Me V MBNA, last credit card

[supasnooper]

1/ Does the CCA look OK anyone, does to me but nice to have a second opinion.

 

You could contend the point of the link between the documents

 

2/ what's the latest about invalid default notice, things have changed since I started my first MBNA saga, It started off invalid default notice no case, then no default notice they can only claim the arrears, next I hear it means nothing.

 

If the DN is defective then they can only claim the arrears

 

3/ Howard Cohen say because it is small claims court they dont need to supply the CCA, is this true? if not they have not upheld their obligation under a court order, how does this affect their case?

 

Unfortunately, yes, HC could say that but you'll need to get the Judge on your side by asking him would he care to swap places, so to speak.

Also invite the Judge to have a look at CPR PD 16.7.3

 

4/ HC supplied their case file late (5 days from trial) does this invalidate their claim because I had insifficient time to prepare a defence.

 

the Judge will probably allow it. You could ask for an adjournment if you feel that you are prejudiced.

Do let the Judge know this fact though.

 

My hearing is tomorrow so a quick response would be appreciated.

 

 

Good luck for tomorrow.

[Mr Happy]

Any suggestions how I word my witness statement, I guess my DN is my only defence, what is the arrears btw.

[Mr Happy]

Bump

[Mr Happy]

Can someone please help me?

 

I am off to court in 4 hours I have a form of defence but I dont know what it means, how it should it be worded and what supporting evidence I can have.

 

It appears my default notice being invalid is my only option, I am told it only obliges me to pay the arrears,

What is the arrears? is it the amount I must pay to remedy the breach?

Where is it stated in legal terms that I only need to pay the arrears so I can show the judge it is not a made up rule?

How is it best worded and is there any other information that may help me.

I got through the last case helped by Restons incompetence but I cant rely on every one being half baked.

[Mr Happy]

They have sent a few copies of statements to show I used the card, although there is a balance on their it does not show any transactions just a balance and interest, is this relevant for my defence.

 

There is also a letter of assignment from Lewis Debt Recovery to CL Finance but not a letter of assignment from MBNA to Lewis shouold there be one?

Edited December 17, 2009 by Mr Happy

[cymruambyth]

An ineffective default notice will prohibit the Claimant recovering all those things on which the service of an effective default notice is dependant. In short, the claim will be reduced to just the arrears, See Woodchester v Swayne.

 

By when proceedings have commenced the Claimant will have terminated the agreement. The language of a default notice is framed on the basis there is a current agreement. That language is prescribed. If the Claimant terminated the agreement, to deliver an effective default notice will involve the fiction the agreement is current and never terminated. It would also involve the Claimant reinstating unilaterally. The debtor would be unlikely to agree to reinstatement if to do so would cure the Claimant's difficulties.

IN THE SUPREME COURT OF JUDICATURE No CCRTF 97/1410/2

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM ORDER OF ASSISTANT RECORDER HIGGINBOTTOM

 

 

Royal Courts of Justice

Strand

London WC2

 

 

Tuesday, 14th July 1998

 

B e f o r e:

 

LORD JUSTICE KENNEDY

 

MR JUSTICE SUMNER

 

 

 

 

 

WOODCHESTER

 

- v -

 

SWAYNE & CO

 

 

 

 

(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

 

 

 

MR T HODGKINSON (Instructed by Anthony W Jeremy & Co of Cardiff) appeared on behalf of the Appellant

 

MR J GRUFFYD (Instructed by Messrs Watkins & Co of London) appeared on behalf of the Respondent

 

 

 

 

J U D G M E N T

(As Approved by the Court )

(Crown Copyright)

 

 

 

 

 

LORD JUSTICE KENNEDY: This is the defendants' appeal from a decision of Assistant Recorder Higginbottom who, in Cardiff County Court on 3rd October 1997, gave judgment for the plaintiffs in the sum of £13,453.07 with costs on the County Court scale 2.

 

FACTS

The factual background to the action can, for present purposes, be stated quite briefly. The defendant appellants, Swayne & Co, are a firm of solicitors in Cardiff who, in 1992, decided to obtain a new photocopier. The machine was supplied by Photostatic Copiers Ltd, but Swayne & Co required finance. So the plaintiff respondents, Woodchester Lease Management Services Ltd, then Woodchester Equipment Leasing Ltd, became involved. On 7th April 1992 an agreement, described as a Rental Plan, was made between Woodchester and Swayne & Co which was for a minimum period of 72 months and provided, inter alia, for quarterly payments of rental in the sum of £648 plus VAT with an increase of 7.5% at end of year 1. Payments were made normally until the end of 1994. Swayne & Co then stopped payments and that, it is now common ground, amounted to a breach of contract. Clause 9.1 of the contract set out what was to happen in the event of default by the customer. So far as material, that clause provides:

"If -

 

(a) the customer fails to pay rental or other sums payable under this agreement ..... on the due date;

 

.....

 

(g) ..... then and in every such case (which, in the case of the events referred to in clauses 9 (a), (b) or ©, will be deemed to constitute a repudiatory breach of this agreement by the customer) an event of default shall be deemed to have occurred for the purpose of this agreement. On the occurrence of an event of default the company may by notice in writing to the customer immediately or at any time thereafter and for all purposes terminate any letting of equipment under this agreement."

 

That contractual right to determine the letting of equipment under the agreement has to be read with certain provisions of the Consumer Credit Act 1974 and some of the regulations made thereunder because, for the purposes of this case, it is admitted that the rental plan under consideration is a consumer hire agreement within Section 15 (1) of the 1974 Act and, thus, a regulated agreement for the purposes of that legislation.

 

Section 87 (1) of the 1974 Act provides that before a creditor or owner in the position of Woodchester can become entitled to terminate an agreement or repossess goods on hire he must first serve a default notice. Section 88 and the Consumer Credit (Enforcement Default and Termination Notices) Regulations 1983 (S/I No 1561) set out in some detail the form which the notice must take and what information it must contain. In particular, if the breach of contract relied upon is capable of remedy, the

notice has to state what action is required to remedy it, and

within what time scale. Section 89 provides that if that action is taken within the stated time scale, the breach shall be treated as not having occurred.

 

The relevant parts Section 87, 88 and 89 read as follows. Section 87 (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

 

.....

 

© to recover possession of any goods ..... "

Section 88 (1):

"The default notice must be in the prescribed form and specify -

 

(a) the nature of the alleged breach;

 

(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

 

© if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

 

(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice ..... "

Section 89:

"If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88 (1) (b) or © the breach shall be treated as not having occurred."

In the regulations the relevant paragraph is paragraph 2 which, so far as relevant, provides:

"Any notice to be given by a creditor or owner in relation to a regulated agreement to a debtor or hirer under section 87 (1) of the Act ..... shall contain -

 

.....

 

(b) the information set out in paragraphs 1 to 3, 6 and 8 of Schedule 2 to these Regulations; and

 

© statements in the form specified in paragraphs 4, 5 7 and 9 to 11 of that Schedule."

 

I, therefore, turn to Schedule 2 which - under the heading Details of breach of agreement and action required to remedy, or pay compensation for, the breach - has in paragraph 3 these words:

"A specification of -

 

(a) the provision of the agreement alleged to have been breached; and

 

(b) the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

 

© if the breach is capable of remedy, what action is required to remedy it and the date, being a date not less than seven days after the date of service of the notice, before which that action is to be taken; or

 

(d) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and the date, being a date not less than seven days after the date of service of the notice, before which it is to be paid."

 

I return now to the facts. On 12th January 1995 Woodchester sent to Swayne & Co a default notice which they contend complied with

the provisions of the 1974 Act and the Regulations made thereunder. Swayne & Co accept that in most respects the notice did comply with the statutory requirements, but they contend that it had one critical flaw. It described the action required to remedy the alleged breach of contract as "payment of the sum of £879.90 by 24/01/95". In fact, as the assistant recorder found, the arrears of rental at that time amounted to £634.30. Woodchester claimed the higher figure because they wrongly increased the rental by 7.5% at the end of year 2 as well as at the end of year 1. An important issue which the assistant recorder had to decide was whether that error, which was admitted by Woodchester at the start of the hearing, rendered the default notice ineffective for the purposes of the 1974 Act. Rather surprisingly, no decision has been traced which is directly in point. But both the court below and this court have considered at the invitation of counsel some cases dealing with legislation of a similar kind. The assistant recorder gave careful consideration to those authorities, and concluded thus:

"A default notice served under Section 87 and Section 88 is not rendered defective merely because the action indicated as required to be taken to remedy the breach is in fact over and above the action necessary to remedy that breach."

 

GROUNDS OF APPEAL

In this court the second ground of appeal put forward by Swayne & Co asserts that the assistant recorder's conclusion in relation to the validity of the default notice amounted to an error of law. That is the only ground of appeal on which we have heard argument. We indicated yesterday, at the end of submissions in relation to that ground of appeal, that we were in the appellants' favour. Accordingly, it was not necessary to hear submissions in relation to ground 4, the only other ground of appeal which Mr Hodgkinson, for Swayne & Co, wished to pursue and in which it is contended that the assistant recorder was wrong in law in holding that the sums claimed by Woodchester pursuant to the contract were not a penalty. Mr Hodgkinson submits that the proper approach to the words of Section 88 (1) is to consider them in their statutory context, that is to say, having regard to the other provisions in the statute and the provisions of the Regulations, bearing in mind the purpose for which this legislation was enacted.

 

THE APPELLANTS' CASE

Mr Hodgkinson submits that if that approach is adopted there can be no doubt about what was required to be contained in a default notice in a situation such as this if the default notice was to comply with the statute. It had to state with reasonable accuracy the sum of money which the hirer had to pay to remedy his breach. An error such as that with which we are concerned must render the notice ineffective.

 

Mr Hodgkinson goes on to submit that none of the authorities relied upon by the assistant recorder, when properly considered, suggests otherwise. He further submitted that this court has no discretion in the matter and invited our attention to other parts of the statute, particularly Section 60 and the sections associated therewith including Section 127 where it is clear that a discretion is given which is noticeably absent in the case of Sections 87, 88 and 89.

 

THE RESPONDENTS' CASE

Mr Gruffyd, for the respondent, submits that it is important to recognise that the notice does not itself give the owner of the goods rights against the hirer. His right of redress, if any, is to be found in the terms of the contract. The only purpose of the notice is to warn the hirer to give him a last chance, and if that opportunity is not taken to enable the owner to take the next step. If the hirer does what the notice requires he is in no danger even if, as in this case, he has overpaid. If he pays the amount really owing he is still, Mr Gruffyd contends, in no danger because the owner then takes further action at his peril, although that seems to me to be a somewhat doubtful proposition if, as Mr Gruffyd contends, the default notice is itself a valid notice. The statute, Mr Gruffyd contends, provides a short period during which the hirer can, if necessary, seek legal advice. The authorities, Mr Gruffyd submits, support this more generous interpretation of the provisions of Section 88 (1) as do the words of the statute itself which does not - in Section 88 (1) (a) or (b) which, for present purposes, are the relevant

provisions - refer to a sum of money. (One can see by way of contrast Section 88 (1) © and paragraph 3 (d) of Schedule 2 to the Regulations.)

 

CONCLUSION

In my judgment, Mr Hodgkinson is right for the reasons which he has given. This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If the hirer is said to have broken its terms, the hirer needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and the resources to give that information with precision. If he does not do so accurately then he cannot take what Mr Gruffyd conveniently referred to as "the next step".

 

That, as it seems to me, is the scheme of the legislation. It

would be frustrated if the notice could claim that in order to put matters right the hirer must pay a sum far in excess of the amount in fact owing and yet constitute a valid notice. It is all very well to say that a hirer can seek advice on receipt of a notice but a hirer has very little time in which to do so. It may be as little as seven days. (See Section 88 (2)). He may not at first appreciate that the large sum set out in the notice is inaccurately calculated and plain wrong. It may be,

perhaps because of earlier defaults on his part or the incidence of interest, not at all easy to calculate what in fact is owing and the hirer may, thus, be misled into believing that the sum set out in the notice is right. He may even be frightened by that belief.

 

It is worth remembering that very often these type of contracts are, in fact, complicated in themselves, quite apart from the question of any default, that those who draw up the contracts, that is to say, the finance companies, have necessarily the obligation of being able to calculate what is owing thereunder.

As Mr Hodgkinson points out, the words of Section 88 (1) require the lender to "specify" not only the nature of the breach - which in this case was adequately described as failure to pay the rental specified on their due dates - but also what action is required to remedy the breach. In the context of this case that meant specifying accurately what sum of money had to be paid.

 

The court might overlook an error which could be described as no more than de minimus, but Mr Gruffyd realistically does not contend that the error with which we are concerned can be so described.

 

The lender should be able to calculate, as I have already said, quite easily, what sum is due whereas the ordinary hirer may not

know. Section 88 (1) (b) does not, in terms, refer to a sum of money only because it applies to all types of breach of contract. Section 88 (1) © is different because in the case of a breach

which cannot be remedied compensation can only be expressed in terms of money so the sub-section is able to refer to "the sum (if any) required to be paid".

 

It is also worth remembering that a valid notice pursuant to

Section 88 can lead to the position in which the lender is able to repossess the goods with all the disruption that may cause to a hirer who, if Mr Gruffyd is right, may be in a position to pay a lesser sum which is the sum which should be paid but of which he has no knowledge because the notice has not been correctly drawn.

 

Turning to the authorities, the idea of requiring a notice to be served prior to repossession can be found in statutes long before 1974 - see in particular Section 14 of the Conveyancing and Law of Property Act 1881, Section 146 of the Law of Property Act 1925, Handel v The City of London Brewery [1901] Ch D 496 and Fox v Jolly [1916] 1 AC 1. They are decisions in relation to the 1881 Act. Silvester v Ostrowska [1959] 1 WLR 1060 was a decision in relation to Section 146 (1). That section provides:

"A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice -

 

(a) specifying the particular breach complained of; and

 

(b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and

 

© in any case, requiring the lessee to make compensation in money for the breach;

 

and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor ..... "

 

In Silvester the notice specified breaches of the covenant to repair and breach of a covenant against sub-letting. In fact there was no covenant against sub-letting in the lease. But having regard to what had been decided in the earlier cases, the notice was held to be sufficient for the purposes of Section 146. As Mr Hodgkinson points out, the breach relied upon was accurately set out even though there was an unjustified reference to another alleged breach. No payment of money was contemplated. The wording of Section 146 was not such as to require the landlord to "specify" what had to be done to remedy the breach.

In Shepherd v Lomas [1963] 2 All ER 902 this court considered a notice served under Section 24 (2) (d) of the Agricultural Holdings Act 1948. At page 906 Harman LJ said:

"I do not think that the notice need be good in every single respect in order that the landlords can rely on it. It is enough if there are substantial portions of it to which they can point as defects in performance on the part of the tenant. That is consistent with the cases under the Conveyancing and Law of Property Act, 1881, to which Lord Denning, MR, has referred, which show quite clearly that a notice served by a landlord, which contains within it matters which he cannot enforce, whether because there was no covenant or because the covenant had not been broken, is not invalidated thereby and that he may rely on other parts of it in respect of which the tenant is in default."

 

The argument which commended itself to the assistant recorder in the present case was that the approach to Section 88 (1) (b) of the 1974 Act should be the same as that adopted in relation, for example, to Section 24 (2) (b) of the Agricultural Holdings Act 1948. I do not agree. Here we are dealing with a statute which, for good and obvious reasons, requires a lender or owner to set out precisely what needs to be done to put right the alleged breach of contract. If a sum of money has to be paid it needs to be "specified". And if the figure given is more than the sum which the giver of the notice is entitled to demand, the notice, in my judgment, must be invalid. A similarly strict approach was taken in this court in relation to a preliminary notice under Case D of the Agricultural Holdings (Notice to Quit) Act 1977 in Dickinson v Boucher [1983] 269 EGLR 1159. But, as Mr Gruffyd points out, the words of the statute were very different. I do not, therefore, look to that authority for support in arriving at the conclusion to which I have already referred.

 

That leaves only the question of what sum of money the plaintiffs are now entitled to and what should be done in relation to costs. It is common ground that if the assistant recorder, whose judgment I regard as a model of clarity, had reached the same conclusion as I have reached in relation to the default notice, he would have entered judgment for the plaintiffs in the sum of £634.30 plus interest. The total sum, inclusive of interest, is now £1,154.42. There was no money in court so he would have awarded costs on scale 1. In my judgment, that is the order which should now be made in respect of costs in the lower court. Mr Hodgkinson sought to persuade us that because the plaintiffs did not concede their error until the start of the trial and because a lot of the hearing time was devoted to the issue of the default notice we should make a different order in relation to costs. I disagree. I note in passing that a lot of the hearing time was devoted to issues not raised in this appeal, some of which appear on first sight to have no merit whatsoever. So far as the appeal is concerned, it is agreed that costs must follow the event.

 

The appeal therefore, in my judgment, should be allowed with costs.

 

MR JUSTICE SUMNER: I agree. I would only and my tribute as well to the particularly clear and careful judgment of the learned assistant recorder.

 

 

 

 

 

Order: Appeal allowed with costs

 

 

Yes. Any valid Arrears due before Termination are still owed, that's assuming they do still posses a properly executed Regulated Credit Agreement.

 

However, the Balance which was not yet due, is lost. This is because their option to seek early Payment of a Debt not yet due (the Balance), went out of the window the second they Terminated on the basis of an Invalid or non-existent Default Notice.

StayingCalm vs Abbey with no CCA**WON**

http://www.consumeractiongroup.co.uk/forum/legal-issues/145452-stayingcalm-abbey-no-cca-8.html

quote the following from Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561)

 

 

Quote:

SCHEDULE 2

FORM OF DEFAULT NOTICE BEFORE A CREDITOR OR OWNER CAN BECOME ENTITLED, BY REASON OF ANY BREACH BY THE

DEBTOR OR HIRER OF A REGULATED AGREEEMENT, TO TERMINATE THE AGREEMENT, DEMAND EARLIER PAYMENT OF ANY

SUM, RECOVER POSSESSION OF ANY GOODS OR LAND, TREAT ANY RIGHT CONFERRED ON THE DEBTOR OR HIRER BY THE

AGREEMENT AS TERMINATED, RESTRICTED OR DEFERRED OR ENFORCE ANY SECURITY

Regulation 2(2)

Details of agreement

 

1

A description of the agreement sufficient to identify it.

Parties to agreement

2

(1) The name and a postal address of the creditor or owner.

(2) The name and postal address of the debtor or hirer.

Details of breach of agreement and action required to remedy, or pay compensation for, the breach

3

A specification of:--

(a) the provision of the agreement alleged to have been breached; and

(b) the nature of the alleged breach of the agreement, specifying clearly the matters complained of; and either

© if the breach is capable of remedy, what action is required to remedy it and the date, being a date [not less than

fourteen days] after the date of service of the notice, before which that action is to be taken; or

(d) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach and

the date, being a date [not less than fourteen days] after the date of service of the notice, before which it is to be paid.

 

relevant case law is this too...

 

DEFAULT NOTICE

 

The Need for a Default notice

• 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 petition.

• It is 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

• Notwithstanding the above points, 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)

• Service of a default notice is a statutory requirement as laid out in sections 87,88 and 89 Consumer Credit Act 1974. Section 87 makes it clear that a default notice must be served before a creditor can seek to terminate the agreement or demand repayment of sums due to a breach of the agreement. therefore without a valid default notice, I suggest the claimants case falls flat and cannot proceed and to do so is clearly contrary to the Consumer Credit Act 1974

• 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

New Default Notice can only be issued if...

 

(1) The Agreement is still live and was not Terminated. That cannot be the case in view of their Demand for Full Payment.

 

(2) The Agreement has been re-activated. That cannot happen unless both sides to the Agreement agree, that's why it's called an Agreement. You would not agree to that, so the Agreement can't be re-activated once Terminated, and certainly not by one party to the Agreement just so that they can fix their own mistakes.

 

If they do come back, then start getting your Counter-Claim and demand for Costs ready!

 

Cheers,

BRW

I think you need to concentrate on two things, i.e. the fact that they have clearly Terminated the Agreement when they demanded Full Payment, and the fact that they did so on the back of an invalid Default Notice, thus denying themselves any of the benefits of s87. Click the Link below to read what any Section within the Act says:

 

Consumer Credit Act 1974

 

Below is the Paragraph that I added to a recent Defence (with underlying thanks to Surfaceagentx20 whose words I have mangled), to make it clear the nasty bankers concerned could not simply go back in time to fix their Default Notice mistakes:

Quote:

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 18/06/2008. 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.

I'd use something like the above, but change the Date to match the Date of their Claim Letter. Or the Date of any earlier Letter if they asked for Full Payment before the Claim.

 

I regret I'm not familiar with your Claim/Counter-Claim, but have you sent them a s77-79 CCA Request and Subject Access Request, or have you used a CPR 18 Request once the Court Claim was issued to get the same sort of details?

 

I'm hoping there that you may yet be able to uncover some more useful information via Subject Access Request or via CPR 18 Request. If you have not yet used CPR 18, then it may be an idea, unless they have not yet issued a new Claim, in which case CPR 18 may not be applicable if no Court Action on their part is actually live at the moment. In that case, Subject Access Request would be the one to use for now.

 

Others may join in here, but the above is my own suggestions. The key is that the invalid Default Notice is 50% of the issue, the other 50% is the Termination. Put them together and they are ham strung, all they can ask for would be any valid Arrears that were due before Termination.

 

I say this, because the proposed Paragraph you stated in the last Post seemed to be mainly concentrating on the Invalid Default Notice, and didn't say enough about the fact that they had Terminated. That Termination is the key to denying them any s87 benefits (as they neglected to bring along a valid Default Notice when they Terminated), and it's also the key to denying them any right to go back and issue a new Default Notice (as the Account is close/dead/Terminated/t*ts up).

 

You may also be able to add a Counter-Claim for Unlawful Rescission of Contract!

 

Remember, an Agreement Regulated by the Consumer Credit Act 1974 binds them as much as it binds you. They can't just wake up one morning having a really bad underpants and wig day and elect to Terminate and extract themselves from the Agreement by lunchtime.

 

This is what s87/s88 is all about, and if you have done something wrong, then these are the steps they must follow to allow them to warn you, ask you to be good, and if you don't, then they can extract themselves from the Agreement that otherwise binds them every bit as much as it binds you.

 

If they elect to jump out of the Agreement Plane without a Default Notice Parachute and s87 Boots, then that could be an even bigger problem for them, because when they crash to earth, you can then start beating them around the buttocks with a Compensation Stick:

Quote:

Furthermore, 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 from enforcing any alleged debt that was otherwise only payable in the future, but would give me a right to Counter-Claim for damages, see Kpohraror v Woolwich Building Society [1996] 4 All ER 119.

Cheers,

BRW

 

If a default notice is prepared and delivered so as to create a situation where less than 14 days is expressed to be available for the debtor to meet the requirements of the DN, the DN is ineffective. The DN is a powerful tool in the creditor's armoury though it was created within a statutory framework designed to provide consumer protection. As such the DN must pass the requirements of section 88 Consumer Credit Act 1974.

 

The period of 14 days is an express requirement of section 88(2). Once upon a time it said not less than 7 days was required. Then in late 2006 Parliament decided 7 days was insufficient and decided that the period of time should be not less than 14 days. If in 2006 Parliament had thought that 13 days or less was required, Parliament would have said so. When Parliament fixed the period as one which 'must not less than 14 days' that is what it meant and it is impossible to imagine in law that a DN is effective where the period is less than 14 days.

 

I am afraid this smacks of an example of a DJ's ignorance, failure to grasp the law or simply not being directed to the specifics of the statute. He might be on the ball when it comes to Landlord and Tenant work and if that were so I doubt he would, for example say a Landlord's section 21 Housing Act 1988 notice was effective where 6 weeks rather than two calendar months notice was given to the tenant.

 

Wherever a DJ is leaning towards declaring a DN effective where it plainly is not, let him know (as politely and deferentially as humanly possible) that if he carries on leaning that way, you will require him to set out his reasoning as part of his judgment and that you want him to spell out his reasoning so that it forms part of the record for appeal purposes. That should sharpen him up a bit.

Edited December 17, 2009 by cymruambyth
Fonts

[cymruambyth]

Trying to remove fonts, thought I had that cracked! Will repost again in afew minutes! Just to add the above post is a comilation of stuff on DNs mostly from posts with BRW. I know there is a lot of information, but there should be bits that you can use. DNs changed from 7 to 14 days in December 2006 (Ithink).

Good luck

Edited December 17, 2009 by cymruambyth

[Mr Happy]

Wow thanks for that, its an awful lot of information, I will take a copy with me and highlight key facts.

 

Unlawful rescission of contract, what is the likelihood of them backing down on that basis?

[cymruambyth]

Sorry can't help any further on that other than to say argue with conviction and back up with legal precedent. Also, not teaching you to suck eggs, take copies of bits that you are refering to to give to DJ if they look like they need help;)

[citizenB]

Can someone please help me?

 

I am off to court in 4 hours I have a form of defence but I dont know what it means, how it should it be worded and what supporting evidence I can have.

 

It appears my default notice being invalid is my only option, I am told it only obliges me to pay the arrears,

What is the arrears? is it the amount I must pay to remedy the breach?

Where is it stated in legal terms that I only need to pay the arrears so I can show the judge it is not a made up rule?

How is it best worded and is there any other information that may help me.

I got through the last case helped by Restons incompetence but I cant rely on every one being half baked.

 

They have sent a few copies of statements to show I used the card, although there is a balance on their it does not show any transactions just a balance and interest, is this relevant for my defence.

 

There is also a letter of assignment from Lewis Debt Recovery to CL Finance but not a letter of assignment from MBNA to Lewis shouold there be one?

 

Bliddy hell, Mr H...

 

cymruambyth, has given you some information which is good.

 

The arrears total should only be what is genuinely owed.. ie no charges etc to be included.

 

You should have been provided with statements from inception of account that showed how the balance has been made up to date. Just because they can prove you used the card, doesnt mean that it proves there is a balance outstanding and what that amount is.

 

You must try and get the DJ on side as regards the late submitting of documents to yourself.

 

The defence below has been prepared specifically for a dodgy default notice. You could amend it to suit your circumstances. It has all the relevant information included.

 

xxx

 

 

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.

 

 

 

 

 

 

This is all I can really find with such short notice. Best of luck.

[citizenB]

You also need sight of that first NOA, if the original assignment wasnt lawful then everything else that followed wasnt lawful either.

[the_shadow]

You also need sight of that first NOA, if the original assignment wasnt lawful then everything else that followed wasnt lawful either.

 

Agree 100%

 

If you have never received a NOA from MBNA to the first DCA then the second DCA have no cause of action despite them having a valid NOA, the chain breaks down.

 

IMVHO If you have to....... be polite but remind the DJ that you have had so little time to prepare each time a point comes up you cant respond to...

 

Critical is a) chain of NoA and b)Default ineffectual, supplement that with the fact the two pages of the CCA dont appear to be linked and I'm guessing they wont bring the original to the hearing as its possibly destroyed in which case quote CPR PD 16 7.3

 

7.3

 

Where a claim is based upon a written agreement:

(1) a copy of the contract or documents constituting the agreement should be attached to or served with the particulars of claim and the original(s) should be available at the hearing, and

 

(2) any general conditions of sale incorporated in the contract should also be attached (but where the contract is or the documents constituting the agreement are bulky this practice direction is complied with by attaching or serving only the relevant parts of the contract or documents).

 

 

 

If they are relying on scanned copies with no original remaining.....Prior to the hearing they should have advised the court and you they were introducing hearsay evidence via a notice, if you've not had that notification then its a error on their part.

 

S.

[Mr Happy]

This is a copy of my case so far, should this be a witness statement.

 

Comments please, a lot needs amending and would appreciate some help, having trouble getting my head around everything.

 

Due to late arrival of the claimants witness statement (5 days prior to hearing) and reluctance to send any information about the case after a request from myself and the courts I have produced a defence that is sufficient but not complete, should it be deemed my evidence is insufficient I would request the possibility of an adjournment.

 

1/ I wish to see the original of the attached Consumer Credit Agreement so I can determine that the CCA document is legal and enforceable, to be legal it is a requirement that the terms and conditions be part of the same document.

2/ With reference to the witness statement of Damiean John Hussain point 3, shows the final balance of the credit card in question, I would like to know where this balance has originated from as it is not clear and can not be assumed as being from my use of the card.

3/ Point 4 has reference to a default notice that was sent to me, I will acknowledge receipt of such default notice, supplying a default notice is not sufficient to legally terminate an account it must be a valid default notice, the supplied notice was invalid by the fact that the required clear 14 days from issue was not adhered too, date on default notice 7th April sent second class so allowing for 4 WORKING days for service, Fri 10th and Mon 13th B/Hols, no post! so Weds 15th deemed 4th working day for service, then 14 clear calendar days from that 29th April not 24th as per default notice.

4/ The mentioned letter of assignment is from Lewis Debt Recovery acting for CL Finance Limited, I would like to see the letter of assignment from MBNA to CL Finance Limited.

 

Added red bit for input, not sure what im talking about here.

[Mr Happy]

Ive also prepared an expenses claim just to encourage them to stop the case.

[cymruambyth]

Can you use some of this to add substance? It was from a WS/defence that I had loads of help with.

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

 

8. Firstly, the agreement must contain certain Prescribed terms under regulations made by the Secretary of State under section 60(1) CCA 1974, the regulations referred to are the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) The prescribed terms for a Running credit account as set out below

 

9. 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--

1. Number of repayments;

2. Amount of repayments;

3. Frequency and timing of repayments;

4. Dates of repayments;

5. 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

 

10. Further, the Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 SI No. 1557 requires that the lettering in every copy of an executed agreement be easily legible. Although most of the document is not easily legible, it clearly states that this document states is an 'Application Form'. It is denied that the ‘Application Form’ Exhibit xx produced by the Claimant is an agreement within the terms of the Act.

13. The court’s attention is drawn to the fact that where an agreement does not have the prescribed terms as stated in (7) above, it is not compliant with section 60(1) Consumer Credit Act 1974 and therefore it is not enforceable by s127(3) of the same Act.

 

14. So there should be no misunderstanding, it is noted that the agreement referred to by the Claimant would have commenced prior to the inception of the Consumer Credit Act 2006. It is therefore regulated by the Consumer Credit Act 1974 s127 as Schedule 3, S11 of the Consumer Credit Act 2006 prevents S15 repealing this clause.

 

 

15. The court’s attention is also drawn to the authority of the House of Lords in Wilson-v- First County Trust [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 by the court.

"72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his right under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in the case of deliberate non-compliance’

 

In addition there is case law from the Court of Appeal which confirms the prescribed terms must be contained within the body of the agreement and not in a separate document - the judgment of TUCKEY LJ in the case of Wilson and another v Hurstanger Ltd [2007] EWCA Civ 299:

"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."

16. It is therefore submitted that the document the claimant has produced as a credit agreement falls foul of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) & the Claimant is therefore put to strict proof that a compliant document exists.

 

[Mr Happy]

Thanks

 

1 hour to go.

[cymruambyth]

Good luck, so I'm giving so much information, without trying to tailor it to your situation, but trying to cover all bases in the shortest time possible!

[supasnooper]

If you feel that you have been prejudiced by the late submission of the WS, then ask the Judge for an adjournment.

 

Good luck for today.

[Mr Happy]

Not a good day.

 

Got there 20 minutes early, didn't want to speak to the opposition, saw a judge poke his little head out, praying it wasn't him because he was the judge I had last time before going to multi-track,

 

Luckily we were the first in and yes it was him, my heart sunk as I already knew the conclusion, gave my points over.

 

Effectively his replies were.

 

Point 1 was that a copy of a document is sufficient and the original would make no difference.

 

Point 2 I would have had statements from MBNA to prove I used the card.

 

Point 3 Invalid default notice only applies to cases where large amounts of money are involved so was over ruled.

 

Point 4 letter of assignment can be assumed to be done even if it doesn't exist.

 

Makes a mockery of the legal system and consumer law.

 

I put in a request to take it to appeal that was refused, I can now choose to appeal but I don't think I can be bothered, perhaps I should use the money from the expenses from my last case to pay for this, wanted to give my son a little extra this year because he has gone without for the last few years and been very good about it.

 

Perhaps I can get them back for illegal bank fees if that ever gets off the ground again.

[the_shadow]

Really! sorry to hear this Mr Happy, judge lottery strikes again I feel...

 

Effectively his replies were.

 

Point 1 was that a copy of a document is sufficient and the original would make no difference.

 

Not according to CPR and in any event, how can they be sure the two items are connected, which is key to the prescribed terms being in the signature document.

Point 2 I would have had statements from MBNA to prove I used the card.

 

That you used the card is not the issue, and I hope you didnt say No I have not used the card, the issue is whether they can legally collect on the debt due to the a) the application being unenforceable due to the prescribed terms missing and b) The default being invalid.

Point 3 Invalid default notice only applies to cases where large amounts of money are involved so was over ruled.

 

This point is possibly true in regards the financial side, if the amount of difference is small then he may claim its a small error, some judges allow no difference, some will give all the leeway to the banks it can

 

However it doesnt explain the lack of time allowed for service, the legislation for this is quite specific that you must be allowed 14 days, nothing less.

Point 4 letter of assignment can be assumed to be done even if it doesn't exist.

 

Hmm should have asked him where in the law of property act it states this as the law is clear the assignment is ineffectual until you have been advised of it!

Makes a mockery of the legal system and consumer law.

 

No comment

 

I put in a request to take it to appeal that was refused, I can now choose to appeal but I don't think I can be bothered, perhaps I should use the money from the expenses from my last case to pay for this, wanted to give my son a little extra this year because he has gone without for the last few years and been very good about it.

 

Perhaps I can get them back for illegal bank fees if that ever gets off the ground again.

 

Its now down to a personal choice... tbh you didnt give us much warning and we might have been able to put something better together with more time... You might want to consider a solicitor for an appeal if you go down that route.

 

Again, sorry you've not had a good xmas present.

 

S.

[supasnooper]

I'm sorry it didn't go well for you today.

 

Your Judge is not very well clued on Consumer Law obviously reading the comments you have posted.

 

If you can pay the amount owing within 28 days then you will not get a CCJ against your name.

 

Nothing to stop you reclaiming any unfair charges on the account.

Credit card accounts are not subject to the bank charges court case.

 

Personally, I would appeal, but if you have had enough; then so be it.

[citizenB]

Yes, very sorry to hear the outcome of this. As said, the Judge didnt appear to be very clued up. I bet the opposition must have thought Christmas had come early.

[cymruambyth]

Very sorry to hear about the outcome. AS supasnooper said don't dismiss appeal, think about it because alot of his decisions didn't seem legally sound.

[downsouth]

Sorry to hear about that outcome. Perhaps in hindsight you should have gone for adjournment so more time to prepare?

 

I'll help get MBNA back for you I hope. Their claim against me is >10k, there is no signed or true copy agreement AND I have just discovered your thread and, guess what, my Default Notice has exactly the same dates as yours (issued 7/4/09, pay by 24/4/09, ignoring Easter in the middle). My arrears are

 

ds

[NGEddie]

Sorry to hear what happend, so if the amount if higher does that count better for the defective default? and what does a De Minimus issue mean?