a "second chance" to put right his breach BEFORE the creditor can terminate or demand repayment in full

 

In fact- since it stays silent on the matter- i would argue that it gives "carte blanche" to the debtor to be repeatedly in breach of the agreement and provided he complies with any ensuing valid Default Notice- to return yet again to the "status Quo" (s89).

 

further- the moment that the creditor serves the Dn and even before he has terminated or demanded payment in full- his systems have acted to in effect repudiate their obligations under the agreement- they certainly do so when they do write and terminate /demand payment in full

 

The argument that needs to be pursued is that the law DOES tolerate "law breaking" and that if the creditor repudiates (remember that the act states that in respect of certain sections of the act the creditors word is BINDING - which includes a notice served under s87 and a subsequent termination) therefore if the creditor writes and tells the debtor that the aghreement is terminated and that the debtor must repay sums not yet due immediately- if that is not a binding statement as prescribed by the act- - and given that the house of lords has also ruled in several cases that the creditors word in a written communication is binding upon them-) then what is?

 

It is not true (IMO) that there is no "civil sanction" for a creditor who acts unlawfully (outside of the CCA)

 

Thecreditor cannott have his cake and eat it

 

he cannot use parts of the CCA to justify his actions and then act outside of the CCa in other respects and claim that that is acceptable

 

 

I still maintain that the law tolerates law breaking (in this sense the repudiation by one party) and that when a party steps outside of a particular piece of legistlation - the injured party MUST have the right to elect.

 

if he could not - then the agreement was never an agreement that was to be performed by both parties but only by the consumer since it means heads the creditor wins- tails the consumer loses

 

The judge in Brandon was clearly wrong IMO

 

from the bits that i have read- i think the Brandon Defence was not up to scratch

Edited October 10, 2010 by diddydicky

[diddydicky]

soon

 

but after conference with a couple of the top consumer credit barristers who have been involved in cases which went to Court of Appeal and Lords, the view coming back is the repudiation argument will never get off the ground, just look at the legal definition of repudiation

 

You withhold payment, or fail to pay per the contract you are in breach of contract, the party signalling the intention to no longer perform is YOU, so how does the lender repudiate?

 

Chitty on contract doesnt provide the answer, Tritel doesnt, Halsburys doesnt, infact whereever you look i dont think you will find the answer

 

because, the CCA is an act for the protection of the consumer and recognises that the parties are not equal

 

it goes out of its way to make provision for the consumer to be in breach and for the creditor NOT to be able to elect- as would be the case in a normal civil contract - by insisting that the creditor MUST give the consumer the right to correct an alleged breach and that if he does comply with the DN outlining that breach- then the "status Quo" (S89) is resumed and the "breach" never occurred

 

The act does NOT give the same right to the creditor- there is no provision within the act for the consumer to serve a DN on the creditor to give him the opportunity to resume performing- therefore it is reasonable to assume that this was not intended

 

 

 

If the consumer within the act has no means of forcing the creditor to perform- when he has unlawfully repuidiated- then clearly the remedy lies outside the CCA

[pt2537]

170. No further sanctions for breach of Act.

— (1) A breach of any requirement made (otherwise than by any court) by or under this Act shall incur no civil or criminal sanction as being such a breach, except to the extent (if any) expressly provided by or under this Act.

 

Contract law does not defeat statute, if statute is in conflict with common law then statute prevails. This is our constitution.

 

You cannot say that a creditor can do something that the statute prohibits. The lender cannot terminate unless he complies with the requirements of s87-89, and s89 is clear that where a breach is remedied the breach is not to have occurred.

 

I do not see that the lender can step outside of the statute and do something which is contrary to the will of parliament. it really is clear cut, the way counsel has explained it.

[diddydicky]

Hi PT - midnight oil?

[diddydicky]

170. No further sanctions for breach of Act.

— (1) A breach of any requirement made (otherwise than by any court) by or under this Act shall incur no civil or criminal sanction as being such a breach, except to the extent (if any) expressly provided by or under this Act.

 

Contract law does not defeat statute, if statute is in conflict with common law then statute prevails. This is our constitution.

 

You cannot say that a creditor can do something that the statute prohibits. The lender cannot terminate unless he complies with the requirements of s87-89, and s89 is clear that where a breach is remedied the breach is not to have occurred.

 

I do not see that the lender can step outside of the statute and do something which is contrary to the will of parliament. it really is clear cut, the way counsel has explained it.

 

 

chitty states that if a party envinces and intention not to perform ( therefore by definition the reference must be that the "performance" is related to some kind of contract or legislation)- then the performing party then has a right to elect

 

It cannot be the case the parliament intended the consumer be "locked into" an agreement that prevented him from election in the event that the creditor ignored its will and unlawfully repudiated- whilst not placing the same sanction on the creditor- that is not equitable- the more so given that the act is for the PROTECTION of the consumer

 

the act also states that the creditor is BOUND by statements he makes under certain sections

 

therefore how can the creditor not be BOUND to his word when - under those sections he states that he has l terminated the agreement and/or demanded immediate repayment of sums not yet due ?

 

 

If the consumer (who is regarded as not as sophisticated as the creditor) claims the DN is defective and that the creditor may not lawfully terminate- but the creditor refuses to accept that this is the case and terminates/demands payment anyway- how can the consumer hold the creditor to the contract- since by this time the creditor has long ceased to perform

 

i understand what counsel are saying- i just think they are running scared of presenting the arguments fully and properly

[Bill Shidding]

Hi Pt, You have written-

 

 

The act is clear that there is no sanction civil or criminal but for that provided by the act itself. So, if the default is not valid there can be no termination.

 

This seems to be the view of the judiciary at large also, im aware of a number of reported cases where the judge has taken the view there can be no termination,

 

And-

 

Contract law does not defeat statute, if statute is in conflict with common law then statute prevails. This is our constitution.

 

If this is true, then it will be very embarrassing for the courts, and very expensive for the banks.

 

Why? Because if the debtor is/was in default, and the DN issued by the bank was non-compliant,

 

1) The banks cannot terminate without issuing a compliant DN.

2) The courts cannot enforce the agreement if there is no valid DN/legal termination.

 

You have implied that, the courts are prevented from using the "balance of probabilities" and must comply with the statute, because a statute over-rules any precedent set by a court.

 

Therefore, any claim that has been previously enforced by a court (under the balance of probabilities) where the DN was non-compliant, and the defendant has been issued with a CCJ, is now open for challenge.

 

In the light of your statements, the courts were acting outside of their powers in ordering the defendant to pay/enforcing the agreement, and the banks had no rights under the statute, to claim for sums not yet due.

 

I look forward to the influx of set aside applications dropping through county court buildings up and down the country.

 

Bill

[pt2537]

well that does indeed depend, Woodchester and swain does allow recovery of arrears, so it is open for the lender to seek to recover the arrears as they fall due.

 

I think Brandon and the other case will clarify the position in respect of default notices, but for all the comments in favour of these arguments of repudiation i struggle to find one successfully argued case. my view is irrelevant, all i pass on is comments of counsel who are in and out of courts on a daily basis.

[Bill Shidding]

Hi PT, thanks for replying.

 

I hope these issues are cleared up also.

Unfortunately, I have zero faith in the judiciary (at this time).

[pt2537]

problem as i see it, is there is no remedy in the act for a defective default notice.

 

There are remedies for breach of s78, 61,90 &91 etc, but nothing set out for 87-89 save for the fact that the lender cannot terminate until compliance is achieved or the breach is remedied.

 

So, i dont see what is available as a remedy as the act itself moves to restrict remedies to those within it.

[Bill Shidding]

There are remedies for breach of s78, 61,90 &91 etc, but nothing set out for 87-89 save for the fact that the lender cannot terminate until compliance is achieved or the breach is remedied.

 

Maybe Mr Bennion should have taken more care when he drafted the act!.

Its possible he didn't think an upstanding financial institution could make such foolish errors.

It should be the courts responsibility to ensure the lenders know how to issue compliant notices.

The best way to ensure they do so, is by hitting them in their pockets.

Courts won't do that, the banks contribute too much to the courts turnover.

 

On a different point, X20 posted "tale of a dodgy DN" nearly 2 years ago. Its notable that there has been no challenge to that thread (that I have seen).

X20 is far more eloquent than I.

 

I would still be interested in any case law that supports the judges opinion in Brandon, namely, a borrowers legal requirement to comply with an ineffective notice.

 

Bill

Edited October 10, 2010 by Bill Shidding
Unsexing X20!

[diddydicky]

unfortunately in one case of mine a valid ddn was issued (post termination) however- in most cases the creditor has terminated /demanded payment on the back of an invalid DN

 

I am informed that even though it would be the reasonable thing to do that a creditor should give proof of his case to the defence before the trial date- that the court will "allow" the creditor, for instance to "produce" on the day the document(s) that he had previously failed to produce to the defence and which could have avoided the trial- thus the court is implicit in attempting to defeat the overriding objectives...........anyway i digress there

 

so i suggest that what's good for the goose is good for the gander ....

 

and where a creditor has sued for the full amount of the account on the back of an invalid DN- the debtor should stand before the judge and propose that the case be dismissed since by the creditors own admission- the agreement is not terminated

 

if the agreement is not terminated but still endures (the claimants own argument) then the claimant has no cause of action since he has yet to comply with s88 and serve a valid DN giving the debtor the opportunity to remedy the alleged breach- without which he cannot claim entitlement (and therefore has no cause of action) to the benefits of s87 ( high court has ruled that he cannot take the next step)

 

Further i dont see how the claimant could ask to amend the POC to show only the outstanding arrears as the cause of action- since the act requires him to give the debtor - via a VALID DN the opportunity to remedy the default

 

True this will merely postpone the creditors attempt to bring the debtor to court- but- unless the system is REALLY corrupt- he would (IMO) find it almost impossible for the creditor to claim any costs of the action.up to the time of the trial- the more so if the debtor has previously written to the creditor and alerted him to his invalid DN (which they almost always ignore) and cites BOS v Robert Mitchell.

 

but the creditor/dca has a bloody nose and that in itself is worth the effort

 

the creditor then presumably will need permission to sue again on the same issues- more inconvenience

 

presumably also there would be scope to argue what has been claimed as matters amounting to a breach in any new DN served by the creditor- since there is BOUND to be a valid argument as to what sums are being claimed in it as required to remedy a breach

 

arguments will surround what figure the creditor claims- if he claims sums due since the last DN as arrears of monthly payments- the debtor can argue that it was the creditor himself that had declared no further monthly payments were due since the agreement was terminated.

 

I can see all sorts of problems arising as to the validity of the figures contained in a second DN - post trial

 

if the gloves are off- then we should stop making life easy for creditors by alerting them pre trial to their failings and giving them the chance to get their cases watertight