HSBC v Pipster - Court Tomorrow!! *****Discontinued*****

[noomill060]

Hello guests.

 

No need to be on the outside looking in- sign up and join the fun!

 

Nice job so far pipster. You gonna skin 'em.

[Pipster2797]

Hello guests.

 

No need to be on the outside looking in- sign up and join the fun!

 

Nice job so far pipster. You gonna skin 'em.

 

HSBC working nikght shift

 

I'll get the skelly finished later this morning as want to get info in about carey at the end after what andy said

[AndyOrch]

The High Court has handed down an important judgment in the case of Carey v HSBC Bank Plc. The case dealt with two matters concerning requests for copies of credit card agreements pursuant to section 78 of the Consumer Credit Act 1974 (Act) and the consequences of non-compliance with that provision. The first matter is the determination of six preliminary issues of law arising in a number of selected cases. The second is the application by two of the defendant banks to dismiss certain claims brought against them.

Preliminary issues

 

The preliminary issues determined by the judge in the case were:

Issue 1

 

 

When providing a copy of an executed agreement in response to a request under section 78(1) of the Act:

• must a creditor provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or complete copy thereof? or
  
• can a creditor provide a document which is a reconstitution of the original agreement which may be from sources other than the actual signed agreement itself?
  

It was held that a creditor can satisfy its duty under section 78 by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.

The judge accepted that as a matter of law, section 78 does not itself require any particular explanation as to how the copy was made. However, as a matter of good practice and so as not to mislead the debtor, it is desirable that the creditor should explain that it is providing a reconstituted as opposed to a physical copy of the executed agreement. This will also explain why the copy might otherwise look a little odd. The creditor can also explain in the letter that this procedure is satisfactory under the Act.

 

The judge also provided that the following information needs to be included in the reconstituted copy agreement (assuming of course that it was present in the original):

1. Heading: Credit Agreement regulated by the Consumer Credit Act 1974
   
2. Name and address of the debtor
   
3. Name and address of the creditor
   
4. Cancellation clause applicable to the executed agreement.
   

All of the above may be provided on a sheet which is separate from the full statement of terms and conditions which also forms part of the reconstituted agreement. The creditor may, however, decide to reconstitute the agreement in a different way so that, for example, the information above is populated electronically onto the same sheet as that which sets out the terms and conditions, or some of them. The judge stated that he did not intend to prescribe the precise form of the reconstituted agreement. The key point is what information it should contain, subject to the point that its format should not be such as to mislead the debtor as to what he agreed to.

The judge also considered whether a statement like the one appearing in the reconstructed application form in Carey referring to the agreement to the terms and conditions "attached" needs to be included in the reconstituted copy. Alternatively if the application form had said "I agree to the terms overleaf", should that statement be included. The judge held that this aspect of the form is not necessary for the purpose of the section 78 copy, although there is nothing to stop a bank from putting it in or indeed from furnishing a copy of the type of application form or signature page that the debtor would have signed, as some banks have done. The statement referring to terms and conditions is not itself prescribed information and the supply of the terms and conditions which were applicable at the time will tell the debtor what he needs to know in terms of the content of what he signed up to, including the presence (or otherwise) of the prescribed terms.

In practical terms what this is likely to mean is that if the creditor chooses to use as the section 78 copy the section 63 copy, which would have been provided to that particular debtor at the time following execution of the agreement, this will be sufficient provided that the information referred to above is supplied. This exercise is not a mere formality. The creditor will need to check carefully that the details of the debtor at the time are correct and that those are the particular terms (including prescribed terms) that he/she agreed to. This is to ensure that it is an honest and accurate copy.

Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 (Regulations) as to form, as at the date the agreement was made in order to comply with section 78?

A creditor need not, in complying with section 78, provide a document which would comply (if signed) with the requirements of the Regulations as to form, as at the date the agreement was made.

Must the copy provided under section 78 include the debtor's name and address as at the date when the agreement was made, and if so in what form?

The section 78 copy must contain the name and address of the debtor as it was at the time of the execution of the agreement. But the creditor can provide the name and address from whatever source it has of those details. It does not have to take them from the executed agreement itself.

Issue 2

 

If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?

If an agreement has been varied by the creditor under a unilateral power of variation, the creditor must still provide a copy of the original agreement, as well as the varied terms.

Issue 3

 

Does a creditor's breach of section 78(1) of itself give rise to an unfair relationship within the meaning of section 140A of the Act?

If a creditor is in breach of section 78 this does not of itself give rise to an unfair relationship within the meaning of section 140A.

Issue 4

 

 

If there is a breach of section 78(1), is that sufficient without more to make a declaration to that effect appropriate, in particular:

• where the creditor admits the breach but did not admit it before the issue of proceedings?
  
• where the creditor denies or does not admit the breach?
  

A court has jurisdiction to declare whether in a particular case there has been a breach of section 78. Whether it will be appropriate to grant such a declaration depends on the circumstances of that case. If there are proceedings on foot and within them the creditor formally admits non-compliance with section 78, there is no point in maintaining the proceedings just to obtain a declaration to that effect.

Issue 5

 

 

Does the document signed by the debtor contain the prescribed terms for the purposes of section 61 and/or section 127(3) if:

• they are on a sheet which is referred to on the piece of paper that was signed by the debtor; or
  
• that sheet is attached to the piece of paper signed by the debtor; or
  
• that sheet is separate from but was supplied with the piece of paper signed by the debtor?
  

The judge held that in assessing whether prescribed terms are "contained" in an executed agreement the following principles are relevant:

• it is not sufficient for the piece of paper signed by the debtor merely to cross-refer to the prescribed terms without a copy of those terms being supplied to the debtor at the point of signature
  
• a document need not be a single piece of paper
  
• whether several pieces of paper constitute one document is a question of substance not form. In particular a physical connection between several pieces of paper is not necessary in order for them to constitute one document
  
• a physical connection (or one or more physical connections) between several pieces of paper does not necessarily constitute them as one document
  
• where the debtor's signature and the prescribed terms appear on separate pieces of paper, the questions of whether those pieces of paper together constitute one document is a question of substance and not form.
  

He added that he would not seek to answer the questions in issue 5 in their current state because the scenarios postulated all require some further elaboration before a simple "yes" or "no" answer can be given.

Issue 6

 

If it were not established, at trial, that there was a document signed by the debtor containing the prescribed terms, would that of itself entail an unfair relationship?

The judge held that the answer to the question was no.

The applications

 

The second matter in Carey (which consisted of a number of cases heard together) was the application by two of the defendant banks to dismiss certain claims brought against them.

The judge held that claims that there was an unfair relationship and an improperly executed agreement in Adris v The Royal Bank of Scotland Plc should be struck out or dismissed. The claim that there was an improperly executed agreement in Yunis v Barclays Bank Plc should also be struck out or dismissed. The absence of any positive pleaded case or evidence as to the circumstances of the making of the agreement by the debtor concerned was fatal to the claims. The absence of any positive plea or evidence as to particular facts relied upon in support of the unfair relationship claim, other than failure to provide a section 78 copy, was fatal to that claim.

Comment

 

This is a helpful judgment for lenders which provides some much needed guidance that will narrow or eliminate the issues arising in the hundreds of other similar claims issued in county courts around the country, many of which have been stayed pending the outcome of this judgment.

On a practical level, given the number of requests received, lenders will particularly welcome the finding that a creditor can satisfy its duty under section 78 of the Act by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself. The real impact here is that it will deter borrowers arguments that the agreement is unenforceable without a copy of the original signed agreement.

 

 

In light of this decision, and as acknowledged by the judge, it now seems likely that the number of challenges about section 78 copies will diminish significantly because:

• it should now be clear what will count and not count as a section 78 copy.
  
• of the decision in Phillip McGuffick v The Royal Bank of Scotland Plc (see our alert Does non-compliance with section 77(1) extinguish a creditor's rights?: Phillip McGuffick -v- The Royal Bank of Scotland Plc for an analysis of this case) to the effect that a section 78 breach does not remove any underlying liability from the debtor and does not stop the creditor from referring the debtor's debt to a Credit Reference Agency. Many of the cases had been started before McGuffick had been decided.
  
• a section 78 breach does not necessarily generate an unfair relationship.
  
• absent any positive allegation of improper execution, a claim to that effect based solely on the absence of or defect in a section 78 copy will not succeed.
  
• the cases tend to show that given time, creditors are usually able to supply a conforming section 78 copy even if not within the prescribed 12 working days. Provided that the creditor makes it clear that it accepts that the agreement is unenforceable pending compliance with section 78, there is nothing further which the debtor needs to do at that time.
  

Regards

 

Andy:wink:

Edited January 4, 2012 by Andyorch

[Pipster2797]

Right, I've got my skelly all sorted and a trip to the post office now to send off. I'm not going to post it up just yet and give the opposition a head start on it (Its different from above)

 

I have to say a big thanks to Andyorch for the help but also a massive THANK YOU to CB for giving me a crucial piece of evidence to send off with it.

 

Now have to sit and wait for next Thursdays hearing.

[citizenB]

Looks like you have things under control now..

 

You are very welcome and if a Witness statement is required to go along with that document.. I am more than happy to provide one

[Pipster2797]

Thank You CB.

[noomill060]

Only one guest tonight.

 

(Probably drinking cocoa while waiting for the National Anthem on Radio 4)

[Pipster2797]

They love the night shift do the guests

[Pipster2797]

UPDATE

 

Hope everyone is well this morning!!

 

Just had a letter from the claimant and guess what..........................................

 

DISCONTINUED!!!!! :whoo: :whoo: :whoo:

 

Firstly I want to say a huge huge thank you to DonkeyB for helping with the Witness Statement because without his help I would of lost this case. This was the basis of my skelly argument and I can't thank you enough for your help.

 

I also want to say huge thanks to CitizenB too because of her help with the Default Notice. She kindly supplied me with a DN notice that was worded exactly the same as my template one and didn't give enough time to remedy and was prepared to send a WS to help my cause. I also want to thank CB though for allot of kind words that not just on this case but also with others she has helped with too.

 

Also a Thank You to Andyorch too. He helped me get the skelly in order and gave some great advice.

 

Thanks Again everyone for the kind words and encouragement throughout all of this.

 

 

Now............TIME FOR COSTS.

 

Before christmas I would of been happy for this to just go away and would of left it at that, however after all the tricks the claimant has pulled on me. Sending me their WS on the day of the first hearing, not getting their skelly until New years ever, a whole 8 days late. I have decided to go for costs and make a contribution to help keep this site going because without it I would of been truly stuffed.

 

Can anyone offer any advice of how I should put together a list of costs and get into the court?

Can I still claim for costs if its a small claim? i.e. under 5k?

 

In the order of the 15th Dec 2011, the judge had noted down that costs in the application would of been discussed tomorrow if the hearing had still taken place.

[Pipster2797]

Hello Guest!!!

[coledog]

Great news - glad you got help last week, sorry I have been out of circulation

[king100]

Congrats....

[Pipster2797]

Great news - glad you got help last week, sorry I have been out of circulation

 

Don't be daft everyone has lives to live. There are some great people on here always ready to help.

[Pipster2797]

forgot to say they sent through the notice to discontinue and I have checked with the court and they have filed it and vacated the hearing for tomorrow.

[AndyOrch]

Well done Pips excellent news.I will get your thread title amended accordingly.

 

Re wasted costs, forward a copy of your completed bill to the Sols and try an informal request pursuant to CPR Part 47 - Procedure for Detailed Assessment of Costs and Default Provisions If they disagree then you can make application and will need to follow CPR 48 Personal liability of legal representative for costs – wasted costs orders.

 

Regards well done.

 

Andy

[Pipster2797]

Thanks andy I will have a proper read of that shortly, just at work at the moment.

[rebel11]

Well Done Pip:-)

[AndyOrch]

Thanks Rebel11

 

Andy

[newman]

Great Result Pip

 

I have been following this thread with a lot of interest as I am in a case with 1st Credit and the similarity is that they have admitted they dont have a DN and no Dn has ever been received. In my case pre action protocols have clearly been totally disregarded No LBA, No terminatipon notice and no DN ever served by the OC Citi Financial who unlawfully sold the account to 1st Crud and we are now embroiled in a legal case with me having to submit a defence by the 27th.

 

The matter pertaining to the DN is one of a few critical matters in my case and I wont go into all the details here - full detials will be posted when it is all over. But what I can say is that 1st credit have done everything they can to abuse the CPR process, they have refused to comply with CPR and even sent a top barrister to a set aside hearing. I am advised by the team I have working with me that there are a number of vital things in my case that mean that 1st Credit have no chance of obtaining a judgement - oh and there is the small ,matter of course of the unlawful way they have acted in this case.

 

They have totally abused protocols but they are having a go anyway and the fact that you were sent such a diabolical default notice and have now won just shows that underhanded bully boy tactics dont work when the law has to be adhered to.

 

If you want a laugh then have a look at my thread - it makes interesting reading. ITs HERE.

 

So I am very encouraged by your result and well done and yes you have had help from a fantastic team of extremely professional and competent people. They are amazing.

 

Again Well done.

 

I will send you a PM off line as I want to ask you a couple of questions away from prying eyes.

Edited January 11, 2012 by newman

[Pipster2797]

thanks newman much appreciated.

 

Yes the DN must have helped and have to thank both DonkeyB and CitizenB for their help on that side.

 

I'll have a good read of your thread. Just going to have a read of andyorch's link now as want to get the costs sorted asap.

[DonkeyB]

Sorry mate, been busy. I’ll stop work on the hearing then! Great news.

 

There’s a lot of info missing here, such as their WS for the summary judgment hearing (which they had intended NOT to send to pipster, which is strictly against protocol and was a deliberate attempt to undermine his defence), and his combined WS/skelly response (drafted rather quickly by necessity) which was then accepted in court as an amended defence.

 

I’ll leave it to pipster if he wants to post these up, but they are very useful.

 

The judge’s order asked HSBC to justify why s127 of the CCA did not apply.

 

I think this probably turned more on the fact that no agreement was ever signed – so s127 HAD to apply. They were relying on Carey, but part of Carey said that when a debtor denied ever signing anything at all, then the Carey principles would not apply and s127 would have to kick in. Their argument was flawed, and they knew it.

 

They also relied on the balance of probabilities that their systems were reliable, and so an agreement would have been signed. We argued that they cannot claim that their systems are reliable, then deny that reliability in failing to show that their systems did not keep a copy of the agreement. It’s wholly contradictory. In any event, there never was a signed agreement.

 

The DN issue (ref Amex v Brandon) was very solid back up, but may have gotten past a judge. Having an actual copy of a non-compliant contemporaneous DN proved the template was misleading.

[Pipster2797]

Right having a blast of the info for costs, to be honest I'm not 100% certain of how it should be laid out or what else i could claim for. Bear in mind that the case was originally started in May 2010 and was stayed for a long time. So lots of correspondence and reading in what has been nearly 2 years.

 

I did get a template costs from a different thread.

 

Costs For Discontinuing Application Case No xxx

xx Court xxx January 2012

 

Rate Claimed Litigant in Person rate of £9.25 / hour

Travelling Costs HMRC Approved Mileage Rate of 40p / mile

 

1) Time spent identifying and understanding relevant legislation.

Time spent identifying and understanding relevant case law.

Time spent preparing defence, witness statement and skeleton argument.

 

40 hours £370.00

 

2) Time spent communicating with Respondent.

 

6 hours £55.50

 

3) Loss of day’s wages for attending court on 8th December 2011 £80.00

 

4) Travelling costs for return journey to court (including 4 x 4.2 miles £6.72

 

Total £512.22

 

Notes

 

Before undertaking this myself I approached a solicitor to handle this. I was given an estimate of 3 to 6 hours at £170/hour to prepare the Application (£510-£1020) plus extra for attending the court.

 

I respectfully request that the court give consideration to awarding these costs on the indemnity basis or, in the alternative, on the standard basis as I believe, in any case, that they have been proportionately and reasonably incurred and/or are of a proportionate and reasonable amount.

 

In support of this request, I would also like to refer the court’s attention to the authority of the High Court in the case of:-

 

Hammonds (a firm) v Pro-Fit USA Ltd [2007] EWHC 1998 (Ch)

 

In this case, Mr Justice Warren confirmed that it was usual for an indemnity award to be made:-

 

27 So far as disputed debts are concerned, the practice of the court is not to allow the insolvency regime to be used as a method of debt collection where there is a bona fide and substantial dispute as to the debt. Save in exceptional cases, the court will dismiss a petition based on such a debt (usually with an indemnity costs order against the petitioner).

 

[Pipster2797]

Oops cant edit that last post

 

Costs For Discontinuing Application Case No xxx

xx Court xxx January 2012

 

Rate Claimed Litigant in Person rate of £9.25 / hour

Travelling Costs HMRC Approved Mileage Rate of 40p / mile

 

1) Time spent identifying and understanding relevant legislation.

Time spent identifying and understanding relevant case law.

Time spent preparing defence, witness statement and skeleton argument.

 

40 hours £370.00

 

2) Time spent communicating with Respondent.

 

6 hours £55.50

 

3) Loss of day’s wages for attending court on 8th December 2011 £80.00

 

4) Travelling costs for return journey to court (including a trip to the court on December 23rd 2011 to pick up the claimants Skeleton Argument) 4 x 4.2 miles £6.72

 

Total £512.22

 

Notes

 

Before undertaking this myself I approached a solicitor to handle this. I was given an estimate of 3 to 6 hours at £170/hour to prepare the Application (£510-£1020) plus extra for attending the court.

 

I respectfully request that the court give consideration to awarding these costs on the indemnity basis or, in the alternative, on the standard basis as I believe, in any case, that they have been proportionately and reasonably incurred and/or are of a proportionate and reasonable amount.

 

In support of this request, I would also like to refer the court’s attention to the authority of the High Court in the case of:-

 

Hammonds (a firm) v Pro-Fit USA Ltd [2007] EWHC 1998 (Ch)

 

In this case, Mr Justice Warren confirmed that it was usual for an indemnity award to be made:-

 

27 So far as disputed debts are concerned, the practice of the court is not to allow the insolvency regime to be used as a method of debt collection where there is a bona fide and substantial dispute as to the debt. Save in exceptional cases, the court will dismiss a petition based on such a debt (usually with an indemnity costs order against the petitioner).

 

[Pipster2797]

Sorry mate, been busy. I’ll stop work on the hearing then! Great news.

 

There’s a lot of info missing here, such as their WS for the summary judgment hearing (which they had intended NOT to send to pipster, which is strictly against protocol and was a deliberate attempt to undermine his defence), and his combined WS/skelly response (drafted rather quickly by necessity) which was then accepted in court as an amended defence.

 

I’ll leave it to pipster if he wants to post these up, but they are very useful.

 

The judge’s order asked HSBC to justify why s127 of the CCA did not apply.

 

I think this probably turned more on the fact that no agreement was ever signed – so s127 HAD to apply. They were relying on Carey, but part of Carey said that when a debtor denied ever signing anything at all, then the Carey principles would not apply and s127 would have to kick in. Their argument was flawed, and they knew it.

 

They also relied on the balance of probabilities that their systems were reliable, and so an agreement would have been signed. We argued that they cannot claim that their systems are reliable, then deny that reliability in failing to show that their systems did not keep a copy of the agreement. It’s wholly contradictory. In any event, there never was a signed agreement.

 

The DN issue (ref Amex v Brandon) was very solid back up, but may have gotten past a judge. Having an actual copy of a non-compliant contemporaneous DN proved the template was misleading.

 

Yep no bother at all, I'll get the Witness Statement and the Skeleton Argument up this afternoon.

[DonkeyB]

This wasn’t allocated a track, was it? You defended, they ignored and it got stayed. They applied to lift the stay and get SJ – so AQs have never been completed. It remains trackless, so wasted costs are due.