Black Horse Finance - Demand balance of payments now state not terminated

[Guest repo threat]

mcjohnson

 

you are hanging by a thread.............. lol

 

but seriously, black horse are adamant that the deposit does not form part of the agreement

[scoobyd00]

No expert, but I do understand written English and I would agree with you that it is very plausible.

 

I agree - definition of 'total price of the goods' in the Consumer Credit Act is :

 

the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement;

 

I have had a bit of a chat with a friend 'in the know' and he advised that the deposit should form part of the 'total price of the goods'. Indeed I can't see why not, as it still forms part of the price paid by you in respect of the goods. I would also refer to the original finance agreement, presumably the deposit is mentioned in the breakdown?? If so, I would invite the finance co to advise why they consider that the deposit is not part of the 'total sum payable' under the agreement and provide authority in law.

 

As for the issue of trespass, the CCA also provides as follows:

 

92 Recovery of possession of goods or land

(1) Except under an order of the court, the creditor or owner shall not be entitled to enter any premises to take possession of goods subject to a regulated hire-purchase agreement, regulated conditional sale agreement or regulated consumer hire agreement.

(3) An entry in contravention of subsection (1) or (2) is actionable as a breach of statutory duty.

I'm not entirely sure of the consequences of a breach of statutory duty in this case, which is why I mentioned in a previous post that it may be considered just a techinical trespass. If anyone can advise of authority/reported cases or legal principles that would suggest a breach of s92 leading to a decision to 'cancel' the finance agreement then i would be very interested to hear it. Like I said earlier, I think you would have a case in respect of trespass but unless the damages can be quantified (e.g. they damaged your driveway,etc) then I can't see what a court would award you.

I would definitely press on with the suggested course of action re the deposit though. I guess checking the agreement would help..

[Guest repo threat]

scoobs

 

i am happy about the deposit issue now, the debate rages on and has moved onto missapropriation by the HP co of payments already made thus far to offset charges that they know doesn't form part of the total payable bit.

[scoobyd00]

scoobs

 

i am happy about the deposit issue now, the debate rages on and has moved onto missapropriation by the HP co of payments already made thus far to offset charges that they know doesn't form part of the total payable bit.

 

Hmm...have these charges been documented in the agreement as to when (i.e. the circumstances under which) they become chargeable and the amount of each charge? I suppose there may be an issue as to whether these charges are fair and reasonable. I am fairly sure that under one of the more recent ammendments to the CCA that the finance co should also provide you with written advice as to any charges debited from your account. I would say that if the payments you have been making are in respect of the monthly installment amount then you could argue that those payments were intended as payments in respect of the contractual installments and that they should not have been applied to any outstanding charges (which may or may not be enforceable and may or may not be documented in your finance agreement). It would probably come down to whether or not you were liable under the contract for the charges that they applied to your account, i.e. whether you were notified in the agreement that charges may be applied for non-payment. As I say, I think these charges would either need to be laid down in detail or represent a 'reasonable' charge...

[Guest repo threat]

so clearly if a default notice dated 21/11/2007 states that £15,583 - total payable under this agreement and £5444 - total paid at date of this notice we are all agreed that Black horse has apportioned £5544 paid to date to payments. Incidentally the actual amount paid as at that date according to my calculations is £5468.26. anyway, one third of £15,583 is in fact £5,194.33 and that point was reached on the 24/08/07. so there you have it, goods became protected goods on 24/08/07 and the HP Company acknowledge irrevocably by their own statement that more than one third was paid as of 21/11/2007.

 

so, imagine my concern when a default notice dated 26/10/2010 states that £15,583 - total payable under this agreement and £4503 - total paid at date of this notice. whoaaaaa !!!!!!!!

 

so there you have it, black horse has unilaterally applied on 15/07/2010 (as confirmed on their statement of account) £1,034.17 LPI (late payment interest

) and apportioned payments made almost 2 years earlier to these late payment interest charges. I smell a rat !!!!!!!!

 

anyways, looks like my position has changed from allegedly owing £10,020 on a HP agreement plus return car to finance co to a right old swing to £10,020 being discharged and the HP company returning to me £6,004, a swing of £16,024 !. blimey oh riley, i would have to earn £20,500 gross income to clear that out. woo hooo.

 

i wonder whether a referal to the FINANCIAL SERVICES AUTHORITY is appropriate, these guys are creating unfair relationships by financial deception and obtaining a pecuniary advantage by deception tantamount to fraud !!!!!!

Edited January 11, 2011 by repo threat
typo

[scoobyd00]

That's just plain cheeky! Surely they can't reallocate payments assigned against installments to cover LPI. That's rubbish surely! Personally I wouldn't waste any time with the criminal allegation - the police are not much cop and as soon as you mention a finance agreement you will be fobbed off with the old 'it's a civil matter' response (whether or not there is any merit to your allegation). I think that the best move may be for you to follow the complaints procedure for the finance co - if you have already made a formal complaint the finance co should already have advised you of their complaints procedure. Standard procedure is for them to have 4-8 weeks to provide a final response to your complaint. Once you have the final response, you can complain to the Financial Ombudsman Service. I think it might be an idea to get the ball rolling on this. Bear in mind that the FOS won't look at your complaint if you have a court hearing pending (i.e. a date set). Are you planning to issue proceedings against the finance co or just to enter a counterclaim when they issue against you? If the latter, it will probably take them a while to issue against you - in which case, following the complaints procedure and then going to the FOS might be an option. Of course issuing proceedings yourself would almost certainly bring the matter to the attention of someone more senior in the finance co. I would also consider complaining to the OFT. Sounds like they are backtracking and trying to justify their actions to me. Luckily for you you have the original default notice showing over 1/3 paid!

[sequenci]

please advise me on what authority mcjohnson

 

Spring House v Mount Cook Land [2001] EWCA Civ 1833

 

A driveway is classed as 'premises'

[sequenci]

Oh, and in addition, If you need to hire a car whilst this mess gets sorted out you're likely to be able to claim the cost in damages too.

[mcjohnson]

Cheers for the case reference, Sequenci; I understood the law (much to the bemusement of the Agents who visited my property earlier this year), but couldn't specify a precedent, so your expertise and knowledge is greatly appreciated.

 

Scooby, much like credit cards I don't think there is any authority to how a company 'assigns' payments that are made towards an agreement. I can't specify, for example, that the £35 I paid my credit card is to come off the balance and not to pay the late payment fee, for example. I believe this is entirely this is entirely at the mercy of the creditor. What is much more relevant is how the late payment interest is defined within the agreement.

 

Could the relevant section of the agreement be scanned and posted?

[Tingy]

 

Scooby, much like credit cards I don't think there is any authority to how a company 'assigns' payments that are made towards an agreement. I can't specify, for example, that the £35 I paid my credit card is to come off the balance and not to pay the late payment fee, for example.

 

Could the relevant section of the agreement be scanned and posted?

 

Is there not a law (there certainly is with banks) called the right of appropriation or something like that whereby you can ringfence funds for a specific purpose. Can this be used in these circumstances also?

[mcjohnson]

I doubt you could use a right of appropriation because the money is all going to the same creditor; how a creditor utilises that money is a commercial matter for them. Otherwise I'm writing to Natwest tomorrow and telling them that all my future payments towards my credit card is to pay the balance, and I'll pay the interest after!!! Right of Appropriation enables you to assign funds to specific creditors, but not determine how specific creditors utilise those funds.

 

Also, and it's a moot point but, the right of appropriation has to be set up in advance of the money being provided to the creditor - they are not applied retrospectively.

 

That's my understanding of the Right of Appropriation.

[Guest repo threat]

i detail below a case which considered appropriation. i would stress that the judge focused on a particulars of claim rather than a prior default notice to confirm a declaration of appropriation. shame really because the default notice is released by a lender in the first instance

 

JULIAN HODGE BANK LTD v. MALCOLM JOHN HALL [1997] EWCA Civ 1852 (12th June, 1997)

 

IN THE SUPREME COURT OF JUDICATURE No CCRTF 96/1536/C

 

IN THE COURT OF APPEAL (CIVIL DIVISION)

 

ON APPEAL FROM ORDER OF HIS HONOUR JUDGE D GLYN MORGAN

 

 

 

 

 

Royal Courts of Justice

 

Strand

 

London WC2

 

 

 

 

 

Thursday, 12th June 1997

 

 

 

B e f o r e:

 

 

 

LORD JUSTICE SAVILLE

 

 

 

LORD JUSTICE THORPE

 

 

 

LORD JUSTICE JUDGE

 

 

 

- - - - - -

 

 

 

JULIAN HODGE BANK LTD

 

Plaintiff/Respondent

 

- v -

 

 

 

MALCOLM JOHN HALL

 

Defendant/Appellant

 

 

 

 

 

 

 

(Computer Aided Transcript of the Palantype Notes of

 

Smith Bernal Reporting Limited, 180 Fleet Street,

 

London EC4A 2HD

 

Tel: 0171 831 3183

 

Official Shorthand Writers to the Court)

 

 

 

 

 

 

 

MR T D HUCKLE (Instructed by Roger James Clements & Panting of Newport, Gwent) appeared on behalf of the Appellant

 

 

 

MISS C WILKINS (Instructed by Anthony Jeremy & Co of Cardiff) appeared on behalf of the Respondent

 

 

 

J U D G M E N T

 

(As Approved by the Court )

 

(Crown Copyright)

 

 

 

LORD JUSTICE SAVILLE: This is an appeal from His Honour Judge Glyn Morgan brought with the leave of that Judge.

 

 

 

The issue arises out of a conditional sale agreement for a Ford Sierra made in May 1989 and is whether at the time the Respondents repossessed the car in April 1990 the Appellant had paid one-third or more of the total price of the goods within the meaning of Section 90 (1) (b) of the Consumer Credit Act 1974. If he had, then under that Section the Respondents were not entitled to recover possession without an order of the Court or the consent of the Appellant, neither of which they had obtained. The Judge decided that the Appellant had not paid one-third or more of the total price of the goods.

 

 

 

The schedule to the conditional sale agreement recorded that the cash price of the car was £6,300; that there was a deposit (by way of part-exchange) of £1,300; that the credit charges for the balance of £5,000 amounted to £2,035.04; and that the deferred payment balance was £7,035.04. The Agreement provided for the Appellant to pay one monthly payment of £205.14 (which included a "document fee" as it was described of £10) and 35 monthly payments of £195.14 starting one month after the seller signing the Agreement and on the same date in each following month.

 

 

 

On the basis of these figures the total amount payable was £8,335.04 and that is stated in the schedule to the Agreement. One-third of that sum amounts to £2,778.35. However, Clause 1 of the Agreement (entitled "Payments") provided as follows:

 

"Having paid the Initial Deposit specified in the Schedule the Buyer agrees to make the payments stated therein, and in default of punctual payment the buyer will be liable to pay interest on any late payment at a rate equivalent to the APR applicable to this Agreement. The interest may be charged before and after any judgment. The Buyer shall pay a documentation fee of £10, which shall be paid in the first monthly payment."

 

In Clause 2.3 there is a further relevant stipulation. This clause stipulated that the buyer would -

 

"on demand repay to the Seller all expenses (including legal charges) incurred by the Seller in tracing the Goods or tracing the Buyer or enforcing the payment of any sum due."

 

It provided:

 

"The sum of £1 may be charged for every written or printed communication sent to the Buyer following any breach of this Agreement by the Buyer."

 

The "total price of the goods" is defined in Section 189 of the Consumer Credit Act as -

 

"the total sum payable by the debtor under a hire purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement."

 

 

 

The Appellant did not make the monthly payments on the due date during 1989 and, with the exception of £40 paid in March 1990, made no payments in respect of the instalments due in 1990. The Respondents sent the Appellant a default notice in March 1990 and then took it upon themselves to repossess the car in the following month.

 

 

 

At the date the Respondents repossessed the car the Appellant had paid them a total of £2,780.56. This is just more than one-third of the total amount payable as specified in the Agreement. However, the point made by the Respondents is that in addition to this amount the Appellant had incurred a liability to them of £12.27 under Clause 1 by way of interest for late payments and £14 under Clause 2.3 for written and printed communications sent to him following his breach of the Agreement in failing to pay the instalments in due time.

 

 

 

For the purposes of this appeal it is not in dispute that that liability was incurred by the appellant. If therefore, as the Respondents contend, these amounts (or either of them) should be deducted from the payments made by the Appellant in calculating whether he has paid one-third or more of the price, or alternatively if they should be added to the total price, then on the arithmetic the Appellant would have paid less than one-third of the total price of the goods.

 

 

 

Dealing first with the latter of these contentions, it is in my view, unsustainable. As to interest the Appellant agreed to make payments on the due date. In breach of the agreement he failed to do so. In that event the Agreement imposed a liability on the Appellant to pay interest on late payments. This is not a case where the Appellant was given an option either to pay on a specific date or to pay later with added interest but an agreement where the Appellant had contractually bound himself to pay on the due date. It follows that if the Appellant did not pay on the due date he was in breach of contract. To my mind it is self-evident that the provision for the payment of interest in this event is to compensate the sellers for the failure of the buyer to perform this part of the bargain. In other words, to my mind, it amounts to an agreement by the buyer to pay liquidated damages for his failure to comply with his promise to make payments on the due dates. Under the Act, therefore, this charge is to be excluded in calculating the total price payable.

 

 

 

As to the charge for communications, this seems to me to fall within the same category. Here the Agreement expressly spells out that it is to apply "following any breach of the Agreement by the Buyer". In the absence of such a provision costs such as the costs of communicating with the contract breaker in an attempt to obtain performance or redress would, to my mind, subject of course to the ordinary rules of damages, be recoverable from the buyer as sums expended by the seller in reasonable attempts to mitigate the loss. In the present case it seems to me that what this Agreement does is to provide the liquidated damages in this regard. I should point out that since the Agreement refers to any written or printed correspondence, whether or not connected with or in consequence of a breach, it could perhaps be argued that the provision is a penalty rather than a genuine pre-estimate of damage. However, this is an irrelevant matter in the present context because, whether it be a penalty or whether it be damages, it is again under the Act to be excluded in calculating the total price payable.

 

 

 

For those reasons, therefore, it seems to me that Miss Wilkins' submission that to calculate the total price for the purposes of the Act one can take into account either of these extra charges is something with which I cannot agree.

 

 

 

There thus remains the question whether the interest or the communication charges are to be deducted from the total amount paid by the Appellant when calculating whether he had in fact paid one-third or more of the total price. The Respondents' case is that they were entitled to appropriate and did appropriate part of what was paid by the Appellant to these charges with the result that he has paid less than one-third of the total price of the goods.

 

 

 

The Appellant does not suggest that he at any stage exercised his right of appropriation when he paid amounts to the Respondents. Thus, on the face of it, the right to appropriate passed to the Respondents. It is perfectly true that in the Respondents' accounts kept at the time the payments were appropriated, as they came in, to the interest and notice charges as they arose to the balance of the instalments due under the Agreement. There is no evidence to suggest that this appropriation was communicated to the Appellant. It remained what Lord Shaw described in Deeley v Lloyds Bank [1912] AC 756 at 783 as a prima facie appropriation. In other words, the fact that the creditor treated the payments in a certain way in his books would not exclude him from electing to make a different appropriation, provided of course the book entries had not been communicated to the debtor: see the discussion at para 21-048 of Vol I of Chitty on Contracts 27th Ed (1994) and the cases cited in that paragraph.

 

 

 

In their original particulars of claim dated 10th September 1990 the respondents, among other things, set out details of the Agreement of the amounts alleged due under it and of the amounts paid. With regard to the last of these sub-paragraph (h) in the particulars was in the following form:

 

"Amount Paid

 

 

 

(i) Deposit £1,300

 

(ii) Instalments £1,480.56."

 

The sum of these two figures is, of course, the total paid by the defendant and is more than one-third of the total price of the goods. It should also be noted that in the particulars the Respondents advanced a claim for interest and what they described as "default charges".

 

 

 

In an affidavit dated 30th April 1993 the Respondents stated that they elected to appropriate the Appellant's payments in accordance with their own accounts and asked for leave to amend the particulars quoted by substituting for the figure of £1,480.56 the figure of £1,454.29, so as to appropriate £26.27 of the payments made to the interest and communication charges.

 

 

 

It appears from the judgment of the district judge that the Respondents at some stage did indeed obtain leave to amend the particulars in this way, but to my mind the original particulars amounted to a clear unequivocal election by the Respondents communicated to the Appellant that they were appropriating the amounts the Appellant made to the instalments due under the Agreement and not to the interest and communication charges due under that Agreement. To my mind, since it is settled law that an election once made and communicated to the debtor is irrevocable, it follows that neither the purported later election in the affidavit nor the amendment to the pleading can be treated as undoing that which had in my view already been done by the original pleading.

 

 

 

Miss Wilkins in the course of argument also suggested that by re-taking the vehicle and asserting at the time, as they apparently did, that less than one-third of the price had been paid, her clients were at that stage making an election by way of appropriating the sums paid to go first to the interest on the communications charges. Suffice to say in my view that although the argument was valiantly put, it is impossible to suggest that the re-taking of the car and the notification which I have indicated by the appropriate letter could amount to a clear election that the bank in this case was appropriating payments that had been made in the way suggested by Miss Wilkins.

 

 

 

In these circumstances therefore I conclude that by their original particulars of claim the Respondents had irrevocably elected to appropriate the payments made to the instalments due under the Agreement and it follows that the Appellant has paid more than one-third of the total price of the goods.

 

 

 

The judge appears to have decided both that the Respondents had effectively appropriated £26.27 of the payments made to the interest and communication charges and that these charges did not amount to sums payable as a penalty or as compensation or damages for breach of the Agreement within the meaning of the Consumer Credit Act.

 

 

 

For the reasons that I have given I would reach a different conclusion from the judge and accordingly I would allow this appeal.

 

 

 

It remains to note that in these circumstances I have not found it necessary to consider the point raised by the Appellant, which was to the effect that the terms of the default notice sent to him by the Respondents were such as to preclude them from contending that the Appellant paid less than one-third of the total price of the goods.

 

 

 

It is also unnecessary to deal with another argument that the court put to Miss Wilkins in the course of argument, namely that a provision within the conditional sale agreement headed "Repossession: your rights", amounted to an agreement between the parties that provided £2,778.35 was paid the car would not be repossessed without a court order or the consent of the hirer. Further, having looked at the conditional sale agreement and indeed the default notice, and although on the latter we have not sought the assistance of Miss Wilkins, I am bound to say that in my view the bank might be very well advised to consider whether or not their forms could be made clearer so as to make absolutely clear the conditions under which they would seek to repossess the vehicle without the consent of the hirer or without a court order.

 

 

 

LORD JUSTICE THORPE: I agree.

 

 

 

LORD JUSTICE JUDGE: I agree with the judgment of Lord Justice Saville and the reasons he has given for allowing the appeal.

 

 

 

In relation to the last matter mentioned in his judgment I should also underline that if the plaintiffs were correct in their contentions, then even in a "prescribed" form the conditional sale agreement is not as clearly drafted as it should be. The box which includes the headings Repossession: your rights, and Termination: your rights, includes figures based on sums agreed at the time when the contract was entered into. If it were right that the total amount payable under the Agreement also included sums envisaged, for example, by Clauses 1 and 2.3, then the words used in the boxes should have included language apt to draw attention to the fact that the payment of the figures appearing in the boxes might not in the result be sufficient to provide the buyer with the relevant protection. I shall reserve my position about the consequences of the omissions of such language in another case.

 

 

 

 

 

Order: Appeal allowed with costs. Legal aid taxation.

[Guest repo threat]

i suspect that Black Horse has a policy of knocking collection and late payment interest off monies paid rather than adding such sums to the total amount payable. its a shame really, because the admin staff see a figure on their computer system which misrepresents the true payments (pyments)and true debits (Instalments due+Additional Interest+Admin Charges)

[mcjohnson]

Excellent read - Repo, thanks for posting.

 

Actually, if I am reading this correctly, it seems very similar to your case in that the creditor provided a notice of the appropriation of funds and then issued a subsequent notice that had re-appropriated the funds in a different manner. The judge seems to contest that this is not workable from a legal point of view, and that only the original, notified appropriation is considered.

 

Or am I reading this wrong?

[sequenci]

i suspect that Black Horse has a policy of knocking collection and late payment interest off monies paid rather than adding such sums to the total amount payable. its a shame really, because the admin staff see a figure on their computer system which misrepresents the true payments (pyments)and true debits (Instalments due+Additional Interest+Admin Charges)

 

Not sure they can do that. Afterall, this is money that you have physically 'paid'.

 

I'll take a look when I'm back in the office in the morning!

[Guest repo threat]

mcjohnsons, you are kinda reading it like me.

 

the issue in point is this.

 

Is a Default Notice a declaration of appropriation. my opinion is that Subsection (1) excludes the power of appropriation of payments which the creditor or owner would have at common law

(i) if such power was conferred upon him by one or more of the agreements or

(ii) if the debtor or hirer failed to exercise any right of appropriation available to him.

Instead the debtor or hirer is given a statutory power of appropriation of any payment insufficient to discharge the total amount then due under all the agreements; and by virtue of CCA 1974, s 173(1) this power is unexcludable

 

The limit of the debtor's power is imposed by the words 'in or towards' in paras (a) and (b) of sub-s (1); the debtor or hirer may not appropriate any payment so as to pay more than is due under one agreement.

 

Subsection (2) provides for a proportionate appropriation to be made when the debtor has failed to make any appropriation within sub-s (1) and one (or more) of the agreements falls within sub-s (2), paras (a), (b) or ©. As far as Hire Purchase and conditional sale agreements are concerned, the section is effectively a re-enactment in similar language of the Hire Purchase Act 1965, s 51 and will to a considerable extent prevent the creditor from appropriating insufficient payments in such a way as to deprive the debtor of his statutory protection under CCA 1974 ss90,91,99 and 100.

As far as the section extends to regulated agreements in general, and to agreements specified in sub-s (2), paras (b) and ©, it extends the protection afforded by the Hire Purchase Act 1965 very considerably. It should be noted that the section is attracted by any regulated agreement; unlike many provisions of this Part of the CCA 1974(eg ss75-80) the sections applies to non-commercial agreements.

[mcjohnson]

If you have historic statements of the account, then these would (should) support the argument that the funds have been re-appropriated and thereby you wouldn't be entirely dependent on the default notice. Aren't HP companies obliged to provide (at least) an annual statement? I guess you could SAR for these and identify whether they've been retrospectively appropriated.

 

As Sequenci suggests, it is unlikely they can reduce the amount you've paid as you could very easily demonstrate from your own records, that you've paid more than they're reporting.

[Guest repo threat]

Not sure they can do that. Afterall, this is money that you have physically 'paid'.

 

I'll take a look when I'm back in the office in the morning!

 

Sequenci

 

are you able to repsond ?

[sequenci]

Sequenci

 

are you able to repsond ?

 

That case that repothreat posted is a good example of what is what. Any payments made go towards the payment of the HP price. Any charges for late payments and interest etc are ancillary to the actually HP agreement and are a seperate entity.

[Guest repo threat]

so if a hirer is discharged from all liability under the agreement, is he still liable for any claims for breach of the agreement or costs not part of the agreement ?

[Guest repo threat]

Things have moved on since my last post.

 

1. Claim was issued by me against Black Horse Pusruant to S91 CCA 1974

2. Black Horse Capitulated within 14 days of claim and repaid all sums paid under the agreement. (still ignorant at this stage)

3. Black Horse have now written to me to confirm that i am discharged from all liability

4. Black Horse have removed all reference to the agreement from the Credit Reference Agencies

5. Black Horse maintain an error on their part and a technical breach............ hmmmmmmm