Invalid Default Notices

[diddydicky]

As I understand it the judge is simply saying that a DN was not required in this case because either party could terminate at any time. He doesn't make any ruling on the debtor's intentions regarding the DN or the time period given in the DN. He regards the DN as irrelevant because in this case there was no requirement to serve one.

 

However Brandon is about a notice served under Sect. 98(1) of the Act. It is not about a notice served under Sect. 87(1) and, since Sect. 87 does not have a clause equivalent to Sect. 98(2), it has no relevance to - and sets no precedent for - notices served under Sect. 87.

 

From the excerpt available the judge in Brandon appears to have been entirely correct. However it is of no concern to most of us because we will have received notices served under Sect. 87(1).

 

so did brandon (i am led to believe)

[nks22]

I think you're both reading too much into this case. Clause 10(2) of Mr Harrison's agreement allowed termination at any time. Therefore it came under Sect. 98. Therefore no DN was required. If the judge was correct in ruling that the same circumstances applied in Brandon then he was right to ignore the dates in Brandon's DN because it was a Sect. 98 case which didn't require a DN.

 

The only cause for concern would be if standard credit card agreements were ruled to fall under Sect. 98 rather than Sect. 87. However Sect. 2(2) of the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 makes it clear that they don't.

[nks22]

so did brandon (i am led to believe)

 

That therefore may be the grounds of the appeal.

[diddydicky]

Diddy

 

My point exactly in post 4068 ... the creditor's "error" has put the debtor at a disadvantage from day one of the DN .... yet the Judge allowed that disadvantage to remain and influence his judgement on enforceablility ...

 

I tell you what .. I can't wait to see what the appeal judge makes of it all ... !!

 

it wilbe VERY interesting because if (based on the limited information we have) the decision is upheld- that there is no need for a s87 notice even in the debtor is in default because the creditor as separate rights under another section of the agreement- to terminate the account- then that would mean that s87/s88/s89 would have been overidden and would no longer be of any use within the CCA

 

i would be surprised if this judge;s decision would be allowed to remove probably THE most important protection contained in the consumer credit act

 

 

i think i was told that this judges experience was in commercial law and not in consumer PROTECTION laws - hence his misdirection of himself (IMO)

[nks22]

But what then would be the point of including Sect. 87 and Sect. 88 in the Act?

[diddydicky]

I think you're both reading too much into this case. Clause 10(2) of Mr Harrison's agreement allowed termination at any time. Therefore it came under Sect. 98. Therefore no DN was required. If the judge was correct in ruling that the same circumstances applied in Brandon then he was right to ignore the dates in Brandon's DN because it was a Sect. 98 case which didn't require a DN.

 

The only cause for concern would be if standard credit card agreements were ruled to fall under Sect. 98 rather than Sect. 87. However Sect. 2(2) of the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 makes it clear that they don't.

 

as far as i understand- from the limited information i have is that the creditor served a s87 DN which was invlalid and only "changed their reason" for termination to s98 when the debtor accepted their unlawful termination as a result of the defective DN

 

i understand that the judge- during the course of the judgement- made a ruling that in any event - not allowing 14 days to remedy- did not prevent the creditor from enforcing the agreement and it is this part of his (alleged) jdugement that has put the cat amongst the pidgeons

 

it was a high court judge in the high court and therefore binding on lower courts!

[diddydicky]

But what then would be the point of including Sect. 87 and Sect. 88 in the Act?

 

nail on the head!!

[nks22]

On the other hand Woodchester (in the Court of Appeal) relies on Sect. 87. The Brandon ruling would in theory invalidate the Woodchester decision (except, of course, that being from a lower court it can't).

[nks22]

Mind you Woodchester was a credit agreement for the lease of a photocopier, wasn't it, rather than a credit card agreement? (You can see why there are so many opportunities for barristers to get rich.)

[wmr]

Hi Folks:

 

Geoffey Alby kindly alerted me to this thread regarding "AMEX v BRANDON" in May.

 

I do hope that this script of the case is of help to you all, (and myself), all of us being intrigued as to the full outcome.

 

I believe this scan file will hopefully help.

 

Thanks Geoffrey for bringing this to my attention

 

Enjoy.

SCAN FORUM AMEX V BRANDON CASE.pdf

[nks22]

Many thanks for that. From a quick glance it is concerning a credit card agreement. It must be rather worrying for the defendant that the judge begins by saying "I had not realised that American Express provided a card which you could pay by monthly instalments rather than paying the whole lot off each month". Presumably on his salary it had never mattered.

[the_shadow]

Reading that all I can say is I'm stunned and shocked!

[robinredbreast]

Thanks WMR .. you're a hero ... !!!

 

I've had a quick scan, tell me if I've mis-read this ... but the reason why the Judge said the time allowed for remedy of the default, was because in the actual terms and conditions for the card it said that the agreement could be terminated at any time by the OC and Debtor for the following :-

 

"39. Paragraph 10 of the terms and conditions is as follows:

 

 

"You can end this agreement at any time by returning to us all cards we

have sent you,coupled with a letter asking us to end the agreement."

 

Then 10(2):

 

"We can end this agreement at any time by giving immediate notice.

 

Alternatively, we can stop you from using the card. If we end the agreement you must pay all money you owe on the account."

 

So paragraph or clause 10(2) of the agreement clearly gives American Express the

Right to terminate the agreement and on termination all sums due and owing by the Debtor are to be paid."

 

So this was based on a clause in the t&cs ... which I agree shouldn't over rule procedures for the processing of a DN as defined by statue - but at least we can see where the Judge went off the rails somewhat ...

 

So, if the OC/DCA uses the case as a defence to your unlawful repuditation, as long as the T&Cs don't mirror those of Amex as above, you at least have a come back, together with the arguements aleady posted here regarding effective DNs...

[nks22]

I love this bit:

 

"American Express is a very large and reputable operation, almost all of whose business must be regulated by the Act. It would be absurd to suppose that it was not aware of the need to comply with a well known requirement which has been in force for 24 years."

 

Anyway, I take back much of what I said previously. This case is also concerned with the need to provide an original agreement in court (not necessary seems to have been the district judge's view) and the inclusion of charges and penalties in the amount demanded (perfectly OK, it seems). It'd be useful to know exactly what decision Brandon was appealing against, though.

[nks22]

It'd be useful to know exactly what decision Brandon was appealing against, though.

 

(As far as I can see it was against the deputy district judge reserving judgement on Amex's application for summary judgement but I'll let others dissect that.)

[diddydicky]

misdirected himself in this paragraph and was clearly applying a test concerned with equality in commercial contracts and not the CCA

 

34. Now, somewhat theoretical though it is, had American Express taken enforcement

actionwithin14daysof 19June, itmaywellbe that thevalidityof thatenforcement

actionwouldhave been opento challenger.expressnofinalviewonthemattcrbut I

do understandthe argumcntbecause,to goback cosection87,it mustspecifythe

nature of thebreachandif the breachis capable of remedy what action is required to

remedyit. Thewholeideais thata debtorshouldhave 14dayswithin which to

redeemthe position,in this casepay £275.80. SoTunderstandtheargument.As I

say, I do not dismiss it a.sbeing unreal. But, the fact of thematteris noenforcement

actionwastakenwithin 14daysof 19June. Sowe havethe service of the

enforcement notice hut nothing immediately happens. In those circumstances, even if

140

,.~,._.

P. 1 a

- Mr Brandon' >point is a good on~) it seems to me to be not relevant in that he has not

. . suffered any prejudice at all by virtue of that technical bn:ach because, n~vcr mind

. within 14 days he did not, for example, within 21 days, which on my finding would

. clearly have been an appropriate period of rime properly to comply with seCtion 87.

. He did not sen.dAmerican Express the cheque for £215. Nothing happened. So he

. remained in breach of his obligation to pay a monthly instalment.

 

firstly, i thought all breaches of terms and conditons were "techinical" - secondly a higher court has already ruled that the normal test of prejudice suffered does not apply in the case of the CCA and that parliament had made that clear

 

 

 

While section 127(3) might be considered drastic, even harsh, in its adverse consequences for a lender, the House of Lords has been satisfied that it was a measure which Parliament was entitled to take and that it was not incompatible with the right to peaceful enjoyment of possessions under article 1 of the First Protocol to the European Convention on Human Rights: Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 paras 68-78; 106-109; 138; 167-172. In Wilson v First County Trust Ltd (No 2) Lord Nicholls of Birkenhead provided this commentary on section 127(3) at pages 844-846:

"71. I turn to the statutory setting of section 127(3). The Consumer Credit Act 1974 contains many requirements about the form and contents of regulated agreements. Parliament has singled out some obligations as having such importance that non-compliance leads automatically and inflexibly to a ban on the making of an enforcement order whatever the circumstances. These obligations are specified in section 127(3) and (4). In these two subsections Parliament has chosen, deliberately, to exclude consideration of what is just and equitable in the particular case. The latter approach, enabling the court to consider the circumstances of the particular case, was adopted as the general rule in section 127(1). Section 127(3) and (4) are, expressly, exceptions to the general rule. In prescribing these two exceptions Parliament must be taken to have considered that the sanction generally attaching to non-compliance with the statutory requirements was not sufficient to achieve compliance with the duty to include all the prescribed terms in the agreement (section 61(1)(a)) or the duties to provide copies and notice of cancellation rights (sections 62 to 64). Something more drastic was needed in order to focus attention on the need for lenders to comply strictly with these particular obligations."

Edited August 8, 2010 by diddydicky

[diddydicky]

it would also appear- from the transcript that he did not make a definitive ruling on the 14 days ( and if he did he was wrong and this might also be being appealed)

[Bill Shidding]

Hi Diddy, good to see you too.

 

On reading the pdf file, did anyone else notice this?

Maybe this was the case referred to?

 

30.

"I have already indicated the dates of the default notice, but in deference to the argument advanced by Mr Rankin the section 87 default notice is dated 19 june 2007:"

 

I hope that is not THE Mr Rankin.

[Guest Jason King]

In a similar scenario of a Default Notice not giving the required time to remedy the breach, say only 10 days was given to remedy due to posting, serving etc, then I'd argue that 10 days was too short a timeframe to remedy but 12 days would have been ample (and within the statutory 14 days), and I would have paid.

 

I would argue I was at a disadvantage because the Act allows me a time frame of 14 days but the credit card provider stated a time frame of 10 days, which is unlawful.

 

It would not be for the judge to determine whether or not I would have paid on the 12th day in any case, it is for him to decide whether I had the right to.

 

My Sainsbury's loan T&C's state...'we will follow the correct legal requirements when we do this (end an agreement) including the requirements made under the CCA to serve notices (Default) before certain action is taken.

[diddydicky]

i'm not sure i follow the logic of your argument

 

parliament decreed (not all that long ago) that the creditor could not take "the next step" (claim entitlement to the benefits of s87) UNLESS it first served a valid DN To be valid the DN must give the debtor AT LEAST 14 days from the date of SERVICE (not the date of posting)

 

No valid DN= No next step

 

nothing in the act whatsoever as to this being different depending on what the debtor does or does not do

 

the DN (horse) comes before the entitlement to the benefits of s87 (the cart)- and the debtors actions in response to the DN are irrelevant

[diddydicky]

i think its the name of the creditors brief- co incidence- or a freudan slip?

[the_shadow]

perhaps...

 

http://www.ftb.eu.com/members/james-rankin.asp

 

S.

[nks22]

In a similar scenario of a Default Notice not giving the required time to remedy the breach, say only 10 days was given to remedy due to posting, serving etc, then I'd argue that 10 days was too short a timeframe to remedy but 12 days would have been ample (and within the statutory 14 days), and I would have paid.

 

Parliament settled on a period of 14 days from service. It's not for a court to decide they were wrong.

[the_shadow]

Hmm the Judge in Brandon decided otherwise......

 

 

Edit: Sorry that was for you Nks22 on the above post

[nks22]

Hmm the Judge in Brandon decided otherwise...

 

Yes and no. He does at least concede that enforcement within the 14 day period is "open to challenge", which is some comfort to those of us with MBNA accounts sold during the remedy period (me included).

 

I don't suppse the transcript of the AMEX v Harrison case is available; it would be interesting to know why that was determined on Sect. 98.