Anatomy of a Default Notice

[lookinforinfo]

So you are saying that you got it on the 14th? Which should mean that you were not given enough time?

[cosalt]

So you are saying that you got it on the 14th? Which should mean that you were not given enough time?

 

The date it was received is irrelevant, the date of service is calculated from the ( if it can be proved ) date of posting, or if unknown the date of the notice.

 

But yes the dn is faulty on a few other points, although whether the court would agree is another matter...........

[Craigbadger]

So you are saying that you got it on the 14th? Which should mean that you were not given enough time?

 

Yes recieved on the 14th april 1st class.

[middenmess]

All you need to know about D/N's as explained by BRW

 

http://www.consumeractiongroup.co.uk/forum/show-post/post-2166205.html

[letsgetitsorted]

Hi craigbadger

My OH received same DN from Cap1, then terminated the agreement, passed to DCA we sent both letter accepting unlawful recession and DCA wrote back saying they will close the file and send back to Cap1, the letter sent was based on the invalid DN, but didnt tell them that,

hope that helps with yours

[Craigbadger]

Hi craigbadger

My OH received same DN from Cap1, then terminated the agreement, passed to DCA we sent both letter accepting unlawful recession and DCA wrote back saying they will close the file and send back to Cap1, the letter sent was based on the invalid DN, but didnt tell them that,

hope that helps with yours

 

Thanks a lot for replying.

Will wait and see what happens.

If you dont mind me asking what were your reasons for accepting the unlawful recession?, I know you say you didnt state this i'm just curious.

 

Craig.

[AA99]

Post #233 and replies on here today http://www.consumeractiongroup.co.uk/forum/legal-issues/212996-car-finance-agreement.html

 

where the judge has ignored the DN:???:

[letsgetitsorted]

the DN was not set out according to the regs, and the needs to pay within 28 days not compliant with regs, therefore when they terminated the account, on the back of a faulty DN, gave course to accept unlawful recession.

[cosalt]

Post #233 and replies on here today http://www.consumeractiongroup.co.uk/forum/legal-issues/212996-car-finance-agreement.html

 

where the judge has ignored the DN:???:

 

Hi AA,

 

As I have said on this thread and others, it is a problem.

 

Its all very well knowing the DN is dodgy, but what do we do when the judge doesnt care / asks if you owe the money / says its a typing error ( as in my case ).

 

Cosalt

[gh2008]

My issue with this type of DN is that the prescribed wording being

 

"If you do not take the action required by this notice before the date shown ...."

 

yet the only 'date shown' is the date of the DN itself

 

How are you supposed to take action before 'the date shown' when you actually receive the notice after 'the date shown'

[diddydicky]

Hi craigbadger,

 

Strictly speaking the dn should state an actual date you need to remedy by, saying something like 'you must make a payment by 28th april' rather than 'within 28 days' however I would doubt this is enough to make the dn invalid as 28 days would always allow you sufficient time.

 

Remember its not when you received it that matters, its when it was served on you. for example first class post is deemed received two working days after it was posted, irrelevant of when you actually recieved it.

 

Have you actually calculated how much of the arrears amount they quote is charges ? This may be a better approach as strictly speaking the arrears amount should only be contractual payments so if charges have been added it can't be right. However again it would need to be a good percentage of the stated arrears or it could be classed as de minus.

 

Hope this helps.

 

Cosalt

 

two days may well be "deemed" for first class- BUT if you admit receiving the notice at an earlier date- (for instance the day after posting)-then the notice is deemed served on that day and not the second day

 

when it comes to 2nd class post (which is prevalent) - and sometimes letters do arrive earlier than 4 working days after posting- it would not be advisable to admit receipt or to post about it on the forum before the four working days are up!

 

belt and braces

[diddydicky]

the DN was not set out according to the regs, and the needs to pay within 28 days not compliant with regs, therefore when they terminated the account, on the back of a faulty DN, gave course to accept unlawful recession.

 

the lack of underlining- is suspect would be regarded by most judges as de minimus,

 

whilst it is true that "a date" must be specified- rather than a number of days- and therefore the DN is defective............i venture to suggest that when the number of days is 28- you will be hard put to convince a judge that you were disadvantaged...........or that you could not work out that 28 days from the date of the letter would give you more than the time that the statute allowed

 

 

in other words- i would advise against basing a defence on these two points with anything other than a slim prospect of success!! (IMO)

[cosalt]

two days may well be "deemed" for first class- BUT if you admit receiving the notice at an earlier date- (for instance the day after posting)-then the notice is deemed served on that day and not the second day

 

when it comes to 2nd class post (which is prevalent) - and sometimes letters do arrive earlier than 4 working days after posting- it would not be advisable to admit receipt or to post about it on the forum before the four working days are up!

 

belt and braces

 

What I meant in my post was that if it was posted 1st class on the 1st it would be deemed served two working days after this even if you actually received it on the 14th.

 

I dont think anyone would admit to receiving it earlier than they did.

[diddydicky]

What I meant in my post was that if it was posted 1st class on the 1st it would be deemed served two working days after this even if you actually received it on the 14th.

 

I dont think anyone would admit to receiving it earlier than they did.

 

i knew what you meant cosalt- some folk have actually said as much in their posts which is why i thought it worth a mention!

[cosalt]

i knew what you meant cosalt- some folk have actually said as much in their posts which is why i thought it worth a mention!

 

Ok, no problem. I am just getting really frustrated that we all go on (me included) about how a dodgy DN and then termination is fatal for the creditor, then we go to court and the judge just dismisses it as nonsense.

[citizenB]

Ok, no problem. I am just getting really frustrated that we all go on (me included) about how a dodgy DN and then termination is fatal for the creditor, then we go to court and the judge just dismisses it as nonsense.

 

 

It is for the defendant to put their case adequately, Cosalt. The following is a defence that has been drafted specifically for a dodgy default notice.

 

 

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.

[vint1954]

My issue with this type of DN is that the prescribed wording being

 

"If you do not take the action required by this notice before the date shown ...."

 

yet the only 'date shown' is the date of the DN itself

 

How are you supposed to take action before 'the date shown' when you actually receive the notice after 'the date shown'

Agreed, but that alone, as they have given 28 days to rectify, would in all probability not be fatal in court.

 

The only other area to challenge would be the ammount noted in the DN, if it were wildly inaccurate.

[vint1954]

the lack of underlining- is suspect would be regarded by most judges as de minimus,

 

whilst it is true that "a date" must be specified- rather than a number of days- and therefore the DN is defective............i venture to suggest that when the number of days is 28- you will be hard put to convince a judge that you were disadvantaged...........or that you could not work out that 28 days from the date of the letter would give you more than the time that the statute allowed

 

 

in other words- i would advise against basing a defence on these two points with anything other than a slim prospect of success!! (IMO)

I'm late to the party again!

[cosalt]

It is for the defendant to put their case adequately, Cosalt. The following is a defence that has been drafted specifically for a dodgy default notice.

 

 

And what happens when the judge says the default notice is incorrect due to a typing error and an allowance can be made for this ?

[vint1954]

And what happens when the judge says the default notice is incorrect due to a typing error and an allowance can be made for this ?

Then if he\she is wrong in law, you point it out politely and appeal if required.

[cosalt]

Then if he\she is wrong in law, you point it out politely and appeal if required.

 

 

Hi vint,

 

Yes that's right and hopefully in my case it won't get that far as after the initial hearing the claimant in my case is getting cold feet and is trying to negotiate a settlement before it goes any further.

 

I am just trying to show to new / inexperienced caggers that having a faulty DN and a termination notice is not a one way ticket to financial freedom, and there could still be a lot of issues / problems down the line if it does end up in court.

 

Cosalt

[diddydicky]

an invalid DN

 

 

that is to say apart from the type of de minimus issues talked about

 

IS a cast iron dead cert to make any subsequent attempt to claim the benefits of s87 unlawful.

 

IMO in 99.999% of cases where a judge rules otherwise- it is down to LIP's

not presenting the case properly and/or not being able to rebut any counter suggestions or proposals put by the other side

 

and that is usually because the LIP is ill prepared

 

i'm not having a pop at LIP's- just stating the obvious facts- rather than continually blaming "bent" or "Biaised" judges

 

a chef's meal is only ever as good as the ingredients he is given to work with

 

judges are not all knowing founts of knowledge- their job is generally to receive the legal arguments from both sides of a dispute and to make a decision as to whose evidence is most compelling.

 

Many judges in county courts are no more than local solicitors- and we all know how difficult it is to get a local solicitor who understands (or even cares about) the consumer credit act

[vint1954]

an invalid DN

 

 

that is to say apart from the type of de minimus issues talked about

 

IS a cast iron dead cert to make any subsequent attempt to claim the benefits of s87 unlawful.

 

IMO in 99.999% of cases where a judge rules otherwise- it is down to LIP's

not presenting the case properly and/or not being able to rebut any counter suggestions or proposals put by the other side

 

and that is usually because the LIP is ill prepared

 

i'm not having a pop at LIP's- just stating the obvious facts- rather than continually blaming "bent" or "Biaised" judges

 

a chef's meal is only ever as good as the ingredients he is given to work with

 

judges are not all knowing founts of knowledge- their job is generally to receive the legal arguments from both sides of a dispute and to make a decision as to whose evidence is most compelling.

 

Many judges in county courts are no more than local solicitors- and we all know how difficult it is to get a local solicitor who understands (or even cares about) the consumer credit act

Spot on. You have to walk them through it step by step. Why it is unlawful, why they have unlawfully rescinded and what the consequences are, while at each stage, providing statutes or case law to support.

[cosalt]

an invalid DN

 

 

that is to say apart from the type of de minimus issues talked about

 

IS a cast iron dead cert to make any subsequent attempt to claim the benefits of s87 unlawful.

 

IMO in 99.999% of cases where a judge rules otherwise- it is down to LIP's

not presenting the case properly and/or not being able to rebut any counter suggestions or proposals put by the other side

 

and that is usually because the LIP is ill prepared

 

i'm not having a pop at LIP's- just stating the obvious facts- rather than continually blaming "bent" or "Biaised" judges

 

a chef's meal is only ever as good as the ingredients he is given to work with

 

judges are not all knowing founts of knowledge- their job is generally to receive the legal arguments from both sides of a dispute and to make a decision as to whose evidence is most compelling.

 

Many judges in county courts are no more than local solicitors- and we all know how difficult it is to get a local solicitor who understands (or even cares about) the consumer credit act

 

I agree with you completely, apart from the biased judge bit. I prepared very well for my case ( thanks to a fellow cagger ) with all points covered, and yes it was only a 5 minute repo hearing that he ajourned to get further info. But he was 100% on the claimants side, basically ignoring me and anything I said, and agreeing with the claimant's solicitors every word.

 

I am an extremely confident, articulate person, used to dealing with people and controlling situations. But when put in front of the judge it is a whole different ball game.

[vint1954]

I agree with you completely, apart from the biased judge bit. I prepared very well for my case ( thanks to a fellow cagger ) with all points covered, and yes it was only a 5 minute repo hearing that he ajourned to get further info. But he was 100% on the claimants side, basically ignoring me and anything I said, and agreeing with the claimant's solicitors every word.

 

I am an extremely confident, articulate person, used to dealing with people and controlling situations. But when put in front of the judge it is a whole different ball game.

In that case, having done all that you can in court, there is only an appeal.