Unenforceability Cases on hold until further notice

[dad]

Hi all,

 

An interesting case, wrongly decided, in part due to the claimant's legal team's conduct of the case.

 

I am not having a go at them because I know how you can be blindsided when concentrating on other points.

 

In my view the fatal error of the claimant was:

 

80. So far as activities (iii) to (vi) are concerned, it was accepted on behalf of the claimant that these did not amount to enforcement or actions to enforce the agreement.

 

For reference activities (i)-(vi) are:

(i) reporting to CRAs without also telling them that the agreement is currently unenforceable; (ii) disseminating or threatening to disseminate the claimant's personal data in respect of the agreement to any third party; (iii) demanding payment from the claimant; (iv) issuing a default notice to the claimant; (v) threatening legal action and (vi) instructing a third party to demand payment or otherwise to seek to procure payment.

 

My view is that (iv) is enforcement, which is supported by:

 

a. The mandatory language of the notice itself which states (See SI1983/1553 schedule 2 para 4):

"IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH".

That wording must mean that by the time a default notice is issued some enforcement has taken place.

 

b. In the judgement the judge himself acknowledges that the language of the Act 'contemplates that the actions listed under section 87(1) are enforcement:

 

 

 

74. The Consumer Credit Act does not define what constitutes "enforcement" and therefore does not define what actions a creditor may not undertake during a period when the agreement is unenforceable. Both sections 76 (dealing with provisions in agreements which entitle a creditor to take certain steps when an event, such as bankruptcy, occurs, but there is no breach of contract by the debtor) and 87 (dealing with the entitlement of the creditor to take such steps where there has been a breach) contemplate that those steps will amount to enforcement. Those steps include matters which might be said to be obviously enforcement such as (under section 87), enforcing security or (under both sections) recovering possession of goods or land.

 

75. Both sections also include two steps which might be said less obviously to amount to enforcement: (i) demanding earlier repayment of any sum and (ii) treating any right conferred on the debtor by the agreement as terminated, restricted or deferred.

Had the claimant said that these are obviously enforcement then the judgment might have been quite different (Note: I have not seen a transcript and it may be that this point was made and the judge chose to 'overlook' the submissions).

 

The difficultly that this presents is that being a concession by the claimant, he will be unable to appeal the point. So ultimately someone else is going to have to go to the Court of Appeal if this is to be addressed.

 

Dad

Edited October 7, 2009 by dad

[dad]

I won't go into to the why's & wherefore's that's already been done other than to say this judgement is bad law in that a consumer simply exercising their legal rights can be deemed as untrustworthy when it come to obtaining future credit. In other words creditors can form a black list of those who have succeeded in enforcing their lawful rights making it difficult if not impossible for them move on in any meaningful way

 

JC,

 

I agree strongly, that is the real outcome of this judgment.

 

Dad