IM vs AMEX - Help with defence

[im4347]

Hi all

 

I fell into financial difficulties in April 2007 and as a result I have been on benefits since November 2007.

 

I couldn’t keep up with my American Express Blue Card payments and as a result I ended up with all the harassment of letters and telephone calls from them. Eventually they sent me a default letter in 2007.

 

I sent them a CCA request in Nov 2007 and got no response. I therefore sent them a non-compliance letter in December 2007. I then received a letter back from Amex in January 2008 stating that they are dealing with my ‘complaint’ and will get back to me, and then finally at the end of January 2008, I received a copy of the ‘application form’ which they refer to as a ‘credit card agreement’ which had been signed by me, and a list of ‘prescribed terms’ which have not been signed.

 

In January 2009, Brachers/Amex filed a court claim which I defended.

 

Their particulars of claim are as follows:

 

Money due for credit card services supplied (************) to and at the defendants request as detailed in monthly statements rendered culminating ******* 2008

 

Sum due at ****** 2008 £****

Add file referral charge 0.00

Less credit 0.00

 

Statutory interest from £**

*********2008 to date at 8% per annum at 0.85 per day

 

Add subsequent debits 0.00

 

The claimant claims £****

 

Plus continuing Statutory Interest at 0.85 per day

Until judgement or sooner payment pursuant to Section 69 of the county

 

 

The defence I filed is as follows:

 

 

Defence

• Except where otherwise mentioned in this defence, I neither admit nor deny any allegation made in the claimants Particulars of Claim and put the claimant to strict proof thereof.
  

• The Defendant is embarrassed in pleading to the Particulars of Claim as it stands at present, inter alia: -
  

• The claimants’ particulars of claims disclose no legal cause of action and they are embarrassing to the defendant as the claimant's statement of case is insufficiently particularised and does not comply or even attempt to comply with CPR part 16. In this regard I wish to draw the courts attention to the following matters;
  

1. The Particulars of Claim are vague and insufficient and do not disclose an adequate statement of facts relating to or proceeding the alleged cause of action. No particulars are offered in relation to the nature of the written agreement referred to, the account number of the agreement, the method the claimant calculated any outstanding sums due, or any default notices issued or any Notice of Assignment required for the claimant to have a legitimate right of action for the purported debt or any other matters necessary to substantiate the claimant’s claim.

 

2. A copy of the purported written agreement that the claimant cites in the Particulars of Claim, and which appears to form the basis upon which these proceedings have been brought, has not been served attached to the claim form.

 

3. A copy of any evidence of both the scope and nature of any default, and proof of any amount outstanding on the alleged accounts, has not been served attached to the claim form.

 

4. Consequently, I deny all allegations on the particulars of claim and do not know what case I have to meet.

 

5. In respect of that which is denied, on **/11/2007 I requested that the claimant provide a true copy of the executed credit agreement, which they claim exists between parties pursuant to section 78(1) Consumer Credit Act 1974. The Consumer Credit (Prescribed Periods for Giving Information) Regulations 1983 (SI 1983/1569) sets out that the claimant must comply with such request in 12 working days of receipt of such request.

 

6. Section 78 (6) consumer Credit Act 1974 sets out the consequences of failure to comply with such request and states s78 (6) If the creditor under an agreement fails to comply with subsection (1)—

 

(a) he is not entitled, while the default continues, to enforce the agreement; and

 

(b) if the default continues for one month he commits an offence.

 

7. It is drawn to the courts attention that the claimant has failed to comply with my request and is in clear default of its obligations under s78 (1) Consumer Credit Act 1974 and it is averred that the claimant has no right of action until such time as the default is remedied and the true copy of the executed agreement is produced before the defendant containing the prescribed terms under Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and signed in the prescribed manner by the debtor and creditor

 

8. Therefore since the documents have not been supplied as requested pursuant to the Consumer Credit Act 1974 I deny that I am liable to the claimant and put the claimant to strict proof that such enforceable agreement between parties exists

 

9. Further to the case, in an attempt to ascertain what grounds the claimant is bringing this action and to allow me to prepare my defence I requested on **/01/2009 the disclosure of information pursuant to the Civil Procedure Rules, which is vital to this case from the claimant. The information requested amounted to copies of the Credit Agreement referred to in the particulars of claim and any default or termination notices, a transcript of all transactions, including charges, fees, interest, alleged repayments by myself and payments made by the original creditor. Also any other documents the Claimant seeks to rely on, including any default notices or termination notice, and a copy of the Notice of Assignment required to give the claimant a legitimate right of action.

 

10. To Date the claimant has ignored my request under the CPR and I have not received any such documentation requested. As a result it has proven difficult to compose this defence without disclosure of the information requested.

 

11. The courts attention is drawn to the fact that the without disclosure of the requested documentation pursuant to the Civil Procedure Rules I have not yet had the opportunity to asses if the documentation the claimant claims to be relying upon to bring this action even contains the prescribed terms required in Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) which was amended by Consumer Credit (Agreements) (Amendment) Regulations 2004 (SI2004/1482). The prescribed terms referred to are contained in schedule 6 column 2 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and are inter alia: - A term stating the credit limit or the manner in which it will be determined or that there is no credit limit, A term stating the rate of any interest on the credit to be provided under the agreement and A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following--

i. Number of repayments;

ii. Amount of repayments;

iii. Frequency and timing of repayments;

iv. Dates of repayments;

v. The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable

 

12. The courts attention is also drawn to the fact that where an agreement does not have the prescribed terms as stated in point 11 it is not compliant with section 60(1) Consumer Credit Act 1974 and therefore not enforceable by s127 (3). The courts attention is also drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the consumer credit act 1974 and the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and Consumer Credit (Agreements) (Amendment) Regulations 2004 (SI2004/1482) the agreement cannot be enforced

 

13. Notwithstanding the above, it is also drawn to the courts attention that no default notice required by s87 (1) Consumer Credit act 1974 has been attached to the particulars of claim

 

14. It is neither admitted nor denied that any Default Notice in the prescribed format was ever received and the Defendant puts the Claimant to strict proof that said document in the prescribed format was delivered to the defendant

 

15. Notwithstanding point 13, I put the claimant to strict proof that any default notice sent to me was valid. I note that to be valid, a default notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237)

 

16. Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but give me a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119

 

17. Without Disclosure of the relevant requested documentation I am unable to assess if I am indeed liable to the claimant, nor am I able to asses if the alleged agreement is properly executed, contain the required prescribed terms, or correct figures to make such an agreement enforceable by virtue of s127 Consumer Credit Act 1974

 

18. In view of the matters pleaded above, I respectfully request that the court gives consideration to whether the claimant’s statement of case should be struck out as disclosing no reasonable grounds for bringing the claim, and/or that it fails to comply with CPR Part 16.

 

19. Alternatively if the court decides not to strike out the claimant’s case, it is requested that the court orders full disclosure of the requested documents pursuant to the Civil Procedure Rules

 

20. Having instigated these proceedings without any legal basis for doing so, having failed to provide sufficient information required under the pre-trial protocols in order to investigate this claim, or indeed to provide a reasonable time period to investigate this matter, and having failed to investigate a dispute as required by the OFT Debt collection Guidelines I believe the Claimant’s conduct amounts to unlawful harassment under section 40 of The Administration of Justice Act1970. Furthermore, the Claimant’s behaviour is entirely vexatious and wholly unreasonable.

 

21. I respectfully ask the permission of the court to amend this defence when the claimant provides the above documents.

 

The Court served an order for Brachers to supply the relevant documents in accordance to my defence, and I have now received a letter from court with a ‘schedule of documents’ from Brachers and I now need to file a defence with accordance to my previous defence and the schedule of documents provided.

 

Please see attached the following:

 

• 
  
  • List of Schedule of Documents
    
  • CCA (application form signed Sept 2000)
    
  • T&C’s May 2002
    
  • An unsigned CCA and T&Cs
    
  • Default Notice
    

Could someone please guide me in constructing my defence in accordance to the attached documents as I have never reached this stage before.

 

Thanks,

IM

Schedule Of Documents Amex - Brachers.pdf

[steven4064]

The 'agreement' they have sent is an application form with no prescribed terms on it. It is dated 2000. THe T&Cs they have sent can't possibly relate to it as they are clearly dated May 2002. THus the prescribed terms (which are credit limit, rate of interest and repayment terms) are not "within the four corners of the agreement" as required by the regulations.

 

I would say that the agreement is completely unenforceable and that your defence is largely OK as it is.

[the_shadow]

The default notice is bunkem too... it allows you 14 calendar days from issue, they havent allowed for service of the document which normally is 2 working days if first class 4 working days if second.

 

You've blanked the day out so cant tell if its affected by a weekend in the middle of those dates either.

 

S.

[im4347]

Hi guys,

 

Thanks for replying, much appreciated.

 

I thought the same regarding the 'application form' as there are no prescribed terms etc on it.

 

With regards to the default, the dates are as follows:

 

Default notice letter - 3rd Aug 2007 (can't remember if it was 1st/2nd class Post)

Cancellation of the account - 19th Aug 2007 (according to the August 07 statement)

Registered on my credit file - 19th Nov 2007

[the_shadow]

Hi guys,

 

Thanks for replying, much appreciated.

 

I thought the same regarding the 'application form' as there are no prescribed terms etc on it.

 

With regards to the default, the dates are as follows:

 

Default notice letter - 3rd Aug 2007 (can't remember if it was 1st/2nd class Post)

Cancellation of the account - 19th Aug 2007 (according to the August 07 statement)

Registered on my credit file - 19th Nov 2007

 

haha poor old amex... they've done it again... DN was dated Friday, so allow two WORKING days for service and the 14 calendar days dont start till Weds 8th August 07.

 

Basically the default rectify date should have been the 22nd August, they've short changed you 5 days!

 

S.

[im4347]

Thanks Shadow,

 

I was a bit confused about the 14 days, whether they included the weekends etc, thanks for clearing that for me.

 

IM

[im4347]

Hiya

 

The court has given me till next week to file my defence with regards to the documents Brachers/Amex have supplied.

 

I understand that they have obviously not supplied the correct information requested in my defence, as can be seen from the attachments above.

 

Is there further templates for my defence regarding my current situation, or is there anyone who could kindly guide me through filing my defence, as I am worried because I need to come back with a response otherwise the ball will be in Amex/Brachers court.

 

Thanks

IM

[im4347]

Hi all

 

So sorry about this, starting to panic a bit now, any advise regarding my last post?

 

Thanks

 

IM

[steven4064]

Hiya

 

The court has given me till next week to file my defence with regards to the documents Brachers/Amex have supplied.

Was this a court order? What stage are you at?

 

You need to give them the info contained in posts #2 and #3

[the_shadow]

Was this a court order? What stage are you at?

 

You need to give them the info contained in posts #2 and #3

 

and post #5

 

S.

[steven4064]

and post #5

 

S.

Yep

[im4347]

Hi guys

 

Thanks for replying.

 

It is a court order, I initially filed the defence, did the Allocation Questionnaire and the court ordered Brachers/Amex to provide all the relevant documents as outlined in my defence post 1.

 

They have since supplied the documents attached in Post 1.

 

The court has now ordered me (the Defendant) to serve a defence in accordance by next week.

 

I understand the advise you guys have provided regarding posts, 2,3, and 5, I really need help in constructing the information as I have never got to this stage before.

 

Thanks.

[steven4064]

Most of what you need is in the defence in post #1. See if you can put something together - it doesn't matter if it repeats what is in the original defence. I am not available this evening but can look in tomorrow. Unless the shadow wants to have a go

[the_shadow]

WARNING - Pls get this checked out properly by someone with experience doing this. I've taken bits from this site and put in some other stuff but it needs to be double checked prior to doing anything with it.

 

re-number, delete/change the stuff in Red

 

S.

 

The requirement for a valid Default Notice to lawfully Terminate an Account whilst in default

 

1. Notwithstanding the matters pleaded above, the Claimant must under Section 87(1) of the Consumer Credit Act 1974 serve a valid Default Notice before they can demand early payment of sums not yet due under a Regulated Credit Agreement.

 

2. Under the Interpretation Act 1978 Section 7, it states:

 

Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

 

2. Practice Direction

Service of Documents - First and Second Class Mail.

With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1). Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.

2). To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-

(a) in the case of first class mail, on the second working day after posting;

(b) in the case of second class mail, on the fourth working day after posting.

"Working days" are Monday to Friday, excluding any bank holiday.

3). Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.

4). This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

 

8th March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division

 

3. Further to point 2 above, CPR rules on service also state the required timescales to be given for serving of documents :-

 

Under CPR 6.26 First class post (or other service which provides for delivery on the next business day) is deemed to be “served” The second day after it was posted, left with, delivered to or collected by the relevant service provider provided that day is a business day.

 

4. The Default notice supplied by the Claimant is dated Friday 3rd August, to allow service in line with the statutory requirements mentioned in points 2 & 3 above, 2 working days were required to allow for 1st Class postage. Thus the Rectify date should be 14 calendar days from Wednesday 8th August, namely Wednesday 22nd August 2007, not the 14 calendar days from the date of the letter as stated in the Default notice which would have been 17th August.

 

5. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory 14 clear days to rectify the breach. I also note that to be valid, a Default Notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237).

 

6. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give me a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119.

 

7. It is submitted that the above Default Notice served s87(1) Consumer Credit Act 1974 failed to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561).

 

8. For a Creditor to be entitled to terminate a regulated Credit Agreement where there is a breach, demand repayment in full or take any legal action to recover any monies due under the Agreement, a creditor must serve a Default Notice under section 87(1) of the Consumer Credit Act 1974 which states:

 

Section 87. Need for Default Notice

 

(1) Service of a notice on the Debtor or hirer in accordance with section 88 (a "Default Notice ") is necessary before the creditor or owner can become entitled, by reason of any breach by the Debtor or hirer of a regulated Agreement -

 

(a) to terminate the Agreement, or

 

(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.

 

9. The Act also sets out via Section 88(1), that the Default Notice must be in the prescribed form, as below:

 

Section 88. Contents and effect of Default Notice

 

(1) The Default Notice must be in the prescribed form…

 

10. The wording must make it clear that no variation is acceptable. Therefore it cannot be dispensed with as a De Minimus issue.

 

11. I note that the regulations do not allow any variation in the form of these statements and therefore it is suggested that where the statements are not as laid down in the regulations the Default Notice is rendered invalid as a consequence.

 

12. In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the Court addressed in some detail the issue of the contents of a Default Notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the Default Notice invalid I quote the comment of KENNEDY LJ: "This statute was plainly enacted to protect consumers, most of whom are likely to be individuals" the judgment appears to confirm the consumer credit legislation made under the Consumer Credit Act 1974 as plainly enacted and set out to offer protection to the consumer. Therefore it is suggested that the failure of the Claimant to set out the Default Notice in accordance with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

13. The Claimant’s failure to issue a valid Default Notice must surely prevent a right of action and would make any termination of the Agreement unlawful, as statute provides the procedure that must be followed. Since the Claimant has failed to adhere to statutory procedure it is averred that the Claimant does not have a right of action, and can never now have a right of action having terminated the Agreement unlawfully.

 

14. Furthermore, the Arrears Total outlined cannot be accurate, as the Balance on the Account was at least partly comprised of Unlawful Charges plus additional Charges and Interest added unlawfully whilst the Account was in Dispute. Therefore, the Arrears claimed cannot be accurate, as they are themselves calculated using a Total that was itself inaccurate.

 

15. This is at all times an Agreement Regulated by the Consumer Credit Act 1974. There is no provision in the Act that allows a large financial institution to terminate an Agreement that is in alleged default or breach simply by giving notice to the Consumer. Section 98(6) makes that quite clear. The Creditor must follow the steps outlined in Section 87 and Section 88 if they are to lawfully Default and Terminate, and enjoy the benefits of Section 87.

 

16. Finally, an invalid Default Notice cannot be remedied by simply issuing a new Default Notice. The Claimant may not serve a second effective default notice in prescribed form post-termination of the agreement. Any such second default notice will necessarily state a date by when I would be required to comply after which in default the agreement would terminate. The second default notice would therefore contain the fiction that the agreement endured when that cannot be the case, as it was terminated on XX/XX/XX. Terminating an Agreement on the back of a defective Default Notice, simply confirms the undeniable truth that Termination of the agreement by the Claimant was carried out in circumstances which then prohibited them from enjoying the benefits of Section 87, namely the opportunity to seek early Payment of a sum that was, prior to Termination, only payable in the future.

[steven4064]

THat's pretty brill shadow.

 

We also need a corresponding bit to deal with the unenforceable agreement and then the whole thing needs to be put together in the proper format

IN THE XXXXXXXX COUNTY COURT

CLAIM NO.XXXXXXXX

 

 

Between

 

 

XXXXXXXXXXXX

Claimant

 

 

and

 

 

XXXXXXXXXX

Defendant

 

 

 

 

___________________________________________________

 

DEFENCE

 

___________________________________________________

 

 

then the text in numbered paragraphs

[im4347]

Thanks Shadow and Steven, that's absolutely brilliant, really appreciate the support. This has definately put my mind at ease....

 

Yep, the balance does have charges and interest included, so that will apply.

 

Your help towards the unenforceable CCA would be highly appreciated.

 

Thanks again guys.

 

IM

[steven4064]

I'll get onto the unenforceable CCA later today

[the_shadow]

I'll get onto the unenforceable CCA later today

 

Cheers,

 

I only got as far as copying bulk info from my hard drive, would need prettying up a lot I couldnt find wilson v fct though, I obviously need to download that as well.

 

S.

 

1. A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

 

Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

 

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

 

2. The need for prescribed terms to be contained in the credit agreement is further confirmed by the Author of the CCA1974 act, I quote ““As the draftsman of the Consumer Credit Act 1974 I would like to thank Dr Richard Lawson for his interesting and well-argued article (30 August 2003) on Wilson v First County Trust Ltd [2003] UKHL 40, [2003] 4 All ER 97.

Dr Lawson may be interested to know that I included the provision in question (section 127(3)) entirely on my own initiative. It seemed right to me that if the creditor company couldn’t be bothered to ensure that all the prescribed particulars were accurately included in the credit agreement it deserved to find it unenforceable, and that the court should not have power to relieve it from this penalty. Nobody queried this, and it went through Parliament without debate. I’m glad the House of Lords has now vindicated my reasoning and confirmed that nobody’s human rights were infringed.” - 167 Justice of the Peace (2003) 773.”

[steven4064]

Her is the complete defence -the shadow's stuff (checked and ever so slightly modified), and the enforceability stuff:

IN THE XXXXXXXX COUNTY COURT

CLAIM NO.XXXXXXXX

 

Between

 

XXXXXXXXXXXX

Claimant

 

and

 

XXXXXXXXXX

Defendant

 

 

 

-----------------------------------------------------------------------------------------------------------

DEFENCE

 

-----------------------------------------------------------------------------------------------------------

Background

 

1. In my original defence I pleaded that the Claimant had provided insufficient information for me to file an adequate defence. Inter alia, the Claimant had failed to provide a copy of the agreement relate to the alleged debt and had not provided evidence that a valid Default Notice had been served.

 

2. On date, the Court ordered the Claimant to produce all the relevant documents as outlined in my defence. The Claimant filed and served various documents in response to this order on date and the Court ordered to file a new defence in response.

 

3. The documents produced by the Claimant in response to the order of the Court are:

i)A list of Schedule of Documents

ii)A copy of an Application Form for the Amex Blue Credit Card dated September 2000 and stamped “Approved UK New Accounts, Date 25 September 2000”

iii)Terms and Conditions dated May 2002

iv)A further copy of an unrelated terms and conditions

v)A copy of a Default Notice dated 3 August 2007

4. Of these, only items ii, iii and v are relevant to the claim. The Claimant contends that the Default Notice provided by the Claimant is not compliant with sections 87 and 88 of the Consumer Credit Act 1974 and the copy agreement provided by the Claimant is not enforceable under sections 61, 65 and 127(3) of the Consumer Credit Act 1974.

 

 

The validity of the Default Notice

5. Notwithstanding the matters pleaded elsewhere in this defence or the earler defence, the Claimant must under Section 87(1) of the Consumer Credit Act 1974 serve a valid Default Notice before they can demand early payment of sums not yet due under a Regulated Credit Agreement or terminate the agreement.

 

3. Under the Interpretation Act 1978 Section 7, it states:

 

”Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

4. Practice Direction, Service of Documents - First and Second Class Mail.

 

”With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1). Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.

2). To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-

(a) in the case of first class mail, on the second working day after posting;

(b) in the case of second class mail, on the fourth working day after posting.

"Working days" are Monday to Friday, excluding any bank holiday.

3). Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.

4). This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

 

8th March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division”

 

5. Further to the above, CPR rules on service also state the required timescales to be given for serving of documents :-

 

Under CPR 6.26 First class post (or other service which provides for delivery on the next business day) is deemed to be “served” The second day after it was posted, left with, delivered to or collected by the relevant service provider provided that day is a business day.

 

6. The Default notice supplied by the Claimant is dated Friday 3rd August, to allow service in line with the statutory requirements mentioned in points 3 to 5 above, 2 working days were required to allow for 1st Class postage. Thus the Rectify date should be 14 calendar days from Wednesday 8th August, namely Wednesday 22nd August 2007, not the 14 calendar days from the date of the letter as stated in the Default notice which would have been 17th August.

 

7. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory 14 clear days to rectify the breach.

 

8. I also note that to be valid, a Default Notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237).

 

9. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give me a counter claim for damages (Kpohraror v Woolwich Building Society [1996] 4 All ER 119).

 

10. It is submitted that the above Default Notice served s87(1) Consumer Credit Act 1974 failed to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561).

 

11. For a Creditor to be entitled to terminate a regulated Credit Agreement where there is a breach, demand repayment in full or take any legal action to recover any monies due under the Agreement, a creditor must serve a Default Notice under section 87(1) of the Consumer Credit Act 1974 which states:

 

Section 87. Need for Default Notice

 

(1) Service of a notice on the Debtor or hirer in accordance with section 88 (a "Default Notice ") is necessary before the creditor or owner can become entitled, by reason of any breach by the Debtor or hirer of a regulated Agreement -

 

(a) to terminate the Agreement, or

 

(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.

 

12. The Act also sets out via Section 88(1), that the Default Notice must be in the prescribed form, as below:

 

Section 88. Contents and effect of Default Notice

 

(1) The Default Notice must be in the prescribed form…

13. The wording must make it clear that no variation is acceptable. Therefore it cannot be dispensed with as a De Minimus issue.

 

14. I note that the regulations do not allow any variation in the form of these statements and therefore it is suggested that where the statements are not as laid down in the regulations the Default Notice is rendered invalid as a consequence.

 

15. In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the Court addressed in some detail the issue of the contents of a Default Notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the Default Notice invalid I quote the comment of KENNEDY LJ: "This statute was plainly enacted to protect consumers, most of whom are likely to be individuals" the judgment appears to confirm the consumer credit legislation made under the Consumer Credit Act 1974 as plainly enacted and set out to offer protection to the consumer. Therefore it is suggested that the failure of the Claimant to set out the Default Notice in accordance with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

16. The Claimant’s failure to issue a valid Default Notice must surely prevent a right of action and would make any termination of the Agreement unlawful, as statute provides the procedure that must be followed. Since the Claimant has failed to adhere to statutory procedure it is averred that the Claimant does not have a right of action, and can never now have a right of action having terminated the Agreement unlawfully.

 

17. Furthermore, the Arrears Total outlined cannot be accurate, as the Balance on the Account was at least partly comprised of Unlawful Charges plus additional Charges and Interest added unlawfully whilst the Account was in Dispute. Therefore, the Arrears claimed cannot be accurate, as they are themselves calculated using a Total that was itself inaccurate.

 

18. This is at all times an Agreement Regulated by the Consumer Credit Act 1974. There is no provision in the Act that allows a large financial institution to terminate an Agreement that is in alleged default or breach simply by giving notice to the Consumer. Section 98(6) makes that quite clear. The Creditor must follow the steps outlined in Section 87 and Section 88 if they are to lawfully Default and Terminate, and enjoy the benefits of Section 87.

 

19. Finally, an invalid Default Notice cannot be remedied by simply issuing a new Default Notice. The Claimant may not serve a second effective default notice in prescribed form post-termination of the agreement. Any such second default notice will necessarily state a date by when I would be required to comply after which in default the agreement would terminate. The second default notice would therefore contain the fiction that the agreement endured when that cannot be the case, as it was terminated on XX/XX/XX. Terminating an Agreement on the back of a defective Default Notice, simply confirms the undeniable truth that Termination of the agreement by the Claimant was carried out in circumstances which then prohibited them from enjoying the benefits of Section 87, namely the opportunity to seek early Payment of a sum that was, prior to Termination, only payable in the future.

 

The enforceability of the Agreement

 

20. Under the Consumer Credit Act 1974 there are certain conditions laid down by parliament which must be complied with if such agreement is to be enforced by the courts. These conditions are prescribed under regulations made by the Secretary of State under section 60(1) CCA 1974, the regulations referred to being the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553). Inter alia, the agreement must:

 

 

• properly identify the debtor by name and full postal address (Schedule 1);
  

 

 

• inform the debtor of the Protection and Remedies Available under the Consumer Credit Act 1974 to Debtors under Regulated Consumer Credit Agreements. In the present case, this means there should be a section headed “Your right to cancel” containing the required information (Schedule 2);
  

 

 

• be signed by the debtor in a signature box of the prescribed form (schedule 5); and
  

 

 

• contain certain prescribed terms relating to important financial information (Schedule 6).
  

 

21. Commenting on the provisions of Schedule 6 in his judgment in the case of Wilson and another v Hurstanger Ltd [2007] EWCA Civ 299, TUCKEY LJ said:

 

"33 In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s 61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement. More detailed requirements, which are designed to ensure that the debtor is made aware, so far as possible, of specified information (including information contained in the

minimum terms) are to be found in Schedule 1." (my emphasis)

 

22. The Defendant admits that the agreement supplied complies with the requirements of the regulations in respect of identifying him as the debtor but does not contain any of the prescribed financial terms. This is sufficient to render the agreement unenforceable.

 

23. In this last respect, the defendant refers to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul):

 

“28.........I should outline the salient provisions of the Consumer Credit Act 1974. Subject to exemptions, a regulated agreement is an agreement between an individual debtor and another person by which the latter provides the former with a cash loan or other financial accommodation not exceeding a specified amount. Currently the amount is £25,000. Section 61(1) sets out conditions which must be satisfied if a regulated agreement is to be treated as properly executed. One of these conditions, in paragraph (a), is that the agreement must be in a prescribed form containing all the prescribed terms. The prescribed terms are the amount of the credit or the credit limit, rate of interest (in some cases), how the borrower is to discharge his obligations, and any power the creditor may have to vary what is payable: Consumer Credit (Agreements) Regulations 1983, Schedule 6. The consequence of improper execution is that the agreement is not enforceable against the debtor save by an order of the court: section 65(1). Section 127(1) provides what is to happen on an application for an enforcement order under section 65. The court 'shall dismiss' the application if, but only if, the court considers it just to do so having regard to the prejudice caused to any person by the contravention in question and the degree of culpability for it. The court may reduce the amount payable by the debtor so as to compensate him for prejudice suffered as a result of the contravention, or impose conditions, or suspend the operation of any term of the order or make consequential changes in the agreement or security.

 

“29. The court's powers under section 127(1) are subject to significant qualification in two types of cases. The first type is where section 61(1)(a), regarding signing of agreements, is not complied with. In such cases the court 'shall not make' an enforcement order unless a document, whether or not in the prescribed form, containing all the prescribed terms, was signed by the debtor: section 127(3). Thus, signature of a document containing all the prescribed terms is an essential prerequisite to the court's power to make an enforcement order….”. (my emphases)

 

“30. These restrictions on enforcement of a regulated agreement cannot be sidestepped.....”

 

And furthermore:

 

“36. In the present case the essence of the complaint is that section 127(3) of the Consumer Credit Act has the effect that a Regulated agreement is not enforceable unless a document containing all the prescribed terms is signed by the debtor”.

 

24. Finally, it should be noted that, in the same judgement, LORD NICHOLLS OF BIRKENHEAD, said:

 

“49. .............The message to be gleaned from sections 65, 106, 113 and 127 of the Consumer Credit Act is that where a court dismisses an application for an enforcement order under section 65 the lender is intended by Parliament to be left without recourse against the borrower in respect of the loan. That being the consequence intended by Parliament, the lender cannot assert at common law that the borrower has been unjustly enriched.(my emphasis)

 

“50. This interpretation of the Consumer Credit Act accords with the approach adopted by the House in Orakpo v Manson Investments Ltd [1978] AC 95, regarding section 6 of the Moneylenders Act 1927 and, more recently, in Dimond v Lovell [2002] 1 AC 384, another case where section 127(3) precluded the making of an enforcement order. In Dimond's case the restitutionary remedy sought was payment of the hire charge for a replacement car used by Mrs Dimond. The House rejected a claim advanced on the basis of unjust enrichment. Lord Hoffmann observed that Parliament contemplated that a debtor might be enriched consequential upon non-enforcement of an agreement pursuant to the to the statutory provisions. It was not open to the court to say this consequence is unjust and should be reversed by a remedy at common law: [2002] 1 AC 384, 397-398.” (my emphases)

 

25. The copy of the agreement provided by the Claimant consists of two parts: a copy of an application form signed by the Defendant and dated September 2000 plus a copy of Terms and Conditions dated 2002 but claimed to be those “applicable at inception of the account”.

 

26. Schedule 6 of the Consumer Credit (Agreements) Regulations 1983, gives the prescribed (financial) terms relevant to a Credit Card agreement (agreement for running-account credit) as:

 

Credit Limit

 

3 Agreements for running-account credit

A term stating the credit limit or the manner in

which it will be determined or that there is no

credit limit

Rate of Interest

 

4. Agreements for

(a) running-account credit

A term stating the rate of any interest on the credit to be provided under the agreement

Repayments

 

5. Consumer Credit Agreements

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following--

(a) number of repayments;

(b) amount of repayments;

© frequency and timing of repayments;

(d) dates of repayments;

(e) the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable.

 

27. It should be noted that none of these terms are present in the Application form provided by the Claimant. They are, however, present in the document described as “True copy Credit Card Agreement/Terms and Conditions applicable at inception of account” (“the T&Cs”).

 

28. As has already been noted, the application form was signed and approved in September 2000. The T&Cs are quite clearly marked “Blue101TC May02” indicating that they are not (as the Claimant claims) the terms and conditions applicable at the inception of the account but those published 2 years later. Thus, the documents provided have both my signature and the prescribed terms but not in the same document. The requirement that “all the terms should be in a single document”, and “within the four corners of the agreement” as demanded by TUCKEY LJ in Wilson and another v Hurstanger Ltd is not met.

 

29. From this and from the above judgement of LORD NICHOLLS OF BIRKENHEAD, it is clear that without a credit agreement, signed by the defendant and containing the information prescribed in the regulations, the Claimant’s claim cannot succeed.

 

Statement of Truth

 

I xxxxxxxxxxx, believe the above statement to be true and factual

 

 

Signed .....................

 

 

Dated this xx day of xxxxxx, 2009

Format has been mangled - here it is as a pdf Defence Edited May 14, 2009 by steven4064

[im4347]

Thank you so much guys for your efficiency and time, the defence is absolutely brilliant!!!

 

Just a quick query, I was looking back at the order by the court to Amex/Brachers, they were told to supply the following, 1,2,and 5 have obviously been covered in the defence by you guys, but what do they mean by points 3 & 4?

 

1. Copies of the CCA and any documents referred to within which complies with the Credit Act 1974 etc

 

2. Default Notice compliant with S87 (1) CCA 1974 etc

 

3.Document, Contract, or Deed of Assignment

 

4. Notice of Assignment with proof of service of the same compliant with S196 of the Law Prpoerty Act 1925

 

5. Copies of any statements or orther documents etc.

 

Regards,

IM

[the_shadow]

Thank you so much guys for your efficiency and time, the defence is absolutely brilliant!!!

 

Just a quick query, I was looking back at the order by the court to Amex/Brachers, they were told to supply the following, 1,2,and 5 have obviously been covered in the defence by you guys, but what do they mean by points 3 & 4?

 

1. Copies of the CCA and any documents referred to within which complies with the Credit Act 1974 etc

 

2. Default Notice compliant with S87 (1) CCA 1974 etc

 

3.Document, Contract, or Deed of Assignment

 

4. Notice of Assignment with proof of service of the same compliant with S196 of the Law Prpoerty Act 1925

 

5. Copies of any statements or orther documents etc.

 

Regards,

IM

 

Deed of assignment is the contract between the OC amex and the DCA normally, its the sale of the debt and contains confidential business information i.e. how much the DCA paid for the debt

 

Likewise Notice of Assignment is the letter sent to yourself that the debt has been sold.

 

As I understand it the debt has never been sold? Its amex taking you to court?

 

S.

[im4347]

Thanks Shadow for clarifing that for me.

 

Regards

IM

[steven4064]

As I understand it the debt has never been sold? Its amex taking you to court?

THat's how I understood it

[the_shadow]

Thanks Shadow for clarifing that for me.

 

Regards

IM

 

Might just be the judge being thorough as most court actions are by DCA's against defendants I believe rather than the original lender. Just to make sure though can you confirm the Claimants details directly off of the court papers served to yourself.

 

S.

[im4347]

Hi guys,

 

The claimant details on the Claim Form is the American Express Services Euro PE Ltd, London Address, but the address for sending documents and payments is to Brachers London Address.