Default Notice/Termination discussion (moved from Stone-broke's thread

[nicklea]

Hmnn, interesting post Nicklea. At first reading, the judges comments seem to suggest that a bad or 'defective' DN can be remedied by the service of a 'good' or non defective DN.

 

After which presumably, lender can then bring enforcement action?

 

Correct

 

I think there are not a few problems with that though. The main one being that of can the DN be remedied AFTER termination of the agreement? Or the reliance upon the bad DN by the debtor which causes them to change their behaviour in some way? How can a good DN ever be correctly served again after the original agreement, as initially specified, has ended?

 

Have a read of the many threads on this forum regarding this matter.

 

see here for example:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?280020-Contracts-Termination-Repudiation-and-Rescission

 

Personally, I am firmly in the camp that termination can't take place without a valid notice so no notice means that there can be no termination.

 

I'll try and read this case much more thoroughly as it appears important to the issues at hand. One thing to be mindful of is the fact the lender was defendant in this case, though, it appears, on the basis of a counterclaim by the Claimant, to threats or actual legal action from the Lender?

 

Would really help if anyone with more detailed knowledge of this Harrison vs Link case please comment - thanks.

 

Have a read here:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?296622-Harrison-vs-Link-Financial-Limited-High-Court-judgment

[bustthematrix]

Personally, I am firmly in the camp that termination can't take place without a valid notice so no notice means that there can be no termination.

I have to say, I'm firmly in the other camp! Though a contract is a binding agreement, there's no reason why it cannot be broken by either party - there'll just be damages for doing so. It can certainly be ended prematurely - especially if both parties agree.

 

Under the CCA, the DN is there to allow for lawful termination under the CCA. A bad Notice followed by termination which is accepted, provides for a prejudiced termination, not just an invalid termination. It therefore gives rise to a counterclaim for damages - this is already case law.

 

...but you obviously probably don't see it that way...or maybe I just need to do more reading and get even more confused!

[nicklea]

Under the CCA, the DN is there to allow for lawful termination under the CCA. A bad Notice followed by termination which is accepted, provides for a prejudiced termination, not just an invalid termination. It therefore gives rise to a counterclaim for damages - this is already case law.

 

I would be interested to know what case you are refering to and I presume that you are also aware of R v Kettering Magistrates Court:-

 

The purpose of Section 170 (1) of the 1974 Act was to clarify (by disapplying) the common law rules relating to breaches of an Act of Parliament

[bustthematrix]

I'm sure you've read Woodchester v Swayne & Co [1998] EWCA Civ 1209 (14 July 1998 )

[nicklea]

To be honest, I don't see the relevance of Woodchester. It had nothing to do with claiming damages and there was no recission of contract.

 

This is from a thread that has been dleted from this site:-

 

The Woodche ter hearing was concerned with a hire agreement.

A hire agreement differs from a loan agreement in that there are no principle liabilities under the agreement.

“14 July 1998

Consumer hire - equipment lease to partnership - non-payment - default notice overstating amount due - whether complying with Consumer Credit Act 1974, s 88”

The photo copier remains the property of the creditor at all times. This was not a hire purchase agreement. I do not see how the debtor could keep the copier unless by the creditors consent I see nothing in the transcript I have to support this.

Briefly the original claim was for the future earnings (rental) on the copier. These are not actual liabilities and are only recoverable on the repudiatory breach of the creditor , the successful issue of a section 87 notice would have been part of this process.

When the notice was found to be ineffective all that was recoverable were the arrears due under the contract (rentals up to date) . Since the rental was up to date there was no longer a breach there was nothing due under the contract so nothing to claim.

In a loan agreement there are actual liabilities under the contract the loan or principle these are always due no matter how the contract is terminated.

 

Also, there is always s170 that prohibits any common law claims for damages

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&p=3315942&viewfull=1#post3315942

[bustthematrix]

I note your points but you seem to be ignoring the prescription of accuracy and correctness for DNs.

[the_shadow]

I note your points but you seem to be ignoring the prescription of accuracy and correctness for DNs.

 

Hmm The act says that a default notice is required prior to termination, then it states what must be in a default notice...

So if the default notice isnt a default notice due to being inaccurate or invalid by days to rectify then they are unable to terminate.

 

Simplistic but thats how I see it.

 

S.

[means2anend]

well they can still terminate but then the termination per se becomes unlawful on the back of a faulty DN..

 

The innocent party can then choose whether to claim damages for breach and continue or to accept the unlawful termination and agree to end the agreement

 

however while there is no termination the faulty dn can be made good by sending a corect dn...as the agreement is still 'live'

[nicklea]

well they can still terminate but then the termination per se becomes unlawful on the back of a faulty DN..

 

Exactly, and so they cannot do this. As a result, the agreement is not terminated and continues.

 

 

The innocent party can then choose whether to claim damages for breach and continue or to accept the unlawful termination and agree to end the agreement

 

I'm afraid they can't claim damages. Have a read of section 170. Also speak to pt2537 - he tried to use a common law remedy for one of his clients and was soundly beaten in the Court of Appeal.

 

With the second part of your comment, have you not read the thread about the person that did accept the termination and ended up being shafted as a result of doing that?

 

 

I really would suggest that your comments are totally wrong on this

[stone-broke]

WOW....you have all been so busy! Some interesting comments though that I will read in greater depth re links that have been added. Some positivity and help would be more welcoming at this present time though! But nice to know some are looking in! :o)

[bustthematrix]

With the second part of your comment, have you not read the thread about the person that did accept the termination and ended up being shafted as a result of doing that?

Hi Nicklea

No, not seen this one. Do you mind posting a link to it please? Thanks

[Guest]

Exactly, and so they cannot do this. As a result, the agreement is not terminated and continues.

 

 

 

 

I'm afraid they can't claim damages. Have a read of section 170. Also speak to pt2537 - he tried to use a common law remedy for one of his clients and was soundly beaten in the Court of Appeal.

 

....

 

the concept of an 'unlawful termination' does exist. yes, an agreement is said to 'continue' because once ended all outstanding sums due then become payable! but, when the total outstanding is demanded it would be regarded as 'ended', because that's when the total outstanding sum would become payable, according to the agreement. so, logic dictates, that if it has not technically been 'terminated' then the total outstanding sum would not be payable! but, where they 'think' that it has been ended, but it technically hasn't been, then there should be redress for all that follows their 'mistake'?

a claimant creditor seeks the equitable remedy of 'performance' of an agreement when they go to court. ie to pay the total outstanding sum (which becomes payable when an agreement is ended!).

 

a poss 'remedy' lies in equity. equity prevails over common law. s140 cca reflects this. depends on the circumstances.

imo

Edited April 2, 2011 by Ford
typ

[Peterbard]

the concept of an 'unlawful termination' does exist. yes, an agreement is said to 'continue' because once ended all outstanding sums due then become payable! but, when the total outstanding is demanded it would be regarded as 'ended', because that's when the total outstanding sum would become payable, according to the agreement. so, logic dictates, that if it has not technically been 'terminated' then the total outstanding sum would not be payable! but, where they 'think' that it has been ended, but it technically hasn't been, then there should be redress for all that follows their 'mistake'?

a claimant creditor seeks the equitable remedy of 'performance' of an agreement when they go to court. ie to pay the total outstanding sum (which becomes payable when an agreement is ended!).

 

a poss 'remedy' lies in equity. equity prevails over common law. s140 cca reflects this. depends on the circumstances.

imo

 

Hi

 

Of coure the way anything is, "Done or nor done" in the life of the agreement can be challenged under section 140.

I think where there has been excesive delay in representing or other shenanigins by the creditor as Ford says action under this section would be appropriate , unfortunatly this is pretty much virgin teritory so there is not much, if any case law to go off.

In the Nationwide case i posted on my the termination thread

http://i740.photobucket.com/albums/xx49/slightly78/court%20pocs/IMG_0002-2.jpg

the deffective default was presented at court and the case was set asside under the courts own initiative pursuant of cpr 3.3.

 

Peter

Edited April 3, 2011 by Dodgeball

[nicklea]

Hi Nicklea

No, not seen this one. Do you mind posting a link to it please? Thanks

 

Here you go:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&p=3313813&viewfull=1#post3313813

 

It has also happened here as well:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?291988-Court-Case-pending-and-help-required-reviewing-position...&p=3345492&viewfull=1#post3345492

 

 

peterbard, who just posted above, commented on the first link as follows:-

 

Hi

Well we finally have a case that has gone to court using the acceptance of repudiation argument here it is

 

Well judgement has gone against me today. I am disappointed but not surprised. The DJ was very nice and treated me kindly and said I had fought a valiant battle and that my documents were all in excellent order. In his opinion "the Defendant's fatal flaw was to accept the repudiation of contract" meaning that I still owe the remaining balance. I do have right of appeal of course and I am also considering bringing a counter claim for damages caused by the repudiation. I shall take legal advice on that point. The DJ agreed the DN was a travesty. When I get the full judgement I will consider posting it up. He felt my argument was attractive but the fact I accepted the rescission in writing brought matters outside the CCA and into normal laws relating to debt.

NO it was deffinately

 

As you can see the judge not only threw it out but found for the creditor because the debtor had repudiated the agreement. The stinger in the tail is that if she had not followed the advice given the case would have been found in her favour as the creditor had already admited the DN was defective.

Needless to say there is multiple back peddling and re writing of history going on now but the tuth is now out, it was never going to work it was a fantassy as i turned out a dangerous fantassy.

 

Problem is that there are many cases like this waiting to come through all advised by the same jolly band.

 

Lets hope they have time to ammend their deffences before they suffer the same fate

 

Peter

 

The link to his comment is here:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?280020-Contracts-Termination-Repudiation-and-Rescission&p=3338072&viewfull=1#post3338072

[Peterbard]

Here you go:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&p=3313813&viewfull=1#post3313813

 

It has also happened here as well:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?291988-Court-Case-pending-and-help-required-reviewing-position...&p=3345492&viewfull=1#post3345492

 

 

peterbard, who just posted above, commented on the first link as follows:-

 

 

 

The link to his comment is here:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?280020-Contracts-Termination-Repudiation-and-Rescission&p=3338072&viewfull=1#post3338072

 

Hi

Yes unfortunately there is another one here

 

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?t=276677&goto=newpost

 

Peter

[Guest]

Hi

 

Of coure the way anything is, "Done or nor done" in the life of the agreement can be challenged under section 140.

I think where there has been excesive delay in representing or other shenanigins by the creditor as Ford says action under this section would be appropriate , unfortunatly this is pretty much virgin teritory so there is not much, if any case law to go off.

In the Nationwide case i posted on my the termination thread

http://i740.photobucket.com/albums/xx49/slightly78/court%20pocs/IMG_0002-2.jpg

the deffective default was presented at court and the case was set asside under the courts own initiative pursuant of cpr 3.3.

 

Peter

 

 

so, where there is no technically terminated/ended agreement, then the demand for the 'full balance' is unlawful! therefore, there should be redress for anything that follows their unlawful demand. eg default registration, collection activities, etc.

there is the possibility of an equitable remedy, as well as that under s140. depends on the circumstances.

as for the idea of 'repudiation' by the creditor, that has been put forward by some - as have posted elsewhere before, 'the essence of repudiation is an intention to abandon the contract or refuse further performance', and where someone attempts to adhere to a contracts terms re termination, it may not necessarily be regarded as a repudiation even if the 'attempt' is unjustified.'

imo

[Peterbard]

so, where there is no technically terminated/ended agreement, then the demand for the 'full balance' is unlawful! therefore, there should be redress for anything that follows their unlawful demand. eg default registration, collection activities, etc.

there is the possibility of an equitable remedy, as well as that under s140. depends on the circumstances.

as for the idea of 'repudiation' by the creditor, that has been put forward by some - as have posted elsewhere before, 'the essence of repudiation is an intention to abandon the contract or refuse further performance', and where someone attempts to adhere to a contracts terms re termination, it may not necessarily be regarded as a repudiation even if the 'attempt' is unjustified.'

imo

 

HI

I dont think the demand for early repayment of a loan is unlawful, even if the account has not been termianted.

You have to remember that credit agrements are regulated by the CCA and the statute says that there can be no sanction for any breach other than the ones described within the statute itself. That does not mean of course that they can enforce the demand for payment, the statute prohibits that, unless of course there has been a default or some exceptional circumstance.

If an agreement was the subject of collection activities by say a DCA when it hadn't been terminated then this would be a breach by the creditor, but i do not see anyway that this could be actionablel unless under the unfairness sections of the statute, the DCA would be guilty of breaching OFT guidlines if they persisted once they where aware.

As i have said before i cannot see how a creditor can repudiate a contract, to do so he would have to deny the existance of the contract , how can he do that when he has liabilities belonging to him outstanding on it. By making recovery actions he is acknowledging that the contract exists. Contry to what is said on here a terminated contract does stil exist , it exists as a terminated contract untill all the liabilities under it are discharged.

It i differrent for the debtor he can deny the debt and the contract, he can and does repudiate when he defaults.

 

Peter

[Guest]

yes it is. by your own admission before also. a demand for the full bal can only be done when an agreement is ended. you, and others, have previously argued that there is no termination if the cca requirements have not been satisfied. therefore, there is no 'termination'. so, if the agreement has not been ended, then any demand for the full bal, which would be required if the agreement was ended, is unlawful. and, yes i am familiar with the cca! the cca does not restrict any other applicable rights of an individual.

i didn't suggest that a cred repudiates! see my post again.

imo

[Peterbard]

yes it is. by your own admission before also. a demand for the full bal can only be done when an agreement is ended. you, and others, have previously argued that there is no termination if the cca requirements have not been satisfied. therefore, there is no 'termination'. so, if the agreement has not been ended, then any demand for the full bal, which would be required if the agreement was ended, is unlawful. and, yes i am familiar with the cca! the cca does not restrict any other applicable rights of an individual.

i didn't suggest that a cred repudiates! see my post again.

imo

 

Hi

What is it about this that gets everyone (including me sometimes) so annoyed.

 

I meant that there is nothing stopping a creditor demanding payment there is nothing stopping him demanding anything he cannot enforce but he can ask he can demand. We can do what we wish unless the law prohibits it it is the essence of our legal system and our freedom.Sorry if i missread your post.

 

Peter

[emandcole]

It i differrent for the debtor he can deny the debt and the contract, he can and does repudiate when he defaults.

 

Peter

Even after the creditor issues a misleading DN that deprives the debtor of their rights? Somewhat changes the implied intention of the debtor does it not? Seems a bit like starting a fire with someone then immediately running off to call the fire brigade reporting your accomplice for their actions and claiming no wrongdoing yourself. The fault is equal however the creditor is supposed to know better? Just gets worse when they pretend to terminate and demand all liabilities.

 

A much debated point but creditor conduct is equally important, especially where the regulations in the CPUTR covering 'Misleading Actions' are concerned. A trader can mislead by action or omission, would suggest a crappo DN and subsequent misrepresentation of the creditor position regarding termination and DCA harassment fit nicely into misleading and unfair practices

[Peterbard]

Even after the creditor issues a misleading DN that deprives the debtor of their rights? Somewhat changes the implied intention of the debtor does it not? Seems a bit like starting a fire with someone then immediately running off to call the fire brigade reporting your accomplice for their actions and claiming no wrongdoing yourself. The fault is equal however the creditor is supposed to know better? Just gets worse when they pretend to terminate and demand all liabilities.

 

A much debated point but creditor conduct is equally important, especially where the regulations in the CPUTR covering 'Misleading Actions' are concerned. A trader can mislead by action or omission, would suggest a crappo DN and subsequent misrepresentation of the creditor position regarding termination and DCA harassment fit nicely into misleading and unfair practices

 

Hi

Yes it may be like all theses things , unfortunatly the one thing it is not like, is the only thing that matters, it is not like a breach of the act.

Peter

[bustthematrix]

Here you go:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&p=3313813&viewfull=1#post3313813

 

It has also happened here as well:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?291988-Court-Case-pending-and-help-required-reviewing-position...&p=3345492&viewfull=1#post3345492

 

 

peterbard, who just posted above, commented on the first link as follows:-

 

 

 

The link to his comment is here:-

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?280020-Contracts-Termination-Repudiation-and-Rescission&p=3338072&viewfull=1#post3338072

OK, this is all well and good, and very useful to be aware of these developments.

 

But where did the judge say he would have found in the Defendant's favour and on what basis??? What, in his learned opinion should the Defendant have pleaded that might have been more favourably decided? Surely part of the value of these initial losses is to help identify the arguments that don't work so that those coming behind don't repeat them?

[nicklea]

OK, this is all well and good, and very useful to be aware of these developments.

 

But where did the judge say he would have found in the Defendant's favour and on what basis??? What, in his learned opinion should the Defendant have pleaded that might have been more favourably decided? Surely part of the value of these initial losses is to help identify the arguments that don't work so that those coming behind don't repeat them?

 

It's not the judge's job to tell anyone what they should have pleaded in order to win.

 

The useful thing about these threads, I would suggest, is that it will deter people from attempting to use the repudiation argument in court.

[Guest]

a cred can repudiate, if they 'intend' to do so. but (as prev'y posted), it seems clear that a cred does not 'intend' to 'abandon' the contract as the contract is that all sums will be payable when it is ended. so, they are not abandoning it as such. they 'think' that it has been ended. the q is whether it has been lawfully ended? if not, then there should be appropriate redress. failure to 'end' properly is a breach of statute (if regulated). and there should be more to it then simply a 'correction' of a bad notice. i know there is Harrison, but the general principle re the correction of notices says that it should only be done if it no 'prejudice' is caused as a result?

also, as suggested, there is equity and/or s140.

in one cred's terms it says that they 'will follow legal requirements' when ending! so, failure to do so is also a breach of their own terms?

imo

Edited April 9, 2011 by Ford
typ

[Guest]

OK, this is all well and good, and very useful to be aware of these developments.

 

But where did the judge say he would have found in the Defendant's favour and on what basis??? What, in his learned opinion should the Defendant have pleaded that might have been more favourably decided? Surely part of the value of these initial losses is to help identify the arguments that don't work so that those coming behind don't repeat them?

 

HI

 

THe quote contains the words "the DJ said the DN was a travesty" this would imply that he thought that the default notice was inefective. The court cannot enforce on a defective notice, unless somone says they are not going to be bound by the contract of course then the court has no option.

The creditor could reissue the notice but he would have to give another stutory period before enforcing and anything can happen in the interim.

There is nothing wrong with questiioning a default notice, if it is defective it can give you time to manuver and maybe even negotiate. But when all is said and done it is just a notice before action, it is not an agreement, it is for information only. The thought that it could ever be used to deny a creditor the right to reclaim his money is totally missplaced.

 

Peter