HSBC using Waksman ruling in court

[Docman]

I raised this initially in the thread on ‘Dissecting the Manchester cases’ but it was suggested I needed a new thread as the discussion could easily get lost in such a long thread.

Briefly a friend asked for my help last summer, knowing that I had my own troubles with HSBC. The bank had issued a N1 claim against her for £9k in June 2009 through Northampton, so no CCA or DN was served. With my help, my friend sent off a CPR 31.14 letter asking for the CCA and copy default notice. When nothing came back, she filed an ‘embarrassed’ defence online. HSBC didn’t respond within 28 days and so the case was stayed.

HSBC (or Dumb Goofers, the in house lawyers to be more precise) wrote back to my friend in September saying ‘their client was unable to locate the credit card agreement’ but attached a blank copy of the page she WOULD HAVE SIGNED in the old Midland branch (my friend opened the account in the late 90s). They continued that they client didn’t retain copies of the Default Notice issued but they did attach a copy of the Default Notice that would have been sent out in November 2008.

I got my friend to go for a strike out and the Court struck the case out just before Christmas. Game over and out you may think. No, think again.

Last week, my friend rang me to say she had received a new set of papers from Dumb Goofers with an application to set aside the strike out of their claim and instead strike out her defence. She was panicking a bit and said HSBC were quoting a case where the judge had ruled that HSBC didn’t have to produce a signed agreement and what they had now attached was acceptable, so she had no defence.

Well my friend and her OH came over on Sunday with a package of over 200 pages. These are mainly old credit card statements and a copy of the CCA and the DN. The application itself has a witness statement in support which contains the following paragraph

“The Claimant provided the Defendant with a blank copy of the Agreement and the terms & conditions applicable to the Agreement on xx September 2009. HHJ Waksman held in Carey v HSBC (& others) that ‘A creditor can satisfy its duty under section 78 by providing a reconstituted version of the executed agreement which may be made from other sources than the actual signed agreement itself’.”

Now my friend has never raised S78 as a defence. She only asked for a CCA as part of the claim. I’ve attached copies of the credit agreement and the Default Notice as they have been served for everyone to see.

I was concerned at first but the more I have read their witness statement, I started laughing. The more I have read the Waksman judgement, the less concerned I am. My only worry is that HSBC must be hoping that they get a judge who doesn’t know the CCA.

Has anyone else come across any bank but particularly HSBC using Waksman in a claim brought by the bank to recover money under the Consumer Credit Act?

hsbc CCA.pdf

hsbc DN.pdf

[vjohn82]

Hi docman.... hope you are well.

 

I have come across this but quite frankly it is a desperate act by HSBC. The Waksman ruling has absolutely no impact upon CPR requests for the original documentation.

 

Can you post up their Witness Statement so I can see what context they are using it? Also, if their original claim was struck out, did they obtain the necessary permission to file a claim again?

 

VJ

[vjohn82]

Oh and the CCA... completely and utterly useless. What terms and conditions are being referred to? The ones for a Nursery?

 

What about the prescribed terms? APR etc

 

Wouldn't worry about this one too much... whether she gets a good judge or not... the appeal route is there

[vjohn82]

Also check out CPR - Practice Direction 32 para 13.1

 

"13.1 photocopies instead of original documents may be exhibited provided the originals are made available for inspection by the other parties before the hearing and by the judge at the hearing""

[vjohn82]

Check this out too: Lenders will welcome judge's ruling

[Docman]

Thanks for this VJ.

 

I haven't got the full WS (my friend kept it, I just copied the last section). The first 20 odd paragraphs in the WS just recited the story (from HSBC's side), and then went straight into the quote from Carey v HSBC.

 

But thinking about whether HSBC sought permission to amend their POC, the answer is no. The POCswere struck out and no application has been made, let alone permission granted. If there are no valid POCs in play, then am I correct in thinking that logically there is nothing to defend?Asking to strike out a defence would seem to be a useless move by HSBC.

 

The more I read and think about my friend's case, they more I wonder about HSBC and their solicitors. Are they living up to my pet name for them?

[the_shadow]

Hmm smacks of desperation...

 

Oh well if they want to quote the Carey rulings then use it to your advantage...

 

 

Paragraph 234(2)....

 

The s78 copy must contain the name and address of the debtor as it was at the time of the execution of the agreement. But the creditor can provide the name and address from whatever source it has of those details. It does not have to take them from the executed agreement itself;

 

Paragraph 234(4) .....

 

If an agreement has been varied by the creditor under a unilateral power of variation, the creditor must still provide a copy of the original agreement, as well as the varied terms;

 

S.

[vjohn82]

Beat me to that one shadow... there are plenty of comments by Judge Waksman which all make HSBC's case seem foolhardy.

 

The context of the case is also important to consider; the cases were the debtors taking creditors to court over breaches of s.78. This is not the case in your friends proceedings and makes a huge difference!

[Docman]

My friend has had a phone call from her local Court. HSBC have apparently submitted a further application to the Court, this time to Amend the Particulars of Claim (and therefore arogantly assuming they will get a set aside) but asked that the two applications are heard together. As there isn't enough time to serve the new application before the set aside hearing which was due to be heard next week, the judge has decided to vacate next week's hearing and fix a later date to hear both applications. The court office rang to explain therefore that there will not be a hearing next week and that my friend should get all the papers by the weekend.

 

I don't know if this is good news or not but I'll post up the Amended POC's as soon as my friend gets them from the court. It will be interesting to see how they get round their previous admission that they cannot locate the original agreement.

[RobinWayRobinme]

Just had a similar issue myself and dealt with in my defence. In addition to what has already been said, I have fired back the shot to further clarify Wakeman ruling by quoting regulation 3(2) of the cancellation notices and copy docs regs that states the regs only apply to copies under a provision of the CCA 1974 and a creditor using a reconned agreement as evidence in a claim for enforcement by a creditor is not provided for in the CCA 1974.

R

[Docman]

Thanks RWR. I'll keep that in mind when I sit down with my friend and we try to draft an Amended Defence.

[Valdez is Coming]

Hi Docman and others...going to court tomorrow - hearing re application to set aside statutory demand.

From letters received so far, have a feeling DCA will rely heavily on Carey v HSBC for their case.

This will be interesting! Am nervous but also well prepared thanks to CAG members help.

Will post furthertomorrow night - good or bad - on my thread 'No stat demand from MBNA then sold to DCA'

All the best..............Valdez

[RobinWayRobinme]

could it be used as an argument against the set aside?

 

Thanks RWR. I'll keep that in mind when I sit down with my friend and we try to draft an Amended Defence.

[Docman]

Hi all, well an update.

My friend finally got a hearing which I attended with her earlier. I’m glad I did as it was a farce worthy of Brian Rix!

A young rent-a-lawyer comes up to my friend as soon as she tells the usher her name. Straight to the point, he demands a copy of her Amended Defence. Hold your horse mate, I pipe up. You haven’t got permission to file a claim yet, so a defence isn’t needed. Huff and puff from young rent-a-lawyer and he goes back to his corner.

We then get called into the judge’s room. Different DJ to the one who struck out the claim earlier. He looks at my friend and assumes she is the defendant (reasonable as she is described as Mrs XX) and then turns to me. Are you Mrs XX’s solicitor? No, sir, I reply. “Well, as this is not a Small Claims matter, you can’t address the Court”. Puts me in my place!

The judge then turns to young rent-a-lawyer. “And how are you Mr S?” Clearly, no introductions needed. You could almost hear the sub text ‘And how are your mother and father?’

Young rent-a-lawyer starts off by stating what he is there for. Only problem is he only has the second application to amend the POCs, not the first one to actually apply for permission to set aside the strike out. Not deterred, young rent-a-lawyer then comes up with his own addition ‘to strike out the defence’ which isn’t on either application. More shuffling of papers.

The DJ then intervenes as young rent-a-lawyer is clearly not with it. “Your clients have really made a mess of this claim. It might have been better if they had started afresh.” YES, YES I start thinking. The DJ’s going to tell them where to go. Err, NO.

Next breath, the DJ says “What I THINK that the claimant’s want me to do is to get things back on track. After all”, he says turning to my friend, “they are not going to go away.” TRANSLATION: HSBC have lots of dosh and aren’t going to let go.

Without anymore discussion, the DJ then pronounces, ‘Order that the claim is restored, with Amended POCs as per the application with liberty for defendant to file defence within 14 days.’ The DJ then asks young rent-a-lawyer when the claimant is supplying the exhibits, to which young rent-a-lawyer says, ‘We will be relying on Carey v HSBC’. The DJ hasn’t heard the case properly so young rent-a-lawyer adds, ‘You know, the one that allows for reconstructed agreements when the originals are destroyed in a fire and so on’. I’m not sure if the DJ has understood this woffle, so I pipe up ‘But... only to be cut off by the DJ’s raised hand. Remember I’m not allowed to address the court.

But young rent-a-lawyer hasn’t finished yet. He then goes on to ask for his costs for the day. This is a bit too much, even for the DJ who reminds him that the claimant is the one who had to bring the application because their claim had been struck out. ‘Costs in the case’ bellows the DJ i.e. my friend will pay if she looses.

Talk about a rubber stamp. Trouble is I can’t make up my mind if the DJ was just thick and too much of an ‘old boy’ or was actually being very crafty in allowing HSBC to proceed to the point where he can give judgment against them instead of just striking out their claim. Or am I just being too optimistic?

I’ll post up the Amended POCs tomorrow with a draft Amended Defence I’m working updating tonight..

[supasnooper]

Oh dear..........sorry to read of your day.

 

Hope it gets better.

[the_shadow]

[sigh] God bless our wonderful judiciary.

 

According to Crudit Today Waksman made a ruling against a Lloyds PPI test case claim recently that will possibly affect all PPI claims and attempts of unenforceability due to mis-selling of PPI. With the recent type of judgments thats probably not a million miles from the truth despite if being from that source.

 

Prob dont have to tell you but ensure if they intend to use Carey you also use it back against them, there are some potential consumer friendly points in there I believe.

 

S.

[RobinWayRobinme]

Agree with you Doc, a complete farce. Down to dealing with Carey in the defence. May also be worth taking a look at Kneale v Barclays [2010] EWHC 1900 (Comm) at para 55 & 56. Although this case deals with pre-action disclosure I think you may be able to use the ref to s78 requests and disclosure of original docs being different.

R

[Docman]

Hi guys

 

Here's the Amended POCs that Dumb Goofers have sent. As you can see whereas before, they submitted template documents for the CCA and the DN (see post #1 above), this time they have just stated there is an 'Agreement' and also a 'Statutory Default Notice'. Neither of these documents have been attached to the claim.

 

As you will see, there is no mention of Carey v HSBC and so I don't propose to suggest it is mentioned in the defence but anyone have any thoughts on the point. Should Carey v HSBC be ignored or should it be assumed and dealt with in the defence?

 

The current draft defence is as follows. Any suggestions?

 

 

IN THE xxxxxxx COUNTY COURT CLAIM NUMBER xxxxxxxx

 

 

BETWEEN

 

HSBC Bank plc

 

 

Claimant

 

 

and

 

 

Docman’s friend

 

 

Defendant

 

 

AMENDED DEFENCE

 

 

1 I, Docman’s friend am the defendant in this action and make the following statement as my Amended Defence to the Amended Particulars of Claim filed by HSBC Bank plc and dated xx March 20xx.

2. Except where otherwise mentioned in this Amended Defence, I neither admit nor deny any allegation made in the claimant’s Amended Particulars of Claim and put the claimant to strict proof thereof.

3. Paragraph 1 of the Amended Particulars of Claim is admitted. .

4. Paragraph 2 of the Amended Particulars of Claim is denied and the Claimant is put to strict proof that a written ‘Agreement’ exists and is put to strict proof as to the terms of such ‘Agreement’.

5. Paragraph 3 of the Amended Particulars of Claim is noted but not admitted.

The Requirements of the Consumer Credit Act 1974

6. An agreement regulated by the Act must be signed in the prescribed manner both by the debtor and the creditor or owner, embody all the terms of the agreement, and be in such a state that all its terms are readily legible when presented for signature. [s61]

7. Under S61 of the Act, any agreement regulated by the Act must contain certain Prescribed Terms under regulations made by the Secretary of State under S 60(1). These Prescribed Terms are contained in schedule 6 column 2 of the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) and are terms stating the credit limit, the rate of interest; and repayment terms.

8. The Prescribed Terms must be within the agreement for it to be compliant with s60 (1) and not in a separate document [Wilson and another v Hurstanger Ltd [2007] EWCA Civ 299].

9. Further, by S65 (1) if an agreement does not contain these terms in the prescribed manner and does not comply with s60(1), it is improperly executed and only enforceable by court order.

10. By S127(3) of the Act, the Court may not make an order under s65(1) if s61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under S60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

11. I refer to LORD NICHOLLS OF BIRKENHEAD in the House of Lords case Wilson v First County Trust Ltd - [2003] All ER (D) 187 (Jul) para 29

29. The court's powers under s 127(1) are subject to significant qualification in two types of cases. The first type is where s 61(1)(a), regarding signing of agreements, is not complied with. In such cases the court 'shall not make' an enforcement order unless a document, whether or not in the prescribed form, containing all the prescribed terms, was signed by the debtor (s 127(3)). Thus, signature of a document containing all the prescribed terms is an essential prerequisite to the court's power to make an enforcement order. “

12. The claimant has not supplied a copy of the Agreement upon which the claimant bases this claim. It is averred that until such time as the claimant supplies the Agreement containing all the prescribed terms and duly signed by both creditor and debtor, the Court may not make an enforcement order.

Default Notice

13. Paragraph 4 of the Amended Particulars of Claim is denied and the Claimant is put to strict proof that a ‘Statutory Default Notice” was sent to the Defendant.

14. A default notice is a required by S 87(1) of the Act before a creditor can become entitled to take any action in respect of a regulated credit agreement.

15. Furthermore s 88(1) of the Act requires that a default notice must be in the prescribed form. The prescribed format for a default notice 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).

16. By Regulation 2(2) of these regulations, any Default Notice must include both a description of the agreement sufficient to identify it and the name and a postal address of the creditor or owner.

17. By S88 (1) © of the Act, the date before which any breach can be remedied or compensation paid, must be stated in the Default Notice. By S 88 (2) of the Act, , the specified date must not be less than 14 days after the date of service of the default notice.

18. The claimant has not supplied a copy of the ‘Statutory Default Notice’. It is averred that the claimant is not entitled to take any action in respect of a regulated credit agreement until such time as the default is remedied and the claimant supplies a copy of the ‘Statutory Default Notice’ to support their claim.

19. Paragraph 5 of the Amended Particulars of Claim is noted but not admitted.

AND the Defendant

A. Submits the statement of case discloses no reasonable grounds for bringing the claim pursuant to CPR part 3.4; and the Claimant has no real prospect of succeeding on the claim pursuant to CPR part 24.2

B. Seeks an order that the Claimant’s action is struck out or otherwise is dismissed on the grounds that any claim cannot succeed;

C. Asks that the Claimant pay the defendant’s costs

D. Alternatively if the court decides not to strike out the Claimant’s case, that the court orders full disclosure of the documents supporting the Claimant’s case; and

E. Respectfully asks the permission of the court to further amend this defence if or when the Claimant provides full disclosure of the requested documents and allows inspection of the original documents.

 

 

 

Statement of Truth

 

 

My friend has telephoned her solicitor this morning (he handled their house purchase a few years ago). he would want £250 per hour and has told her she needs to set aside around £5,000 for his costs. Apparently, he didn't think it was a good idea to go up against HSBC and she 'would in all likelihood loose and then be responsible for HSBC's costs of several thousands'. Sounds like the solicitor and the DJ from yesterday all belong to the same HSBC club.

 

My advice to my friend is to file an Amended Defence and see what happens. If HSBC continue, I have suggested she instruct a barrister herself.

APOCs.pdf