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Help Needed on Assignment Issue


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I received a Notice of Assignment from a DCAlink3.gif #1. The DCA claimed it was an absolute assignment of a debt originally owed to Barclays.

 

A Barclaycard account number was quoted along with an amount owed.

 

Naturally I queried the debt but all I received was a notice of intention to summons followed by a summons.

 

There are a number of technical queries but the two I really need assistance with are:

 

1. The Law of Property Act states that an assignment is valid on the date of receipt of the notice of assignment. Everything seemed fine until further research found out that Barclays hadn't assigned the debt to the DCA #1. Barclays had assigned the debt to DCA #2. DCA #2 assigned the debt to DCA #1. This has now been acknowledged by DCA #1.

 

My understanding is: If I never received a Notice of Assignment following the assignment from Barclays to DCA #2 then that assignment isn't valid until I receive such notice, and the assignment is only valid from the date of receipt of the notice. Therefore, if there has not yet been a valid assignment from Barclays to DCA #2 then DCA #2 can't assign the debt to DCA #1 as it is not possible to to assign something you don't own.

 

2. The Notice of Assignment gave an account number (which was a credit card number) and an amount of 31K. However, statements from Barclays and the DCA's Statement of Claim to the court show that the amount claimed on that card is only a 12K. There are two other accounts, one for 10K and one for 9K. The three added together add up to $31K but only one account number is mentioned on the Notice of Assignment.

 

My understanding is: If the amount on a Notice of Assignment is incorrect then the Notice of Assignment is invalid and a new Notice of Assignment must be issued. Furthermore, the summons following the Notice of Assignment must be withdrawn and a new one issued after the new Notice of Assignment. Also, if the Notice of Assignment failed to identify the other two accounts they can't be included on the Notice of Assignment, a new Notice of Assignment would need to be issued by the DCA.

 

Is my understanding of these two matters correct? If so I would really appreciate some case law references as this is almost certainly going to court. Also, DCA #2 made reference to debt previously owed to Barclays. Is there any requirement for the assignee to be mentioned on a Notice of Assignment? Again, case law would be great.

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It's not unusual for DCAs to sell debts they have bought to other DCAs and the proof of ownership is in the Deed of Assignment, a list of debt sales and purchases which only a court can ask to see. You will not get to see it as it is a confidential business document and has the deatils of other purchases on it. Notices of Assignment are often just ignored by banks/DCAs and they will argue in court that they sent one as this their standard practice. It will not be given much weight by a judge. What he/she will be looking at is whether there is an enforceable agreement for the debt claimed and your legal argument should be based on an unforceable agreement and/or unlawful rescission of contract ie did you receive a lawful Default Notice before the debt was terminated in writing/full balance demanded/sold on.

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My understanding is that for an absolute assignment to be effective the debtor needs to receive a Notice of Assignment. The assignment is effective from the date of receipt. Without receipt of the Notice of Assignment there is no absolute assignment.

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How is that?

 

I've researched several cases which have been thrown out because of an inaccurate Notice of Assignment. I know that the Deed is the vehicle for assignment but to make it effective a Notice of Assignment has to be given to the debtor. The assignment becomes effective when the notice is delivered. This is covered under the Law of Property Act and further clarified in case law.

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If you have researched them you will have the case law. What matters in court is an enforceable agreement in your name with the prescribed terms and your signature. If that is there it will be for you to argue that the debt doesn't belong to the pursuer.

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Guest HeftyHippo

I think Pinky is correct.

 

The NOA is for the protection of the buyer of the debt. If you don't receive one, you have no obligation to pay the 'new' creditor. You still have a contract/agreement with the 'old' one, and should pay them. It is then for the new creditor to obtain from the old creditor, anything you paid them. The NOA allows them to collect direct from you rather than the old creditor

 

The NOA is only for the clarification of who should be paid. I believe the transfer of title takes place according to the contract of sale between the seller and buyer, ie, date etc. It is therefore possible I believe, for a legitimate sale to take place, but until the NOA is delievered, the debtor is obliged to pay the original creditot.

 

No where in the Sale of Property does it say that the transfer of title takes place when the NOA is delivered. Title decides ownership.

 

In that respect, it is perfectly possible for a legitimate sale to have been made, title to be transferred, but because of cockups in the NOA, you still pay the old creditor. The new creditor then has to get money from the old one.

 

A court would look at the enforceability of any agreement, then at whom has the right to enforce it.

 

The fact that a NOA hasn't been made only means you should pay the old creditor. Your obligations remain as they were.

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Heftyhippo,

 

Essentially, what you say is very close. An ineffective Notice of Assignment simply means that there is no absolute assignment. Any assignment would be an equitable assignment.

 

I was not proposing that the debt doesn't exist because of an ineffective absolute assignment, simply that without an effective Notice of Assignment there is no absolute assignment.

 

The major difference between an absolute assignment and an effective assignment is that an assignee can't enforce an agreement through the courts without the original creditor being listed as co-plaintif.

 

I found the case law after I posted my original question.

 

I appreciate that for a number of CAGers there is no practical difference between an absolute assignment and an effective assignment. But for those of us who it does affect, it a huge difference.

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Guest HeftyHippo

newman, its funny you ask for advice, and then tell the advisors that you know more than them. why ask in the first place if thats the case? Personally, I'm always more than a bit irritated when someone asks for advice and then argues that he knows more than the people giving up their free time in an attempt to help him by offering him their opinions. It sounds more than a bit ungrateful.

 

By all means wait around and see if anyone else can offer different advice, and fell free to argue with whatever advice doesn't suit your legal opinion.

 

You can argue about the semantics all you like. I feel you will have an unpleasant experience in court with your defence. If the judge is satisfied that Grabbit en Run own title to your debt, he is satisfied. The fact that you argue different because the paper trail is not to your satisfaction will be an entertainment to him but won't change his mind.

 

By all means argue about the paper trail, you may delay things a short while, but as long as title can be shown, its only a matter of time before someone is given the court assistance in collecting.

 

If you like to consider a scenario that a creditor sells a debt to a 3rd party and title is transferred, but for one thing or another, the seller dies or is incapacitated and cannot issue another NOA, according to you, the new owner cannot enforce the debt because the NOA went MIA. Are you seriously suggesting that is realistic? As Pinky says, the court will look at the agreement and if it is enforceable. It will then look, in the interests of justice, at who should be allowed to collect on the debt.

 

No where in the Sale of Property act does it say that a buyer cannot enforce the debt until the NOA arrives. In the above screnario, the debt wouldnt be enforceable.

 

As I said above, the NOA protects the buyer from a seller who says "No, he's chosen to pay us so that means he must want us to have his money" and from a debtor who says "No, my contract is with xyz and I'm going to pay them and not you"

 

 

I cannot offer any more so I'm unsubscribing. Best of luck.

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Hefty,

I normally would not have bothered replying to such an uninformed, opinionated personal attack such as yours, but there are people who here actually want to know the facts and are looking for some help.

I originally asked for advice on a couple of technical issues that are critically important to a number of CAGers who have been working together for some time. I was hoping in my original post that someone would have had some case law to back up the section on Assignment in the Law of Property Act.

When there was no immediate response I did some research and found two cases that have established the case law on assignment. My question was to the entire community not just the advisors.

We have all been helped by the work of others on these forums, and I am very grateful for this forum and the people who contribute. I hope I have helped others in the past, and will continue to do so. I’m sorry if you feel that relative newbies shouldn’t know more than advisors who have been here for years. Unfortunately the courts pay more weight to proper research establishing precedent and case law.

This isn’t about arguing over semantics. This is about legal precedent and case law. You may feel that I will have an unpleasant experience in court, but I can assure you that going into court with legal precedent and established case law to back up statute law is the most effective way to secure a positive outcome. Offering uninformed, inaccurate opinions is what usually leads to unpleasant experiences in court.

It is irrelevant whether I feel that the paper trail is unsatisfactory. What is important is that I can prove in court that the DCA did not comply with the law. There are probably thousands of cases that have been thrown out of court because the defendant can prove that the DCA was in breach of the law. Equally, there are cases where a DCA was able to enforce a dodgy agreement because of lack of preparation on the part of the defendant.

The whole point about my case and others I have been working on is that the DCA rushed to issue a summons to beat the statute of limitations which has since expired. The delay, and forcing them to issue a new summons, means that our debts would be statute barred.

Quote “No where in the Sale of Property act does it say that a buyer cannot enforce the debt until the NOA arrives. In the above screnario, the debt wouldnt be enforceable”

 

The act is the Law of Property Act 1925 and it states very clearly that:

Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice.

 

If you research the subject you will find that any assignment that the debtor is not notified about is an equitable assignment, which is different than an absolute assignment.

Edited by WA_Newman
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Hi Pinky,

 

Thanks for your help. Since my original post I have researched the subject a lot.

 

I was amazed that so few people are aware of the law of assignment when so much is known here about the CCA and Default Notices.

 

My subsequent posts were not critical of you, and I hope I don’t appear ungrateful for your help as Hefty implies. The reason for my subsequent posts is to try to inform CAGers of an extra weapon in their defence, and to increase the knowledge base here.

 

An improperly drafted or delivered Notice of Assignment means that the assignment is not effective. Any assignment would be equitable rather than absolute, which is substantially different. I have sent you a PM with the case law if you wish to read it.

 

In your earlier post there was a technical error. You wrote:

 

Proof of an absolute assignment is in the Deed of Assignment. The fact you were not informed via a proper NOA will not affect a court ruling on ownership and enforceability.

 

A more accurate statement would have been:

 

Proof of assignment is in the Deed of Assignment. If the assignment is an absolute assignment it becomes effective once a valid Notice of Assignment is delivered to you. The fact you were not informed via a proper NOA will not affect a court ruling on ownership and enforceability. However, it will affect whether the assignee can commence legal proceedings without the assignor as co-plaintif.

 

The agreements are also unenforceable in my case, but there are about a dozen of us so every possible defence is being considered.

Edited by WA_Newman
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A very valid point by WA Newman, I am sure other caggers can benefit from this reseach.

 

Have a 'ding' for your trouble :)

 

Lex

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Here is the information on assignment. Hopefully it will be of help to some.

 

Statutory Assignment

 

The English Supreme Court of Judicature Act 1873 introduced a statutory assignment. S 25(6) of the 1873 Act has now been replaced by s 136 of the Law of Property Act 1925. In simple terms, an assignee of a valid statutory assignment could now sue the debtor in his own name. This is effectual in law to transfer to the assignee from the date of notice of assignment the legal right to a debt or chose in action, all legal and other remedies and the power to give a good discharge for the same without the concurrence of the assignor.

 

However, to create a statutory assignment, four conditions must first be satisfied, namely (1) the assignment is in respect of a debt or other legal chose in action; (2) the assignment must be in writing under the hand of the assignor; (3) express notice in writing of the assignment must be given to the debtor, trustee or other person from whom the assignor would have been entitled to claim the debt or chose in action; and (4) the assignment must be absolute and not purporting to be by way of charge only. Such an assignment is subject to equities having priority over the assignee, that is, the assignee takes the assignment subject to any defects in the assignor’s title and all other claims the debtor may have against the assignor. The assignment takes effect from the date of receipt of the notice of assignment by the debtor, an exception to the postal rule that acceptance takes effect upon posting. (See Holt v Heatherfield Trust Ltd [1942] 1 All ER 404.)

 

As regards condition (1), the “debt or other chose in action” must be one that is existing at the time of assignment, albeit the debt is payable later. (Earle v Hemsworth [1928] All ER 602.)

 

As respects condition (2), the assignment has to be in writing under the hand of the assignor. In other words, if an agent signs the assignment, then this will be ineffective. (Wilson v Wilson 1880 5 Ex D 155.) The assignment must still be one of absolute assignment and not by way of charge.

 

Condition (3) requires an express notice of assignment in writing to be given to the debtor so that the debtor knows to whom he must now pay the debt. Consent from the debtor to the assignment is not necessary. The date of assignment must also be stated correctly, (Stanley v English Fibres Industries Ltd (1899) 68 LJQB 839) albeit if no date is given at all, the notice is still not defective. (Van Lynn Development Ltd v Pelias Construction Co Ltd [1969] 1 QB 607) The notice will also be bad if the amount of debt has been stated incorrectly. (W F Harrison & Co v Burke [1956] 2 All ER 169.)

 

Upon receipt of the notice, the debtor must make all payments of the debt to the assignee and not the assignor and if he pays the assignor without the consent of the assignee, he may have to pay the assignee all over again.

 

Condition (4) is perhaps the most important, that is, the assignment must be absolute and not by way of charge. Generally, the requirements of an absolute assignment are: (1) the assignment must be in respect of the whole and not part of the debt (Jones v Humphreys Ibid.); (2) the assignment must not be conditional and (3) the assignment must not be “by way of charge”.

 

If the assignment fails to meet the above conditions, then the assignment will be an equitable assignment in which case the assignee has to join the assignor as a co-plaintiff but the assignor is entitled to sue direct.

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