Old HSBC case taken up by MKDP LLP. When is a Default Rectified?

[colin21958]

No, I accepted their termination on 23/07/10, after receiving their final demand on 21/07/10, having received no Default Notice since 04/12/09.

 

 

I also informed them in the letter that they had terminated the account without issuing a DN and that this rendered the account illegally terminated by them. i.e., they had repudiated the agreement and I accepted their repudiation. Thereby no agreement then existed.

 

 

It was clearly them that terminated the agreement by demanding the full amount. I just accepted their termination.

Edited January 2, 2014 by colin21958

[Peterbard]

No, I accepted their termination on 23/07/10, after receiving their final demand on 21/07/10, having received no Default Notice since 04/12/09.

 

Yes so if you accepted that the agreement was terminated why would they need to send a default notice ?

[colin21958]

They should have sent a Default Notice before terminating the agreement by demanding the full balance. By s87 they can't do that! So they terminated the agreement in breach of s87. This is a basic requirement of the Act...

[Peterbard]

They should have sent a Default Notice before terminating the agreement by demanding the full balance. By s87 they can't do that! So they terminated the agreement in breach of s87. This is a basic requirement of the Act...

 

Yes but you agreed the termination so all sums will become due. The debtor can do this , i think section 173(3).

[Peterbard]

Just found this via search tool

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&highlight=pumpkinhead

 

Posts 255 267 279

[colin21958]

How can it? If they terminate the agreement without issuing a DN, then they terminated it illegally and therefore are not entitled to any money under the agreement! They can't demand the full balance after they have terminated illegally. s87 clearly states that they have to issue a DN before they can enforce the agreement. If they terminate the agreement without a DN, then they can't possibly enforce the agreement!

[citizenB]

responding to S.O.S.

 

I am not sure I can offer any more advice than has already been given.

 

I can see what you are saying.. that a DN WAS issued, but appears to have been rectified by HSBC removing money from another account (did they advise you they were going to do this or did they just do it?)

 

The account rumbled on for a further 7 months which appears to confirm your suspicions that the DN had been rectified.. however, they then issued a termination notice without having issued a new Default Notice.

 

As for the agreement, it is correct that unless you can categorically deny having signed a document that contained all of the prescribed terms that are statutory requirements under the CCA, that most Judges will let them get away with not producing anything other than a statement saying that it was their policy to not lend until an agreement was signed !!

 

Do you know what your timeline is regarding this claim ?

 

Issue Date XX + 5 days for service = XX + 14 days to acknowledge claim = XX + 14 days to submit defence = XX

 

.

[Peterbard]

How can it? If they terminate the agreement without issuing a DN, then they terminated it illegally and therefore are not entitled to any money under the agreement! They can't demand the full balance after they have terminated illegally. s87 clearly states that they have to issue a DN before they can enforce the agreement. If they terminate the agreement without a DN, then they can't possibly enforce the agreement!

 

No they cannot, but you can, and it seems you did. Once terminated all sums are due under common law. Sorry

[colin21958]

Just found this via search tool

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?257032-RBS-Mint-Loan-Court-Action-Started-amp-Dodgy-DN-issues&highlight=pumpkinhead

 

Posts 255 267 279

 

 

Having read these posts, it seems clear to me that the case is entirely different! In that case a defective DN was issued, however, in my case they clearly have not issued one at all. They have terminated the agreement without following the correct procedure. This is a breach under the CCA. They can't then say that because the agreement is breached the CCA no longer applies, otherwise what is the point of the CCA in the first place?

[colin21958]

No, I didn't terminate the agreement, they did when they demanded money not due under the agreement.

[colin21958]

responding to S.O.S.

 

I am not sure I can offer any more advice than has already been given.

 

I can see what you are saying.. that a DN WAS issued, but appears to have been rectified by HSBC removing money from another account (did they advise you they were going to do this or did they just do it?)

 

The account rumbled on for a further 7 months which appears to confirm your suspicions that the DN had been rectified.. however, they then issued a termination notice without having issued a new Default Notice.

 

As for the agreement, it is correct that unless you can categorically deny having signed a document that contained all of the prescribed terms that are statutory requirements under the CCA, that most Judges will let them get away with not producing anything other than a statement saying that it was their policy to not lend until an agreement was signed !!

 

Do you know what your timeline is regarding this claim ?

 

Issue Date XX + 5 days for service = XX + 14 days to acknowledge claim = XX + 14 days to submit defence = XX

 

.

 

 

Hi CitizenB,

 

 

In answer to your questions, no they did not inform me that they were going to take money, they just did it and I found out when I checked my account, I never got any notice in writing from them, even after they did it, stating that they were going to do it.

 

 

I acknowledged service online on 17/12/13.

 

 

Regards,

 

 

Colin.

[mjt2013]

Do the t&cs of your agreement say anything about making transfers from other accounts? It's not an uncommon provision.

[colin21958]

No they cannot, but you can, and it seems you did. Once terminated all sums are due under common law. Sorry

Refering to the post #22 by The Mould. I did some research into this aspect of Contract Law and discovered that it is stated In UK contract law, where a repudiatory breach of contract occurs, the innocent party must elect either to treat the contract as terminated (acceptance of the repudiation), or to treat it as continuing (affirmation of the contract). Affirmation can only take place if the innocent party knows of the breach and of his right to choose between terminating and affirming the contract; it is clear that HSBC knew of the breach, as they issued a Default Notice on 04/12/09 and I am certain that such a large company would be aware of their legal right to choose, as I am sure this was not the first contract they had entered into. Acceptance of this repudiation, as they have since claimed, would have therefore been evidenced by the prompt termination of the account and the demand of money owed on the agreement. Affirmation of the contract is implied if the innocent party knows of the breach and of his right to choose and acts in a manner consistent with treating the contract as continuing. Although the innocent party does have time to elect whether to affirm or terminate, doing nothing for too long, such as 7 months, must surely be seen as an affirmation. Once an innocent party has affirmed a contract, the affirmation is irrevocable. So, when they then breached the contract I was faced with the same decision, to either treat the contract as terminated, or to affirm the contract. Now, since they had breached the CCA and that was the reason for accepting their termination, the agreement was therefore terminated, I don't therefore see how they can then demand repayment. Especially as they have no written agreement, other than whatever concoction they produce at the hearing, and that will have been negated if the agreement is terminated. So, what contract would any outstanding balance be supported by, if there is no existing agreement?

[colin21958]

Do the t&cs of your agreement say anything about making transfers from other accounts? It's not an uncommon provision.

 

 

I am sure it does, but as I don't have the original t&cs I can't be sure. But this point is irrelevant, I am not questioning this. The fact that they did it, whether or not they had the right to, and the way they then treated the account suggested that they had rectified the default for me. So they should then have issued a further default notice, but they didn't. They then terminated the account by demanding the full balance, clearly in breach of s87, CCA.

Edited January 2, 2014 by colin21958

[Peterbard]

Having read these posts, it seems clear to me that the case is entirely different! In that case a defective DN was issued, however, in my case they clearly have not issued one at all. They have terminated the agreement without following the correct procedure. This is a breach under the CCA. They can't then say that because the agreement is breached the CCA no longer applies, otherwise what is the point of the CCA in the first place?

 

I think the only relevant (similar)point is that you terminated your agreement, it may be that the court does not pick up on this, however it is something to keep in mind when preparing any defense.

 

It is also similar in that i both case the DN issue was not relevant, in your case it was remedied in the other case it was defective.

[colin21958]

 

The account rumbled on for a further 7 months which appears to confirm your suspicions that the DN had been rectified.. however, they then issued a termination notice without having issued a new Default Notice.

 

Hi CitizenB,

 

What is your opinion with regard to this and the issue about me accepting their termination of the agreement? I would welcome your comments, especially in view of the comments made by Dodgeball. Thanks,

 

 

Regards,

 

 

Colin.

[Peterbard]

I am not sure what to say about the earlier quote from the mould. Undoubtedly it is common law , however on a credit agreement the creditor performs his duties under the agreement when he advances the loan.

Thereafter the only duties (other than those under the statute) are for the debtor to repay the loan, if the loan is terminated by either party the liabilities under it still have to be settled, this is true even on equitable rescission of agreement.

[colin21958]

Yes, I agree Dodgeball, but he also has to fulfil those duties in order to benefit from the terms of the agreement. The CCA states that in order to enforce the agreement (which includes demanding the full balance) that he must first issue a default notice. If he doesn't do that, then how can be still be entitled to reclaim money under the agreement. If the agreement no longer exists, what would he base any claim on? If he claims against the agreement (as this Claimant is doing) then he needs the agreement. If he discards the agreement by stating that I accepted his termination of it, then what has he got left to prove that he is owed anything?

[Peterbard]

Yes, I agree Dodgeball, but he also has to fulfil those duties in order to benefit from the terms of the agreement. The CCA states that in order to enforce the agreement (which includes demanding the full balance) that he must first issue a default notice. If he doesn't do that, then how can be still be entitled to reclaim money under the agreement. If the agreement no longer exists, what would he base any claim on? If he claims against the agreement (as this Claimant is doing) then he needs the agreement. If he discards the agreement by stating that I accepted his termination of it, then what has he got left to prove that he is owed anything?

 

Sorry but his argument will fail.

 

Yes indeed, and so they do if by default, but in your case the sums under the contract are due because you terminated the contract, not because of any default.

Liabilities do not just disappear, there is no section of the CCA which says that a contractual debt is lost because of a statutory breach.

 

I wold re- think this aspect of any defense.

Edited January 2, 2014 by Dodgeball
os?

[colin21958]

But what would this "contractual debt" be based on, if the only contract has been terminated. The whole point of a credit card agreement is to allow you to repay money borrowed at a certain rate in return for being charged interest on the money borrowed. So, if I repudiated that agreement then I can understand that I would be obliged to repay the full debt immediately, but if the creditor terminates this agreement in contravention of the terms of the agreement and the CCA which governs and regulates the agreement, then they have not only lost the right to interest, but they also have no agreement to prove any "contractual debt". Besides which, the CCA which regulated the agreement states that the debt cannot be enforced unless a Default Notice is first issued. If they try to enforce the debt without issuing a DN then they have breached the Act.

[colin21958]

Dodgeball, may I ask whether you have any legal training in this field? Thanks.

[Peterbard]

Dodgeball, may I ask whether you have any legal training in this field? Thanks.

 

Yes you may ask

[colin21958]

Dodgeball, If what you say was true, then any Credit Card company could commit any breach of the agreement and then demand the full balance, if the debtor did nothing, they could say that the debtor had accepted their termination of the agreement by acting as if the agreement had continued, and then sidestep the requirements of the CCA which were supposed to be there to stop things like this from being possible!

[colin21958]

Dodgeball, Do you have any legal training in this field?

[Peterbard]

But what would this "contractual debt" be based on, if the only contract has been terminated. The whole point of a credit card agreement is to allow you to repay money borrowed at a certain rate in return for being charged interest on the money borrowed. So, if I repudiated that agreement then I can understand that I would be obliged to repay the full debt immediately, but if the creditor terminates this agreement in contravention of the terms of the agreement and the CCA which governs and regulates the agreement, then they have not only lost the right to interest, but they also have no agreement to prove any "contractual debt". Besides which, the CCA which regulated the agreement states that the debt cannot be enforced unless a Default Notice is first issued. If they try to enforce the debt without issuing a DN then they have breached the Act.

 

The rights and duties exist under the contract of course, the statute merely regulates it.

 

Once a contract is dissolved the liabilities have to be repaid, there is nothing really more to it than this.

 

In order to recover sums once under contract it is true that it must first be terminated, it is the sums that were under the contract which are claimed as damages.

 

Not that the CCA cannot interrupt any action in the court it can, if there is suggestion of improper execution or if notices have not been served it can require an enforcement order, but where you yourself have terminated the agreement this would not be needed, the liabilities would be due under common law.