Brandon Case

[Desperate Daniella]

Oh Shirley you're not coming up with that one!

[emandcole]

Great that this has finally been resolved and daft that an issue set in stone amongst statute has been perverted for so long that it took someone like Brandon to have the arguments and questions settled. However...

 

We need to look at the paths available in various situations where a creditor has defaulted badly then gone on to terminate. This is bound to form the substance of many threads as we all work to understand how this result influences various scenarios.

 

1) If a creditor issues a bad DN and hasn't terminated I think we all agree they are still free to issue another correct one. Fair enough.

 

2) If a creditor issues a bad DN and then terminates (that being by formal letter/notification or by demand for the full amount outstanding) then surely it is not quite so simple as the debtor has been subjected to unwarranted activity and would surely have legal ground for recourse for this...after all DCA letters are designed to be nasty and who wants to be sent one incorrectly? Legal avenues here would be a good discussion point.

 

3) If a creditor issues a bad DN, terminates and then assigns the debt absolutely to a third party who then attempts collection under threat of litigation I cannot accept it is simply a matter of the new owner constructing a new 'good' DN to skirt around the underlying issues. Numerous questions arise such as -

 

• Did the creditor have any right to have sold the account anyway?
  
• Is it actually terminated or still live?
  
• Data protection breaches - no third party should have access to your details and use those to forward letters demanding sums of money under the threat of litigation.
  
• Surely the creditor acting in the way they have constitutes breach of contract - they chose to terminate your account having deprived you of your protected opportunity to provide remedy contrary to the terms of the governing CCA it proposed the agreement was subject to. They then want to brush that aside and start again?
  
• What about DCAs who have gone on to secure judgment when a bad DN has been raised by the defendant in their defence and had the same statute ignored as de minimus as has just been upheld by the Brandon judges?
  
• What about cases where the DJ has dismissed requests for stay of process pending the outcome of Brandon and gone on in their wisdom to uphold judgment for the claimant with the wonky DN? Repurcussions surely for bad decisions prejudicial to the (now vindicated) defendant.
  

This is just a start, would throw this out to you all for discussion

Edited October 30, 2011 by emandcole

[gezwee]

I think we'll see claims hurriedly amended to 'test' a combined s.98 judgment and attempts to hoodwink dj's in the meaning of the Brandon appeal

 

Gez

[Gallahad]

Just to get my facts straight (I've been off the forum for a bit and am playing catch-up ) this was permission to appeal the previous judgment right?

 

If so we can expect to see all manner of poison coming into play as the banks and the wider finance parties come to realise that 'all those freakin' caggers banging on about statute being important' were actually onto something.

 

You don't have to spend long reviewing threads on here to recognise that there are a whole bunch of DN's out there that are completely invalid throwing all manner of complex scenarios into question concerning subsequent terminations, DCA involvement with demands for full balances (technically not yet payable) and even lost litigation on bad DN's where the more incapable disrict judges have adopted a moral view on the issue rather than restraining themselves and simply following statute...especially where defendants have cited Brandon requesting stay of process pending the Brandon outcome and had that refused.

 

If we are actually heading to the 'main event' on this things are about to get extremely messy.

 

Given the fact that banks have the government in their pocket (let's face it, the government have simply thrown more money at a load of people to solve a problem caused by those same people having already spent money they didn't have - akin to giving a fat kid more sweets after he promises he won't eat them all again!) it'll be interesting to see how influence and back room hand shakes get round statute to keep the few at the top happy.

Very astute i would say perfect reading of the overall situation

G

[May Fly]

one thing I'm not sure about, if a bank sells a debt/account to someone/DCA after a dodgy DN was issued, will the DCA be in a position to serve a DN? ie, does the licence situation come into it? Do lenders have a different licence than DCAs? Can DCAs lend money? If not, then how can they issue a DN?

 

And when they 'terminate' an account after a dodgy DN, is it actually terminated? I've got several dodgy DNs, all 'terminated'? Can the banks now say that they weren't actually terminated, and I now owe bank interest since the date of 'termination'?

[stone-broke]

Does the following not apply these days?

 

The Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, and that a failure of a Default Notice or Termination Notice to be accurate not only invalidates such notice (Woodchester Lease Management Services Ltd V Swain & Co NLD 14 July 1998 but it is an unlawful rescission of contract which would not only prevent the court enforcing any alleged debt (Wilson V First County Trust Ltd [2003] UKHL 40, Wilson V Robertsons (London) Ltd [2006] EWCA Civ 1088, Wilson V Pawnbrokers [2005] EWCA Civ 147) - but would also give the claimant a claim for damages in the sum of £1000 (Kpophraror V Woolwich Building Society [1996] 4 All ER 119).

 

If the above doesn't apply, what is the leading authority regarding that situation whereas the DN is bad with respect to Wilson V First County Trust et al. as stated above?

 

SB

[May Fly]

Please, don’t anyone start talking about unlawful rescission, cos it’s got bugger all to do with the actual judgment.

 

nothing to do with this judgement because the appeal was about the lower court saying that the DN error was minor, but has this argument gone away, invalid? As the poster says above, what case disposed of the arugument?

 

The lender can break the contract by their actions as well as by their words/letters. They may claim they have a contractual right to terminate, but I have always felt that that 'right' undermines the protection of the CCA - why would a bank bother writing default notices that they have got wrong time and time again, when they can simply point to clause x and say we're calling in the debt? You could be in a situation where you default, ae served with a correct DN, you rectify the default within time, and then they just end the account/agreement anyway pointing to clause x or y?

 

Indeed Amex tried that argument, and the appeal court said that 'may be the case' but teh fact that they may be able to do that doesn't mean they can use that to ezcuse any shoddy piece of rubbish called issued as a DN

[Guest]

yes, they may be able to use contractual terms (in non default cases for eg) (which are also subject to cca requirements). but, it's not common practice to 'call in' (end) an agreement unless there has been a breach by the debtor. and, 'if by reason of any breach by the debtor' they seek etc......then a compliant dn is required. they can't end by reason of the breach, and then say well we could've done it otherwise if they didn't!

Edited October 31, 2011 by Ford
typpo

[May Fly]

yes, they may be able to use contractual terms... but, they rarely do 'call in' (end) an agreement unless there has been a breach by the debtor.

 

I seem to remember Egg ended thousands of agreements simply because they wanted to.

 

The example i posed was why would a bank bother with Default Notices when they've screwed them up time after time? Why not simply rely on their contractual right to 'end at any time'? Simple. One letter, absolutley standard with no variation, no need to calculate dates etc, no specific wording. Much easier than bothering with precise legal words and formats, esp when they've got them wrong hundreds of times before.

 

The question is not did they choose to do it before, (they have) but is it legal for them to do so.

[Guest]

as i posted!

s87 cca - 'if by reason of any breach by the debtor' they seek etc, then a compliant dn is required! that's why.

for reference, can you post up/reference the full circumstances for the egg eg you quoted?

[piccerella]

Hi, I refer to the last two posts and I can confirm that my bank sent me two letters, both dated 18th October 2011.

 

The first letter stated I have outstanding amount over the limit and demanded immediate payment.

 

The second letter/same date/ informed me that they are to enforce their contractual right as per T&C and terminate my agreement, 'which , as they said they do understand this may have been a surprise'. I was not given the correct 2 months notice as well but this is not my point now as I have started a different thread about this.

 

My point is why bother and wait for me to default when they could and did just contractually terminate still non defaulted account. No other late payments registered throughout my 7 years with the bank...

[Guest]

you're right, they can just 'end' as per the agreement (and cca) without there being a breach. in which case, a dn would not be required. but, 'if by reason of any breach...' they did so, then a dn would be required.

[alangee]

Ford

 

If they end the agreement without there being a breach, can they demand all monies owing? If so, and you cannot pay all owing, what happens to a default after they have terminated in this way?

 

Alan

[May Fly]

you're right, they can just 'end' as per the agreement (and cca) without there being a breach. in which case, a dn would not be required. but, 'if by reason of any breach...' they did so, then a dn would be required.

 

who says they can? any clause allowing termination can be used to circumvent the CCA. As I said, why bother with DNs and the CCA, just use a contracual clause to end the agreement. You breach, they serve DN, you rectify. They then terminate via their contractual clause. Or, you breach, they terminate via their contractual clause, NOT because you breach, but simply because they don't want you as a customer any more.

 

termination via contractual clause is much simpler than via DN - no prescribed wording, no prescribed dates etc.

 

As for examples, Egg closed a hundred thousand or so accounts because it is believed they were not profitable enough - ie the holders were responsible and minimised their debt. I believe Amex also closed accounts - in my case when I reported to them that I was experiencing difficulties. I thought I was being responsbile. They simply closed the account, then when I didn't make a payment, defaulted me and reported me to the credit ref agency.

 

The advice at the time given to those whose egg accounts were closed was that it was illegal rescission. So, what happened to the illegal rescission defence? What case destroyed it as a defence.

 

Now that a court has held that a DN must comply with the legislated requirements (why it took the appeal court to decide that I don't know) we may see contractual closures from lenders rather via DNs as the banks have shown time and time again that they are unable to get them right.

 

So, in addition to wondering what happened to te illegal resicsion argument, all those accounts that were ended after dodgy DNs - are they actually ended, or is it that the bank just haven't kept their end of the bargain by providing the expected facilities - credit card, credit, monthly statements, any perks that went with the account?

[dadofholly]

An account cannot be terminated on the back of a fulty DN - so a faulty DN means that the account is still in fact live.

 

A creditor cannot enforce an agreement on the back of a faulty DN either.

[May Fly]

An account cannot be terminated on the back of a fulty DN - so a faulty DN means that the account is still in fact live.

In which case what happens if they fail to operate the account as expected, eg, withdraw credit facilities, end any perks you may have had with the account? What happens if they sell the account to a non-lending DCA, so that all hope of credit has gone? They've broken the agreement, yes/no? if yes, what happens to the illegal rescission argument? If no, what is required for them to have broken the agreement? Are they then, on realising the DN was defective, going to terminate for contractual reasons?

 

I note, that many termination clauses do not specify anything other than their right to end the agreement, ie no repayment clause. If they rely on this clause are they not ending the requirement to repay?

 

A creditor cannot enforce an agreement on the back of a faulty DN either.

if you mean they can't obtain judgement, then thats what the Brandon case established. But why bother with a DN? why not just end via the contractual clause?

[dadofholly]

It depends a lot on what type of account it is. You can have fixed credit agreements - (loans), rolling credit agreements - (credit cards etc.), HP agreements - (where the loan is secured on the goods), then things like overdrafts etc.

 

They have different rules governing each type.

 

If you fancy some bed time reading i can upload the CCA 1974 and the CCA 2006 amendments for you.

 

I think the section mentioned in the Brandon case was s.98

 

As for the illegal recission argument am afraid that is dead and burried as far as i am aware - but if anyone knows case law to say otherwise i am willing to be corrected.

[DonkeyB]

Lots of red herrings here, and should be on another thread, not this one. It’s IRRELEVANT to this thread.

 

A creditor can effectively close your account by reducing your credit limit to zero, but would have to allow you to pay off the balance as per the T&Cs.

[Old Cogger]

It depends a lot on what type of account it is. You can have fixed credit agreements - (loans), rolling credit agreements - (credit cards etc.), HP agreements - (where the loan is secured on the goods), then things like overdrafts etc.

 

They have different rules governing each type.

 

If you fancy some bed time reading i can upload the CCA 1974 and the CCA 2006 amendments for you.

 

I think the section mentioned in the Brandon case was s.98

 

As for the illegal recission argument am afraid that is dead and burried as far as i am aware - but if anyone knows case law to say otherwise i am willing to be corrected.

 

 

could be a good read.?

[dadofholly]

could be a good read.?

 

Here you go then

 

CCA 1974.pdf

 

CCA 2006.pdf

 

Will help you sleep

[May Fly]

I've already read them.

 

yes Donkey B, they could reduce your available credit to zero each month, but that is not the same as terminating it.

 

Everyone seems to be saying that illegal rescission argument is gone, but no one seems to know why or when? And although it may not appear relevant, it is, because now that the banks know that DNs must be accurate and comply with the statute, they may wish to act as though those accounts are live again so they can serve a correct DN or simply close via contractual clause. Knowing what the legal situation is to those accounts is important. As I said in an earlier post, are the banks now going to say that the accounts were never closed after all, so here's a statement with all the back interest? If they haven't kept to their side of the agreement, how could they say the accounts wern't terminated. and why haven't they broken the agreement?

 

This appeal case only succeeded in establishing that DNs muct be compliant, and hasn't actually improved our situation at all, although we should be gratfeul that eventually, what common sense told us all, has been stated by a court

[DonkeyB]

I’m not getting in to it on this thread – this about the Brandon case.

[Old Cogger]

Here you go then

 

[ATTACH]31126[/ATTACH]

 

[ATTACH]31127[/ATTACH]

 

Will help you sleep

 

Thankyou

[DonkeyB]

Look up Harrison v Link Financial as well. Please, people, if you want to talk about rescission, start a new thread and don’t confuse this one.

[May Fly]

this about the Brandon case.

 

My apologies, I didn't realise you were in charge of this thread. I'm just puzzled as to why you weren't at all bothered by

 

Oh Shirley you're not coming up with that one!

 

making the thread irrelevant, or that this one

 

 

Oh, come on, it's a whole syllable!

 

was confusing the issue, or that

 

The Naked Gun, 'Don't call me Cybill'

 

was in danger of something else altogether.

 

Or were they relevant to the court case in some way that I missed?

 

In any case, I was responding to this (esp the bits that I have made bold:

 

Great that this has finally been resolved and daft that an issue set in stone amongst statute has been perverted for so long that it took someone like Brandon to have the arguments and questions settled. However...

 

We need to look at the paths available in various situations where a creditor has defaulted badly then gone on to terminate. This is bound to form the substance of many threads as we all work to understand how this result influences various scenarios.

 

1) If a creditor issues a bad DN and hasn't terminated I think we all agree they are still free to issue another correct one. Fair enough.

 

2) If a creditor issues a bad DN and then terminates (that being by formal letter/notification or by demand for the full amount outstanding) then surely it is not quite so simple as the debtor has been subjected to unwarranted activity and would surely have legal ground for recourse for this...after all DCA letters are designed to be nasty and who wants to be sent one incorrectly? Legal avenues here would be a good discussion point.

 

3) If a creditor issues a bad DN, terminates and then assigns the debt absolutely to a third party who then attempts collection under threat of litigation I cannot accept it is simply a matter of the new owner constructing a new 'good' DN to skirt around the underlying issues. Numerous questions arise such as -

 

Did the creditor have any right to have sold the account anyway?

Is it actually terminated or still live?

Data protection breaches - no third party should have access to your details and use those to forward letters demanding sums of money under the threat of litigation.

Surely the creditor acting in the way they have constitutes breach of contract - they chose to terminate your account having deprived you of your protected opportunity to provide remedy contrary to the terms of the governing CCA it proposed the agreement was subject to. They then want to brush that aside and start again?

What about DCAs who have gone on to secure judgment when a bad DN has been raised by the defendant in their defence and had the same statute ignored as de minimus as has just been upheld by the Brandon judges?

What about cases where the DJ has dismissed requests for stay of process pending the outcome of Brandon and gone on in their wisdom to uphold judgment for the claimant with the wonky DN? Repurcussions surely for bad decisions prejudicial to the (now vindicated) defendant.

 

This is just a start, would throw this out to you all for discussion

 

Some of us, rather than crowing about the Brandon case which would seem to represent merely a small victory for common sense, realise the need to look to the future, and look at how those affected by this decision might see their situation develop. Far from being irrelevant, it is the next, logical step, because whilst some members might enjoy making irrelevant, flippant comments such as those I quote, and metaphorically shooting their AKs into the air, you can be sure that if they haven't already started, the banks will soon be looking at their options, and their legal position in the light of this decision. It is after all, the next logical step for them to make, because they are not going to give up anything without a fight, not a single penny.

 

So, if anyone wants to start a new thread, or continue with this one to discuss the implications of this decision, I'm sure I will be joined by others wishing to hear intelligent discussion and speculation.