RBS Mint Loan - Court Action Started & Dodgy DN issues

[gh2008]

An example of a high court judge upholding the CCA? We have it here with MBNA. Considering the debt was in excess of 20k I assume the bank would have lavished a sufficient amount of effort on obtaining good counsel, which begs the question...why did they not try to recover the debt under common law?

because teh debtor did not agree to it (PH did)

 

Presumably, they can't as there was no 'stepping outside of' the CCA? We have seen the attempt and success though using common law as a 'back up' when the creditor messes up so why not here?

 

http://www.bbc.co.uk/news/business-12622318

 

Also confirms the court can just wipe out the debt and deny the creditor even though it may be a touch harsh for the bank - they know the rules however and what is expected of them if they wish to play with the grown ups so refreshing to see a judge uphold the requirements and not remove consumer rights.

 

It was an axcellent win for PT and the team here is the Judgment http://www.bailii.org/ew/cases/EWHC/Mercantile/2011/B3.html

 

Given this approach is it too hard for us to believe a creditor who deprives you of your rights and terminates on a dodgy DN can also expect to lose their entitlement to sums not yet payable? After all, the act states that terms and conditions should be supplied, don't recall it saying they must be supplied but perhaps I'll go check that out and examine the terminology unless anyone else knows off hand?

 

Being pedantic here - the creditor is NEVER entitled to repayment other than by the terms of the contract. They have to BECOME ENTITLED by jumping through CCA 'hoops'

The judge could have (in the style of a default notice issue post termination and during litigation) told the bank to hand the defendant a set of T&C's so that magically everything is alright, but he didn't. Clearly he recognised there is a procedure in place that must be followed in order with no skipping about to correct previous mistakes as we see in default and termination disputes. Here we actually see an order in how the creditor must have behaved and the judge deemed that order must have been followed.

 

Although I say I'm being pedantic that point goes to teh core of the legislation - the creditor does not gain automatic entitlement to repayment, there is not an automatic liability for repayment.

These facts are the crux of the matter IMHO

[Undercover-Elsa]

Damn right. Also the judge had no issue with the date of service being the date of RECEIPT of the Dn.

Wasn't it the Brandon judge who allowed himself to be bullied by counsel into the ridiculous concept that a time limited notice could be deemed served at time of posting? FFS. Contradictory judgements, lack of knowledge of the CCA, legal errors, personal opinion and bias, all from the judiciary, twisting the law.

If I'd made such errors in my professional career there'd be dead people in testament.

 

Elsa x

[Gallahad]

Very pertinent Elsa the term "Hitting the nail on the head" comes to mind.

G

[Pumpkinhead]

The legal advice I've received since last Friday's judgement, interprets it as the judge taking my comments in my Jan 2010 letter as consent to the termination of the agreement as per s173(3) and therefore the enforcement of the agreement without the need for a DN. So it may not be worth an appeal. The Judge said"Defendant’s case fatally flawed as she chose to agree to the ending of the contract. She could have said the DN is nonsense but Mrs X accepted.....

Anyone else any ideas cos I still can't really understand/believe/accept it.

[gh2008]

I STILL think the crux of the matter is what were your liabilities at termination.

 

No-one has yet put forward an argument that the liabilities are for the full amount.

 

Unfortunately you have to remember that unless you pay for representation/advice then they will only take on cases where they are pretty certain of winning - that's fair enough, they have their reputation/business to protect.

 

If someone can show me how the Claimant becomes entitled to full repayment after terminating at will (not on teh back of a DN or any other notice) then I will shut up !!

 

BTW the day of posting=service case is Costa's - permission to appeal hearing v. soon

[gh2008]

oh, and you DID say the DN was nonsense, and then accepted their termination.

 

You do have to accept (as I am sure you do) that you were using un tried methods in this case.

Should you go to appeal, this case would become the 'classic' either the shining light for debtors or finally shutting the door on the repudiation/rescission argument for ever.

 

AFAIK this was the first time the argument went to Court being properly argued.

I wasn't the 'inventor of the idea' in fact I have argued against it, but I tried to put my best argument for it forward.

As I said I still haven't heard the argument as to how they become entitled ....... other than persuading a DJ that 'it's not fair to the creditor' as in this case (which I see as an error in Law)

[Undercover-Elsa]

Thanks gh..knew I'd seen it somewhere. Will this latest judgement be in time to help?

 

Pumpkinhead, I do so feel for you. I too feel it is very wrong, hopefully through further research and discussion a way forward may present itself.

 

Elsa x

[emandcole]

If PH accepted the termination then first of all we can establish that the court accepts the idea that termination can occur despite the CCA stating the claimant is not entitled to terminate until a valid DN has been served. This I believe is the main argument Peter Bard has supported for a long time if I'm correct Peter, correct me if I'm mistaken.

 

Personally I've always struggled to comprehend the difficulty between 'being told you may not do something' such as termination on a dodgy DN, and the reality of the matter where they terminate anyway and act in every way as if it is indeed terminated right through to litigation.

 

Picking up on GH's latest posts I am more inclined to accept that yes indeed, the creditor must gain entitlement in order to then demand sums not yet payable by adhering to the CCA, their 'right' to demand sums is not automatic but must be earned. An order is therefore followed.

 

So, if PH accepted the termination and the court had no bones with the concept how did the court also consider those sums not yet payable had been secured by entitlement? I assume the rub is that they had not?

 

Surely it then follows that if the creditor did not then use the CCA to recover their money that in itself is evidence enough that they had not secured the entitlement and they knew it. They had therefore first broken the contract to its heart so should not be able to benefit from their own breach to the detriment of the debtor by taking a large sidestep and using common law instead?

 

Seems a bit like smacking someone in the face and then prospering by selling them some 'cure all' ointment?! Section 140 must come into play or what is to stop any creditor acting in this way deliberately as they win both ways and the judiciary doesn't appear to have adopted an official line on how to respond to these cases. Accept or not to accept, you can't accept, you can accept, it's a mess.

[Bigdebtor]

Some excellent points in today's above posts! If the Creditor WAS ALLOWED to end the contract without following the procedures and PH to accept the contract was ended - then surely only the Arrears are now due? Otherwise as Eman says the creditor wins both ways?

 

BD

[gh2008]

If PH accepted the termination then first of all we can establish that the court accepts the idea that termination can occur despite the CCA stating the claimant is not entitled to terminate until a valid DN has been served. This I believe is the main argument Peter Bard has supported for a long time if I'm correct Peter, correct me if I'm mistaken.

 

I have always disagreed with the ineffective termination argument. I agree they cannot terminate if they are relying on the Default Notice, but if they are 'just terminating' then I cannot see how they can be forced not to. It is a simple breach of contract.

 

Personally I've always struggled to comprehend the difficulty between 'being told you may not do something' such as termination on a dodgy DN, and the reality of the matter where they terminate anyway and act in every way as if it is indeed terminated right through to litigation.

 

Picking up on GH's latest posts I am more inclined to accept that yes indeed, the creditor must gain entitlement in order to then demand sums not yet payable by adhering to the CCA, their 'right' to demand sums is not automatic but must be earned. An order is therefore followed.

 

I know I keep banging on about this point but I really do think this is the 'golden nugget' in all of this.

i.e. what was PH's liability at the point of termination.

Full balance or arrears

 

So, if PH accepted the termination and the court had no bones with the concept how did the court also consider those sums not yet payable had been secured by entitlement? I assume the rub is that they had not?

This case is pushing new ground wrt to CCA and without case law a LiP is going to struggle to get the point across, I am struggling on here and pretty much everyone on here are on the same side !!!

 

Surely it then follows that if the creditor did not then use the CCA to recover their money that in itself is evidence enough that they had not secured the entitlement and they knew it. They had therefore first broken the contract to its heart so should not be able to benefit from their own breach to the detriment of the debtor by taking a large sidestep and using common law instead?

 

Seems a bit like smacking someone in the face and then prospering by selling them some 'cure all' ointment?! Section 140 must come into play or what is to stop any creditor acting in this way deliberately as they win both ways and the judiciary doesn't appear to have adopted an official line on how to respond to these cases. Accept or not to accept, you can't accept, you can accept, it's a mess.

 

Again I think this strikes to the heart of the matter.

 

What the Court is saying is that, without a DN, the creditor can terminate and, as long as it is accepted by the debtor they are then suddenly entitled to full repayment. (Acceptance can be via deed as well as statement i.e. not paying instalments etc)

 

I am sure this is not as intended....

 

Another point to ponder is that this, being a loan SHOULD have an early repayment calculation built in.

Now this can only happen if the account is still 'live' and it is therefore a CCA debt (or a debt covered by the CCA)

 

I would submit that as soon as the account is terminated the debt becomes 'an ordinary debt' and the liability is what was due at termination under the CCA

 

discuss ........

[gh2008]

.... If the Creditor WAS ALLOWED to end the contract without following the procedures and PH to accept the contract was ended - then surely only the Arrears are now due?.......

 

That was certainly PH's argument throughout the thread, however not hearing the argument against this in Court I don't know how the DJ was persuaded otherwise. (Or did the DJ not get the 'no automatic entitlement to full balance' bit of the CCA)

[Peterbard]

Peter

 

I think we need to clarify what the "liabilities" actually are in such circumstances?

 

If the contract goes back to the original state then surely only the original balance needs repaid - without any interest and charges?

Please indulge me if I try to make my thinking clearer by means of an example:

 

If PH borrowed (say) £10k at 20% apr to be paid back over (say) 5 years this would require annual payments of £3k approx. If the contract is rescinded after (say) 3 years then £9k of payments will have been made, but the contract would show an outstanding balance of £6k which would be comprised of £1k principal and £5k Interest. These are facts - based on simple arithmetic of 20% apr on a straight line reducing balance to be paid in equal monthly instalments over 60 months with actual inetrest charged approximated at 10% straight line interest (approximately same as 20% apr) for ease of illustration.

 

The following is what I believe to be the logical outcome - but I have suffixed these with question marks as I seek confirmation of this.

 

1. Surely the Interest would no longer be reclaimable as rescission renders matters as if the contract was still on Day 1, 0 - or even Day -1? (so no interest accrued and payable at that point)?

2. - or as if the contract had never been in force (so no interest had been agreed)?

3. In either case surely the "agreed" £5k interest would no longer be "agreed" and therefore no longer be payable by the debtor?

4. Only the £1k balance of the original £10k loaned would need to be reapid to fully discharge the debt?

 

I wouldn't worry about your posts being moderated. This is mild compared to some of your posts which have been left unscathed.

 

I am quite happy to have my logic challenged and any flaws together with my admitted lack of detailed knowledge exposed (most of us have never claimed to be experts - and we have all seen the Law can be a most unpredictable a Lottery). However I would prefer answers to be written in a concise, non-confrontational, non-sneering, non-aggressive and ideally calm and polite manner.

 

BD

 

PS - Aren't you pre-empting the decisions of some appeals still under way?

 

Hi

 

When the contract is terminated and then recsinded the amount of liabilities due will be all those that have accrued on that account up to that time, it makes no difference if these consist of further advances made after execution or interest debited to the account as long asd the added debits are applied to the account they become part of the liability.

 

When a credit card sccount is first opened the initial ballance is zero and so at that point are the liabilities, as the card is used the liabilities accrue some of tha will be interest and due at terminmation.

 

Peter

[Peterbard]

Could I please clarify who exactly you are attacking with this remark??

 

 

Not attacking any one ther truth is that anyone who advised the op on this course of action should accept the responsibility of their action.

What seems to be happening is dome strange re writing of events on a vain attempt to justify the mistake.

This is unhelpful to anyone else considering this and may be confused about its effecitess.

 

Peter

[Peterbard]

This is exactly how I see it - I am not sure of PH's actual Judgment though

 

I do NOT agree with Peter's argument that a contract having been rescinded you are then liable to the FULL BALANCE i.e. future years interest as well as past ..... err no

 

Please produce links/case law etc Peter to back up the fact that rescinding a contract means that one party has all the benefits (and more) however the other party receives none.

 

 

Never said that anyone is entitled tyo future interest.

 

They wo9uld be entitled to the full amount of interest accrued under the loan up to the date of default then dependant on the contract any default intrest that may accrue.

 

On a fixed sum account the creditor would be entiytled to the balance+ interest as calculated under the early settlement regulations.

 

Facts

Peter

[Peterbard]

Ah, I may see a flaw in the argument - you accepted recission rather than termination.

 

Recission allows the contract to be-unwound, to put the parties back in the position they were in before the contract was signed.

 

Hmmmmm

 

However that would NOT allow for the balance to be repaid but the original capital advanced less all payments. (imho)

The orriginal ballance on a running account agreement is Zero.

[emandcole]

This would seem quite logical to me too. Either the contract exists resulting in either party obtaining something of value by participating in it or it doesn't, surely resulting in the opposite of that occurring?

 

Benefits - Interest for the creditor and monetary lump sum for the borrower.

 

If the contract is rescinded then the loss to each party must be that those benefits are removed resulting in no interest for the creditor and no right to that lump sum for the debtor.

 

As such unless anyone can demonstrate otherwise the court should find that the actual sum the debtor is liable for is the amount borrowed minus what they have already paid and not the total amount payable minus what they have paid. This makes sense right?

 

That being the case there is every possibility on loans that are closer to the end than the start that the principal debt has actually been paid, all the more so on a credit card and highly likely on a store card with perhaps an interest rate approaching 30%. That compounded interest soon rocks up after all!

 

Think the use of the words rescission and repudiation are not interchangeable in any way and a quick review of what these words mean might be helpful, hope I'm not being patronising.

 

Rescission -

 

The cancellation or annulment of a transaction or contract by mutual consent or by law.

 

Repudiation -

 

The rejection or refusal of a duty, relation, right, or privilege.

 

 

Repudiation of a contract means a refusal to perform the duty or obligation owed to the other party.

 

Think this is extremely pertinent, the rejection of a right or privilege, which might be for example the right or privilege the creditor should have secured in order to go on to demand sums not payable?

 

The refusal to perform the duty or obligation owed to the other party? Such as denying them enough time to seek advice and raise funds after issuing a DN? If they then terminate how can this not be repudiation? And if they have repudiated why not accept it, they are after all the breaching party are they not?

 

This then returns us to the question of what is actually outstanding at the point of that repudiation, an unfair act that as we've brushed on is also grounds for an accusation of it being an Unfair Agreement. How could you decalre it as a fair agreement when the creditor pulls your rights and shuts the whole agreeemnt down exposing you to full liability?

 

Also found the term Anticipatory Repudiation -

 

An act or declaration before performance is due under a contract that indicates that the party will not perform his or her obligation on the future date specified in the contract.

 

I have never seen a clause in a CCA regulated agreement that reserved any future right to bypass your rights by perhaps issuing a short DN and then terminating on it. Do we not expect the creditor to be bound by their word, they after all invite you to be constrained by the CCA so why can we not insist the letter of the law is followed? Would you be granted such leeway if you were caught driving 50 in a 30? No, and quite rightly you shouldn't expect any either.

 

Can you argue that by a creditor doing this, and importantly you can safely assume it may have done this to others, that the creditor was prepared to bypass your rights from the very off should it need to therefore constituting Anticipatory Repudiation?

 

Clearly, if the creditor is smug that the courts 'will look after us' and 'we can do as we please' there is a touch of anticipation in there should they need or wish to act in a way that deprives you of your rights...contentious suggestion I know but if the shoe fits?

[Pumpkinhead]

The agreement for was a fixed term loan repayable in instalments over 7 years. So we started off with the capital sum loaned plus all the interest added to it upfront to make the total sum advanced. I paid off just over 3 years worth. The amount I will have to repay is the remaining balance less a rebate against the interest that the claimant is no longer entitled to as the loan gets repaid earlier than expected.

 

Just seen Emandcole's post above mine. The situation I'm in more or less boils down to use (misuse) of certain words. In the legal sense rescission is taken as going back to how things were before the contract existed i.e. the creditor had the whole sum and I had nothing. I've seen this definition on various legal dictionary websites.

[Peterbard]

The agreement for was a fixed term loan repayable in instalments over 7 years. So we started off with the capital sum loaned plus all the interest added to it upfront to make the total sum advanced. I paid off just over 3 years worth. The amount I will have to repay is the remaining balance less a rebate against the interest that the claimant is no longer entitled to as the loan gets repaid earlier than expected.

 

Just seen Emandcole's post above mine. The situation I'm in more or less boils down to use (misuse) of certain words. In the legal sense rescission is taken as going back to how things were before the contract existed i.e. the creditor had the whole sum and I had nothing. I've seen this definition on various legal dictionary websites.

 

Absolutely correct.

The anount of rebate will be calculaed by the early settlement regulations. But there is no way of getting out of interest allready ccrued on the acount.

 

In fact if this woud have been a high APr account with a large TCC due to fees then if the account was rescinded in its early stages the amount owed would exceed the amount borrowed.

 

Peter

 

Peter

[emandcole]

PH, have you worked out how much you have paid them and compared that to what you have been ordered to pay? Be interested in the numbers.

[gh2008]

The agreement for was a fixed term loan repayable in instalments over 7 years. So we started off with the capital sum loaned plus all the interest added to it upfront to make the total sum advanced. I paid off just over 3 years worth. The amount I will have to repay is the remaining balance less a rebate against the interest that the claimant is no longer entitled to as the loan gets repaid earlier than expected.

 

IMHO the Judgment is wrong.

 

The Judgment has used the CCA to determine the amount payable at the date of repayment RATHER than the agreement being rescinded and everyone 'put back' to their positions prior to execution

 

EITHER they use the CCA (In which case I would still argue they are not entitled to sums not due)

OR they use Common Law in which case it is as above (i.e. capital less payment - which is actually what they argued in their WS they did NOT argue for balance but capital)

[emandcole]

More grounds for appeal then, you have to wonder at it all don't you?!

[Bigdebtor]

The agreement for was a fixed term loan repayable in instalments over 7 years. So we started off with the capital sum loaned plus all the interest added to it upfront to make the total sum advanced. I paid off just over 3 years worth. The amount I will have to repay is the remaining balance less a rebate against the interest that the claimant is no longer entitled to as the loan gets repaid earlier than expected.

 

Just seen Emandcole's post above mine. The situation I'm in more or less boils down to use (misuse) of certain words. In the legal sense rescission is taken as going back to how things were before the contract existed i.e. the creditor had the whole sum and I had nothing. I've seen this definition on various legal dictionary websites.

 

PH

 

My view is the most you can possibly owe now is the balance of the original sum borrowed - you owe NO interest whatsover - not even that charged over the last three years. If you take the amount borrowed (not including the amount of interest added) and deduct the total amount paid back to date - then you only owe the difference.

 

Forget about any guff about "rebate on future interest". You owe NO interest at all if no agreement is any longer in place, and never was - which is what rescission causes.

 

BD

 

PS Nice to see this thread taking a more positive and pro-active approach today!

It's only by challenging "accepted wisdom" that knowledge advances and civilisation matures.

Edited March 4, 2011 by Bigdebtor
A few spelling mistakes spotted - corrected for clarity

[Bigdebtor]

Interesting (and pleasing) to note we seem to have moved on from the assertion (by some) in pinky69's much missed thread that an agreement's early unlawful termination "cannot be accepted" by the other party into examining the "manner" or "nature" of such termination and th eother party's subsequent acceptance.

 

I believe this new approach is much more likely to generate benefits for the CAG community - delighted to see this sea change.

 

BD

[Pumpkinhead]

Regarding Emandcole's question in post 368, I haven't as yet had the Order come through. Counsel also didn't have the calculation with them last week. The judge did allow them to claim interest under s69 but restricted the amount saying if the Claimant had got their POC right first time round it wouldn't have taken so long to sort out.

[Peterbard]

Hi

I would advise something like this. regarding your other accounts.

Re my earlier correspondence dated…..

It is clear that the Default notice sent by you did not conform to the statutory provisions of the consumer credit act and is therefore ineffective.

Contra to my earlier assertion I am now advised that because of this you are not entitled to terminate my agreement on an alleged breach (section87).

Please disregard my assertion of accepting your termination as clearly there was none to accept.

This does still however leave us with the situation that you are unable to enforce the agreement.

Now here is where if I were you I would make an offer to start talks about a repayment schedule.

Highlight why you were mistreated by the creditor or DCA refer to the recent case and how the judge viewed unreceptive or intransigent creditors.

Peter