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Halifax - dodgy default - agreement now terninated, help!


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If the default notice was sent, then the account terminated, LTWFB is saying that there is no account to charge the £50 to. Terminated, closed, ceased to be.

 

Halifax have issued legal notices, and behave as though nothing has happened, in effect that their legal notices have had no effect on the account. They have, it is closed.

 

Termination of an account does not just mean that they withdraw your line of credit. Also if they have terminated the agreement, they no longer have signed authority to report to credit reference agencies.

 

The letters that you are probably receiving now, are called notices of default sums, probably sent every 2 months with missing payments. These are not Default Notices. They should not send these once the agreement ceases.

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You did... what did you say and what did they say?

I dropped into a long letter that they had issued a DN and termination and that they would need to check CCA 1974 for the consequences of their unlawful rescission of the agreement.

 

First response was, what, we have not terminated the agreement! My reply was DN sent xxxdate by yyy, Termination sent xxxdate also by yyy. Now very quiet.

 

They do not seem to record these legal letters so that the account status changes. They just use them as debt collection tools. Well more fool them.

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Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

Cant see how that would stack up for them, unless the wanted to charge off the account, then see if your offer was better than selling the debt?

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So what if they don't actually terminate the agreement but say they do as a DCA "threat" ?

There is a lot of discussion on what constitutes a termination. There is good argument to say that demanding the ballance in full is termination. Selling it on to a third party, most definitely is.

 

When they sell it though, they must issue you with a notice of assignmnent, under the property act 1925. This is obviously an act of termination.

 

There is a long post by x20. I will try and find it to post.

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From x20

 

 

My fellow Caggers, back to the general issue ..

 

May be it was my doing or we've just hung on to this word 'termination' like Rotweillers. The thing is, at least as I see it is, that where a creditor seeks early repayment or the return of goods following service of an ineffective DN, he is by his words and conduct expressing in clear terms that he is no longer willing to perform the essential obligations he promised to provide under the credit agreement. True, these words and conduct ride on the back of the debtor's failure to perform the debtor's essential obligations. But in this event the creditor has only to follow the procedure laid out in the Act and Regulations. And the Act says unless and until he has met the requirements of the Act and the Regulations, he acquires no such entitlement. Accordingly, to withdraw from the debtor the right to pay sums due by instalments or withdraw the right to continue with possession of the goods is to withdraw in breach of the statutory code which regulates the agreement.

 

The withdrawal of the debtor's rights may in one person's parlance be the same as the creditor's termination of the agreement. Just like 'default' in the words of one person may amount to 'breach' in the words of another. Or 'repudiatory breach' in the language of lawyer A is 'renunciation' in the language of lawyer B. Let's say though, for the purpose of the stream of thinking which follows, that strictly and legally speaking, withdrawal of these rights in default (or breach) isn't a termination of the agreement and that for termination strictly so called to have occured, the creditor miut have served a notice of termination. Does that mean therefore that the creditor's withdrawal and demand for early payment and/or return of goods is something the court can waive? Something the debtor can be expected to have understood was a mistake and unintended? That it is of no consequence?

 

I've got Chitty on Contracts General Principles (26th Edition) (1991). A bit out of date but good enough on General Principles I would have thought. And I'd thought I'd open it. Always a good idea when examining the contractual relationship of parties. Interestingly, 'termination' does not have an entry of its own in the umpteen page index at the back. It says in relation to Renunciation (and if you look up Repudiatory Breach it refers to to the same page number) that:

A renunciation of a contract occurs when one party by words or conduct evinces an intention not to perform, or expressly declares that he is or will be unable to perform, his obligastions under the contract in some essential respect. An absolute refusal by one party to perform his side of the contract will entitle the other party to treat himself as discharged, as will also a clear and unambiguous assertion by one party that he will be unable to perform when the time for performance should arrive. Short of such an express refusal or declaration however, the test is to ascertain whether the action or actions of the party in default are such as to lead a reasonable person to conclude that he no longer intends to be bound by its provisions. The renunciation is then evidenced by conduct. Also, the party in default 'may intend in fact to fulfil (the contract) but may be determined to do so only in a manner substantially inconsistent with his obligations' [Federal Commerce & Navigation Co Limited v Molena Alpha Inc (1979)] or may refuse to perform the contract unless the other party complies with certain conditions not required by its terms. In such a case, there is little difficulty in holding that the contract has been renounced.

 

If one party evinces an intention not to perform or declares his inability to perform some but not all of his obligations under the contract, then the right of the other party to treat himself as discharged depends upon whether the non-performance of those obligations will amount to a breach of a condition of the contract or deprive him of substantially the whole benefit which it was the intention of the parties that he should obtain from the obligations of the parties under the contract then remaining unperformed.

 

The renunciation must be made quite plain. In particular where there is a genuine dispute as to the construction of a contract, the courts may be unwilling to hold that an expression of intentino by one party to carry out the contract only in accordance with his own erroneous interpretation of it amounts to a repudiation and the same is truew of a genuine mistake of fact or law.

The demanding of early payment is to my way of thinking the immediate withdrawal of consent to all the remaining credit provided for under the agreement. Further, that it substantially deprives the debtor of the prime benefit he was to derive under it. Such a demand constitutes a breach of the regulated agreement save where it is demanded in compliance with the Act. If the demanding of such things is not tantamount to the creditor terminating the agreement, it is, nonetheless in my opinion, the creditor's renunciation of it. in consequence and in my opinion, the debtor may fairly regard himself as discharged from the agreement.

 

Chitty has this to say:

 

Consequences of Discharge - Effect on Contract

It has become usual to speak of the exercise by one party to treat himself as discharged as a 'recission' of the contract but as Lord Porter pointed out in Heymans v Darwin limited (1942):

'To say that the contract is rescinded or has come to an end or ceased to exist may in individual cases convey the truth with sufficient accuracy, but the fuller expresion that ther injured party is thereby absolved from future performance of his obligations under the contract is a more exact description of the position. Strictly speaking, to say that on acceptance of the renunciation of a contract the contract is rescinded is incorrect.'

This statement was unanimously approved by The House of Lords in Johnson v Agnew (1980) where Lord Wilberforce emphasised that this so-called 'recission' is quite different from recission ab initio as may arise for example in cases of mistake, fraud or lack of consent. It has also become usual to speak of the contract as having been 'terminated' or 'discharged' by the breach. Again however, these expressions may be somewhat misleading for they might suggest that the contract ceases forv all purposes to exist in that event. Such an approach was indeed adopted by the Court of Appeal in Harbutt's Plastercine Limited v Wayne Tank & Pymp Co (1970) so as to prevent the party in default from relying on an expemtion clause inserted in a contract which had been 'terminated' by breach. But this case was overruled by the House of Lords in Photo Production limited v Securicor Transport limited (1980). The true position was there stated to be, where the innocent party elects to terminate the contrsct, ie to put an end to all primary obligations of both parties remaining unperformed - that (per Lord Diplock) '(a) there is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay money compensation to the other party for the loss sustained by him in consequence of their non-performance in the future and (b) the unperformed primary obligations of that other party are discharged.'

Given Diplock's statement of the position, may be to describe the agreement as 'terminated' following the events we are describing is, to adopt the words of Lord Porter, '.. to convey the truth with sufficient accuracy.'

 

FURTER.

I am yet to be persuaded that in the context of a regulated consumer credit agreement and the receipt of an express notice or activity on the part of the creditor consistent with termination, that the agreement does not terminate unless and until the debtor signifies by word or deed that he accepts termination. The damned notice of termination says what it says.

 

For sure in those cases where the termination amounts to the anticipatory breach of the agreement by one of the parties to that agreement the law says the innocent party should elect either to accept the termination or inform the terminating party that he requires them to perform their obligations owing under the agreement. But we're not concerned with an anticipatory breach by the creditor. It's not as if the creditor having agreed to give credit has then decided not to loan after all. What the creditor is doing is calling in the loan he has already made ahead of the time when it would ordinarily have been repaid.

 

But in a regulated consumer credit agreement, what in reality can the court genuinely expect the innocent, ordinary and unsophisticated debtor to a consumer credit agreement, who is strapped for cash, do in response to the demands of the creditor? Write a letter saying 'I accept your repudiatory breach of contract'?. Of course not. Well I say of course not. That is a ludicrous expectation to hold. Was the Court of Appeal ever concerned to ascertain in Woodchester v Swayne & Co that Swayne had accepted Woodchester's termination on the back of their ineffective DN? Mais non. Swayne & Co had done nothing. Swayne & Co were a firm of solicitors in Cardiff for crissake. Yet they still were treated to the benefits of the Act as one intended for the protection of consumers. Swayne were, according to claue 9.1 of the terms of the agreement between Woodchester and Swayne, in repudiatory breach of contract, entitling Woodchester to immediately terminate the agreement. But all the same, Kennedy LJ held that the provisions of section 87 dictated what Woodchester were required to do in order for Woodchester to become entitled to claim early payment and demand the return of the photocopier let on hire under the agreement. This was regardless of what the agreement said.

 

Indeed in the context of activity, if Swayne & Co had paid some money to Woodchester they would have done themselves a favour because those payments would have been applied to the credit of the arrears.

 

I appreciate that counsel for banks are currently advancing that the absence of some clear acceptance on the part of the debtor operates to negate the meaning and intent of the creditor's express termination. The latest clever arguments seem to be that a DN is not required at all where the agreement has no fixed duration. But that's counsel pushing at the boundaries and thinking out the box in a novel way. All good lawyers do that. They invent and shape their arguments to distinguish their case from those which suggest they're on a loser so as to suit the requirements of their client. They have no idea as they're inventing and shaping that the argument they've conjured will succeed. But they sigh with relief when they appreciate their opponent is a LiP.

 

I do not buy in to the notion that unless the debtor is active or inactive in a way somewhat different to the way he was active or inactive prior to the termination, that the agreement has endured despite the delivery of an express notice of termination, or despite activity on the part of the creditor which is in keeping with the creditor having terminated the agreement. Remember this : when Woodchester v Swayne was first decided, before it got to the Court of Appeal, Assistant Recorder Higginbottom found for the creditor on the basis that

 

"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."

 

The Assistant Recorder did not add 'and because the debtor had failed to serve a notice of acceptance of termination or had conducted itself in a way different to the way it had conducted itself before termination or before the creditor behaved as if the creditor had terminated.'

 

Kennedy regarded the Assistant Recorder's judgment 'as a model of clarity'. But he still found the decision was wrong. He held quite the reverse to the Assistant Recorder. He held the DN was rendered defective because the action indicated as required to be taken to remedy the breach was in fact over and above the action necessary to remedy that breach. He did not qualify that view by saying it was reached owing to the activity or inactivity of the debtor or that his view would have been different depending on what activity or inactivity there may have been on the part of Swayne & Co. As we know, because Swayne got hit with a judgment for the actual arrears, Swayne did nothing.

 

Woodchester v Swayne is still good law. Swayne & Co did the right thing. They were well placed to do the right thing. They were a firm of lawyers. The right thing they did was to appeal the decision. The result speaks for itself.

 

x20

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No, your misunderstanding. Default was registered before the agreement was terminated.

 

a default is normally registered with the cra's when the "relationship" with the creditor has broken down (usually when they terminate)

 

quite apart from whether they are/were entitled to default you if in breach of CCA, they cannot issue a default on your credit file until at least 15 days after they send you the DN

 

the reason they cannot (lawfully) do so is that the DN gives you 14 days to rectify the breach and states that if you do so then it will be as if the breach had never occurred.

 

clearly registering adverse against your CRA files prior to the expiry of this 14 day "grace" in which for you to pay- is unlawful

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Quote:

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

 

Cant see how that would stack up for them, unless the wanted to charge off the account, then see if your offer was better than selling the debt?

 

I have no idea what their reasons were, but have it in writing that they would have to issue a default notice and terminate the account before a reduced payment arrangement acceptance could be constdered.

 

So am wondering if by me making an arrangement with them to make token payments after they have terminated the account I have cocked up with regards to the unlawful recission angle

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Quote:

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

 

 

 

I have no idea what their reasons were, but have it in writing that they would have to issue a default notice and terminate the account before a reduced payment arrangement acceptance could be constdered.

 

So am wondering if by me making an arrangement with them to make token payments after they have terminated the account I have cocked up with regards to the unlawful recission angle

 

that should not IMO be a concern since you are david and they are goliath- so if they told you that the arrangement could not be effected until the agreement was terminated then that is a clear attempt to mislead you and you are not expected to have the same legal knowledge.

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Quote:

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

 

 

 

I have no idea what their reasons were, but have it in writing that they would have to issue a default notice and terminate the account before a reduced payment arrangement acceptance could be constdered.

 

So am wondering if by me making an arrangement with them to make token payments after they have terminated the account I have cocked up with regards to the unlawful recission angle

No, I don't think you have. Once the agreement has been unlawfully rescinded, there is no going back.

 

As dd says above, you can not be expected to understand the law, better than a sifisticated financial company, in order to recognise when you are being mislead.

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Quote:

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

Originally Posted by alfwithhair viewpost.gif

Would it make a difference if it was the other way round. ie They would not come to an agreement until after they had terminated the account?

 

 

 

I have no idea what their reasons were, but have it in writing that they would have to issue a default notice and terminate the account before a reduced payment arrangement acceptance could be constdered.

 

So am wondering if by me making an arrangement with them to make token payments after they have terminated the account I have cocked up with regards to the unlawful recission angle

 

Yes this seems to be common practice, was actually told this by the CAB.

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CAB in most cases concerning debt management are ****-poor IMO.

 

CAG is THE place to be and the advice here is a lot more sound, again, IMO.

 

The key to the above argument is that you DO NOT make ANY payment to them after a recission of contract otherwise they can argue you acknowledged the alleged debt.

 

Clear enough? ;-)

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CAB in most cases concerning debt management are ****-poor IMO.

 

CAG is THE place to be and the advice here is a lot more sound, again, IMO.

 

The key to the above argument is that you DO NOT make ANY payment to them after a recission of contract otherwise they can argue you acknowledged the alleged debt.

 

Clear enough? ;-)

 

Dare I...

 

... argue that the payment is a gift, and the account remains rescinded? Can't undo that, surely?

 

In the same way that making a payment on a statute-barred debt does not reactivate it. Once it's dead, it's dead. Norwegian parrot. Michael Palin. Need a bit of legal here...

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Dare I...

 

... argue that the payment is a gift, and the account remains rescinded? Can't undo that, surely?

 

In the same way that making a payment on a statute-barred debt does not reactivate it. Once it's dead, it's dead. Norwegian parrot. Michael Palin. Need a bit of legal here...

 

At this stage of the game it might be worth seeking a legal opinion.

 

They can't get blood out of a stone, no matter how much they try.

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as an aside, there is a school of thought that says when a creditor issues a DN and makes a statement within it (he is legally bound by any statement he makes ) that if you do not remedy the breach within 14 days etc, he WILL (as opposed to MAY) terminate the agreement..............that you, as an un sophistacted layman are entitled to take him at his word and ASSUME after 14 days that he has in fact DONE that which he (being legally bound by his words) said would be done and that the agreement is terminated!!

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