MBNA/Reston threating court action

[diddydicky]

why would the provision of items in 8/ and 9/ be relevant to your defence of the claim?

[jason_mnm]

Should I also delete item 8 and 9 please..

[MandM]

Should I also delete item 8 and 9 please..

 

I don't think they are necessary for your defence.

 

Put it this way - if you didn't receive that information it wouldn't make an ounce of difference to the strength of their claim IMO.

 

M

[diddydicky]

the problem with including stuff that is not necessary is that they will use that as an excuse to ignore the whole of your CPR18

[jason_mnm]

Thanks guys,, I was waiting for ur advice....

 

By the by I have not heard anything for my CPR 31.14 request yet...

[MandM]

 

By the by I have not heard anything for my CPR 31.14 request yet...

 

Don't worry too much about that. Will just give you more ammo later if they frustrate your efforts to defend fairly.

 

M

[jason_mnm]

I have adjusted it as follows:

 

 

REQUEST FOR INFORMATION CPR 18

 

I have received a recent court claim from your organisation. In order to file a defence and counter claim I require some information. Given that this matter is now the subject of legal proceeding, you are obliged to disclose under the Civil Procedure Rules, the information and documents detailed below.

 

The information must be furnished within fourteen days of the receipt of this letter. If you fail to comply, this will be reported to the Court, a copy of this letter will be provided as evidence to the same and an Order enforcing your compliance will be sought.

 

All records you hold on me relevant to this case, including but not limited to:

 

 

1.Transcriptions of all telephone conversations recorded and any notes made in relation to telephone conversations by MBNA.

 

2.Where there has been any event in my account history over this period which has required manual intervention by any person, I require disclosure of any indication or notes which have either caused or resulted in that manual intervention.

 

3.True copies of any notice of assignment and/or default notice or enforcement notice issued by MBNA together copies of any proof of postage.

 

4.MBNA communications log relevant to this account

 

5.Documents relating to any insurance added to the account; including the insurance contract and terms and conditions, date it was added and deleted (if applicable).

 

6.Copies of statements for the entire duration of the credit agreement.

 

7.Any other documents you seek to rely on in Court.

 

I will require this information within the next fourteen days. I must advise you that of the information are not forthcoming, it will be reported to the Court that you are trying to frustrate proceedings and denying me the opportunity to file a defence and counter claim.

 

Yours sincerely,

xxxxxxxxxx

[MandM]

Looks good to me.

 

M

[jason_mnm]

Thanks MandM...

[diddydicky]

Thanks guys,, I was waiting for ur advice....

 

By the by I have not heard anything for my CPR 31.14 request yet...

 

nor will you, i suspect

 

time for another go at AQ's

[jason_mnm]

Lol... diddy I was reading ur thread...http://www.consumeractiongroup.co.uk/forum/legal-issues/242373-mbna-restons-diddydicky-case-2.html

I have not seen anything since Jan 18.... Have you continued it to different thread?

[diddydicky]

to warm the heart of all MBNA victims

 

read and enjoy

 

First, note MBNA’s comment to the press here*http://www.guardian.co.uk/money/2009...stomer-refunds*and in particular the part which states*

 

"This case was brought by one of MBNA's agents who appears not to have been provided with full documentation. As such, the case was lost by MBNA, as MBNA was not able to rely on materials that it would ordinarily rely on in these circumstances. The case was not lost on any finding that there had been any unfair relationship." …..*

 

…… hmmm*

 

Well, I’ve since come into possession of a transcript of the judgment which is reprinted in its entirety below. The first observation is that regardless of any smokescreen put up by MBNA it is interesting to see from the quote above that MBNA seemed to be at pains to disassociate themselves by the emphasis that the case was brought not by MBNA but one of their "agents"! As MBNA were the claimant in the case and "brought it", the clear implication of the above seems to be that MBNA appear to be blaming their solicitors, Optima for either messing it up themselves or failing to ensure that the person they (Optima) instructed to present their case for them (Mr McGee) had all of the documentation.*

 

For what it’s worth, my opinion, as somebody who has worked in the profession is that the reason why the judge came to the decision she did was entirely due to what seems to have been a woeful lack of care in checking of documentation by Optima, the solicitors as it should have been relatively simple to establish and advise on the documentation required to prove the claim!

 

On the question of the MBNA Spokespersons assurance regarding the unfair relationship aspect…

"The case was not lost on any finding that there had been any unfair relationship."….

 

ACTUALLY, WHILST THE CASE LARGELY SEEMS TO HAVE BEEN LOST DUE TO WHAT SEEMS TO BE INCOMPETENCE ON THE PART OF THOSE RESPONSIBLE AT MBNA AND OPTIMA FOR PREPARATION AND EVIDENCE GATHERING AND FAILURE TO PROVIDE THE CORRECT TERMS AND CONDITIONS…. IF YOU MAKE THE EFFORT TO ACTUALLY READ THE TRANSCRIPT OF THE JUDGMENT IT IS CLEAR THAT THE JUDGE DID HAVE SOME VIEWS ON THE UNFAIR RELATIONSHIP POINT IN CONNECTION WITH CERTAIN ASPECTS OF THE CLAIM. HAVE A LOOK AT WHAT THE JUDGE ACTUALLY SAID ON THIS….. ITS AT PARAGRAPH 33-34 WHERE THE JUDGE FINDS THAT THE PPI CONSTITUTED AN "UNFAIR RELATIONSHIP" AND AT PARAGRAPH 37 WHERE SHE EXPRESSLY STATES THAT ON THE BASIS OF WHAT MBNA AND OPTIMA PUT BEFORE THE COURT, SHE WAS HOLDING THAT SOME OF THE CHARGES BREACHED REGULATION 5 OF THE UNFAIR TERMS IN CONSUMER CONTRACT REGULATIONS 1999.*

 

NOTE that Optima seem to have failed to produce any witness evidence for trial other than a witness statement by their own case worker! (see paragraphs 6, 13, 16, 22, 25, 37 and 38 of the judgment where the judge makes comments about the absence or shortcomings in the evidence).

 

Note also that Optima seem to have failed to spot that the terms and conditions in the bundle were not the terms which the card was taken out under and that the judge (a very aptly named lady.. "Deputy District Judge Smart") held true to the maxim that it is for the CLAIMANT to prove their case!

 

This is very important to bear in mind for anybody faced with a claim from MBNA, particularly as they almost never actually seem to send a live witness to give evidence at trial and seem to have great difficulties in production of documents etc. See in particular paragraphs 22 and 25 of the Judgment (and love the comments regarding the magnifying glass and the incompleteness of the documents, in particular this little gem of a quote at para 25)…*

 

"This is the trial and I am not prepared to make leaps of faith as to what was in the original agreement. This is not an unusual type of proceedings and it is not that difficult to produce the original contractual documentation, even if it is on microfiche"………..*

 

Absolutely delicious! The judges comments seem to be positively dripping with a mixture of disbelief and incredularity.*

 

It seems crystal clear that the solicitors seem not to have checked the evidence thoroughly before sending it to court. The judges comments would seem all the more scathing when you consider that Optima seem to have done much work for MBNA in debt recovery and had been doing so for years!*

 

See also the comments made at paragraphs 42-44 of the judgment regarding MBNA and their non compliance with Section 78 Consumer Credit Act 1974. I think that the general thrust of those comments continue to be correct after Carey –v- HBOS as there is no way that you can properly argue that the 2009 conditions which would be clearly marked as being so, would have applied to an agreement taken out beforehand.

 

It is only a*County Court*case and, as such is not precedent setting but it is going to be persuasive for any*County Court*cases with similar issues and is well worth reading, printing out and referring to if anybody is facing a situation where the claimant has not produced all of the contemporaneous documentation and seems to be relying on a different set of terms and conditions than the ones in force at the time of the contract… it is for the claimant to prove their case and, if they are advised by Solicitors, there can be no excuse for any shoddiness or gaps in presentation of their evidence or the documentation.*

 

It always surprises me that some solicitors are not as robust in advising their clients of the pitfalls in pursuing claims on the quality of evidence they have as they should be. I remember when I was working in the business I always was a pain in the a*se with my clients being, as I was, something of a stickler for attention to detail. One of the first things I checked was that the terms in my possession were the ones which had actually governed the contract. I also used to actually read the damned things and cross reference the documents to ensure that there were no gaps or that any gaps could be explained.*

 

Part of ones duty in being a solicitor is to recognize when your client is on dodgy ground and advise accordingly. It is interesting that the claims company who acted for Ms*Thorius*are at pains to stress that the other cases they dealt with in similar circumstances settled before coming to court which would suggest that the solicitors may have advised their clients to take a pragmatic view and to cut a deal rather than risk coming a cropper at trial!

 

As an aside, the Whistle Blower who is somebody on the inside track at Optima also tells me with some glee that these same solicitors may have recently came unstuck again in Geordieland on an unrelated matter (suing a conveyancer for alleged professional shortcomings). Can’t put up any party details here unfortunately as it is irrelevant to MBNA but if nothing else though, it shows that the judges in the North East are well clued up and not afraid to adhere to the maxim "it’s your claim….. prove it" even if the claimant is represented by a top 100 firm of solicitors!

 

Anyway, the transcript of the Judgment is below but, just one last observation.*

 

Capita.... major PLC and massive investment in Optima.... publicly accountable to shareholders etc.... £40,000,000 well spent? (see footnote 2)http://www.capitareport2008.co.uk/ac...ts/note15.aspx

 

Enjoy.

 

IN THE NEWCASTLE-UPON-TYNE*COUNTY COURT

The Quayside

Newcastle Upon Tyne

NE1 3LA

Date: 21st September 2009

Before:

DEPUTY DISTRICT JUDGE SMART

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

Between:

MBNA EUROPE BANK LTD. Claimant

- and -

MRS. LYNNE*THORIUS*Defendant

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

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

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

APPROVED JUDGMENT

Tape Transcription by Marten Walsh Cherer Ltd.,

1st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.

DX 410 LDE

Telephone: 020 7067 2900. Fax No: 020 7831 6864

DEPUTY DISTRICT JUDGE SMART:

 

1. This is a claim by MBNA to recover a total debt of £8,396.90 under a Sunderland FC MBNA Credit Card.

 

2. The sums claimed comprise:

(a) what I shall describe as "capital borrowing"; the purchases and cash advances;

(b) "interest";

© "standard charges" such as late payment fees and administrative expenses;

(d) Monthly payments for payment for Payment Protection cover ("PPI").

 

3. It is for the Claimant to prove on the balance of probabilities the prima facie

contractual right to recover the sums claimed.

 

4. Thus the Defendant invokes specific statutory protection and remedies of:

 

(i) An unfair relationship under section 140A Consumer Credit Act 1974 as amended, which when established results in the court having the flexible powers of intervention under section 140B Consumer Credit Act 1974;

 

(ii) In relation to the levying of charges, Regulation 5 of the Unfair Terms in

Consumer Contract Regulations 1999, which has been held as capable of applying to such charges (as falling outside the core obligations) at first instance upheld on appeal by the Court of Appeal in Abbey National PLC & Others v. Office of Fair Trading [2009] EWCA Civ 119, [2009] 2 WLR 1286; and further argues

 

(iii) in relation to the PPI Claimant was or should be treated as, or in the same position as a broker or equivalent ("ad hoc") fiduciary relationship and concealed (in the sense of did not disclose) commission, so that Defendant is entitled to rescind the PPI transaction

 

(iv) in breach of section 78(1) Consumer Credit Act 1974 Claimant failed upon

request of Defendant to provide the documents as required by that section and

accordingly its right to enforce the consumer credit agreement is suspended.

 

THE AGREEMENT

 

5. The Agreement was signed by the Defendant on 6th July 2002 when she was visiting Sunderland FC Shop to buy Christmas presents for her son who was a keen Sunderland supporter. She went at that time well in advance of and to avoid the increased demand for items closer to Christmas. She too was a loyal Sunderland supporter.

 

6. The Defendant was the only witness to give evidence. She was an extremely honest witness, completely without guile, who answered all the questions put to her in crossexamination immediately and directly, readily and maturely accepting the responsibility for the decisions she had made in relation to taking out the credit card. I accept her evidence in its entirety.

 

7. Her evidence was that she was approached by a sales person to take out the credit card and originally declined. The sales person was persistent and she was followed round the shop and pressed again. She was told (paragraph 3 of her section witness statement) that she could save money in the shop. She was told that she did not have to keep the card. Eventually she agreed and signed up. She said "Sometimes it is easier to do that with these people to shut them up."

 

8. The original Agreement, to the extent that it has been reproduced, is in the trial bundle at pages 56-57 (with a more legible version of the front page at page 231).

 

9. It includes personal details of the applicant (2), employment details (3), financial details (4), and a "Principal Cardholders Request and Declaration" which concludes with a request for the issue of a credit card including:

 

"I agree to be bound by the MBNA Credit Card Terms and Conditions and I understand I will be responsible for paying any balance due on my credit card account."

 

10. No document headed or described "MBNA Credit Card Terms and Conditions" has been produced, no document described specifically as such. The document at page 57 of the bundle is headed "Financial and Related Conditions". Under that is a reference to the MBNA Credit Card. It is very probable, and I find, that this is a reproduction of what is on the original, on the reverse of the original Agreement reproduced at page 56 of the bundle. In the absence of proof of any other documents satisfying the description, I find that is "the MBNA Credit Card Terms and Conditions". This will become important later.

 

11. The Defendant was asked on that occasion if she wished to take out payment protection insurance ("PPI"). She declined and in the box "no" was ticked under "5. Payment Protection Cover". At the time of taking out the credit card her gross income was £10,000. She had a clear credit record. She had not previously had a credit card, had no substantial debts, no County Court judgments, and her only experience of credit, she said, was a catalogue account. On the other hand, I am satisfied from the evidence she was not vulnerable. She knew what a credit card was. She knew what PPI was.

 

12. The subsequent steps in relation to using the card required that she telephone to activate it, which she did. She said in evidence that payment insurance was mentioned at that time, but she does not accept that she agreed to it being taken out. That appears to have been on 31st July 2005, only some twenty-five days after the agreement was signed.

 

13. There has been produced by the Claimants (through the statement of someone who is actually the case worker at the Claimant’s solicitor’s office) a computer record with very limited information on it. I heard no direct evidence from anybody from the Claimant. The computer record refers to thetelephone call*being for activation of the credit card and a standard record of the PPI being sold. So far as that conflicts with what the Defendant’s evidence is I accept the Defendant’s evidence. I do not accept that when she activated the credit card she agreed to take out the PPI which she had rejected only some twenty-five days earlier.

 

14. Her evidence is that she noted she had been charged for PPI and she noticed it on the credit card statements. She initially discussed it with her partner and did not challenge it because she thought at that price there might be a certain benefit on that. But the payments increased as her liability did, and she made a further*phone call*to the Claimant in which she challenged it and effectively sought to terminate the PPI policy.

 

15. Her evidence of that occasion is that she was told that she had to have it. She could not have the credit card without it. That was her understanding of the conversation. What is quite clear from her evidence is she did make such a*telephone call*and it did not result in the Claimant cancelling the PPI, which was the purpose of the call. What she said specifically in her evidence was that she was told she had to have the PPI and she would not have got the credit card without it. She did not know the law. It is clear to me that she understood from that conversation that she could not cancel the PPI and that she had to have it.

 

16. There is no evidence from the Claimant to rebut the Defendant’s evidence. There is nothing but a computer record, unsupported and unexplained even as to the circumstances in which the record of the sale of PPI would have been put on the computer file.

 

17. In the light of that, I find that there was no contract in relation to the PPI. The fact that it was charged for against a background of making minimum payments in my view cannot constitute an acceptance of the liability to make those payments. There is a further difficulty in relation to that in my view. It would have been a fundamental variation in the contract as originally taken out; that such a variation goes not as to amount to anything chargeable under a head previously agreed but introduced a new head of payment. If it was a term of the consumer credit contract (as benefiting the creditor), to actually vary that agreement there would have to be compliance with the Consumer Credit Act Regulations. (I also have that in mind in relation to fixed charges.)

 

18. The PPI was probably not a part of the consumer credit contract, rather a separate contract, but related.

 

19. However, I am not satisfied on the evidence before me, bearing in mind that the Defendant has given what appeared to be consistent and logical evidence of the steps taken against the background of someone who had originally declined PPI, that the Claimant has established a contract entitling it to recover for that insurance, and it is no answer to say, well, she has got it so she should have paid for it. She did not want it. I am not satisfied that there was an agreement to take it out. On the contrary, the charging of the payments continued on the basis of her understanding of information which was incorrect when she tried to stop further payments being added to the account.

 

20. After those phone conversations the monthly statements continued to be provided. She made the minimum payments. The original credit card limit was £1,500 and over the subsequently years those credit limits were increased, I accept unilaterally, in the sense that those increases are offered by the creditor and unless there is opposition to them they are activated. But I do accept also that it is entirely open to the person with the credit card to actually respond back and say they want the credit limit restored as it previously was.

 

21. The Defendant did use the credit card. She did use it with the benefit of the increasing limits. She maintained minimum monthly payments at least, and the bank statements evidence a significant increase in, shall we say, capital indebtedness even before we get to the charges being added, until 2008 when she struggled, because of a reduction in her income where her employment circumstances changed and her hours reduced, to maintain the monthly payments. That is the crystallisation ultimately of the Claimant commencing proceedings.

 

22. Prior to the commencement of proceedings on 19th December 2008 the Defendant’s solicitors requested documents under sections 7 and 8 of the Consumer Credit Act 1978 enclosing the appropriate fee required under those sections. The response was sent on 20th January 2009. For the purposes of this hearing in relation to the request it sent a copy of the signed Agreement and the current conditions, that is, the conditions current in 2009. So far as the Agreement is concerned, in 2002, the crucial documents, and the only ones anybody can point to, are at page 56-57 in the bundle. The current conditions on the face of what has been provided are different to the 2002 conditions.

 

23. Dealing with the various issues raised, this is necessarily a summary of my reasons.

 

24. Firstly, in relation to the terms formulated in the Agreement, I have dealt with that previously.

 

25. So far as the fixed charges are concerned the Claimant has not proved a contractual term entitlement to recover them, that is the default charges and the charges for legal and administrative expenses. The evidence before me of the original contract is at pages 56-57 of the bundle. That is what the Claimant has produced, and doing the best I can with a magnifying glass to read the conditions, which I do find must have been what is on the reverse of the original Agreement, what has been provided is incomplete and does not evidence any entitlement to recover fixed charges. It deals with interest and the minimum payments and the ability of the Claimant to suspend them or reduce them, but it does not deal with fixed charges. There clearly was more

to the Terms and Conditions than that, because if you read on the first page the reference to the Conditions under "Data Protection" the person applying is actually directed to Condition 11 -- there is no Condition 11 -- and the power to make conditions attached to that. Quite clearly that document is not complete. The Claimant has to prove it. This is the trial and I am not prepared to make leaps of faith as to what was in the original agreement. This is not an unusual type of proceedings and it is not that difficult to produce the original contractual documentation, even if it is on microfiche. Therefore in any event on the evidence before me today, the standard charges have not been proved as recoverable.

 

26. So far as the Claimant tries to rely, effectively as a course of dealing, on the statements produced from time to time, that is one thing in relation to the amounts claimed; it is quite another in relation to a heads of charge that the Claimant is entitled to recover. If you cannot prove the original contract you have got to prove entitlement as a variation, and variations of the Consumer Credit Act in material particulars have to be established by notice served under the Consumer Credit Act. It is also limited in its scope where it can apply. None of that has been established before me having regard to the sums claimed in reliance solely on the credit card statements.

 

27. The interest rates are covered under the terms and conditions, and as far as I can see from the extracts of the original Terms and Conditions, the ability to vary them from time to time. In so far as the contract is concerned, on the question of proof before me today the Claimant is limited to the provisions in the actual sections of the credit card conditions it has produced.

 

28. Similarly, in relation to the PPI, so far as it might fall within the standard "Terms and Conditions", the sending of the documents in relation to the sums which have been challenged do not in my view establish a contract for payment, even when those statements have been produced for a length of time.

 

UNFAIR RELATIONSHIP

 

29. I then move on to the question of unfair relationship. This is relied upon by the Defendant, effectively to challenge the whole of the Consumer Credit Agreement and the PPI. This was an ordinary credit card agreement. It is with one of the High Street lenders. It is not a sub-prime lender. It is not an unlicensed lender. It has not been targeted at vulnerable categories of consumer. It was being proferred in a store with related benefits, albeit a store to which a customer might exhibit some loyalty. Before we get to specific elements of it, the general structure of the obligation is one where all or none of the credit can be used. The structure of the charging provisions, charging interest on capital not so paid with no period of credit given, or the amount

of credit given, even if I found the clauses proved in relation to standard charges, was not out of line with regularly undertaken such credit agreements. It is an agreement where the person undertaking it is free to cancel it at any time, albeit repaying the balance. I do not regard the nature of the agreement and the circumstances of its selling of itself as something which resulted in an unfair relationship between the Claimant and the Defendant.

 

30. If any finding was likely to be operative in relation to this, there is one aspect of this in respect of which I would be prepared in this context to say that there was an unfair relationship. Going to section 140(a):

 

"The court may make an order under s. 140(b) in connection with a credit agreement if it determines the relationship between the creditor and the debtor arising out of the agreement is unfair to the debtor because of one or more of the following:

 

any of the terms of the agreement, or of any related agreement."

 

31. I would take that view, in this particular case, in respect of the related agreement, which is the PPI agreement.

 

32. The Agreement actually encourages acceptance of the PPI by the debtor. It does so on the face of the application for payment protection cover --

 

"Safeguard your payments against life’s unpredictable events

with our Payment Protection cover for just 68p per £100. Our

payment protection cover is designed to protect your ability to

make repayments of your MBNA credit card in the event you

are unable to work due to accident, sickness or involuntary

unemployment …. We strongly recommend you take out this

cover. For cover just tick the ‘yes’ box to confirm that you are

eligible and have read and understood the terms and

conditions."

 

33. There is no evidence the terms and conditions of the cover were actually produced or available at the time somebody was invited to take out the payment protection cover. There is a strong encouragement to the person signing the form in terms which I do not think can be regarded as a mere puff in the context of the explanation in the Agreement of the benefits of that PPI. That would not in itself, in my view, be enough for a challenge; but what the Agreement does not explain is that there is a benefit to the Claimant from commission, which is undisclosed, and they are in a position where it is in their interests to get the particular debtor signed up. So effectively at the time this agreement is entered into there is a lack of transparency of the relevant positions of the debtor and the creditor of the terms of the PPI and not enough information provided for the debtor to be aware that the Claimant has a financial benefit from this. That is in a context where there is also no explanation of the freedom to look elsewhere.

 

34. When you are able to look at PPI as in this case as a linked transaction, or particular terms of a contract, I take the view that in respect of that particular part of the transaction there was an unfair relationship. But if I was considering the remedy for that, I would be considering the benefit to the Claimant compared to any detriment and benefit to the debtor. I would take the view that the debtor has not been encouraged to look round. I would also take the view that the financial benefits to the Claimant have not been disclosed. I would have regard to a proportionate order, and it seems to me glaringly obvious in this particular case that an appropriate order would be the restoration of one of two things: either to rebate the premiums or to set

off the commission against the premiums. But that of course would only be relevant if I found that the PPI had effectively been entered into. And it is unnecessary to go further into the question of an unfair transaction and remedies because of my findings on the issue of imposition below. I should add that on the issue of unfair relationship it is accepted by both counsel that because of the unique nature of the transitional provisions applied to an application made after the transitional one year period, the relevant provisions can apply to the Agreement and PPI in this case.

 

35. I turn to the Consumer Credit Regulations. I have already referred at the start of the judgment to the fact that in principle it has been held that the nature of the provisions in relation to fixed charges fall outside the core terms in relation to provision of credit so that they can be considered under Regulation 5. Terms which may be unfair are those which require any customer who fails to fulfil his obligation to pay a disproportionately high sum in compensation. Under Regulation 5:

 

"A contractual term which had not been individually negotiated

shall be regarded as unfair if, contrary to the requirement of

good faith, it causes a significant imbalance in the parties’

rights and obligations arising under the contract to the

detriment of the customer."

 

36. There are two elements to that. First, there has to be a significant imbalance in the parties’ rights and obligations arising out of the contract and that imbalance is to the detriment of the consumer; then, second, that has got to be contrary to the requirement of good faith. In relation to fixed penalty charges, putting it very broadly, they are fixed sums imposed, in this case starting at £25 and then reducing to I think £12.50, in two types of circumstances. The first is where somebody has not made the minimum

payment by the due date, the second, where a credit limit has been exceeded. That means that the same amount of money can be recovered whether somebody is one day late or twenty-eight days late, whether the amount due under the credit agreement is £5 or £5,000, and where a credit agreement is exceeded by £1 or by £1,000. On the face of it that operates disproportionately between the detriment suffered having regard to the extent of the breach of obligation by the consumer and the amount of charge to be paid by the debtor.

 

37. The question is whether that occurs contrary to the requirement of good faith. Good faith appears to be a nebulous concept applied to ensuring that terms are balanced between the Claimant and Defendant. I take the view that a threshold of breach of regulation 5 has been raised in relation to fixed penalty charges of £25 and later on, more significantly, £100 or more in relation to legal and administrative expenses. I am in a position where the Claimant has not led any evidence or provided any explanation to counter the rigidity of the effect of those charges on the debtor. For the purposes of this particular case in the state of the evidence before me I would incline to the view that those charges -- that is in the alternative to whether or not they are contractually binding -- do breach regulation 5. I make it clear I am confining my decision to this case and the state of the evidence before me. The unfairness extends only to that term, and therefore the remainder of the contract is binding between the Claimant and the Defendant.

 

38. If I were looking at this particular contract in a more general context (and we were considering a particular contract and for example minimum payments of £85.15 late payment of which would allow imposition of a £25 charge) it may very well be the case that over the general operation of fixed charges over the life of credit card agreements it could be established by a balancing exercise, certainly at a reduced rate of £12.50, that fixed charges are not out of line with the cost and reasonable compensation to the Claimant for a breach by a debtor. But I have got to deal with this case on the evidence and information that has been put before me. In fact it is unnecessary to determine formally that point because I found that on the evidence before me it has not been proved that there is a contractual entitlement to recover those sums.

 

BREACH OF FIDUCIARY DUTY

 

39. The next point that has been raised is, was there a fiduciary duty such that there is an obligation on the Claimant to inform and to advise as to commission? The only evidence that the Defendant can point to in this case is the encouragement to take out insurance and her assumption that that was advice and that was advice being given to her in her interests. I am quite satisfied in this case that the Claimants are acting as agents for the insurers. The contractual provision and encouragement is not in my view sufficient to constitute an assumption of responsibility towards the Defendant; nor in any more nebulous form to be a situation in which the court ought to impose an

ad hoc agency or fiduciary relationship between the Claimant and the Defendant. That would be pushing the factual situation far beyond the bounds of the arm’s length transaction between a creditor and a debtor. It was, if anything, a matter to be dealt with under the allegation of unfair relationship in relation to a related transaction.

 

40. I have dealt with the points above going beyond the question of contractual entitlement because I have been asked to do so.

 

41. However, there is a final crucial matter that has been raised which bears on the Claimant’s entitlement to recover, and that is whether or not there has been provision of appropriate information under section 78 of the Consumer Credit Act.

 

42. It may be very simplistic, but I take the view that it is obvious that the appropriate information was not provided. Section 78(1) states in terms that where the request is given in accordance with that section on payment of the requisite fee the creditor shall give the debtor a copy of the executed agreement, if any, and of any other document referred to in it.

 

43. In this particular case the consumer credit agreement refers to the "MBNA Credit Card Terms and Conditions", and there is a partial reproduction of those on the back page which clearly is not complete. The subsequent response to that request provided a copy of the Agreement and the current credit card terms and conditions. It is clear in my view, having regard to the purpose of section 78, to provide the debtor with the information to enable her not just to assess the day to day statement of account and calculation of the liability, but actually the compliance, at the stage the contract was taken out, with the elements of the Consumer Credit Act, and also the heads of liability which could be claimed by the creditor, that in this particular case the documents provided fall short of the statutory requirement and specifically do not include the original terms and conditions referred to in the Agreement. That has become important in this case because of the claim to contractual entitlement to the fixed terms and charges. Without the complete terms and conditions it is impossible for the consumer to assess whether or not those charges are recoverable under the original contract, before you get to any question of entitlement to recover them having regard to any provisions of the Consumer Credit Act.

 

44. Accordingly, I take the view that section 78 has not been complied with and the contractual entitlement to recover the money claimed has been suspended prior to the commencement of proceedings, and remains suspended, pending full compliance with that section.

 

45. On the basis of that last element of my decision there has to be judgment for the Defendant.

 

46. I make it clear that if I had found section 78 complied with, I am satisfied in this case that the original capital is recoverable, by which I mean the purchases and the cash advances, that there is clearly a scheme of recovery of interest proved under the original agreement and that the interest would be recoverable including as varied.

 

47. The result of my decision is that the Defendant has won on a little, but merely postponed liability for the majority

[diddydicky]

Lol... diddy I was reading ur thread...http://www.consumeractiongroup.co.uk/forum/legal-issues/242373-mbna-restons-diddydicky-case-2.html

I have not seen anything since Jan 18.... Have you continued it to different thread?

 

no but having considered things carefully decided to wait to AQ's then invite the judge to use his powers

 

cheaper and a lot less hassle

[jason_mnm]

I have a feeling you going to win your case... Best of Luck..Diddy...

[jason_mnm]

Hi thr I have not sent my this month token payment yet for MBNA as they sent me CCJ claim form this month..

 

Should I still sent token payment for this month that I used to sent to MBNA?

Last month I sent the payment to Restons, should I sent for this month also to Restons?

 

Plz let me know ur kind advice as I only got 5 days left for this month to send the token payment...

Edited January 24, 2010 by jason_mnm

[slick132]

Hi Jason,

 

If you can manage the usual payment, send it to show good faith.

 

If you can't afford the usual payment, send what you can.

[jason_mnm]

Thanks Slick. Last month I sent it to Restons? Shall I sent for this month also to Restons?

[diddydicky]

Thanks Slick. Last month I sent it to Restons? Shall I sent for this month also to Restons?

 

did you say you had a defective DN? i cant remember

 

if so and they are taking you to court then clearly they have terminated

 

in which case i would accept the unlawful repudiation and NOT send any payments to them since you will be both accepting and refuting the repudiation!!

[jason_mnm]

Hi diddy I really do not if it is defective or not?

 

The DN was dated on 17 November 2009 and was asked to pay arrears of £1245.00 by 5 December 2009. Then it gives the full balance £6xxx.xx.

 

I did not keep the envelope as I didnot know that I should keep the envelope.

 

What do u think is the DN defective?

[diddydicky]

if it was posted 2nd class, as is usual then it is short by 2 days

 

if first class then valid on dates

 

but if they have not complied with s78 they also should not be enforcing so either way i would accept an unlawful repudiation just to be on the safe side.

[jason_mnm]

I sent s78 request to Restons which they ignored and they asked to send that request to MBNA. then I received the claim form. After that I didnot sent s78 request rather I had sent CPR31.14 request for a week now, but did not recieved nothing yet. In the meantime I also send SAR request to MBNA.

 

I also sent CPR18 request 2 days ago where I asked for MBNA communications log, hope they sent it and it shows 2nd class post used for DN..

 

So u r saying I should not send the payment?

[vint1954]

Hi diddy I really do not if it is defective or not?

 

The DN was dated on 17 November 2009 and was asked to pay arrears of £1245.00 by 5 December 2009. Then it gives the full balance £6xxx.xx.

 

I did not keep the envelope as I didnot know that I should keep the envelope.

 

What do u think is the DN defective?

The morons always use second class mail, if it has come from MBNA.

 

Do as DD suggests and send the letter accepting the termination.

[diddydicky]

I sent s78 request to Restons which they ignored and they asked to send that request to MBNA. then I received the claim form. After that I didnot sent s78 request rather I had sent CPR31.14 request for a week now, but did not recieved nothing yet. In the meantime I also send SAR request to MBNA.

 

I also sent CPR18 request 2 days ago where I asked for MBNA communications log, hope they sent it and it shows 2nd class post used for DN..

 

So u r saying I should not send the payment?

 

the oft position is that if you send a s78 to the claimants representative they have an obligation to forward it to the OC for a response and not just ignore it

 

if you send the s78 request with the corrrect fee to restons then it is tough titty on mbna if they did not respond to it

 

i suggest you look up the new proposed oft guidelines to creditors and print it off

[jason_mnm]

To clarfy I have sent CPR 31.14 , do I still need to send s78 request?

[diddydicky]

To clarfy I have sent CPR 31.14 , do I still need to send s78 request?

 

why not- it's only a quid -postal order endorse on the back what it is for recorded delivery