DG Solicitors issued NI Form on Faulty DN

[frettful38]

This morning I have received a claim form NI from DG Solicitors. I really need some help on what to do next.

 

HSBC know that I have a faulty DN and I need some urgent help with my defence. Any help will be very much appreciated as I am in a state of panic!!!!!!!!!

 

They are claiming 8% interest also which I thought was not allowed on a CCA agreement?

 

Claim Form:

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/hsbc/DGSolsNIForm.jpg

[Drowning but not sunk...]

Have a look at my thread just posted link I think this is why HSBC may be overlooking faulty DN

[frettful38]

Thanks DBNS do you have a link?

[frettful38]

I know that interest is not allowed to be added to judgments under £5k. Now either I am wrong or deluded but it took me over a year to prove this point on my thread "is it a mistake or fraud".

 

Or the banks & lenders are in bed with the courts and have looked in to their crystal ball and know that the Brandon appeal will lose and are dishing out claims in advance as they know they are still the top dogs?

 

Still I am not surprised.

[frettful38]

So do we use the Woodchester v Swayne or does the Brandon case over ride this?

[fork-it]

Claimant can apply for 8% interest under section 69 of the Courts Act. Its not an automatic right.

 

Whats a faulty DN?

[Drowning but not sunk...]

I think the term "Whats a faulty DN" says it all there is no longer such a thing!

[cymruambyth]

How is the DN faulty?

 

I believe that Brandon's case is dependant on how many days are allowed for posting. Does the DN include charges etc?

AS it is still going to appeal it is not definitive

[rebel11]

http://www.hammonds.com/FileServer.aspx?oID=23087

[frettful38]

Hi cym,

 

DN is faulty as it does not give enough days to remedy but there is also something very sinister going on here. I know I am being monitored but don't really care anymore.

 

My cca agreement does not have any cancellation rights and I don't know what the act says about that but there are many discrepancies regarding my credit card.

[rebel11]

There was a time when Creditors complyed with CCA 1974. All the T's and C's were dotted as to not fall foul of the CCA 1974. In order to maximise their profits, take

short cuts, save on manpower, Creditors have ignored their obligations. It seems that the Courts are amending the CCA 1974, which has stood the test of time for over 36. If the CCA 1974 was so wrong why has it never been tackled by Parliament and repeeled.

 

Why should the courts provide comfort to Creditors for their breaches?

[frettful38]

I agree with you totally rebel11, anyways I have uploaded my cca and would like any advise on what peeps think? Is it a proper CCA?

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/HSBCCCA1.jpg

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/HSBCCCA2.jpg

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/HSBCCCA3.jpg

 

 

Not too sure as my cca has no credit limit which is a prescribed term, but have read comments that the creditor is allowed to state the credit limit will be determined from time to time and therefore there is no need for him to state a figure on what the credit limit is.

 

I would also like some advice about the cancellation rights as there are hardly any.....maybe not enough to make it unenforceable. Also when I received my SAR from HSBC it does not show a history of what purchases I made and when.....not sure if it should show this?

 

When I originally applied for my cc with HSBC the card was a different number, and with that card I had made several purchases and I have all the receipts showing that I used that card. Sometime later I lost that card and was issued with a new one and my credit limit was raised without asking me from 2500 to 3000.

 

Maybe I am just clutching at straws here but something is not right here.

[frettful38]

Actually I believe the cancellation rights are on the second page under Important- Read this carefully to find out about your right.

[rebel11]

http://www.legislation.gov.uk/uksi/2004/2095/contents/made

 

Hi cym,

 

DN is faulty as it does not give enough days to remedy but there is also something very sinister going on here. I know I am being monitored but don't really care anymore.

 

My cca agreement does not have any cancellation rights and I don't know what the act says about that but there are many discrepancies regarding my credit card.

[frettful38]

Thanks rebel11, my creditor has stated I can cancel anytime on my agreement so it is valid?

[frettful38]

So much information about what makes a cca enforceable or not. I have read on many sites that the info below should be in contained in a credit card agreement.

 

I have also read in various places that a credit card agreement does not have to contain a limit and a phrase stating that the credit limit will be determined by us from time to time is sufficient. What I need to know which statement is true anyone?

 

For a credit agreement to be enforceable in a court of law it must contain a number of prescribed terms. If any contract is missing any of these prescribed terms then it can be deemed ‘unenforceable’ and the debt cannot legally be collected by the lender.

 

In section 127(3) of the Consumer Credit Act 1974 it clearly states;

(3) The court shall not make an enforcement order under section 65(1) if section 61(1) (a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

Here is an overview of the requirements of section 127(3) of the Consumer Credit Act 1974. For a credit agreement to be enforceable it must contain the following prescribed terms;

 

1) Amount of credit

There must be a term on the agreement which states the amount of credit which has been issued

 

2) Credit Limit

The agreement must include regarding a credit limit or if a credit limit is not required (i.e. in the case of a loan)

 

3) Repayments

 

The agreement must contain information on how the debtor is to make repayments. This could be in the form of any of the following points;

a. Amount of repayments to be made

b. Date the repayments are to be made

c. Timing of payments

d. Frequency of payments

e. Total number of repayments (For instance, when a loan is required)

f. The power of the creditor to vary any of the above mentioned

f. The manner in which any of the above is to be determined.

4) Rate of interest

 

There must be a term referring to the rate of interest to be applied to the credit agreement

 

Credit Cards;

 

If you have a credit card then sections 2, 3, and 4 apply to you.

[vint1954]

But Not for CCA1974

[frettful38]

But Not for CCA1974

 

Sorry vint, what does that mean not for cca 74?

[vint1954]

Hi Frettful,

 

Was this issued out of Northampton. If so you can acknowledge on line saying you are going to defend in full. The details are on the N1 form of how to register and log on. Be sure to click the box, defend in full.

 

This will give you good time to collate your defence.

 

Vint

[vint1954]

Regulated credit agreements, eg Credit Cards or Loans

[vint1954]

Excelent work already done by x20:

 

Accurate Default Notices are vital

 

Introduction

 

Businesses engaged in lending or hiring regulated by the Consumer Credit Act 1974 should be aware of a recent Court of Appeal case highlighting the potential pitfalls of creditors failing to ensure that their documentation complies with the regulations.

In the vast majority of cases, before a lender or hirer can take action against a debtor or borrower, a default notice has to be served. The default notice has to comply with the Act and the relevant regulations (Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1993). If a default notice in the proper form is not served, the action cannot proceed.

In this case*, the defendant hired a photocopier but failed to pay a quarterly instalment of its rent. The plaintiff served a default notice which substantially overstated the arrears which were then due. Despite this, the judge at first instance held that the default notice was valid and entered judgement for the plaintiff.

Correct procedures must be adhered to

 

On appeal, Lord Justice Kennedy held that the Act was enacted to protect consumers, most of whom were likely to be individuals. When contracting with a financial organisation, a consumer was bound to be at a disadvantage. The contract was likely to be in standard form and complex. His Lordship said that if it was said that a consumer had broken the terms of the agreement, the consumer needed to know precisely what had been done wrong and what was needed to put matters right. The lender has the ability and resources to do this and, if it does not do so accurately, it is only right that it should not take the next step. Under s88(1) of the Act there is a requirement that the lender should 'specify' not only the nature of the breach, but also what action is required to remedy it. In the context of this case, that meant specifying with reasonable accuracy what sum the hirer had to pay to remedy the breach.

The Court went on to say that an error that could be described as minimal might be overlooked, but the substantial inaccuracy in this case rendered the default notice ineffective, so the appeal should be allowed.

Tens, if not hundreds, of thousands of default notices are issued every day. This case illustrates how vitally important it is that any default notice is correct in form, as well as in substance. It is likely that the Court would take the same view with regard to the form and contents of regulated agreements.

*Case reference

Woodchester Lease Management Services Ltd v Swain & Co NLD 14 July 1998.

Edited November 17, 2010 by ScarletPimpernel
Removed 2 copies of the same text

[frettful38]

Hi Frettful,

 

 

 

This will give you good time to collate your defence.

 

Vint

 

 

Was this issued out of Northampton. If so you can acknowledge on line saying you are going to defend in full. The details are on the N1 form of how to register and log on. Be sure to click the box, defend in full.

[vint1954]

And more from x20:

 

when you refer to "alerting them" are you referring to an old termination?

 

what Bill shidding was saying is that the DDJ ruled that where it had not been made clear that the unlawful termination had been accepted by the debtor then it was taken that the agreement endured- for the reason that the creditors termination of the agreement itself was not valid due to the defective DN

 

the creditor then just let the matter rumble on and kept sending monthly default letters until the agreement naturally came to an end,

 

Now, all the payments that would have been due each month are now arrears (they became arrears each month as they were not paid)

 

so at the end of the natural life of the agreement the creditor says fine, i accept that the termination was not LAWFUL as it was issued on the back of a faulty DN therefore the agreement still endured because the debtor did not accept the UNLAWFUL nature of the termination (contract law) therefore all the arrears (which of course by then is the whole of the account) is now is now due as the agreement clearly had not been properly ended

 

 

IF the debtor had exercised his right, when the creditor UNLAWFULLY terminated (repudiated) the agreement and accepted the unlawful termination then the agreement would have ended then and there and no more arrears could have accumulated

 

if you read this posting by x20 you might get a better feel for the thought process:-

 

The contention advanced by ABC's lawyers was that if the DN was ineffective, the termination which ABC subsequently brought about in reliance upon that ineffective DN, was itself ineffective. In support, ABC said that since the law did not permit a creditor to terminate an agreement unless there had been serivce upon a debtor of an effective DN, by extension therefore, rather than having been terminated, the agreement endured.*

 

The law in support of this proposition was Consumer Credit Act 1974 section 87(1)(a) which says:

 

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement (a) to terminate the agreement

 

ABC went on to say that owing to the agreement enduring, ABC were therefore at liberty to serve a second DN.

 

At first blush, that looks quite a convincing argument. The Act itself forbids the creditor the right to terminate save in certain circumstances. So if the required circumstances were not present, how could the law regard the agreement as having terminated?

 

[1] Termination of a Contract and General Principles

A good place to start would be to dispel the myth that the law will not tolerate contract breaking. On the contrary whilst not actively encouraging it, the law will tolerate it. The courts will rarely impose upon one party an obligation to perform under a contract against its will, to do what it failed to do or redo what it tried and failed to do. Instead, what the law will do is on the one hand restrain the contract breaker from procuring the benefits it would have enjoyed had it fulfilled its contractual obligations and on the other, enable the injured party to recover damages flowing from the breach.

 

In*Golden Strait Corporation v Nippon Yusen Kubishka Kaisha*[2007], Lord Bingham said:

 

'The repudiation of a contract by one party ("the repudiator"), if accepted by the other ("the injured party"), brings the contract to an end and releases both parties from their primary obligations under the contract. The injured party is thereupon entitled to recover damages against the repudiator to compensate him for such financial loss as the repudiator's breach has caused him to suffer. This is elementary law.

The damages recoverable by the injured party are such sum as will put him in the same financial position as if the contract had been performed.'

 

What's more, the law will not merrily award whatever loss the injured party says he suffered. The court will require the injured party to prove his loss and further, will expect the injured party to take steps to mitigate the loss.*

 

'An injured party such as the owners may not, generally speaking, recover damages against a repudiator such as the charterers for loss which he could reasonably have avoided by taking reasonable commercial steps to mitigate his loss.'*[Lord Bingham in Golden Strait Corporation.]

 

Further still, in assessing damages the law will not even award what the parties may at formation of the agreement have agreed should be payable as liquidated damages in the event of breach. The court will not permit the recovery of liquidated damages unless the damages represent a fair pre-estimate of what loss might flow from the breach. If the liquidated damages are shown to be excessive and unrepresentative of the sactual loss suffered the law will readily declare the liquidated damages as a penalty and unenforceable.

 

In short, not only does the law tolerate contract breaking, but also, it will not tolerate the injured party taking advantage of the wrongdoer. The law does not pounce on the contract breaker to teach him a lesson. The court only awards the innocent party what damages truly flow from the breach. That admits of the possibility that a contract breaker can get away with it. If the injured party is unable to show resulting loss, the injured party may get nothing.

 

'One must look at the contract as a whole, and if it is clear that the innocent party has lost nothing, he should recover no more than nominal damages for the loss of his right to have the whole contract completed.'*[Edmund Davies LJ in*'The Mihalis Angelos'*(1971)]

 

[2] Termination in Non-Conformity with section 87.

The contention I advance is that an ineffective DN does not prohibit the creditor from terminating the agreement. Termination after service of an effective default notice is lawful termination, but as we have seen, a party may still terminate an agreement and be in the wrong for doing so. The law operates on a wrongful termination to offer to the injured party the choice of accepting the termination or to hold the contract breaker to his promise.

 

In the world of consumer credit, I contend a termination of the agreement by a creditor in terms whereby he announced he would no longer permit the debtor time to repay the credit, was a creditor in repudiatory breach of the agreement, unless in leading up to termination, the creditor complied with the requirements of the Act in circumstances where the debtor was in first breach of the agreement.

 

Further, and it is worth remembering, the Act is an Act for the purpose of consumer protection. The purpose of the Act is not to preserve the rights of creditors in contracts and to protect them from misadventure where for example, they terminated an agreement where it subsequently transpired the termination had not been in their interests. If that were so, the Act would have been an Act for the better protection of financiers.*

 

In a proper case, the law will come to the aid of the vulnerable to protect them from the consequences of their contracts (for example the unsound in mind, children, those under duress or undue influence). To suggest financiers fell into that bracket and the Consumer Credit Act*

operated to protect them and not the consumer, was absurd. The civil law does not come to rescue the misadentures of the sain and the savvy.

 

The clue to the position of the creditor on termination is in the use of the word 'entitled' in section 87(1). 'Entitled' connotes a right or a benefit. The Act therefore confers rights, conditional upon the provisions of section 87(1) being fuilfilled. Fail to fulfill the condition and the entitlements do not become available.*

 

In the case of a contract entered into by a person under duress and who then breaks the contract the law will come to that person's aid by recognising that person's plea that the contract was made under duress. If that person seeks a declaration of the court that the contract was made under duress the court wil readily declare the contract void.

 

If the Act had intended that a creditor's termination in circumstances where section 87(1) had not been fulfilled by the creditor and was to be of no effect, the Act would have declared that termination void. It doesn't. The termination is voidable at the option of the debtor.

 

[3] The Debtor's Point of View

Third, let us look at the position from the ordinary man as debtor's point of view in a consumer credit situation.*

 

The DN is defective for failing to conform to the prescribed terms, or gives misleading information or at worse is plain nonsense so that the debtor does not know precisely what he has to do in order to comply with it and is consequently disadvantaged. Should the law disregard the fact that the creditor put the debtor at a disadvantage and thereby at risk the creditor might lawfully terminate the agreement?*

 

'This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If the hirer is said to have broken its terms, the hirer needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and the resources to give that information with precision. If he does not do so accurately then he cannot take what Mr Gruffyd conveniently referred to as "the next step".*[per Kennedy LJ in Woodchester v Swayne [1998]]

 

Moving on, if the debtor receives a notice from the creditor in which the creditor expressly states the contract is terminated, what is the debtor supposed to think? Would the law regard him as likely to think the creditor had terminated the contract or would the law regard him as thinking it had not terminated because strictly speaking, the creditor had served a default notice which was not in accordance with prescribed terms?

 

Or where perhaps the creditor did not expresly terminate but sent the bully boys over to demand the keys to the car. What was the debtor to think then? Would the debtor think the creditor had terminated?

 

It seems to me on the basis of the passages below, the courts will be ready to hold a creditor to his words and actions.

 

"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".

[per Lord Wilberforce in*Gallie v Lee*(1971)]

 

'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'

[per Scott LJ in*Norwich & Peterborough Building Society v Steed*(1992)]

 

In short, the creditor is bound by his deed. All that is required is for the debtor to accept the creditor's termination. He can write saying 'thank you I accept you termination' or he can conduct himself in a way in keeping with that termination. Not paying the instalments would be in keeping with an acceptance of the termination.

 

[4] The fiction of the Second DN and the Enduring Obligation

The service of any second default notice, at a time when the contract is terminated, owing to the wording of the DN in its prescribed form, would perpetuate the fiction that the contract endured. The same can be said owing to the provisions of section 89 of the Act.

 

The form of words in the DN incorporate text in order to meet the intention of section 89 of the Act which provides:

 

'If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88(1)(b) or © the breach shall be treated as not having occurred.'

 

In other words, in serving the second DN, the creditor would be suggesting:

 

[a] an obligation had persisted post termination by which the debtor was bound to make instalment payments (ie post-termination 'arrears'), and

that if payment of those 'arrears' was made, an obligation to make future instalment payments would endure.

 

The obligations at [a] and are obligations enduring during the currency of the agreement. Besides maintaining the fiction of the enduring agremeent as I say, it seems to me any second DN would be bound to be defective for over-stating the sums due. The creditor can not state as an amount due for 'arrears' of instalments that which he said in consequence of his termination was no longer due and payable by instalments. If the creditor sought to use a form of DN which made sense by getting round the fact the agreement had been terminated, the DN would not be in prescribed form.

 

The only way in which a second DN would be of value to the creditor would be where the contract had been re-instated. If the debtor has accepted the termination, re-instatement requires the consent of the debtor.*

 

The net result of [1] to [4] is the agreement is terminated for all time. The creditor's remedy is now limited by section 87(1). All that is left for the creditor to recover is the sum truly in arrear at the date of the default notice.

 

Damage to Credit

A man's credit is damaged when it is impugned. He learns it is damaged when he seeks credit to fund a transaction and is turned away or when his creditors seek to call in debts. The effect can be simple embarrasment to being totally destabilising. A learned his credit was impugned when he was warned by his bankers. The damaging effect of the adverse reporting could have been a lot worse.

 

I had deliberately tried to keep my first post as simple and straight forward as I could. I hope this expanded version showing the way strands of law can intertwine to build a case is of assistance.

 

x20

 

 

[frettful38]

Great info vint and I am sure that will come in very useful, but the issue on the faulty DN has been bashed around so much on the DN thread that site team have had to close it down..........also does the Brandon case which is at appeal on 6 Dec 10 not quash all arguments in favor of a faulty DN?

 

Yes it was issued at Northampton and I will register and acknowledge claim on line but really need some help with a defence if possible please?

 

Here is a copy of my faulty DN, HSBC have terminated my agreement and I have sent them a letter accepting their unlawful rescission, received various letters from DG sols since and today this bombshell was dropped on me.

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/barristers%20advice/downloads/HSBCDN1-1.jpg

Edited October 30, 2010 by frettful38

[frettful38]

Deleted

 

I am having trouble registering my respond to claim online.......probably have to keep trying. There is a password given and I have put it and the claim number in but keeps coming back invalid password or claim number

 

OK I'm in. The claim form has given me 14 days to acknowldge

Edited October 30, 2010 by frettful38