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Clydesdale/Yuill and Kyle ordinary cause credit card debt


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mystery1 said:

They did not supply original t&c's for the s78 request.

 

Ahh that be why they trying to pass off an attached booklet containing the Terms and Conditions as being within the same four corners of the application document. Sounds like they are clutching at straws, which probably explains why they are so late in entering adjustments.

 

And to be honest i am not of the view that a booklet (brochure) can even be classed as part of a legal document, as am pretty certain that terms and Conditions under Contract must be set out in a prescribed format and i doubt a booklet format is a prescribed format in which a contract can be deemed as binding, infact its nothing more then a brochure that is freely available in the banks branches for all to browse through. Certainly worth looking into or arguing, in the event they turn up to court with a booklet. Even if the agreement was attached to the booklet where it was later ripped off and separated makes it clear that the application and booklet where designed to form two separate documents from the start! If i had a booklet containing a set of terms and conditions and then stapled a application for credit to it, does that then mean the 2 separate documents are 1 and within the same 4 corners of the same document? No it does not, thats why most enforceable agreements are larger then A4 Size and contain all the terms and condition along with the application within the same piece of paper.

 

So yeah i would oppose this if it was me.

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Oppostion will be sent tomorrow with further productions.

 

 

32. Postage receipt dated 18/02/10 for the latest defence of Mum

33. Proof of delivery regarding defence document 32 dated 19/02/10.

34. Cover letter from Yuill & Kyle for 2nd note of adjustments dated 02/03/10.

35. Envelope dated 02/03/10 for defence exhibit 34.

36. Envelope dated 02/02/10 for defence exhibit 38.

37. Envelope dated 08/04/10 for pursuers motion of amendment.

38. Cover letter dated 28/01/10 for the pursuers first inventory of productions and first note of adjustments.

39. Money Laundering Regulations 1993.

 

 

M1

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  • 3 weeks later...

Well to oppose a written motion it costs £40. Have paid and the hearing is tomorrow.

 

I would like any thoughts on the opposition and any counter arguments that anyone can think of.

 

M'Lud, I would like to oppose the Pursuers motion for several reasons. Firstly it would appear that the pursuers have brought about a case without much preparation. They had notice from before they launched this action (defence exhibit 19 dated 16th September) that they had not produced an agreement with all the prescribed terms that are required. During this action they have changed the start date from October 2000 (first record) to March 1997. They have eventually decided that the credit Limit is £800 and produced no proof to substantiate this claim. The application form the pursuers wish to be a binding agreement states that a credit limit of £200 was applied for and approved but nowhere does it state the limit given or how it was to be notified.

 

Secondly. The pursuers have been dragging out proceedings already and don't seem to want to make adjustments in time with the schedule relayed to both parties by the court. My original defence was sent on 18th December for the first options hearing of 17th February. The pursuers did not reply until 02/02/10 (defence exhibit 38) which arrived on the 3rd February 2010 which was the last day of Adjustments. The cover letter contained within this envelope was dated 28/01/10 some 5 days earlier.

 

This lead to my motion at the Option hearing to extend the period of adjustments so i could amend my defence accordingly. This was duly sent to the pursuers and arrived on 19/02/10. (defence exhibits 32 & 33). Again the pursuers replied by sending minor adjustments dated 02/03/10 which arrived on the last day of adjustments. (defence exhibit 34). The options hearing then took place 17/03/10. At no time did the pursuers indicate they needed extra time to prepare.

 

The pursuers were put to strict proof of a valid agreement and a valid default notice. M'lud indicated at the options hearing that they had to provide the agreement and yet they haven't. The motion saught does not bring about proof and therefore should be denied.

 

 

 

 

 

 

 

 

Cheers M1

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Well we went in with :-

 

My Lord,

 

I oppose the motion of the pursuers for the following reasons.

 

The pursuers were put to strict proof of an agreement during the period of adjustments. This was received by them on the 19th February 2010 (exhibits 32 and 33). The 2nd options hearing was on the 17th March 2010. No further defence was put to the professional legal services of the pursuers after 19th February. There was no response from the pursuers until the 2nd March and received the 3rd of March 2010 which was the last day of adjustments. (exhibits 34 and 35). The 2nd options hearing on 17th March 2010 brought about no new evidence or claims and My Lord queried how the Pursuers could prove an agreement. Nothing in the Pursuers proposed Minute of amendment provides strict proof of an agreement.

 

The minute of amendment proposed also mentions a credit limit of £800. No proof is given if this ever was a credit limit let alone the initial limit. Again the booklet they have now found is provided with no proof of origin.

 

My lord if the pursuers had used the period of adjustments as i believe as a lay person they were intended to be then the extra court time and costs could have been reduced or avoided. During the first period of adjustments the initial defence was sent 18th December 2009 and no response was received until I received a reply dated 02/02/10 (defence exhibit 38 and 36) which arrived on the 3rd February 2010 which was again the last day of Adjustments. The cover letter contained within this envelope was dated 28/01/10 some 5 days earlier. This leads me to believe that they are deliberately dragging their feet which amounts to an abuse of process which should not be rewarded.

 

 

For these reasons I wish to oppose the motion.

 

 

 

The Sheriff replied that we may well be right but the rules do allow for amendments and so the motion was granted. I did expect that but wanted to get the point over for the expenses later. I would not have contested the motion if i'd known the costs but after paying special delivery twice wasn't going to let it slide.

 

Have 14 days to answer their amendments after which there is 14 days for adjustments and a rule 18 hearing on the morning of the debate.

 

M1

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Have just typed up the last record and added in the adjustments they sent with the minute of adjustments. I believe i need to supply a copy to the court after the adjustments are over again.

 

The rule 18 hearing is on the morning of the debate in June. The answers to the minute of adjustment need to in next week before the 14 days of further adjustment.

 

 

Took me ages to type that up so i'll have a break before actually started to answer the new points.

 

M1

Edited by MARTIN3030
Removing personal details
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Cheers Monty. Must have missed that.

 

Do you have any thoughts on cca section 59 ?

 

I am also going to introduce failure to comply with money laundering and check out if i can introduce failure to have a system for storing the microfiche.

 

M1

 

Instead of delete smith and put jones etc i just said delete all and started again. Have added in section 59, 85 and money laundering. Any thoughts before i send tomorrow afternoon ?

 

Cheers M1

 

 

 

 

 

 

1.Delete answer 2 and replace with “The averments regarding the defender admitted. The existence of jurisdiction is admitted. It is explained that these proceedings were raised at a time when the Pursuer had advised that they were investigating a complaint raised 16th September 2009 to which they issued a final written response dated 23rd November 2009 which came after letters dated 14th October 2009 and 11th November 2009 stating they would be in touch. The initial writ was dated 13th November 2009.

2.Delete answer 3 and replace with ”It is denied that the defender applied for a mastercard on or around October 2000. It is explained that the pursuer has sent an application form from 1997 in the First List Of Productions. The defender craves the Pursuer be put to strict proof of an agreement which complies with the Consumer Credit Act 1974 and Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553). The pursuers state they no longer hold the principal agreement but have retained an electronic copy. The defender puts the pursuer to strict proof that this electronic copy has been sent to archive and stored in a competent manner which has preserved the integrity of the document. The Defender craves an explanation as to why the pursuers no longer holds the principal agreement.

 

The Money Laundering Regulations 1993

Record-keeping procedures

12.—(1)Record-keeping procedures maintained by a person are in accordance with this regulation if they require the keeping, for the prescribed period, of the following records—

(a)in any case where, in relation to any business relationship that is formed or one-off transaction that is carried out, evidence of a person's identity is obtained under procedures maintained in accordance with regulation 7 or 9 above, a record that indicates the nature of the evidence and—

(i)comprises a copy of the evidence;

(ii)provides such information as would enable a copy of it to be obtained; or

(iii)in a case where it is not reasonably practicable to comply with paragraph (i) or (ii) above, provides sufficient information to enable the details as to a person's identity contained in the relevant evidence to be re-obtained; and

(b)a record containing details relating to all transactions carried out by that person in the course of relevant financial business.

 

(2)For the purposes of paragraph (1) above, the prescribed period is, subject to paragraph (3) below, the period of at least five years commencing with—

(a)in relation to such records as are described in sub-paragraph (a), the date on which the relevant business was completed within the meaning of paragraph (4) below; and

(b)in relation to such records as are described in sub-paragraph (b), the date on which all activities taking place in the course of the transaction in question were completed.

 

(3)Where a person who is bound by the provisions of regulation 5(1) above—

(a)forms a business relationship or carries out a one-off transaction with another person;

(b)has reasonable grounds for believing that that person has become insolvent; and

©after forming that belief, takes any step for the purpose of recovering all or part of the amount of any debt payable to him by that person which has fallen due;

the prescribed period for the purposes of paragraph (1) above is the period of at least five years commencing with the date on which the first such step is taken.

 

(4)For the purposes of paragraph (2)(a) above, the date on which relevant business is completed is, as the case may be—

(a)in circumstances falling within Case 1, the date of the ending of the business relationship in respect of whose formation the record under paragraph (1)(a) above was compiled;

(b)in circumstances falling within Case 2 or 3, the date of the completion of all activities taking place in the course of the one-off transaction in respect of which the record under paragraph (1)(a) above was compiled;

©in circumstances falling within Case 4, the date of the completion of all activities taking place in the course of the last one-off transaction in respect of which the record under paragraph (1)(a) above was compiled;

and where the formalities necessary to end a business relationship have not been observed, but a period of five years has elapsed since the date on which the last transaction was carried out in the course of that relationship, then the date of the completion of all activities taking place in the course of that last transaction shall be treated as the date on which the relevant business was completed.

Refernce is also made to future acts of the same regulations 2003 section (6) and 2007 (19).

 

Section 59 of the consumer credit act

“Agreement to enter future agreement void

(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

(2) Regulations may exclude from the operation of subsection (1) agreements such as

are described in the regulations.

 

 

 

3.Not withstanding the above, Under the Act there are certain conditions laid down by parliament which must be complied with if such agreement is to be enforced by the courts:-

 

Firstly, the agreement must contain certain Prescribed terms under regulations made by the Secretary of State under Section 60(1) of the Act, 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:

 

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.*

 

It is explained that the documents supplied by the Pursuer do not confirm to the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) in so far that the Prescribed Terms are not contained within the agreement. These terms must be contained within the Agreement to be compliant with Section 60(1)(a) of the Act. The Court of Appeal case law, Wilson and another v Hurstanger Ltd [2007] is applicable as is the judgment of TUCKEY LJ in the case of Wilson and Anor v Hurstanger Ltd [2007] EWCA Civ 299"[11] Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated consumer Credit Agreements". Some of this information mirrors the terms prescribed by Schedule 6, but some does not. Contrasting the provisions of the two schedules the Judge said:

 

“33 In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the Court can identify within the four corners of the Agreement. Those minimum provisions combined with the requirement under s61 that all the terms should be in a single document, and backed up by the provisions of s127(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."

 

If the Agreement does not contain these terms in the prescribed manner it does not comply with section 60(1)(a) of the Act, the consequences of which means it is improperly executed and only enforceable by Court order. Notwithstanding this point, the Agreement must be signed in the prescribed manner to comply with Section 61(1)(a) of the Act. If the Agreement is not signed by Debtor or Creditor, it is also improperly executed and again only enforceable by Court order, although without a Debtor’s Signature, enforcement would not be possible.

 

I now wish to make reference to an excerpt of case law from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch).

 

In Wilson v Secretary of State for Trade and Industry [2003] UKHL 40, [2004] 1 AC 816, [2003] 4 All ER 97, the House of Lords explained that the 1974 Act was, like the Moneylenders Act 1927 before it, designed to tackle a significant social problem. The activities of some moneylenders have given the money lending business a bad reputation. Something had to be done to protect the borrower, who frequently, indeed normally, would be in a weak bargaining position. Protection of borrowers is the social policy behind the legislation. Part of that policy is to be achieved by setting stringent rules, which have to be complied with by the lender if his money lending Agreement is to be enforceable. The strictness of the discipline imposed on lenders is illustrated by the following passage in the speech of Lord Nicholls:

 

"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. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

 

The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face, considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach…

 

Despite [criticism in the Crowther report] I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, deciding that failure to comply with certain formalities is an essential prerequisite to enforcement of certain types of Agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the Court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumers adequately…"

 

The message from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch), is that the Consumer Credit Act is clearly enacted to protect consumers such as myself and therefore the Claimant’s failures to supply the information and their general behaviour in this matter should be noted accordingly, giving consideration to the case law and the facts as set out within this Defence.

 

The courts powers of enforcement where agreements are improperly executed by way of Section 65 of the Act are themselves subject to certain qualifying factors. Under Section 127(3) of the Act the requirements are laid out clearly what is required for the court to be able to enforce the agreement where Section 65(1) of the Act has not been complied with.*

 

Section 127(3). The Court shall not make an enforcement order under Section 65(1) if Section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under Section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

The Courts attention is also drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the Consumer Credit Act 1974 and the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and Consumer Credit (Agreements) (Amendment) Regulations 2004 (SI2004/1482) the Agreement cannot be enforced.

 

With regards to the Authority cited above, I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul):

 

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

 

It is also explained that Schedule 3, Section 11 of the Consumer Credit Act 2006 prevents Section 15 repealing Section 127 (3) of the 1974 Act for agreements made before Section 15 came into effect. Since any agreement would have commenced prior to the inception of the Consumer Credit Act 2006, Section 15 of the 2006 Act has no effect and hence the Consumer Credit Act 1974 is the relevant act in this case.

 

The Consumer Credit Act 2006, Schedule 3, Transitional Provision and Savings:

 

11 The repeal by this Act of-

(a) The words”(subject to subsections (3) and (4))” in subsection (1) of Section 127 of the 1974 Act,

(b) Subsections (3) to (5) of that section, and

© the words “or 127(3)” in subsection (3) of Section 185 of that act, has no effect in relation to improperly-executed Agreements made before the commencement of Section 15 of this Act.

 

It is explained that the application form from 1997 that has been produced does not specify what the credit limit is but merely contains a request for a limit and a section for bank use only which states that a limit of £200 has been sanctioned which was not present upon the signature of the defender. It is denied that the credit limit was £800 and it is explained that the Defender has no recollection of this and thus the Defender puts the Pursuer to strict proof that the credit limit was £800.

 

It is explained that there is no interest rate on the application and no reference to another document where it can be found. The defender does not recollect receiving a separate document prior to signing the application form. The pursuers averments that the application was folded and attached to a booklet raise doubts to the defender as there appear to be no folds in the microfiche copy and there is no immediate sign of perforation as stated.

 

It is explained that there is no explanation of how the defender would pay back any money due under an agreement.

 

 

 

The defender has not been sent any copies of an executed agreement in accordance with section 85 of the act.

The defender puts the pursuers to strict proof that section 85 of the act has been complied with. “85. (1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it

(2) If the creditor fails to comply with this section -

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

(3)This section does not apply to a small agreement.

 

 

 

 

It is explained that there is a 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. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory time 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).

 

4. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) 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.

 

5. 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).

 

6. 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.

 

7. 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…

 

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

 

9. 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.

 

10. 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.

 

11. 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.

 

12. 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.

 

13. 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.

 

14. 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 the 7th July 2009. 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.

 

Quoad ultra denied.

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Mystery-have moved your attatchment since it contained identifiers.

Thanks to Old Andrew for spotting it.

If you can remove the last part-then re-submit.

Have a happy and prosperous 2013 by avoiiding Payday loans. If you are sent a private message directing you for advice or support with your issues to another website,this is your choice.Before you decide,consider the users here who have already offered help and support.

Advice offered by Martin3030 is not supported by any legal training or qualification.Members are advised to use the services of fully insured legal professionals when needed.

 

 

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  • 3 weeks later...

After some reading of Macphail and another Hennesey if replied to their amendment.

 

 

SHERIFFDOM OF Tayside, Central and Fife At Cupar

 

Court Ref. No. x

Amended Defence/Answers For The Defender To Minute Of Amendment For Pursuers

In the cause of

 

Clydesdale Bank Plc

30 St Vincent Place

Glasgow

G1 2HL

 

PURSUER(S)

 

Against

 

mum

house

DEFENDER

 

 

1. Delete answer 2 and replace with “The averments regarding the defender admitted. The existence of jurisdiction is admitted. It is explained that these proceedings were raised at a time when the Pursuer had advised that they were investigating a complaint raised 16th September 2009 to which they issued a final written response dated 23rd November 2009 which came after letters dated 14th October 2009 and 11th November 2009 stating they would be in touch. The initial writ was dated 13th November 2009.

 

2. Delete answer 3 and replace with ”It is denied that the defender applied for a mastercard on or around October 2000. It is explained that the pursuer has sent an application form from 1997 in the First List Of Productions. The defender craves the Pursuer be put to strict proof of an agreement which complies with the Consumer Credit Act 1974 and Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553). The pursuers state they no longer hold the principal agreement but have retained an electronic copy. The defender puts the pursuer to strict proof that this electronic copy complies with BSI DISC PD 0008, the international standard of electronic document retention since 1996. The Defender craves an explanation as to why the pursuer no longer holds the principal agreement.

 

The Money Laundering Regulations 1993

Record-keeping procedures

12.—(1)Record-keeping procedures maintained by a person are in accordance with this regulation if they require the keeping, for the prescribed period, of the following records—

(a)in any case where, in relation to any business relationship that is formed or one-off transaction that is carried out, evidence of a person's identity is obtained under procedures maintained in accordance with regulation 7 or 9 above, a record that indicates the nature of the evidence and—

(i)comprises a copy of the evidence;

(ii)provides such information as would enable a copy of it to be obtained; or

(iii)in a case where it is not reasonably practicable to comply with paragraph (i) or (ii) above, provides sufficient information to enable the details as to a person's identity contained in the relevant evidence to be re-obtained; and

(b)a record containing details relating to all transactions carried out by that person in the course of relevant financial business.

 

(2)For the purposes of paragraph (1) above, the prescribed period is, subject to paragraph (3) below, the period of at least five years commencing with—

(a)in relation to such records as are described in sub-paragraph (a), the date on which the relevant business was completed within the meaning of paragraph (4) below; and

(b)in relation to such records as are described in sub-paragraph (b), the date on which all activities taking place in the course of the transaction in question were completed.

 

(3)Where a person who is bound by the provisions of regulation 5(1) above—

(a)forms a business relationship or carries out a one-off transaction with another person;

(b)has reasonable grounds for believing that that person has become insolvent; and

©after forming that belief, takes any step for the purpose of recovering all or part of the amount of any debt payable to him by that person which has fallen due;

the prescribed period for the purposes of paragraph (1) above is the period of at least five years commencing with the date on which the first such step is taken.

 

(4)For the purposes of paragraph (2)(a) above, the date on which relevant business is completed is, as the case may be—

(a)in circumstances falling within Case 1, the date of the ending of the business relationship in respect of whose formation the record under paragraph (1)(a) above was compiled;

(b)in circumstances falling within Case 2 or 3, the date of the completion of all activities taking place in the course of the one-off transaction in respect of which the record under paragraph (1)(a) above was compiled;

©in circumstances falling within Case 4, the date of the completion of all activities taking place in the course of the last one-off transaction in respect of which the record under paragraph (1)(a) above was compiled;

and where the formalities necessary to end a business relationship have not been observed, but a period of five years has elapsed since the date on which the last transaction was carried out in the course of that relationship, then the date of the completion of all activities taking place in the course of that last transaction shall be treated as the date on which the relevant business was completed.

Reference is also made to future acts of the same regulations 2003 section (6) and 2007 (19).

 

Section 59 of the consumer credit act

“Agreement to enter future agreement void

(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

(2) Regulations may exclude from the operation of subsection (1) agreements such as

are described in the regulations.

 

 

Not withstanding the above, Under the Act there are certain conditions laid down by parliament which must be complied with if such agreement is to be enforced by the courts:-

 

Firstly, the agreement must contain certain Prescribed terms under regulations made by the Secretary of State under Section 60(1) of the Act, 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:

 

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.*

 

It is explained that the documents supplied by the Pursuer do not confirm to the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) in so far that the Prescribed Terms are not contained within the agreement. These terms must be contained within the Agreement to be compliant with Section 60(1)(a) of the Act. The Court of Appeal case law, Wilson and another v Hurstanger Ltd [2007] is applicable as is the judgment of TUCKEY LJ in the case of Wilson and Anor v Hurstanger Ltd [2007] EWCA Civ 299"[11] Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated consumer Credit Agreements". Some of this information mirrors the terms prescribed by Schedule 6, but some does not. Contrasting the provisions of the two schedules the Judge said:

 

“33 In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the Court can identify within the four corners of the Agreement. Those minimum provisions combined with the requirement under s61 that all the terms should be in a single document, and backed up by the provisions of s127(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."

 

If the Agreement does not contain these terms in the prescribed manner it does not comply with section 60(1)(a) of the Act, the consequences of which means it is improperly executed and only enforceable by Court order. Notwithstanding this point, the Agreement must be signed in the prescribed manner to comply with Section 61(1)(a) of the Act. If the Agreement is not signed by Debtor or Creditor, it is also improperly executed and again only enforceable by Court order, although without a Debtor’s signature, enforcement would not be possible.

 

I now wish to make reference to an excerpt of case law from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch).

 

In Wilson v Secretary of State for Trade and Industry [2003] UKHL 40, [2004] 1 AC 816, [2003] 4 All ER 97, the House of Lords explained that the 1974 Act was, like the Moneylenders Act 1927 before it, designed to tackle a significant social problem. The activities of some moneylenders have given the money lending business a bad reputation. Something had to be done to protect the borrower, who frequently, indeed normally, would be in a weak bargaining position. Protection of borrowers is the social policy behind the legislation. Part of that policy is to be achieved by setting stringent rules, which have to be complied with by the lender if his money lending Agreement is to be enforceable. The strictness of the discipline imposed on lenders is illustrated by the following passage in the speech of Lord Nicholls:

 

"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. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

 

The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face, considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach…

 

Despite [criticism in the Crowther report] I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, deciding that failure to comply with certain formalities is an essential prerequisite to enforcement of certain types of Agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the Court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumers adequately…"

 

The message from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch), is that the Consumer Credit Act is clearly enacted to protect consumers such as myself and therefore the Claimant’s failures to supply the information and their general behaviour in this matter should be noted accordingly, giving consideration to the case law and the facts as set out within this Defence.

 

The courts powers of enforcement where agreements are improperly executed by way of Section 65 of the Act are themselves subject to certain qualifying factors. Under Section 127(3) of the Act the requirements are laid out clearly what is required for the court to be able to enforce the agreement where Section 65(1) of the Act has not been complied with.*

 

Section 127(3). The Court shall not make an enforcement order under Section 65(1) if Section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under Section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

The Courts attention is also drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) which confirms that where a document does not contain the required terms under the Consumer Credit Act 1974 and the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and Consumer Credit (Agreements) (amendment) Regulations 2004 (SI2004/1482) the Agreement cannot be enforced.

 

With regards to the Authority cited above, I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul):

 

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

 

It is also explained that Schedule 3, Section 11 of the Consumer Credit Act 2006 prevents Section 15 repealing Section 127 (3) of the 1974 Act for agreements made before Section 15 came into effect. Since any agreement would have commenced prior to the inception of the Consumer Credit Act 2006, Section 15 of the 2006 Act has no effect and hence the Consumer Credit Act 1974 is the relevant act in this case.

 

The Consumer Credit Act 2006, Schedule 3, Transitional Provision and Savings:

 

11 The repeal by this Act of-

(a) The words”(subject to subsections (3) and (4))” in subsection (1) of Section 127 of the 1974 Act,

(b) Subsections (3) to (5) of that section, and

© the words “or 127(3)” in subsection (3) of Section 185 of that act, has no effect in relation to improperly-executed Agreements made before the commencement of Section 15 of this Act.

 

Sir Andrew Morritt, Vice Chancellor in Wilson v First County Trust Ltd [2001] EWCA Civ 633 said at para 26 that in the case of an unenforceable agreement:-

“In effect, the creditor – by failing to ensure that he obtained a document signed by the debtor which contained all the prescribed terms – must (in the light of the provisions in sections 65(1) and 127(3) of the 1974 Act) be taken to have made a voluntary disposition, or gift, of the loan monies to the debtor. The creditor had chosen to part with the monies in circumstances in which it was never entitled to have them repaid”

 

 

It is explained that the application form from 1997 that has been produced does not specify what the credit limit is but merely contains a request for a limit and a section for bank use only which states that a limit of £200 has been sanctioned which was not present upon the signature of the defender. It is denied that the credit limit was £800 and it is explained that the Defender has no recollection of this and thus the Defender puts the Pursuer to strict proof that the credit limit was £800.

 

It is explained that there is no interest rate on the application and no reference to another document where it can be found. The defender does not recollect receiving a separate document prior to signing the application form. The pursuers averments that the application was folded and attached to a booklet raises doubts to the defender as there appear to be no folds in the microfiche copy and there is no immediate sign of perforation as stated. The pursuers averments regarding the interest rate are denied.

 

It is explained that there is no explanation of how the defender would pay back any money due under an agreement.

 

 

 

 

 

The defender has not been sent any copies of an executed agreement in accordance with section 85 of the act.

The defender puts the pursuers to strict proof that section 85 of the act has been complied with. “85. (1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it

(2) If the creditor fails to comply with this section -

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

(3)This section does not apply to a small agreement.

 

 

 

 

It is explained that there is a 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. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory time 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).

 

4. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) 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.

 

5. 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).

 

6. 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.

 

7. 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…

 

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

 

9. 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.

 

10. 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.

 

11. 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.

 

12. 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.

 

13. 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.

 

14. 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 the 7th July 2009. 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.

 

Quoad ultra denied.

 

Delete pleas in law and replace with :-

 

PLEAS-IN-LAW For Defender

 

1. The PURSUER’S averments are irrelevant et separatim lacking in specification, the action should be dismissed

 

2. The Pursuers having only an agreement to enter future agreement which is void under section 59 of the consumer credit act 1974 are not entitled to any proceeds, decree of absolvitor should be pronounced as craved.

 

 

3. The pursuers having failed to prove a valid agreement within the scope of the consumer credit act 1974 and its associated statutory instruments particularly prescribed terms are missing. Accordingly this alleged debt is unenforceable under section 127(3) of the same act. The defender craves that the court uses its powers under section 142 of the consumer credit act 1974 to dismiss this action as unenforceable.

 

4. The pursuers having failed to prove they have validly terminated any agreement in accordance with sections 87 and 88 of the consumer credit act and as such having unlawfully rescinded any contract that might otherwise be proven to exist, decree of absolvitor in favour of the defender should be pronounced as craved.

 

5. The Defender denies the sums being claimed as due and the resting owing decree should not be granted as craved.

 

 

 

 

 

 

 

SHERIFFDOM OF Tayside, Central and Fife At Cupar

 

Court Ref. No. A

Rule 18.8 note

In the cause of

 

Clydesdale Bank Plc

30 St Vincent Place

Glasgow

G1 2HL

 

PURSUER(S)

 

Against

 

mum

DEFENDER

 

 

Dear Sir/Madam,

 

The Defender in the above case hereby gives notice of pleas-in-law upon which they seek to rely.

 

PLEAS-IN-LAW For Defender

 

1. The PURSUER’S averments are irrelevant et separatim lacking in specification, the action should be dismissed

 

2. The Pursuers having only an agreement to enter future agreement which is void under section 59 of the consumer credit act 1974 are not entitled to any proceeds, decree of absolvitor should be pronounced as craved.

 

 

3. The pursuers having failed to prove a valid agreement within the scope of the consumer credit act 1974 and its associated statutory instruments particularly prescribed terms are missing. Accordingly this alleged debt is unenforceable under section 127(3) of the same act. The defender craves that the court uses its powers under section 142 of the consumer credit act 1974 to dismiss this action as unenforceable.

 

4. The pursuers having failed to prove they have validly terminated any agreement in accordance with sections 87 and 88 of the consumer credit act and as such having unlawfully rescinded any contract that might otherwise be proven to exist, decree of absolvitor in favour of the defender should be pronounced as craved.

 

5. The Defender denies the sums being claimed as due and the resting owing decree should not be granted as craved.

 

 

 

 

Added another 2 items to inventory of productions.

 

43. Wilson v First County Trust Ltd [2001] EWCA Civ 633

44. British Standards Institution (BSI) BIP 0008

 

 

 

 

 

Surprised they didn't adjust after the initial minute.

 

M1

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Well it is the debate tomorrow. Have sent in written submissions to the Sheriff as advised. It can't be changed but obviously they will argue with it. Any pointers welcome.

 

 

 

 

 

SHERIFFDOM OF Tayside, Central and Fife

 

Case no. x

 

AT Cupar Sheriff Court

 

Written submission for Debate for the defender

 

in the cause

 

Clydesdale Bank Plc

30 St Vincent Place

Glasgow

G1 2HL

 

Pursuer

 

Against

 

Mum

Defender

 

 

 

 

My Lord, I am the Defender, Mum, in this case. I believe Mr x appears on behalf of the Pursuers. This is a debate in relation to the Pursuers pleas-in-law 1,2,3 & 4 and the Defenders pleas-in-law 1,2,3,4 & 5. The Defenders are seeking dismissal of the action.

 

For ease I will refer to Defenders list of production as dp with the corresponding number e.g. (dp1) consumer credit act 1974

 

As your Lordship will see, this case concerns an alleged credit card agreement regulated by the consumer credit act 1974 which the Defender applied for on the 6th March 1997. The pursuer says that a valid agreement was completed and all statutory obligations were fulfilled by them and that they are legally owed £9xxx which is the sum sued for with expenses. The Defender admits to filling in an application but denies that any agreement is legally valid or that statutory duties have been fulfilled by the Pursuers.

 

The Defenders have 5 Pleas-in-law which are on page 13 of the Closed Record (as Amended). The Pursuers have 4 pleas-in-law which are on page 12 of the Closed Record (as Amended). The rule 22 note for the Pursuers is for their Plea-in-law number 4 only. The Defenders have lodged a rule 18.8 note in support of their pleas-in-law. As your Lordship will see from the rule 18.8 note the Defenders position is that the Pursuers pleadings are irrelevant, that plea-in-law for the Defender number 1 should be upheld, and that the action should be dismissed.

 

The Defenders further hold the view that on the facts as shown there is no valid agreement and that even if the Pursuers can prove that all the required prescribed terms are contained in the agreement the claim is still bound to fail and that plea-in-law 2 should be upheld and the Defender should be assoilzied.

 

The Defenders also state that the Pursuers have not shown that they have an agreement with all the statutory provisions. Plea-in-law 3 for the Defender should be upheld and the court should declare the agreement unenforceable and dismissal should be granted.

 

The Defenders also believe the Pursuers have unlawfully rescinded any agreement which may be proven to exist plea-in-law 4 for the defender should be upheld and the Defender should be assoilzied.

 

 

I would propose to address your Lordship in detail as follows:

 

1. I will review the relevant averments made by the pursuer regarding credit card application and the status of any agreement.

2. I would propose to consider the detail averments against the Defender (which your Lordship will find in Article 3 of condescendence)

3. I will address your Lordship on the authorities applicable to a claim of this nature which will indicate the particular facts, and therefore, the particular averments, which would have to be present before it would be possible for the Pursuer to succeed with the claim against the Defenders in these circumstances.

4. I will then demonstrate that in the absence of these averments the Pursuers case is bound to fail.

 

In doing this, I am of course aware that the Pursuers averments have to be read as if they are true. I believe that the Pursuers pleadings plainly fail to satisfy the tests of relevancy and specification and decree of dismissal will be merited

 

Your Lordship will find that the Pursuers averments are that the Defender has an agreement for a credit card with the Pursuer and has defaulted on payment and as such they have terminated the agreement and seek the return of their money. (Condescendence 3 pages 2-6 of the closed record (as amended)) The pursuer lists some statements and letters to the defender.

 

 

I would also like to direct your Lordship to the averments which the Pursuer makes regarding the Defender. Your Lordship will find that the only averments relating to the Defender are as follows :

 

1. In condescendence 1 on page 1 of the closed record (as amended) the pursuer simply describes the Defender by reference to their address.

2. In condescendence 2 on page 2 of the closed record (as amended) the pursuer simply describes the Defender by reference to their address and nationality.

3. In condescendence 3 on page 2 of the closed record (as amended) the pursuers aver “On or around October, 2000 the Defender approached the Pursuers with regard to the Pursuers supplying the defender with a Mastercard credit card.”

4. In condescendence 3 on page 2 of the closed record (as amended) the pursuers aver “on or around October, 2008 the Defender reported the card lost or stolen”

5. In condescendence 3 on page 2 of the closed record (as amended) the pursuers aver “the Defender operated her account satisfactorily until August, 2009.”

6. In condescendence 3 on page 4 of the closed record (as amended) the pursuers aver “on or around September, 2009 the Defender defaulted on said agreement and failed to make payment of the minimum payment”

7. In condescendence 3 on page 5 of the closed record (as amended) the pursuers aver “Reference is made to the pursuers’ letter dated 17thth September, 2001. Explained and averred that the Defender has failed to make any payment since that date.”

8. In condescendence 3 on page 5 of the closed record (as amended) the pursuers aver “The Pursuers have requested the Defender to make payment of said sum, but the Defender has refused or at least delayed to make payment of the sum sued.”

9. In condescendence 3 on page 5 of the closed record (as amended) the pursuers aver “This part of the document together with the said application form was signed by the Defender on 6th March, 1997”

 

 

Now, My Lord, that is, so far as I can see, the full extent of the pursuers pleadings and their position regarding an agreement signed by the defender.

 

 

The first legal point upon which I wish to address your Lordship at this stage is whether the agreement (Pursuers first inventory of productions number 1) was in fact valid. I would like to refer your Lordship to the Consumer Credit Act 1974 (dp 1) section 59. “Agreement to enter future agreement void

(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

(2) Regulations may exclude from the operation of subsection (1) agreements such as

are described in the regulations.”

 

I would then like to refer your Lordship to Consumer Credit (Agreements to enter Prospective Agreements) (Exemptions)Regulations 1983 (dp 40)

With reference to the agreement (Pursuers first inventory of productions number 1) I would point out to your Lordship that the main heading is “access application” I would further point out that in the box 4th from the bottom on the right hand side it states “ I understand that the bank reserves the right to decline the application”

In the box underneath it says “this is a Credit Agreement regulated by the consumer credit act 1974.

Sign only if you want to be legally bound by it’s terms”

I would also refer your Lordship to Lord Wilberforce in Saunders v Anglia Building Soc (sub nom Gallie v Lee) [1970] UKHL 5 (09 November 1970)(dp47) where he states"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".

 

This is further backed up Lord Justice Scott in Norwich and Peterborough BS v Steed [1992] EWCA Civ 5 (05 March 1992)(dp46) where he states'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'

 

 

The agreement (Pursuers first inventory of productions number 1) has been signed by a representative of the bank.

It is clear that this is a “prospective regulated agreement” as per CCA 1974 s. 59(1) and it is also clear from Consumer Credit (Agreements to enter Prospective Agreements) (Exemptions)Regulations 1983 (dp 40) that there is no exemption for this type of agreement.

It is the defenders submission that any agreement was legally void before it even started and as such even if the Pursuer can prove the agreement exists and contains all the information that is obliged to be there by statute then the action still fails and I move your Lordship to sustain Plea-in-law 2 or alternatively Plea-in-law 1.

 

 

 

If your Lordship is not with me on this point then I move on to my second point.

Under the Consumer Credit Act 1974 (dp1) there are certain conditions laid down by parliament which must be complied with if such agreement is to be enforced by the courts:-

 

Firstly, the agreement must contain certain Prescribed terms under regulations made by the Secretary of State under Section 60(1) of the Act, the regulations referred to are the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) (dp4). The prescribed terms for a Running credit account as set out below:

 

The prescribed terms referred to are contained in schedule 6 column 2 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) (dp4) 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.*

 

It is explained that the documents supplied by the Pursuer do not confirm to the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553)(dp4) in so far that the Prescribed Terms are not contained within the agreement. These terms must be contained within the Agreement to be compliant with Section 60(1)(a) of the Act (dp1). The Court of Appeal case law, Wilson and another v Hurstanger Ltd [2007] (dp11) is applicable as is the judgment of TUCKEY LJ in the case of Wilson and Anor v Hurstanger Ltd [2007] EWCA Civ 299"[11] (dp11) Schedule 1 to the 1983 Regulations sets out the "information to be contained in documents embodying regulated consumer Credit Agreements". Some of this information mirrors the terms prescribed by Schedule 6, but some does not. Contrasting the provisions of the two schedules the Judge said:

 

“33 In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties (with the benefit of legal advice if necessary) and/or the Court can identify within the four corners of the Agreement. Those minimum provisions combined with the requirement under s61 that all the terms should be in a single document, and backed up by the provisions of s127(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."

 

If the Agreement does not contain these terms in the prescribed manner it does not comply with section 60(1)(a) of the Act, the consequences of which means it is improperly executed and only enforceable by Court order. Notwithstanding this point, the Agreement must be signed in the prescribed manner to comply with Section 61(1)(a) of the Act. If the Agreement is not signed by Debtor or Creditor, it is also improperly executed and again only enforceable by Court order, although without a Debtor’s signature, enforcement would not be possible.

 

I now wish to make reference to an excerpt of case law from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch). (dp13)

 

In Wilson v Secretary of State for Trade and Industry [2003] UKHL 40, [2004] 1 AC 816, [2003] 4 All ER 97, the House of Lords explained that the 1974 Act was, like the Moneylenders Act 1927 before it, designed to tackle a significant social problem. The activities of some moneylenders have given the money lending business a bad reputation. Something had to be done to protect the borrower, who frequently, indeed normally, would be in a weak bargaining position. Protection of borrowers is the social policy behind the legislation. Part of that policy is to be achieved by setting stringent rules, which have to be complied with by the lender if his money lending Agreement is to be enforceable. The strictness of the discipline imposed on lenders is illustrated by the following passage in the speech of Lord Nicholls:

 

"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. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

 

The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face, considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach…

 

Despite [criticism in the Crowther report] I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, deciding that failure to comply with certain formalities is an essential prerequisite to enforcement of certain types of Agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the Court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumers adequately…"

 

The message from the case of Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch)(dp13), is that the Consumer Credit Act is clearly enacted to protect consumers such as myself and therefore the Claimant’s failures to supply the information and their general behaviour in this matter should be noted accordingly, giving consideration to the case law and the facts as set out within this Defence.

 

The courts powers of enforcement where agreements are improperly executed by way of Section 65 of the Act are themselves subject to certain qualifying factors. Under Section 127(3) of the Act the requirements are laid out clearly what is required for the court to be able to enforce the agreement where Section 65(1) of the Act has not been complied with.

 

Section 127(3). The Court shall not make an enforcement order under Section 65(1) if Section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under Section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

The Courts attention is also drawn to the authority of the House of Lords in Wilson-v- FCT [2003] All ER (D) 187 (Jul) (dp43) 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)(dp4) and Consumer Credit (Agreements) (amendment) Regulations 2004 (SI2004/1482) (dp8)the Agreement cannot be enforced.

 

With regards to the Authority cited above, I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul):

 

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

 

It is also explained that Schedule 3, Section 11 of the Consumer Credit Act 2006 prevents Section 15 repealing Section 127 (3) of the 1974 Act for agreements made before Section 15 came into effect. Since any agreement would have commenced prior to the inception of the Consumer Credit Act 2006, Section 15 of the 2006 Act has no effect and hence the Consumer Credit Act 1974 is the relevant act in this case.

 

The Consumer Credit Act 2006 (dp2), Schedule 3, Transitional Provision and Savings:

 

11 The repeal by this Act of-

(a) The words”(subject to subsections (3) and (4))” in subsection (1) of Section 127 of the 1974 Act,

(b) Subsections (3) to (5) of that section, and

© the words “or 127(3)” in subsection (3) of Section 185 of that act, has no effect in relation to improperly-executed Agreements made before the commencement of Section 15 of this Act.

 

Sir Andrew Morritt, Vice Chancellor in Wilson v First County Trust Ltd [2001] EWCA Civ 633 (dp43) said at para 26 that in the case of an unenforceable agreement:-

“In effect, the creditor – by failing to ensure that he obtained a document signed by the debtor which contained all the prescribed terms – must (in the light of the provisions in sections 65(1) and 127(3) of the 1974 Act) be taken to have made a voluntary disposition, or gift, of the loan monies to the debtor. The creditor had chosen to part with the monies in circumstances in which it was never entitled to have them repaid”

 

 

My Lordship, May I direct you to the Closed Record (as Amended) page 5 whereby the Pursuer admits they no longer hold the principal agreement. If your Lordship may recall as far back as the second options hearing on 17th March 2010 at which time your Lordship raised the matter of proof of any agreement with the Pursuers and questioned how they would prove the debt and thereby that the agreement is enforceable. To date there has been no proof but the pursuer has made the above admission. It is the Defenders submission that the Pursuer cannot prove they have a legitimate claim and as such their pleadings are irrelevant. I move your Lordship to sustain plea-in-law 3 for the Defender.

 

 

If your Lordship is not with me on my above to points I would therefore add further that:

 

It is explained that there is a 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 (dp1) 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. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory time 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)(dp9) and amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (amendment) Regulations 2004 (SI 2004/3237)(dp16).

 

4. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339)(dp14) 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. (dp15)

 

5. It is submitted that the above Default Notice served s87(1) Consumer Credit Act 1974 (dp1)failed to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561)(dp9).

 

6. 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(dp1) 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.

 

7. 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…

 

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

 

9. 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.

 

10. In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal(dp14), 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)(dp9) 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(dp1) 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)(dp9) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

11. 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.

 

12. 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.

 

13. This is at all times an Agreement Regulated by the Consumer Credit Act 1974(dp1). 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.

 

14. 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 the 7th July 2009. 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 refer your Lordship to the Pursuers production 110 a default notice dated 15th June 2009. I refer your Lordship to the Closed record (as amended) page 11 where the Defender put the Pursuer to strict proof of a valid default notice. “I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory time to rectify the breach.”

 

As no proof of service has been forthcoming from the pursuers then as per J R BICKFORD SMITH Senior Master Queen's Bench Division above then we should assume second class post and service of after 4 working days.

 

Your Lordship the 15th of June 2009 was a Monday. Therefore :

 

Day of posting Monday 15th.

16th – 1st working day after posting.

17th – 2nd working day after posting

18th – 3rd working day after posting

19th – 4th working day after posting

20th – 1st clear day

21st – 2nd clear day

22nd - 3rd clear day

23rd - 4th clear day

24th - 5th clear day

25th – 6th clear day

26th – 7th clear day

27th – 8th clear day

28th – 9th clear day

29th – 10th clear day

30th - 11th clear day

1st July – 12th clear day

2nd – 13th clear day

3rd -14th clear day

 

 

As can be seen on the notice the date action was required before is the 2nd July 2009 and further it states “your agreement will be terminated”

 

It is the Defenders submission that any agreement that may have existed has been unlawfully rescinded. In Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007] (dp45), Lord Bingham said:

 

'The repudiation of a contract by one party ("the repudiator"), if accepted by the other ("the injured party"), brings the contract to an end and releases both parties from their primary obligations under the contract. The injured party is thereupon entitled to recover damages against the repudiator to compensate him for such financial loss as the repudiator's breach has caused him to suffer. This is elementary law.”

 

The contention I advance is that an ineffective default notice does not prohibit the creditor from terminating the agreement. Termination after service of an effective default notice is lawful termination, but as we have seen, a party may still terminate an agreement and be in the wrong for doing so. The law operates on a wrongful termination to offer to the injured party the choice of accepting the termination or to hold the contract breaker to his promise.

 

In the world of consumer credit, I contend a termination of the agreement by a creditor in terms whereby he announced he would no longer permit the debtor time to repay the credit, was a creditor in repudiatory breach of the agreement, unless in leading up to termination, the creditor complied with the requirements of the Consumer Credit Act 1974 (dp1) in circumstances where the debtor was in first breach of the agreement.

 

Further, and it is worth remembering, the Act is an Act for the purpose of consumer protection. The purpose of the Act is not to preserve the rights of creditors in contracts and to protect them from misadventure where for example, they terminated an agreement where it subsequently transpired the termination had not been in their interests. If that were so, the Act would have been an Act for the better protection of financiers.

 

In a proper case, the law will come to the aid of the vulnerable to protect them from the consequences of their contracts (for example the unsound in mind, children, those under duress or undue influence). To suggest financiers fell into that bracket and the Consumer Credit Act

operated to protect them and not the consumer, was absurd. The civil law does not come to rescue the misadventures of the sain and the savvy.

 

The clue to the position of the creditor on termination is in the use of the word 'entitled' in section 87(1). 'Entitled' connotes a right or a benefit. The Act therefore confers rights, conditional upon the provisions of section 87(1) being fulfilled. Fail to fulfill the condition and the entitlements do not become available.

 

In the case of a contract entered into by a person under duress and who then breaks the contract the law will come to that person's aid by recognising that person's plea that the contract was made under duress. If that person seeks a declaration of the court that the contract was made under duress the court will readily declare the contract void.

 

If the Act had intended that a creditor's termination in circumstances where section 87(1) had not been fulfilled by the creditor and was to be of no effect, the Act would have declared that termination void. It doesn't. The termination is voidable at the option of the debtor. I have accepted the termination of the creditor. Reference is made to the closed record(as amended) page 2 condescendence 3 “Explained and averred that the Defender operated her account satisfactorily until August, 2009” and page 4 “Explained and averred that on or around September, 2009 the Defender defaulted on said agreement and failed to make payment of the minimum payment”

 

Lord Justice Kennedy in Woodchester v Swayne [1998](dp14) said “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"

 

I would once again refer your Lordship to Lord Wilberforce in Saunders v Anglia Building Soc (sub nom Gallie v Lee) [1970] UKHL 5 (09 November 1970) (dp47) where he states"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".

 

This is further backed up Lord Justice Scott in Norwich and Peterborough BS v Steed [1992] EWCA Civ 5 (05 March 1992)(dp46) where he states'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'

 

It is the Defenders submission that the Pursuer is bound by his deed. The pursuer has terminated the agreement. The net result is the agreement is terminated for all time. The creditor's remedy is now limited by section 87(1). The pursuers initial crave is irrelevant and and I move your Lordship to sustain plea-in-law 4 for the defender or alternatively plea-in-law 1.

 

 

 

If you Lordship is not with me on my submissions, then I would move your Lordship to allow a proof before answer on these averments.

 

My motion, therefore, is for your Lordship to sustain the pleas-in-law for the defender and to grant decree of absolvitor or decree of dismissal.

 

Your Lordship, these are my submission for the Defender.

 

 

 

Cheers

M1

Edited by mystery1
correction
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Pretty tough but managed through ok.

 

Wanted to know the definition of a prospective agreement. Couldn't find and didn't know. Err used common understanding of english. Pity he was so clued up. Still don't know. I think he might investigate this.

 

Wanted to know what terms are missing.Told him. Consensus is that averments have to be read as true so they are there but remain to be proven for the proof before answer/proof.

 

Credit limit caught his attention. He asked the other side what the limit was at time of agreement. Then he expressed concern that it was not allowed to be £200 as the terms and conditions say £500+.

 

He wasn't to interested in Bickford Smith but again it goes to pba/proof if there were 14 clear days after service.

 

Made no mention of our pleas sustained/repelled/reserved but did tell them theirs was rubbish.

 

Onward and upward (hopefully)

 

M1

 

He will inform his judgement later.

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Well done must have been pretty nerve-wrecking.As he has said their pleas are rubbish why didn't he repell them? Has hes set a proof? I think your the only one on cag who has been to debate so congratulations on getting through it.

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Judgement to be handed down. I think he has discounted their plea but he didn't announce it specifically. Will see when the postie calls. It may be that we sneaked in for dismissal but i suspect a pba will prevail.

 

M1

 

Almost forgot to mention, the other side tried to use Mcguffick to persuade the Sheriff that they can supply a reconstructed copy.

 

Confused me for a bit even when nobody could find it in the judgement but it has now sunk in and i realised they actually used the wrong case. Mcguffick has zip to do with copies :D

 

(yes i do know which one they meant)

 

M1

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/264264-court-want-know-what.html#post2998396

 

Should have asked before debate as that might have swung it.

 

M1

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As no one answered... here's your definition and references:

 

From the Encyclopaedia of Banking Law:

 

--> Division A Regulation of Banking

---->The Consumer Credit Act 1974

------> 8 Entry into credit agreements

--------> Para 1129

 

© a copy of the unexecuted agreement (ie of the prospective agreement before it is signed by both parties)

 

From the Consumer Credit (Content of Quotations) and Consumer Credit (Advertisements) (Amendment) Regulations 1999:

 

© any document sent to a prospective customer for signature which embodies the terms (or such of them as it is intended to reduce to writing) of a prospective personal credit agreement or a prospective agreement for the bailment of goods;

(d) any copy of an unexecuted agreement delivered or sent to a prospective customer under section 62 of the Act (duty to supply copy of unexecuted agreement);

 

From CCA:

 

unexecuted agreement” means a document embodying the terms of a prospective regulated agreement, or such of them as it is intended to reduce to writing;

 

Goode: Consumer Credit Law and Practice:

 

--> Division I

-----> 31

 

31.31: What constitutes a prospective regulated agreement?

 

It is not clear at what stage a contemplated agreement becomes a 'prospective' agreement for the purpose of the CCA 1974, s 57. In most cases, nothing turns on the answer to this question, but there may be circumstances in which a supply transaction initially concluded on a cash basis becomes a 'linked transaction' because of subsequent negotiations with a third party for credit to finance it, so that withdrawal from the prospective credit agreement would operate to cancel the supply transaction1. So far as s 57 is concerned, matters must at least have reached the stage where there is something to withdraw from. Mere contemplation of a credit or hire agreement in the mind of the putative debtor or hirer would obviously not suffice, nor, it is thought, would a mere enquiry to the putative creditor or owner about the availability or terms of credit. It would seem necessary that the parties should be engaged in negotiations for agreement, using the term 'negotiations' in its ordinary sense and not in the extended sense of 'antecedent negotiations' employed in the CCA 19742. However, this by itself does not suffice to attract s 57, which operates only in relation to a prospective regulated agreement. Accordingly, what must be in prospect at the time of a purported withdrawal under s 57 is an agreement that would fall within the definition of a regulated agreement3. 'Prospective' necessarily imports a degree of contingency. It is thus not necessary for the projected terms to have become crystallised to the point where it can be said that any ensuing agreement would definitely constitute a regulated agreement; it suffices that there is a clear prospect that it would do so.

 

--- SNIP --- DIFFERENT SECTION --- SNIP ---

 

I:30.47

 

It will be recalled that an unexecuted agreement is a prospective regulated agreement which, though reduced to writing, lacks contractual force, either because it remains to be signed by one or more of the parties or because the offeree has not yet communicated his acceptance of the other party's offer.

 

I:30.48

 

It is clear from the statutory definition of 'unexecuted agreement' and from the legibility requirements of the CCA 1974, s 61(1)©1 that a document which omits any term of the prospective agreement intended to be reduced to writing (and a fortiori a document supplied completely blank) is not an unexecuted agreement for the purpose of the CCA 1974 and that presentation or dispatch of such a document does not constitute compliance with any requirement of the Act or regulations relating to the supply or content of an unexecuted agreement or copy. But the omission of items of information which are not terms of the agreement, such as the name and address of the debtor, does not affect the status of the document as an unexecuted agreement. It is therefore in order for the creditor to send out pre-printed forms of agreement which do not show such information.

Edited by rhodium78
Quick references added as per Dad's request :)
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I thought that Rhodium's answer is very helpful and comprehensive and I only wish to add that it would be clearer if the extract included section numbers and or page numbers (for the dictionary).

 

Dad

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The lesson there is to make sure you have the details before you go to court. Sheriff may get these details on his own but it would have been a good idea to put it on his plate.

 

I wonder if you are allowed to send extra details after a debate ?

 

Cheers for the info.

 

M1

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Was there a final judgement? If there was... and it's grounds for your appeal, then you keep it for your appeal. If it is out of common courtesy, then no point and if prospective agreements or a contract to enter into prospective agreement is to be argued, then it is good practice to have all this info with you anyway for the future.

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No it was a debate and the judgement of that isn't handed down yet. The case can be dismissed at debate but it might go to proof or proof before answer which is closer to a trial than a debate. Debate is more like do you have grounds in your pleadings to have a chance of victory (relevancy, specification etc.

 

M1

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