Brandon Case

[DonkeyB]

Wouldn’t the usual clause in the account’s T&Cs allow the creditor to appoint a third party to recover a debt?

[nks22]

Now in the case you mention - as long as the original DN was not faulty i would assume they would simply terminate your account before sale.

 

That's not what happened with mine. MBNA issued a DN then sold the account - which was in dispute - to Hillesden's/DLC before the DN had expired (and Hillesden's have admitted this in writing). Hillesden's have since demanded full repayment. No termination notice has been issued by either party.

 

I don't believe I'm alone in this.

[DonkeyB]

Have you a thread on that, nks?

[mystery1]

Have you a thread on that, nks?

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?224927-MBNA-CCA-Is-it-legal

 

Haven't read it but the title looks about right.

 

M1

[nks22]

Yes, that's the one. I shall go and update it (not that there's anything much to report).

[DonkeyB]

Thanks mystery. Blimey, that goes back a bit.

 

At that time, our understanding on CAG (for the majority of us) of DNs was totally different – just shows how things can evolve so quickly through judgments and how (because this is a forum of laymen, not legal bods) we can simply misinterpret the law or statute and get things not quite right.

 

Where did your case end up, nks? Did Hillesden slink away? In the light of new info, their letters to you were misguided and plain wrong in fact, but then so possibly was a claim of unlawful rescission.

[nks22]

Nothing much has happened since they sent me that letter a year ago (see #131). They sent me an 'Income & Expenditure' form in April (unsolicited), an annual statement in June and, in the same month, replied to a request to stop phoning me when they stated that "we maintain our stance as outlined in our letter dated 16 November 2010".

[Guest]

........For example, I like the law in Scotland – if you make a claim, you have to present the documents you intend to rely on at the time you issue the claim. That would include a DN and CCA, etc. Then maybe they would spot their, er, errors before the problems start. In England and Wales, they simply issue a claim without the proper facts and evidence, and for the most part get default judgments.

...........

 

maybe not quite the same. but, for general info, there is the cpr practice direction re pre action conduct which a creditor should adhere to (if applicable, eg in disputed cases) that does say that a list of 'essential docs' relied on etc 'should' be provided in a letter before claim, together with other matters. it does though also place obligation(s) on the defendant. (and the cred should refer an LiP def to this PD). it also allows for a def to request further information. etc.

Edited November 1, 2011 by Ford

[The Mould]

As far as service of a statutory valid Default notice is concerned, I would argue (among other things relevant to the defence, dependent upon the other matters relating to the case) the following and even more so where it can be shown that the debtor had communicated his financial difficulties to his creditor and it had been agreed (orally or in writing, although one should always obtain a written agreement from his creditor in such circumstances) that the debtor could make reduced payments in substitution of the normal monthly payments due for a temporary period that was to be reviewed at the end of the temporary period in order to establish whether the debtor’s financial status had or had not changed.

 

Termination while in breach of statutory duty imposed under Section 87(1) CCA 1974 (as amended)

 

1. The Defendant asserts that Claimant terminated the agreement unilaterally and without service of any notice required under clause 9.1 of the agreement as a result of a minor non-repudiatory breach of the agreement by the Defendant. (state the provision of clause 9.1 in respect of the creditor’s entitlement to terminate the agreement (clause 9.1 is simply a number made up as an example for the purposes of this argument))

 

1.1 The Defendant asserts that the Claimant seeks to enforce the agreement demanding the full balance without securing the necessary rights under section 87 of the said Act that would entitle him to do so.

 

1.2 The Defendant asserts that the statutory notice dated (put date) (default notice) served and relied upon in these proceedings by the Claimant is a defective (bad) notice, for instance the arrears figure stated therein by the Claimant allegedly due and owing is incorrect and the time to remedy the said breach relied upon stated therein is insufficient with the requirement imposed by the said statute , in this regard, I respectfully refer the court to a recent High Court Judgement before his Honour Judge Chambers QC sitting as a judge of the High Court between Mr Keith Harrison and Link Financial Limited. 2011 EWHC B3 (Mercantile) At Para 75 of said case, His Honour Held.

 

1.3 Para 75, “The notice of enforcement was a statutory pre-condition of enforcement. It was a bad notice and enforcement cannot be attempted in dependence upon it. However, bad notices can often be remedied by the service of good notices and I see no reason why that should not be so in respect of credit agreements’’

 

1.4 Further to the above, the Defendant contends that His Honour Judge Chambers use of the word ‘often’ in para 75 of the said Judgment, can only be construed to mean ‘sometimes’, but not always. It should be noted that the said statutory notice relied upon by the Claimant in these proceedings is a bad notice and it is a second bad notice served (or third or fourth) by him after he had already terminated the agreement on the grounds of the first invalid statutory notice served by him.

 

1.5 The Defendant contends that the circumstances to which a bad notice can be made good in respect of credit agreements have not been established, however, it is my contention that if a creditor should terminate the agreement after having served a bad statutory notice upon the debtor, then the opportunity for him to remedy the bad notice with the service of a good notice has been lost, the bad notice in such circumstances extinguishes the creditors’ entitlement under Section 87 of the said act to demand sums not yet due, early, but said notice does not extinguish his action of termination, yes the debt would remain , but the creditor’s own actions of the non compliance with the statutory requirements imposed upon him under CCA 1974 (as amended)has deprived him of entitlement to the full balance he claims, therefore, only the correct arrears sum that was due before he terminated the agreement in breach of his statutory duty, on the foundation of a bad notice, is the sum he is entitled to pursue the defendant for through these proceedings.

 

1.6 The Defendant contends that the Claimant is responsible for his own action of his said breach of statutory duty.

 

1.7 The Defendant contends that if the principle quoted above from the said Harrison case, that the claimant can remedy his wrongdoings until he finally complies with his statutory duty and serves a valid statutory notice, this would mean that the innocent party to the agreement is not only deprived of the protection afforded by the said act and intended by parliament but also the innocent party would be deprived of his right to remedies against the offender and his freedom to elect which of those remedies he should prefer to choose, furthermore, the Defendant contends that if such principle applies to consumer credit agreements, then the same must be applied to all contracts governed by English law.

 

1.8 The Defendant respectfully refers the Court to the recent Judgment handed down by the Court of Appeal in respect of a creditor’s failure to serve a valid statutory Default notice in Ian Karl Robert Brandon v American Express Services Europe Ltd [2011] EWCA Civ 1187, therefore, the creditor was not entitled to enforce the agreement and obtain Judgment.

 

1.9 The Defendant respectfully refers the Court to Section 87 of the Consumer Credit Act 1974 (as amended) concerning the statutory requirement of service of a valid Default notice.

 

Default Notices

 

87 Need for default notice

 

(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, or

(b) to demand earlier payment of any sum, or

© to recover possession of any goods or land or

(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e) to enforce any security

 

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restrictions or deferment effective.

 

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

 

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

88 Contents and effect of default notice

 

(1) The default notice must be in the prescribed form and specify-

 

(a)The nature of the alleged breach;

 

(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

 

© if the breach is not capable of remedy, the sum (if any) required to be paid as a compensation for the breach, and the date before which it is to be paid.

 

(2) A date specified under subsection (1) must not be less than [14] days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1) before those [14] days have elapsed.

 

(3) The default notice must not treat as a breach failure to comply with a provision, of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1) if the [F114] days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.

 

(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it

(4A) The default notice must also include a copy of the current default information sheet under section 86A.]

 

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid

 

89 Compliance with a default notice.

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.

 

For all the reasons stated above, I respectfully request that the Claimant’s claim be struck out as abuse of process on the grounds of no entitlement to enforce the agreement.

 

Statement of Truth

 

I believe that the facts stated in this response to the claim are true.

 

Signed……………………………………………….this 1st day of November 2011

Mr John Smith - Defendant

 

 

As I have said on many occasions, the service of a defective Default notice does not extinguish the termination of the agreement on the grounds thereof, if it is argued that it does, then you are saying that the same extinguishes all actions undertaken by the creditor, in such circumstances, to make such an assertion is inequitable against the debtor since he would have suffered much needlessly and unnecessarily as a direct result of the creditor’s action of repudiating the contract in breach of statutory duty and without just cause. The said action of a creditor ending the contract in such a manner does indeed sever the very root of the contract whereas a late payment or a few missed payments by a debtor in circumstances where there is communication from him in respect of the same is not a material breach of the contract.

 

The creditor ought to know what his statutory duties are under the said act and therefore he would need to show what action he has undertaken to mitigate his loss, did he need to terminate the agreement, did he comply with statutory duty, was the termination justified when the evidence before the Court clearly shows that the debtor was making payments to the account, whether agreed or not?

 

Kind regards

 

The Mould

[citizenB]

the Mould, just in case you receive a CAGbot, one of your posts had a hiccup and duplicated.. so it has been unapproved..

[trout]

Having read the thread, a few things come to mind.

 

1) AMEX and various caggers believe that S98 CCA74, allows a creditor to terminate a credit card agreement.

 

2) In post 164 MAYFLY states ' what happened to the unlawful rescission ' arguement re Egg Cards

 

3) After terminating unlawfully ( on the back of an invalid DN ), and then carrying out enforcement activity, what compensation should the injured party be entitled to.

 

 

My thoughts -

 

1) S98 (2) states - subsection 1 of 98 ( ie the right to terminate a regulated agreement by giving 7 days notice ) ONLY applies where ( a ) a period for the duration of the agreement is specified in the agreement. THIS DOES NOT APPLY TO CREDIT CARDS WHICH HAVE AN OPEN ENDED AGREEMENT

 

2) A cagger on this Legal Forum recently detailed his litigation with EGG. On asking what allowed them to end a non default credit card agreement,firstly their legal team asked for time to seek LEGAL ADVICE,

then they dropped their actions and marked his account as SETTLED.

 

3) Emandcole has touched on this point. The judge in Harrison pointed out that no enforcement can be taken on the back of a dodgy DN ie the agreement is not Terminated. So what is the recourse when they do ie telephone harrasment, blackening your credit file, passing your personal details to third parties,doorstep visits or the threat of etc ?

 

Trout

Edited November 4, 2011 by trout

[mystery1]

Mould,

 

1.6 should use these

 

 

"... 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)]

 

 

M1

[dadofholly]

 

3) Emandcole has touched on this point. The judge in Harrison pointed out that no enforcement can be taken on the back of a dodgy DN ie the agreement is not Terminated. So what is the recourse when they do ie telephone harrasment, blackening your credit file, passing your personal details to third parties,doorstep visits or the threat of etc ?

 

Trout

 

A company can carry out collection activity regardless of the agreement being live or terminated. If the customer has failed to meet payment schedule then the creditor has the right to attempt collection - their difficulty would come in trying to enforce the debt i believe.

[TweedleDee]

Let's not forget that two points got over ruled. One was the Default Notice issue.

 

The other ramblings were related to the introduction of a new argument of law (contractual termination) and not the actual argument itself which the previous judge erred on and thus was over ruled.

 

The previous findings are still present and binding as they were either upheld by the CoA or they were not argued there and therefore accepted:

 

- The excessive charge of £25.00 for default is a reasonable pre-estimate of the loss an organisation suffers.

- That the bringing of the original to court or to attach it to a claim is not compulsory (note the difference in the use of the word should versus must) unless there is dispute about the terms of the contract or the construction of clauses. Even then, the court may order disclosure so that is not a case loser.

- Reporting to CRAs.

 

We should take this judgment and read the previous ones and put it all together to understand what can and can't be done but at the very least, the Default Notice issue got solved.

[pumpytums]

The amusing thing with regards to DN's is that companies still start the 14days from the issue date not the date of service. My mother in law received one on Friday, this was even though she agreed a repayment plan with the numpties, I believe this goes against the FOS guidlines.

 

Pumpytums

[QCKate]

The Court was in agreement with the first instance judge that the issue of liquidated damages for breach of contract could amount to £1,000 in the Appellant's favour.

Look at para 42 "I cannot accept that this issue could be worth more than £1,000 at most. Even if that sum was deducted from the Amex claim.."

Edited November 9, 2011 by QCKate

[TweedleDee]

The Court was in agreement with the first instance judge that the issue of liquidated damages for breach of contract could amount to £1,000 in the Appellant's favour.

Look at para 42 "I cannot accept that this issue could be worth more than £1,000 at most. Even if that sum was deducted from the Amex claim.."

 

I think you are getting two issues muddled up. The first is the point of liquidated damages for breach of contract by Brandon, with second being the counter claim for loss of reputation as regards reporting of default. They are mixing terminology here.

 

Look at the whole of para 42. He did not express an opinion that they were penalty charges or not as the case maybe. This does not detract from the earlier precedents about penalty charges. All he is stating is that he agrees with the court in the first instance that if it was penalty charges, which the first instance judge did not find they were, then it would be a reduction of £1000.00, but seeing that they were not held to be penalty charges in the first instance, that is a mute point. As he stated in the first line of para 42 which you quote:

 

"I express no view as to whether it is realistically arguable that the £25 monthly charge was a penalty."

 

When he is talking about the counter claim, that part was dismissed as Brandon was claiming for damages for loss of reputation for reporting to CRAs and that was struck out.

 

There are two heads in this argument, both findings upheld by the CoA but it doesn't mean that the previous precedents set about charges are null and void. It seems that the CoA is happy for this to be argued at trial so left it be.

Edited November 10, 2011 by TweedleDee

[welshperson3]

This is something I posted on another thread, and is my view of things.

Now what I would like is for someone to show me how in law a faulty DN and subsequent termination ends the agreement, as I have an ongoing case, have been to court once with this agreement and won, but now back in court for round two (new DN issued)

1. The most important point of this debate is this can the creditor terminate the agreement without following the rules set out in the CCA.
    
    
   Now the CCA
    
   87. Need for default notice
   (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
    
   After reading the above then it is clear that he is not entitled to
    
   Now just because the creditor sends out a termination letter and cancels all your rights under the argument, and thinks he has terminated the agreement.
   The rule above says he is not ENTITELD TO so although he thinks he has and you would have wanted him to,. it has not happened
    
   All that has happened is that the creditor is now in breach of the agreement.
    
    
   Another way of looking at it is if the debtor wants to end the agreement he has to do specific things, pay the dept and end the agreement.
    
   Now as a debtor lets say I send a letter terminating the agreement to the lender, and then I stop paying,
    
   1 have I ended the agreement or am I in breach?
    
   2 Just because I say it is over is it finished?
    
   What we have to understand is that just because he has tried to end the agreement it dose not make it end ,it just puts him in breach of agreement
    
   Wp3
   

[TweedleDee]

Now as a debtor lets say I send a letter terminating the agreement to the lender, and then I stop paying,

 

1 have I ended the agreement or am I in breach?

 

2 Just because I say it is over is it finished?

 

What we have to understand is that just because he has tried to end the agreement it dose not make it end ,it just puts him in breach of agreement

 

Wp3[/size][/font]

 

In my opinion, which is not worth much as my thoughts are not binding on lower courts or ANY court :

 

1.) You are in breach as you can't end the agreement without following the rules of CCA yourself. For example, to terminate a regulated hire-purchase or conditional sale agreement, you have to follow the provisions of s 99 of CCA 1974. Also to terminate a term loan agreement, you will have to pay the outstanding amount minus any rebate due to discharge your obligations. To prove that you don't owe the creditor anything, you can send a notice to the creditor as per s 103 stating that you have terminated the agreement, etc.

 

2.) No as you still have outstanding obligations under the contract.

 

Remember that non-compliance with the default notice by the debtor allows for the term debt (monthly instalments) to be accelerated (one full payment).

 

The most important point of this debate is this can the creditor terminate the agreement without following the rules set out in the CCA.

 

Again, in my non-binding opinion, if they can't enforce the agreement because they did not comply with CCA, then how can they be expected to terminate the agreement as one follows the other. Therefore if the CCA stops me from enforcing an agreement because of a faulty default notice, s 78 breach, etc., then it stands to reason that I can't terminate unless I comply correctly.

 

Just my 2 cents and it might be worth reading the posts of DonkeyB and dadofholly from page 7 onwards. They are enlightening and unbiased.

 

It would be good for a test case to go through the courts to see how many bites of the cherry they can have before they are deemed not able to enforce the agreement due to breaches of the CCA 1974.

[The Mould]

It does not matter that the said statute says ‘not entitled’ xyz, the breach of the agreement by the creditor in the circumstances that you speak of , is a material breach of the contract that is so severe it goes to the root of the contract.

 

In circumstances where the debtor has missed one or two or three payments or made late payments to the account, such conduct of the debtor does not amount to a material breach of the contract and where there has been clear and unequivocal communications from the debtor informing his creditor that he is going to miss a payment or that his payment will be late that month or that he is unable to pay the full amount for that month and that the payment he makes will be £50 or £100 or £150 less, the creditor who serves a defective statutory notice in such circumstances and then terminates the contract in breach of his statutory duty has repudiated the contract. It is the creditor who is the contract breaker in the circumstances described above and it is no defence for a creditor to admit that the said notice was invalid and therefore he has not terminated because the said statute says he cannot do so because the said notice is a bad one. The invalidity of the said notice does not invalidate the termination, the creditor has abandoned the contract, he is in the wrong and in walking away from the contract in such haste, he has failed to secure his said entitlement to what he claims in court from the debtor. It is inequitable to say …but statute says he cannot terminate without the service of a valid statutory notice, if the creditor has terminated, then he has terminated, it becomes a question as to what is the creditor entitled to in court……the full amount he claims or the actual arrears that were due and owing before the creditor repudiated the contract, if he repudiated then his only entitlement is to the actual arrears and nothing more.

 

Last year and earlier this year I put my arguments forward on this point of law and EDIT I was heavily criticised EDIT, I maintained my said contentions and assertions in respect of this default notice issue and when demands were put upon me EDIT to produce case law or point them to the authority that would back my well-reasoned arguments up, I simply responded by saying statute says it all and the that the case law is to come and that the Woodchester case is still good law and remains as an authority on this particular subject.

 

I also stated that this default notice issue will not be a one shoe fits all size cases of the type.

 

EDIT

 

Kind regards

 

The Mould

Edited November 11, 2011 by caro
Unnecessary comments

[DonkeyB]

Mould, you are awful... but I like you.

[The Mould]

Mould, you are awful... but I like you.

 

Some mother's do 'ave 'em:lol:

[DonkeyB]

The problem is, your assertions re statute are correct, IMO. But the case law is working against it. It needs properly testing in the highest court, and that may not happen for quite a while, because the defendants in such cases are almost by definition unable to afford the appeals process.

[The Mould]

The problem is, your assertions re statute are correct, IMO. But the case law is working against it. It needs properly testing in the highest court, and that may not happen for quite a while, because the defendants in such cases are almost by definition unable to afford the appeals process.

 

Inability of the majority (the commoners, as we are refered to) to afford the services of a professional advocate is a fundamental problem in the world that is as old as the so-called roman empire that all governments continue and will always disregard.

 

Kind regards

 

The Mould

[TweedleDee]

Mould, thank you for your tirade and I am sure it was not directed at me as I did not have the good fortune or misfortune of crossing your path.

 

I can't comment on your previous stance and your past dealings with however our interpretation of statute and its SIs is irrelevant here which is why we have case law to help guide us.

 

With access to law material like you have, it should be obvious that the law is an organic thing that changes every day thus a ruling one day which is a precedent may change the next day as not every case is identical. It is a best fit model when using precedents. It is not that anyone was wrong or right, it is the best decision at the time.

 

That is one of the ways legal professionals base their educated opinion on matters. They look at the case law and try to look for differentiators in the case if the precedent is not for them or look for similarities if it is. Case law is like a map drawn on a beach with the tide coming in, it can change at any moment or even get wiped off.

 

So at the moment we have Harrison and Brandon which state that they can re-serve the default notice despite your repudation of contract argument, thus unless another precedent changes that, that will be the de facto stance because unfortunately, our word is not the law despite how we want to interpret statute or the SIs.

Edited November 11, 2011 by caro
Removing quote that has been edited out