Unenforceability Evolution 2010

[diddydicky]

The new OFT consultation guideline paper clearly separates enforcement legally and in terms of contracts and explains the usage of said word.

 

S.

 

not quite sure that they refer specifically to the DN more to do with s77/78/79

 

the OFT guidance cannot ovverule the CCA

[the_shadow]

not quite sure that they refer specifically to the DN more to do with s77/78/79

 

the OFT guidance cannot ovverule the CCA

 

Agreed although the courts tend to recognise the OFT's "take" on things where the CCA is involved.

 

and yes enforcement is in realtion to s78 but on a broader scale they state what is deemed enforcement after the recent court rulings and what they deem to be contract enforcements under the CCA.

 

S.

[diddydicky]

Agreed although the courts tend to recognise the OFT's "take" on things where the CCA is involved.

 

and yes enforcement is in realtion to s78 but on a broader scale they state what is deemed enforcement after the recent court rulings and what they deem to be contract enforcements under the CCA.

 

S.

 

this bloke benion has a lot to answer for!!

[the_shadow]

this bloke benion has a lot to answer for!!

 

I doubt parliament would have rubber stamped it if it was watertight... and would we want it such ;-)

 

S.

[diddydicky]

I doubt parliament would have rubber stamped it if it was watertight... and would we want it such ;-)

 

S.

 

true, but a few more "musts" and less "mays" and "shoulds" would have been useful!!

[gh2008]

Reproduced here for ease ( from http://www.oft.gov.uk/shared_oft/consultations/OFT1175con.pdf)

5 SANCTIONS FOR NON-COMPLIANCE

 

5.1 If the creditor or owner fails to comply with the duty under section

77(1), 78(1) or 79(1), it is not entitled, while the failure to comply

continues, to enforce the agreement.(*24)

 

5.2 In a recent judgment,(*25) the Commercial Court held, in a case under

section 77 of the Act, that passing details of a debt to a credit reference agency and related activities do not constitute enforcement. It also held that steps taken with a view to enforcement, including demanding payment from a claimant, issuing a default notice, threatening legal action and the actual bringing of proceedings, are not themselves 'enforcement'. On the other hand it confirmed that obtaining judgment against the debtor was enforcement, as were the actions listed under sections 76(1) and 87(1),(*26)notwithstanding that some of the actions 'less obviously' amounted to enforcement. These actions are demanding earlier payment, recovering possession of goods or land, treating any right conferred on the debtor by the agreement as terminated, restricted or deferred, enforcing any security and terminating the agreement.

 

5.3 In drawing a distinction between actions which were and were not enforcement, no definition of enforcement was given the court, but it would appear that it was distinguishing between actions based on the exercise of contractual rights (which would be enforcement) and other actions intended to obtain payment which did not involve the exercise of a contractual right.

 

*24 Sections 77(4), 78(6) and 79(3). A declaration under section 142(1) of the Act (with the consequent application of section 106 (rendering securities ineffective) is not available, as section 142(1) does not apply to unenforceability consequent upon sections 77(1), 78(1) and 79(1).

 

*25 McGuffick –v- The Royal Bank of Scotland plc [2009] EWHC 2386 (Comm) 26 Paragraph 74 of the judgment. OFT1175con

 

*26 Paragraph 74 of the judgment.

Ok, so the ones in blue are NOT considered enforcement

HOWEVER the ones in red are ........

 

demanding earlier payment = enforcement (i.e. demanding anything other than arrears)

terminating the agreement = enforcement

 

in fact any of the things under 87(1)

(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.

although that also means that terminating = enforcement BUT issuing an action does not therefore it may blow apart our hypothesis that in issuing an action the creditor is terminating the agreement.

 

So they can issue a default notice, however cannot act on it

but they can IMO issue a claim for the arrears

 

thoughts?

[diddydicky]

and it need challenging

 

the exercise of contractual rights (which would be enforcement)

 

for instance - commencing legal proceedings is not enforcement? but obtaining a judgement is!!

 

so, the creditor takes you to court, which is not enforcement - and before the judge makes a decision the creditor says "excuse me sir, please don't find in our favour otherwise we will be guilty of enforcing when we are not allowed!!

 

the judgment in the commercial court with respect to the CCA was just plain wrong!

 

the prescribed wording of the DN is indisputable proof that parliament intended that the service of a DN was enforcement

[gh2008]

but, for the moment, that's what we've got to work with, and it does clearly state that they cannot demand earlier payment.

 

Thinking about this, if they are in default of an S78 request, they cannot terminate under S87 therefore if they do terminate then IMHO they lose the right to the repayment of anything other than the arrears. (i.e. any payments not yet due)

[gh2008]

Also seems even the OFT don't understand their own advice !! from page 30 of the above doc

What if the lender does not comply with the request?

Your lender must provide you with the information within 12 working days of receiving your request. After the 12 days are up, if the lender has not provided the information then the agreement is unenforceable until they do provide the information.

 

'Unenforceable' does not mean that your debt is wiped out. Any outstanding debt is still owed, but there are some consequences for the lender’s ability to enforce the debt.

 

If you do not make payments when your debt is 'unenforceable' it means that:

• Your lender cannot

- demand earlier payments of your debt

- threaten court action

- take possession of anything that you bought on credit, or

which you used as security when you took out the

agreement.

As this is a consultation paper - maybe we should let them know how we feel about it .....

[diddydicky]

but, for the moment, that's what we've got to work with, and it does clearly state that they cannot demand earlier payment.

 

Thinking about this, if they are in default of an S78 request, they cannot terminate under S87 therefore if they do terminate then IMHO they lose the right to the repayment of anything other than the arrears. (i.e. any payments not yet due)

 

only if you accept the repudiation!!

 

if they fail to comply with s78 they cannot have a cause of action as anything done under s87/8 will not be in compliance as you say

[diddydicky]

Also seems even the OFT don't understand their own advice !! from page 30 of the above doc

As this is a consultation paper - maybe we should let them know how we feel about it .....

 

as you say complete contradiction

[lookinforinfo]

Interesting that when the OfT list all the things that can still be done by financial concerns while in default of s.78 there is no mention of interest.....................

Edited January 27, 2010 by lookinforinfo

[diddydicky]

at the end of the day the creditors have had scant regard for their advice in the past

 

why should they treat this one any differently

[AA99]

Agreed although the courts tend to recognise the OFT's "take" on things where the CCA is involved.

 

That sounds so much like the DJ lottery again! An opinion or 'take' is not the law! Even if you are the judge!

 

gh2008's post below is very useful:)

[AA99]

I have today received a copy of a letter my solicitor has received from an OC who is unable to provide a copy of my Credit Agreement.

 

We can confirm that until we are in a position to respond to you in full we will not seek to enforce the Agreement, in accordance with the legal interpretation of 'enforcement' in the case of McGuffick v RBS (2009) EWHC 2386 (Comm).

 

In light of the above, we consider that it would be unreasonable to issue proceedings in this matter at this current time.

[MDK]

Thank you, seriously fed up:cool: Although there seems to be an awful lot of law thrown around here, there seems to be one law for them, and one law for us :?

 

I quite agree, it seems the banksters can get away with anything.. even getting taxpayers money to be baled out for taking massive risk and making stupid mistakes. They then get huge bonuses and pensions for being failures.

Now banksters give virtually nothing to savers and yet at the same time charge massive interest rates to anyone who is struggling.

That is completely wrong and totally unjust.

[Peterbard]

HI

It seems like the OFT have put yet another twist in the ,what is “enforcement” saga.

　

They seem to have spotted the various contradictions that have been pointed out on here particularly section 76 (1) where the regs say that the creditor can take actions to encore and demand early payments on certain breaches it looks to me like they are aiding the earlier definition by adapting the definition still further

“On the other hand it confirmed that obtaining judgment

against the debtor was enforcement, as were the actions listed under

sections 76(1) and 87(1),26 notwithstanding that some of the actions

'less obviously' amounted to enforcement. These actions are demanding

earlier payment, recovering possession of goods or land, treating any

right conferred on the debtor by the agreement as terminated, restricted

or deferred, enforcing any security and terminating the agreement.

5.3 In drawing a distinction between actions which were and were not

enforcement, no definition of enforcement was given the court, but it

would appear that it was distinguishing between actions based on the

exercise of contractual rights (which would be enforcement) and other

actions intended to obtain payment which did not involve the exercise of

a contractual right“.

So it would seem to me that the OFT are trying to sew up a loophole in the definition by saying that the enforcement mentioned in 76and 87 may be called enforcement but it was not the kind of enforcement that the judge meant, no this was a different kind of enforcement ,this was enforcement under the agreement and not enforcement of a judgement.

So is this the same kind of enforcement meant in section 78 or is it the same as meant in the judges definition

Wearing a bit thin now don’t you think. Somebody must soon say there was only one definition intended in the CCA and hat means 76 and 87 are not allowed if the agreement is unenforceable. That is what the act meant and no amount of patching up and creating new divisions that don’t exist will make any difference.

Perhaps common sense will have its day after all and we may not have to live with the judges error. Perhaps the OFT have stretched this a bit to far.

Peter

24

[volvo]

subbing

 

keep up the good work peter

[diddydicky]

HI

It seems like the OFT have put yet another twist in the ,what is “enforcement” saga.

　

They seem to have spotted the various contradictions that have been pointed out on here particularly section 76 (1) where the regs say that the creditor can take actions to encore and demand early payments on certain breaches it looks to me like they are aiding the earlier definition by adapting the definition still further

“On the other hand it confirmed that obtaining judgment

against the debtor was enforcement, as were the actions listed under

sections 76(1) and 87(1),26 notwithstanding that some of the actions

'less obviously' amounted to enforcement. These actions are demanding

earlier payment, recovering possession of goods or land, treating any

right conferred on the debtor by the agreement as terminated, restricted

or deferred, enforcing any security and terminating the agreement.

5.3 In drawing a distinction between actions which were and were not

enforcement, no definition of enforcement was given the court, but it

would appear that it was distinguishing between actions based on the

exercise of contractual rights (which would be enforcement) and other

actions intended to obtain payment which did not involve the exercise of

a contractual right“.

So it would seem to me that the OFT are trying to sew up a loophole in the definition by saying that the enforcement mentioned in 76and 87 may be called enforcement but it was not the kind of enforcement that the judge meant, no this was a different kind of enforcement ,this was enforcement under the agreement and not enforcement of a judgement.

So is this the same kind of enforcement meant in section 78 or is it the same as meant in the judges definition

Wearing a bit thin now don’t you think. Somebody must soon say there was only one definition intended in the CCA and hat means 76 and 87 are not allowed if the agreement is unenforceable. That is what the act meant and no amount of patching up and creating new divisions that don’t exist will make any difference.

Perhaps common sense will have its day after all and we may not have to live with the judges error. Perhaps the OFT have stretched this a bit to far.

Peter

24

 

i would say that in the absence of the act stating that the word "enforcement" would have a special meaning within the act (and it doesnt') the normal everyday meaning of the word must be the one that is taken as meant

 

To enforce would usually mean in a civil action a method by which one party forces or compels another , against his will into compliance with his demands, where there is otherwise a reluctance to comply

 

Taking someone to court is a step taken normally to enable the claimant to enforce the debt (to make the other compliant to his demand)

 

 

The act clearly therefore intends when it states that the creditor may not enforce, that the creditor may not do anything to compel or to attempt to compel the debtor to comply with his demands

 

the proposition therefore that taking the preliminary action of service of summons but being unable to actually undertake the proceedings is clearly a nonsense and the act would not have been drawn with the intention of a creditor being able to start, but never complete litigation