Charbydis v Platform *Claim struck out in court*

[zootscoot]

Hi Charbydis,

 

Are there any Directions on the court order that you must comply with?

 

There may use the no breach argument which if successful they would not have to disclose their costs. However, you've got a pretty tight argument against the no breach route and certainly have an arguable case.

 

Yes they are trying to panic you!

 

Keep your cool and you'll be fine!

 

All the best

 

Zoot

[Charbydis]

Thanks for the advice Zootscoot.

I have re-read the letter from the court and all that says is that there will be a hearing on the 5th Feb at 2pm at Newport county court. There are no directions there.

The copies of the forms from the sollicitor state the reasons they are seeking strike out and then state

"The Claimant's attention is drawn to Part 24.5 of the CPR as any evidence he wishes to rely on needs to be filed and served no later than 7 days before the date of the hearing."

I am thinking I should beef up the defence I have already filed and send that to them and the court but as they haven't filed any evidence to date I don't know what I am supposed to be defending against!

[zootscoot]

Best to phone the court and check on Directions.

 

It may be that there are no directions as they have already received your defence and are therefore assuming that is your evidence.

[Charbydis]

I have just spoken to a helpful lady at the court who said that it is just a notification of the hearing and if nothing is requested by the judge then I don't need to file anything, just turn up and present my side of the case against strick out.

I suppose if it does go ahead I should take along my defence and any supporting documentation e.g. the mortgage contract, redemption statement etc.

[Charbydis]

Having now read Jamorgan's thread I am panicing. I am up against Dryden's as well. I am seriously considering pulling out, if I did could they go after me for costs still?

[Charbydis]

Right, Panic over, now I am seriously annoyed(polite version). I have two charges I am claiming one failed DD and an ERC. I would like to seem them argue that not making a mortgage payment is not a breach. Furthermore they have to date made no effort to file evidence that my case is without merit etc. It probably won't help my case but I will raise it if they chase me for costs and it will make me feel better.

[priestley1965]

I had a similar situation.... check my thread (platform defending or are they)

 

Alan......

[priestley1965]

Just posted on my thread details of how it went at court and what details i used. Hope it is useful to you.

 

Good Luck!

 

Alan....

[Charbydis]

I have a hearing for strike out on the 5th Feb against Platform. I have received two letters from Dryden's: one is a copy of the application for strike out (they love sending letters) and the other is a witness statement.

Basically they argue the failed DD fee was justified but give no costs and

then deny a there was a breach in the mortgage contract and therefore ERC is justified.

I have rejigged the template letter and intend sending to Dryden's and the court so that there can be no argument that I failed to respond.

I have drafted the following argument:

 

 

Defence to the defendant’s contention that the claim is without merit

 

 

It is not disputed that the claimant had a mortgage account with the defendant.

 

The claimant accepts the sequence of events outlined in paragraphs 8 to 17 took place.

The claimant denies paragraph 18 in that he does not accept that the charge levied is justified. The claimant has repeatedly asked for a break down of the costs incurred due to this clear breach of contract, namely not making the required monthly payment on time. The defendant argues that the fee was justified due to costs incurred by the defendant outlined in paragraphs 18(a) to 18© but no actual costs are given and I put the defendant to strict proof to itemize the actual costs involved in this breach as it is the claimants belief that:

 

a) This charge debited to the Account is punitive in nature; is not a genuine pre-estimate of cost incurred by the Defendant; exceed any alleged actual loss to the Defendant in respect of any breaches of contract on the part of the Claimant; and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

 

b) The contractual provision that permits the Defendant to levy such charges is unenforceable by virtue of the Unfair Contract Terms in Consumer Contracts Regulations (1999), the Unfair Contract Terms Act 1977 and the common law.

 

I would also draw the courts attention to the position regarding bank charges for similar breaches of contract for which there have been numerous claims lodged for repayment of such fees. All of such claims have to date been settled out of court without any disclosure of actual costs forthcoming.

 

The claimant denies paragraphs 24 of the defence. The claimant was in breach of a major term of the contract. The particular term in the mortgage which was breached was an express term relating to the period of twenty three years for which the mortgage was to run. This term of the contract was clearly stated in the written mortgage offer signed by the claimant. The terms of which were incorporated by reference into the mortgage deed which was not only signed, but also witnessed. There is clearly no room for doubt that such a clause existed in the contract. Similarly, there is no question that the claimant in fact redeemed the mortgage on the xxxx as evidenced by the final redemption statement. This date is clearly well before the contractually agreed date of xxxx and thus represents a clear breach of the contract.

 

To further the contention that a breach of contract did in fact occur, it is submitted by the claimant that during the period of the twenty three years the claimant was clearly under a contractual obligation to pay monthly installments to the defendants and clearly has not made such payments since the redemption of the mortgage.

 

At the time the mortgage was redeemed the claimant was in severe financial difficulties and in with a number of his creditors including a secured loan. If the situation had been allowed to continue he would have risked being in arrears on the mortgage and be unable to make the required payments to his creditors via a debt management plan. Furthermore he would have had little or no funds available for day to day living expenses. The claimant therefore came to the conclusion that there was no alternative other than to breach the mortgage contract and redeems it before the contractually agreed date.

 

It is denied that an argument based on breach of contract is bound to fail. The Defendant asserts that the presence of clause 4.1 prevents a finding of breach of contract, however, in the case of Bridge v. Campbell Discount Co Ltd [1962] AC 600. House of Lords held that a breach of contract had in fact occurred despite the presence of a term conferring a right to end early. The finding of a breach of contract was based upon the defendant’s regret of not being able to meet his contractual obligations. The Claimant submits that this was the position in which he found himself.

 

8. Furthermore, in Campbell Discount v Bridge was based on the fact that to amount to an exercising of an option there had to be intention to exercise the option demonstrated by the hirer. When the Claimant terminated the mortgage early it was purely to be free from the burden of the contractual obligation. The Claimant was not aware that he was exercising an option to terminate but merely knew that if he did end early he would have to pay a penalty. If the Claimant is unaware that he is exercising a right how can it be said that he intended to exercise such a right. The Claimant’s position bears a greater analogy to that of the defendant in Campbell Discount in that he was regretful in being unable to maintain performance of the contract, than a person who is expressing a wish or intending to exercise a right.

 

9. In the event that the court were to find the Claimant had exercised his right under the said term as oppose to breaching the contract, without prejudice to the proceeding paragraphs, it is submitted that it is still open to the court to hold that Clause 4.1 of the contract amounted to a penalty. In DunlopPneumatic Tyre co Ltd v New Garage [1915] AC 79 Lord Dunedin stated:

 

"whether a provision is to be treated as a penalty is a matter of construction to be resolved by asking whether at the time the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach.”

 

 

 

 

Furthermore an OFT report into mortgage redemption penalties reported the following:

 

 

“A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the unfair terms in consumer contracts regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement.”

 

 

10. In looking at clause 4.1 it can be construed as a disguised penalty clause. The Claimant, thus invites the court to look at the substance of the clause rather than the form. The claimant submits that the clause gives rise to two possible meanings: the first, favouring the Defendant in that the fee is levied in pursuant to a contractual option to terminate the mortgage and the second, favouring the Claimant; that in reality the clause is a disguised penalty for breach of contract. The Claimant invites the court to apply the contra proferentem rule which requires a construction against the person who drafted the clause. The Claimant further wishes to invoke Regulation 7(2) of the Unfair Terms in Consumer Contract Regulations 1999: which provides if there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer will prevail. The availability of a court to find that a contractual term which is expressed so as to relate to a provision of a service or exercising a right, to be in fact a disguised as a penalty, was specifically left open in the case of Interfoto v Stilletto Visual Programmes Ltd [1988] 2 WLR 615.

 

10. Furthermore, the Claimant respectfully requests that the court has regard to the advances in consumer protection legislation since the Court of Appeal’s decision in Campbell Discount Co Ltd v Bridge [1961] 1QB445 and Associated Distributors Ltd -v- Hall (1938 ) 2 KB 83. In particular Regulation 5 requiring a contractual term to be fair. It is submitted that the use of a contractual term to seek to circumvent the penalty provisions, is contrary to the requirement of good faith. The offending clause is also within the ambit of sch 2 (1)(e) in that it requires a consumer who fails in his obligation to pay a disproportionate sum. In this regard the Claimant would distinguish the cases of Euro London Apartments ltd -v- Claessens International ltd [2006] EWCA Civ 385 and Export Credits Guarantee Department -v- Universal Oil Products Co [1983] 1 WLR 399as commercial agreements requiring no consideration of the consumer protection provisions.

 

11. It is thus the Claimant’s submission that the court finds either:

As a matter of fact, the Claimant was in breach of contract in accordance with the Claimant’s submissions para 2-7 above or

As a matter of law, that in the event the court were to find the Claimant had exercised a contractual right, clause 4.1 is still the subject to equitable jurisdiction of the court to strike down the clause as a penalty in accordance with the submissions outlined in paras 8-10 above .

12. If the court is persuaded to find for the Claimant as per para 11, the claimant submits that clause xx is in fact a penalty. To further this, the Claimant cites Dunlop Pneumatic Tyre Co. Ltd. v New Garage & Motor Co. Ltd. [1915] A.C. 79 where Lord Dunedin stated a term will be held to be penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach as opposed to a genuine pre-estimate of loss. The Claimant submits that the early redemption charge is an unconscionable penalty as it is extravagant and exceeds any loss that the Defendant could have expected to have incurred as a result of the Claimant’s breach. The Claimant has repeatedly requested the defendant to provide a breakdown of their loss and evidence of a genuine pre-estimate. The Defendant has failed to respond to these requests. The Claimant is thus of the opinion that no genuine pre-estimate of loss in fact took place and the early repayment charge was levied with a view to act in terrorem , to punish the claimant and deter him from ending the contract.

 

13. The Claimant further submits that the clause is unfair under Regulation 5 of the Unfair Terms in Consumer Contract Regulations 1999:

 

5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

The Claimant submits the clause xx is unfair because it cause a significant imbalance in the parties rights and obligations to the detriment of the consumer, particularly when read in conjunction with clause xx relating to a variable interest rate. A recent statement of good practice by the Financial Services Authority supports this view.

 

14. Under Regulation 6 the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent. At the time of taking out the Mortgage with the Defendant, the Claimant had an adverse credit rating. This meant that the options open to him in terms of being offered a competitive Mortgage offer and rate of interest were extremely limited. The majority of High Street lenders do not offer mortgages to those with adverse credit history and the Claimant was in a vulnerable position having no bargaining power in a market where competition between providers of mortgages in the sub-prime category is extremely limited. The Defendant is thus in a privileged position of being able to charge exhorbitant fees on unwilling consumers. In taking out the Mortgage agreement, the Claimant had no choice in agreeing to terms as laid out therein – these were set by the Defendant.

 

 

15. In the premise of all the above, the Claimant vigorously denies paragraphs 21 and 28 of the Defendant’s defence in respect of the Application For Summary Judgment and respectfully submits that the Claimant does indeed have a legitimate cause of action which should be allowed to proceed to trial, in the event that the Defendant continues to refuse to provide the claimant with the information requested to satisfy the Claimant that the fees levied by the Defendant were indeed lawful. The Claimant further submits that the defendant has not provided a satisfactory cause for the claim to be struck out nor provided a legitimate reason for its assertion that it is misconceived and discloses no reasonable grounds for the relief sought. Indeed had the Defendant complied with the claimant’s requests for information initially, the Claimant would not have needed to seek redress through the courts.

 

 

 

Defence to the defendant’s counterclaim for costs

 

 

 

• Further to paragraph 29-31 of the defendant’s defence it is submitted by the claimant that it was not in the contemplation of the parties nor was it anticipated that such a clause could be relied upon by the defendant to require the claimant to indemnify the defendant in proceedings brought by the claimant to recover sums unlawfully taken by the defendant.

• Furthermore as the contract was discharged on xxx it is no longer open to the defendant to rely on a term within the mortgage contract allowing for recovery of legal costs.

• Without prejudice to the above paragraph, it is further submitted that clauses 17.1 and 17.2 of the contract which the defendant seeks to rely on to recover their legal charges is an unfair term under s.4 of the Unfair Contracts Terms Act 1977. It is respectfully submitted by the claimant that such a term should be regarded as unreasonable under s.11 of the said Act, as even if the claimant were to succeed in these proceedings, the term would effectively deprive the claimant of a remedy and indeed could leave the claimant open to pay further costs.

• The claimant respectfully asks the court to strike out the defendant’s counterclaim as it represents an abuse of the court process in that it is intimidatory to the claimant, aimed at pressuring the claimant into withdrawing his claim and is in direct conflict with the Civil Procedure Rules.

Under the overriding Objectives of the Civil Procedure Rules there is an obligation to deal with cases justly and to ensure that the parties are on an equal footing. To allow the defendant’s counterclaim for costs would put the defendant at a substantial disadvantage to the claimant in that the claimant has no reciprocal right to claim costs under the contract and is thus unable to obtain legal advice and representation for her claim. Also as a litigant in person the claimant is already at a substantial disadvantage as the defendant is a large financial institution with ready access to legal advice and the ability to bear the burden of such costs. The claimant firmly believes in the justice of his claim and feels he has no option but to proceed. The claimant and his family would be caused severe financial hardship should the court allow the defendant’s counter claim.

 

 

• The claimant accepts that it is within the courts jurisdiction to award costs against him, however, the defendant’s counterclaim seeks to usurp the judge’s power on the order of costs.
  
• In view of the defendant’s conduct thus far in the proceedings and particularly for the reasons given in paragraphs 1-6 above it is respectfully requested that the court makes an order that no costs be awarded against the claimant at all in these proceedings.

I am sure the paragraph numbers need adjusting but can someone give this the once over to check I haven't made any major mistakes.

 

 

I haven't been asked to send anything to the court but I will take my summary of events as per Priestly1965's post and draw the judges attention to the fact that a recent hearing against Platform decided that there was a case to answer.

 

 

What do people think?

[zootscoot]

Hi Charbydis,

 

The bit about the OFT needs to go between Para 8 and 9. Also don't forget to add your dates.

 

With regards to the counter claim, can you post their actual counter claim because some of them are quite different.

 

All the best

 

Zoot

[Charbydis]

The following is the counterclaim they filed with their defence:

COUNTERCLAIM

11. The Defendant repeats the Defence herein.

12. By clause 17.1 of the Mortgage Conditions incorporated into the mortgage, the Claimant agreed:

"as a separate and independent agreement on demand to reimburse us (on a full, complete and unqualified basis) against all reasonable costs, claims, proceedings and liabilities which:

(a) we may reasonably incur, or which may be made against us, whether before or after our power to sell the Property has become exercisable in connection with the Mortgage;

(b) arise as a consequence of anything done or purported to be done under these Conditions;

© result from you failing to do anything under these conditions; or result from any payment or discharge in respect of the Secured Amounts (whether made by you or a third person) being challenged or declared void for any reason whatsoever."

18. On 24 November 2006 the Defendant sent a letter to the Claimant, attached hereto marked D, demanding that he meet the Defendant's costs of these proceedings in a sum to be quantified.

19. In the premises, the Defendant claims from the Claimant its reasonable costs of these proceedings on a full, complete and unqualified basis.

20. Further, the Claimant claims interest on those costs under clause 17.2 of the Mortgage Conditions at the mortgage interest rate from the date those costs are incurred until payment, alternatively under section 69 of the County Courts Act 1984 at such rate and for such period as the Court shall deem fit.

AND the Defendant counterclaims:

(1) Costs and expenses as a matter of contract as set out in

Paragraph 13 herein;

(2) Alternatively to (1), the costs of these proceedings as a matter of the discretion of the Court;

(2) Interest;

(3) Such further or other relief as may be necessary or desirable.

 

Then with their witness statement to the application to strike out they filed this:

 

Counterclaim

29 In accordance with Condition 17 of the Mortgage Conditions the Claimant agreed to indemnify the Defendant in respect of any costs the Defendant reasonably incurred in dealing with the discharge of the mortgage. The Defendant also claims, pursuant to Condition 17.2, interest on those costs. The Defendant denies that this Condition is in any way unfair or unreasonable. In any event the Defendant is entitled to and will seek if necessary an order for costs pursuant to the court's general discretion.

30 Accordingly, the Defendant is entitled to and does seek to recover all costs the Defendant incurred in relation to these proceedings. The Defendant also seeks interest on those costs.

31 The Claimant was notified of the Defendant's intention to seek costs by a letter dated 24 November 2006. A copy of this letter is at page 36 of "ASF1 ".

 

Thanks for your time

[zootscoot]

Yes the defence covers that one.

[Charbydis]

Based on the recent Barry vs Swift result should I file a request for disclosure now? I have a hearing for strike out on Monday should I wait until after the result of that is known? How do I go about requesting disclosure anyway.

[Charbydis]

Despite feeling like my life is falling apart, partly due to recent developments re: reclaiming ERCs I am carrying on, at least until I get to a point where I can withdraw with minimum damage.

I about to send the following to Drydens with a copy to the court:

 

Request under CPR 18.1 for further information in relation to Claim 6NP03452

• In relation to paragraphs 18-21 of the witness statement of Adam Fox dated 22nd January 2007 on behalf of the Defendant in its application for strike out/summary judgment of the above claim please provide full details (with all relevant supporting documentation) of:
   
  a) any letters, telephone calls, or incidents of manual intervention into the account in respect of the failed direct debit charge claimed by the Claimant in the Particulars of Claim;
   
  b) how charges are applied to the account (whether automatically or by some other means) and when;
   
  c) the Defendant’s assessment of the cost to it of sending any letter making any telephone call or otherwise administering the account, with details of how the cost to the Defendant is calculated and what items of expense are included, or such other costs as are foreseeable in the context of contractual damages and the remoteness thereof and which can be specifically identified and defined and which can be reasonably attributed to each and every breach on the part of the Claimant;
   
  d) the justifiably objective principles upon which all such costs are calculated and result in the specific level of each charge levied by the bank in respect of each of the breaches which resulted in the charges now claimed by the Claimant.

• In relation to paragraphs 12-15 of the defence to the Claimants claim 6NP03452 and paragraphs 25 and 26 of the of the witness statement of Adam Fox dated 22nd January 2007 on behalf of the Defendant in its application for strike out/summary judgment of aforementioned claim please provide full details (with all relevant supporting documentation) of:
   
  

a) any letters, telephone calls, or incidents of manual intervention into the account in respect of the failed direct debit charge claimed by the Claimant in the Particulars of Claim;

 

b) how charges are applied to the account (whether automatically or by some other means) and when;

 

c) the Defendant’s assessment of the cost to it of sending any letter making any telephone call or otherwise administering the account, with details of how the cost to the Defendant is calculated and what items of expense are included, or such other costs as are foreseeable in the context of contractual damages and the remoteness thereof and which can be specifically identified and defined and which can be reasonably attributed to each and every breach on the part of the Claimant;

 

d) the justifiably objective principles upon which all such costs are calculated and result in the specific level of each charge levied by the bank in respect of each of the breaches which resulted in the charges now claimed by the Claimant.

 

I require you to provide this information with in fourteen days of the date of request. Should you fail to do so I will ask the court to enforce the request.

Can anyone comment? It may help but I don't see how it can do any harm.

[Charbydis]

I sent off my Pt18 disclosure request and popped home at lunchtime to find a list of costs and a skeleton argument from Drydens.

They list costs as 4400.55 and theirs skeleton argument is for no breach based on

 

Euro London Appointments Ltd vs Claessens International Ltd

Associated Distributors Ltd vs Hall and

Export Credit Guarantee Department vs Universal Oil Products Co.

 

Interestingly they completely ignore the question of the failed direct debit charge and then they argue that the clause in the mortgage they rely on to claim costs is valid and "does not terminate upon termination of the agreement".(a direct quote from them)

Can any one advise me, please?

My life is just falling apart at them moment for various reasons and I am desperately holding on to the hope that this will come through.

[zootscoot]

Charbydis,

 

Are you still going ahead with this?

[dolly]

Best of luck for today - I am thinking about you.

[Charbydis]

Does any one know what the cost implications will be if I back out now. The case hasn't been allocated to a track yet.

[zootscoot]

You are liable for full costs to date unless you can negotiate a settlement.

Its worth a try negotiating. If you pull out completely this morning I don't think you will save yourself an awfull lot in costs than if you went to court as these costs will already have been accounted for.

[dolly]

Any news?

[Charbydis]

Well its over. I lost on the grounds of no breach and the judge upheld the clause making me indemnify them for costs so I no owe £5500. In a sense I am relieved its over as it was taking over my life. I now have 28 days to pay or come to an agreement to pay.

My advice to anyone contemplating an ERC claim is don't especially if your mortgage had a clause in like mine.

I tried negiotiating but their position was pay us our costs and withdraw.

I had hoped for this money to give me a break financially but now I am going to step back and concentrate on the important things in life which are my wife and kids and making sure they have a happy and secure home life.

[Charbydis]

One final point. There has been talk of reclaiming mortgage exit fees based on the recent OFT report. I would say ask by all means but if your mortgage had a clause like mine don't bother filing a claim as they will wheel out the legal big guns and you will foot the bill.

When I get my head more straight I will write to my MP and any one else I can think of publising this indemnity clause which I suspect is used by all sub-prime mortgage lenders.

[gizmo111]

Sorry to hear your news Charbydis.

 

It may be worth you contacting zooman for advice on paying this. See maroonfox v mortgage express.

[zootscoot]

So sorry to hear this you must be devasted.

 

Take care

 

Zoot

[Seminole]

I am extremely sorry to hear about this. Could I ask for clarification on one point.

 

You said that youe claim was for an ERC and also for charges. Did the court strike out the whole claim or just in relation to the ERC?