Imperial Consolidated/Orion Asset/Merit - adding 8% statutory interest to old ccj,

[the tinkerman]

Cheers Sequenci

[Guest]

..........My personal understanding is the same as yours! My emploers argue that regardless of the judgment any post-judgment interest should be collected in a seperate 'pot' and not added to the original judgment debt. Although the HOL case states that post-judgment contractual interest can be claimed to our knowledge there has never been a case where a creditor tries to sue for it!

 

it's any interesting area for sure.

 

........

 

hi, see for eg http://www.consumeractiongroup.co.uk/forum/showthread.php?279746-T.B.I-Finacial-Services-Charging-Order where post J contract. interest is, unfortunately, an issue!

Edited October 28, 2010 by Ford
typo

[Guest]

sequenci/dx

 

given the recent Q's on CAG re post Judgement interest, (and the recent 'MO' for requesting a 'sticky' ), how about doing a 'sticky' re post J interest?

[sequenci]

Great idea. I'll try and get something together over the next few days. I'm away at the mo so will get started on Monday.

 

Incidentally I've found some VERY good information regarding this!

[Guest]

looks promising! care to elaborate?

[sequenci]

I just need to get a bit of time to go through it, I've been away the last few days but things should die down over the next few.

 

I think we need to spend a bit of time on post-judgment interest as it really is a massive can of worms!

 

Best wishes,

 

Seq

[Guest]

hi. agreed. but you've left it in suspense saying that you've found some 'VERY good information'

[sequenci]

I'm so sorry.

 

I wanted to get straight on to it but I've just been handed loads of work in the day-job that I need to get sorted first!

 

In a nutshell, depending on when the judgment was entered post-judgment contractual interest does not accrue as part of the judgment debt.

 

It has to accrue in a seperate pot.

 

I'll try and post something up a little later if I can find the time (and I really hope to!)

[Guest]

...I wanted to get straight on to it but I've just been handed loads of work in the day-job that I need to get sorted first! of course.

 

 

In a nutshell, depending on when the judgment was entered post-judgment contractual interest does not accrue as part of the judgment debt. It has to accrue in a seperate pot. agreed. i had also read that the judgement debt would need to be paid first before any contract. interest could be claimed? ......... [/QUOTE]

 

[sequenci]

I would imagine that to be true!

[Guest]

it' seems an anomaly! post J contract. interest is allowed (if in the agreement) yet post J stat. interest, at a mere 8% in comparison, is not allowed! thankfully, it seems rare (so far!) for creditors to try and claim it!

Edited November 27, 2010 by Ford

[sequenci]

Hey there, sorry it's a little late. I've written a blog on post-judgment interest.

 

I'm going to update it with some remedies tomorrow.

 

http://www.consumeractiongroup.co.uk/forum/entry.php?191-Post-judgment-interest-on-CCA-regulated-debts

[Guest]

tinkerman

 

any developments? did you manage to get the interest stopped?

[the tinkerman]

Hi All

 

Not been in touch for a while had a bit of a breakdown over Christmas,

 

was my day of reckoning yesterday this is what happened:

 

The Judge explained to me that I had to much information about certain technicalities that needed to be narrowed down,

she asked both me and the Claimants solicitor to adjourn for half an hour whilst she decided what course of action she would be taking,

 

once called back in she stated that the Claim needs to go back to the beginning as nothing has been sorted out in 3 previous hearings regarding the Issues and that all previous hearing should be struck out and that I need to now fill in a single application in numerical order for the court to consider along with a Witness Statement in support of my application, each is to have numbered paragraphs and a Statement of Truth as if I was doing it from the beginning listing all the issues I have regarding the Notice of Assignment, Statutory Interest being applied, The interest rate regarding the Original Credit agreement and the fact that this DCA did not appear to hold a Consumer Credit License for a couple of years whilst collecting this debt and why they should not vary the agreement.

 

The background being

 

the now Claimant Merit Finance ltd bought this CCJ debt back in 2002 from a company called Orion Asset Finance Ltd

then name changed to ICF Loans Ltd who Originally bought the debt from the Original Creditor Imperial Consolidated Financiers Ltd as they went into administration and my CCJ payment has always gone to the solicitor,

 

but I was only acknowledged in the way of a Notice of Assignment a year later back in 2003 that Merit had bought this Debt from ICF Loans Ltd,

 

Then in December 2009 I received a notice of a application for a hearing with a date time but nothing else,

so I sent a letter to the Court to ask what it was about in case I needed to form a defence and could I have it transferred to a Local Court.

 

The Court acknowledged receipt of my letter but I only received a copy of the Claimants application which was for Merit to be substituted as the new Claimant and witness statement the day before the hearing was about to take place thus giving me no time in which to form a defence

 

I rang the Court in a blind panic to explain this and ask could they at least adjourn the hearing giving me time to form a defence to which I was told that it would go before the judge.

 

Two weeks later I received a letter back from the court to inform me that the substitution has been granted in my absence:-x

 

I then applied for a Set aside which was granted to be heard in my local Court as alot of things came to light in the claimants witness statement that either I did know about like the first sale of my CCJ from Imperial Consolidated Financiers Ltd to Orion Asset Finance ltd whom then had a name change to ICF Loans Ltd which up to the now Claimants Merits witness statement

 

I had no prior knowledge of this sale either in the way of a Notice of Assignment or any letters from the solicitor, and what is strange is the fact ICF Loans Ltd you could take in short for the Original Creditor Imperial Consolidated Financiers Ltd yet they do appear to be two separate companies?

 

So all in all I wanted to question:

 

A.The Validity of the First sale as no Notice of Assignment was received by me yet as stated in the now Claimants witness statement that it was and when I asked for a copy of it they sent me chapter and verse of the Deed of Assignment from the first sale from Imperial Consolidated Financiers Ltd to Orion Asset Finance ltd whom then had a name change to ICF Loans Ltd but then stated seeing as Merit were not party to the first sale that they did not have a copy of the Notice of Assignment yet you would have though Merit would have had to have sight of that document to prove everything had been done legally from the first sale before they bought this judgement debt because my understanding of the LOP Act 1925 s136 & s196 is that unless you issue the third party a Notice of Assignment then the assignment is equitable and not absolute thus meaning that ICF Loans Ltd should not have sold this CCJ without the Original creditor Imperial Consolidated Financiers Ltd being a party to proceedings as the co claimant.

 

B.The validity of the statutory interest being applied to the CCJ.

 

and another two issues since which have been brought to my attention:

 

C. Merit bought this debt in 2002 to which they have been collecting on it ever since through their solicitor yet it appears that they only obtained a Consumer Credit License in 2003 to which also that Licence seemed to have run out in Aug 2008 and appears to only have been renewed nearly a year later in July 2009 ?

 

D.The extortionate APR OF 50% from the Original CCA.

 

I have no problem in doing that and the Judge seem to take on board that yes questions do need to be answered by the Claimant in relation to those issues I had raised but I need to condense them more in my Application in fact she was very nice really, Question is what form do I fill in for this as the Solicitor asked the Judge is Merit still the Claimant and she relied "yes" So, is it still a N244 that I fill in and and again ask for a Set Aside of the Substitution of Merit taking place in relation to the issues that I am raising or is it something completely different? Bit miffed that I have to pay for the Application again to as I was not given the chance to defend the substitution in the first place!

 

 

 

Their Solicitor seemed a bit miffed by all of this and when I asked especially about the statutory Interest the Claimant was applying and mentioned about the The County Courts interest on judgment debts order 1991and therefore it seems that s2(3) of the order is applicable in my case, he quoted that only applied to grants, the landlord of a dwelling house, or the mortgagee under a mortgage of land which consists of or includes a dwelling house a suspension order for possession as below?

 

The general rule

2.—(1) Subject to the following provisions of this Order, every judgmentdebt under a relevant judgment shall, to the extent that it remainsunsatisfied, carry interest under this Order from the date on which therelevant judgment was given.

 

(2) In the case of a judgment or order for the payment of a judgmentdebt, other than costs, the amount of which has to be determined at alater date, the judgment debt shall carry interest from that later date.

 

(3) Interest shall not be payable under this Order where the relevantjudgment—

 

(a)is given in proceedings to recover money due under an agreementregulated by the Consumer Credit Act 1974(1);

(b)grants—

(i)the landlord of a dwelling house, or

(ii)the mortgagee under a mortgage of land which consists of or includesa dwelling house,

a suspended order for possession.

(4) Where the relevant judgment makes financial provision for thespouse or a child, interest shall only be payable on an order for thepayment of not less than £ 5,000 as a lump sum(whetheror not the sum is payable by instalments).

 

For the purposes of this paragraph, no regard shall be had to any interest payable under section 23(6) of the Matrimonial Causes Act 1973(2).

 

 

 

But as I read it (3) Interest shall not be payable under this Order where the relevantjudgment— (a)is given in proceedings to recover money due under an agreementregulated by the Consumer Credit Act 1974(1);

 

Regardless and that sec 3 (b) and 4 where Just other cases in which interest shall not be payable under this Order, the Claimants Solicitor then went on to state to me that the Act only applied to Judgements of £5,000 or less.

 

The Judge stated that it did not need to state on the Original Judgment about Statutory Interest and that the Claimant can apply it under section 74 of the County Courts Act 1984, but when I mentioned about the County Courts interest on judgment debts order 1991 and showed this what I had found below

 

House of Lords Session 2001- 02

Publications on the Internet

Judgments

 

Judgments - Director General of Fair Trading V First National Bank

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

 

 

HOUSE OF LORDS

Lord Bingham of Cornhill Lord Steyn Lord Hope of Craighead Lord Millett Lord Rodger of Earlsferry

 

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

THE DIRECTOR GENERAL OF FAIR TRADING

 

(ORIGINAL RESPONDENT AND CROSS-APPELLANT)

 

v

 

FIRST NATIONAL BANK PLC

 

(ORIGINAL APPELLANTS AND CROSS-RESPONDENTS)

 

ON 25 OCTOBER 2001

 

[2001] UKHL 52

 

LORD BINGHAM OF CORNHILL

 

My Lords,

 

1. First National Bank plc ("the bank") is licensed to carry on consumer credit business. It is a major lender in the market and has lent large sums to borrowers under credit agreements regulated under the Consumer Credit Act 1974. Such agreements are made on its printed form which contains a number of standard terms. The Director General of Fair Trading ("the Director"), in exercising powers conferred on him by regulation 8 of the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159) ("the regulations"), sought an injunction to restrain use of or reliance on one such standard term on the ground that it was unfair. The bank resisted the Director's application on two grounds. The first, rejected by Evans-Lombe J at first instance ([2000] 1 WLR 9 and the Court of Appeal (Peter Gibson, Waller and Buxton L JJ) ([2000] QB 672), was that the fairness provisions of the regulations did not apply to the term in question. The second, accepted by the judge but partially rejected by the Court of Appeal, was that the term in question was not unfair. In this appeal to the House the bank again relies on both these arguments. The Director seeks to uphold the decision of the Court of Appeal but contends that the term was more fundamentally unfair than the Court of Appeal held it to be. Thus there are two broad questions before the House:

 

(1) Do the fairness provisions of the regulations apply to the term in question?

 

(2) If so, is the term unfair and, if it is, on what ground?

 

2. By its standard form of regulated credit agreement the bank agrees to make a sum of money available to the borrower for a specified period in consideration of the borrower's agreement to repay that sum by specified instalments on specified dates with interest at a specified rate. Condition 4 of the bank's standard form provided that:

 

 

"The rate of interest will be charged on a day to day basis on the outstanding balance and will be debited to the Customer's account monthly in arrears . . ."

 

and provided that the rate of interest might be varied. Condition 8 of the agreement was in these terms:

 

 

"Time is of the essence for making all repayments to FNB as they fall due. If any repayment instalment is unpaid for more than 7 days after it became due, FNB may serve a notice on the Customer requiring payment before a specified date not less than 7 days later. If the repayment instalment is not paid in full by that date, FNB will be entitled to demand payment of the balance on the Customer's account and interest then outstanding together with all reasonable legal and other costs charges and expenses claimed or incurred by FNB in trying to obtain the repayment of the unpaid instalment of such balance and interest. Interest on the amount which becomes payable shall be charged in accordance with Condition 4, at the rate stated in paragraph D overleaf (subject to variation) until payment after as well as before any judgement (such obligation to be independent of and not to merge with the judgement)."

 

Emphasis has been added to the last sentence of this condition, since it is to that sentence alone that the Director's objection relates. I shall refer to this sentence as "the term".

 

3. The bank's stipulation that interest shall be charged until payment after as well as before any judgment, such obligation to be independent of and not to merge with the judgment, is readily explicable. At any rate since In re Sneyd; Ex p Fewings (1883) 25 Ch D 338, not challenged but accepted without demur by the House of Lords in Economic Life Assurance Society v Usborne [1902] AC 147, the understanding of lawyers in England has been as accurately summarised by the Court of Appeal at p 682 of the judgment under appeal:

 

 

"It is trite law in England that once a judgment is obtained under a loan agreement for a principal sum and judgment is entered, the contract merges in the judgment and the principal becomes owed under the judgment and not under the contract. If under the contract interest on any principal sum is due, absent special provisions the contract is considered ancillary to the covenant to pay the principal, with the result that if judgment is obtained for the principal, the covenant to pay interest merges in the judgment. Parties to a contract may agree that a covenant to pay interest will not merge in any judgment for the principal sum due, and in that event interest may be charged under the contract on the principal sum due even after judgment for that sum."

 

4. To ensure that they were able to recover not only the full sum of principal outstanding but also any interest accruing on that sum after judgment as well as before, it became the practice for lenders to include in their credit agreements a term to the effect of the term here in issue. If such a provision had not been included, a lender seeking to enforce a loan agreement against a borrower in the High Court would suffer prejudice only to the extent that the statutory rate of interest on judgment debts at the material time is lower than the contractual interest rate, because the High Court has, since 1838, had power to award statutory interest on a judgment debt until payment.

 

5. But a lender seeking to enforce a regulated credit agreement is in a different position. He is obliged by section 141 of the 1974 Act to sue in the county court. Until the Lord Chancellor, exercising his power under section 74 of the County Courts Act 1984, made the County Courts (Interest on Judgment Debts) Order 1991 (SI 1991/1184), the county court lacked power to award statutory interest on any judgment debt and, when such a general power was conferred by the order, judgments given in proceedings to recover money due under agreements regulated by the 1974 Act were expressly excluded from its scope. It was further provided in the order:

 

 

"3 Where under the terms of the relevant judgment payment of a judgment debt -

 

 

(a) is not required to be made until a specified date, or

 

 

(b) is to be made by instalments,

 

 

interest shall not accrue under this Order -

 

 

(i) until that date, or

 

 

(ii) on the amount of any instalment, until it falls due,

 

 

as the case may be."

 

6. Thus a lender under a regulated credit agreement who obtains judgment against a defaulting borrower in the county court will be entitled to recover the principal outstanding at the date of judgment and interest accrued up to that date but will not be entitled to an order for statutory interest after that date, and even if the court had power to award statutory post-judgment interest it could not do so, in any case where an instalment order had been made, unless there had been a default in the due payment of any instalment. The lender may recover post-judgment interest only if he has the benefit of an independent covenant by the borrower entitling him to recover such interest. There is nothing to preclude inclusion of such a covenant in a regulated credit agreement, unless it falls foul of the fairness requirement in the regulations.

7. Section 71 of the County Courts Act 1984 conferred a general power on the county court, where any judgment was given or order made for payment of a money sum, to order that the money might be paid "by such instalments payable at such times as the court may fix". The 1974 Act also conferred on the county court three powers relevant for present purposes. First, the court was empowered to make a time order. Sections 129 and 130 of the Act, so far as relevant, provided:

 

 

 

To tell you the truth after them reading the above, I don't think nobody neither the Judge Or the Claimants Solicitor new then whether or not this 1991 Act applied to my Judgment or not Which reading it I think it definitely does, after all mine is a regulated credit agreement and I am at a loss as how you could read it any other way, what is anyones take on this please hard facts if possible.

 

Got the Impression I hit a nerve or two with the questions I raised, especially in relation to the The County Courts interest on judgment debts order 1991 regarding Statutory Interest you pointed out to me, not to mention the other issues,also got the impression though that their solicitors will try and do there best to come up with a reason why this act does not apply to me, but at the end of the day as I said to their solicitor it either does or it does not full stop.

 

 

Regards

 

 

 

Tinks

 

 

 

Once again thanks all of you for the advice so far in this case, without you I would be up S**t creek without a paddle .

Edited February 10, 2011 by the tinkerman

[Guest]

hi tinkerman

sorry to read of your circumstances over xmas.

re post judgement stat interest, you are absolutely correct. the 91 order does apply to regulated debts (not just grants etc!). as you say, para 2 (3) (a). (a) is independent of (b) etc.

para 6 of the HL judgement above sums things up...'a lender under a regulated credit agreement who obtains judgment..................but will not be entitled to an order for statutory interest after that date.....'

If they and the ct are unable to read the 91 Order properly, then the authority is the HL judgement quoted above. particularly para 6 by Lord Bingham.

ps, 'relevant judgment' means a judgement of not less than 5,000. ie it relates to judgements over 5,000! any judgement below 5K is not even subject to s74 interest at all.

also, remember CPR Practice Direction 70, 6

imo

Edited February 11, 2011 by Ford
typ/ps added

[martin g]

Hi,

I'm just interested in the maths on the claim

You owe them ( in round terms) £12,000 and they want to add 8% interest, or say £1,000 p.a.

You are paying them at the rate of £5 per month or £60 p.a.

To pay the capital sum off is £12,000/ £60 =200 years, and, sadly, none us are going to live that long.

To pay £12,000 less £60pa plus £1,000pa (plus I assume compound interest on £940 at 8%) means that the debt will compound and stretch beyond infinity.

In fact,it would over a longish period of years exceed the whole world's financial output. No doubt, there is some one reading this who could tell us how many years it would take for this to happen.

 

Don't you feel that you should point this out to the judge and the claimant and try to come up with a sum of money in full and final settlement?

 

Just my thoughts,

Martin g

Edited February 11, 2011 by martin g
Can't spell

[debbbbsy]

hi,

 

I think there are many issues you have raised.

 

As for the PJI, you are correct the original agreement needs to have a "PJI clause".

 

Where as normally you cannot do a CCA request once a judgement is granted. However, this exemption does not apply if they are applying interest to the judgement.

 

4 WHEN THE DUTY DOES NOT APPLY

4.1 Sections 77 to 79 set out a limited number of situations where the duty

to supply copies and statements does not apply.

• It does not apply to an agreement under which no sum is, or will or

may become payable by the debtor or hirer. It will therefore not

apply where the agreement has been paid off and terminated. It will

also not apply where judgment has been obtained, unless there is an

interest-after-judgment clause in the agreement which the creditor or

owner has not expressly waived. Where, however, the agreement

has merely been terminated, but monies are or will or may be

payable under it by the debtor or hirer, the OFT considers that the

duty will still apply.

Now, normally if a DCA fails to respond to a CCA request, you put the account in dispute & they can't get judgement. But they already have a CCJ. So in this case failure or refusal to comply when interest is being applied, and when the claimant is seeking to further enforce the claim. You can make an application to the court for a "Declaration Of Enforceability".

 

You are reminded that should you fail or refuse to comply with my request, the provisions of s.77(6) will apply.

 

 

Your attention is drawn to ss.5(2), 3(b),6 and 7 of the Consumer Protection From Unfair Trading Regulations 2008 (CPUTR). Ensure that your response is factually correct. Failure to comply with an information request, or to respond in such a way that is misleading and unfair will result in a 'Domestic Infringement' under the Enterprise Act 2002, and enforcement proceedings will be issued under the Act.

Your attention is also drawn to section 170(3), any breach of the act will result in an application to counterclaim for Declaratory & Injunctive relief.

Debs

[sequenci]

As for the PJI, you are correct the original agreement needs to have a "PJI clause".

 

And even if it does the interest would have to accrue in a separate pot (for any judgments enetered into after 1st oct 2008)

[Guest]

As for the PJI, you are correct the original agreement needs to have a "PJI clause".

 

to clarify - a 'clause' in an agreement is not required re post Judgement 'statutory' interest. the application of post J statutory interest is enshrined in statute (s74), subject to the 91 Order.

a clause in an agreement is required for any post J 'contractual' interest.

imo.

Edited February 12, 2011 by Ford
typ

[Guest]

bump re other issues raised in post #43 ie NoA etc

 

thanks

[paulwlton]

Can you post up the original agreement?

[the tinkerman]

Hi Paul

 

see copy of t&cs and copy of original judgement

 

Tinks

T&C .pdf

judgement.pdf

[paulwlton]

Hi Paul

 

see copy of t&cs and copy of original judgement

[ATTACH=CONFIG]28036[/ATTACH][ATTACH=CONFIG]28035[/ATTACH]

 

Tinks

 

Can you post your original consumer credit agreement?

[the tinkerman]

Hi Paul

 

Copy of Orig Credit Agreement, T & C s on back of agreement on post previous

agreement.pdf

[Guest]

apr 50%