Vehicles on HP can be sold by a bailiff. Evidence must be provided that there is no 'beneficial' interest.

[Peterbard]

I would have thought that it would be but the expert on CCA is Dodgeball and no doubt he will correct me if I am wrong.

 

Interestingly, yesterday I had lunch with a group of friends (one of whom is a dairy farmer) and he was talking about a brand new tractor that he has just taken delivery off and interestingly he was saying that the interest rate for his HP agreement was exceptionally low but that he had to make a down payment of £30,000. The purchase price being £92,000. Taking his case into consideration it could conceivably be the case that even on day one, there is already a 'beneficial' interest in the machine.

 

Yes any goods bought on contractual sale or HP would be subject to the CCA 1974 and have all the protections that go with it.

[Bailiff Advice]

I don't buy for one second that this could be seriously implemented in practice. A judge sitting in the county court hardly creates a legally binding precedent (merely a persuasive force of law).

 

P.s why are bailiff companies going crazy over this judgement?

 

How can they implement it in their internal procedures? It's merely a county court judgement, persuasive force of law at most.

 

In the first instance, under the former (common law) rule it was the case that 'equitable interests' in goods could not be seized but this wording was changed when the new TCG Regs 2013 was implemented on 6th April 2014 to 'beneficial interest'. I share John Kruse's comment that this 'radical change' was not an intentional one.

 

Clearly this is a very important subject and this can be demonstrated by the exceptionally high number of views (almost 750) that this thread has had in less than 24 hours and accordingly, I would assume that John Kruse would not object if I posted the following extract from his excellent commentary:

 

 

If this county court interpretation is confirmed, it would represent a major statutory change to bailiffs’ powers. A number of factors lead me to suggest that this is an ‘unintended’ change to the law, a product of a drafting choice rather than any clear policy decision.

 

Firstly, there was no consultation upon this alteration by MoJ in advance of the new law. Its importance to all parties, not least finance houses, might have led us to anticipate this. The only reference to HP during the entire review process was by Professor Beatson in 2000: his recommendation was that HP goods should only become liable to levy after the debtor had acquired full title to them.[8]

 

Secondly, and probably more importantly, there is the fact that definition in Sch.12 para.3 stands alone; it is unsupported by any other measures. The legal rights of co-owners of goods are clearly protected by a series of provisions to ensure that they are kept informed and involved in the process. There are no equivalent provisions for the realisation of beneficial interests. There are no notice requirements, no procedures for the valuation and sale of the goods or for challenges to the distribution of proceeds.

 

This lack of statutory mechanism suggests that there was no deliberate intention to make the radical change that may have been effected. Of course, incompleteness is a feature of the new law and may not be conclusive; equally, it is possible for an agency to construct an adequate procedure following the rules for dealing with joint owners, although it is clearly far from satisfactory to have to make it up as you go along.

[Conniff]

I would have thought that it would be but the expert on CCA is Dodgeball and no doubt he will correct me if I am wrong.

 

Interestingly, yesterday I had lunch with a group of friends (one of whom is a dairy farmer) and he was talking about a brand new tractor that he has just taken delivery off and interestingly he was saying that the interest rate for his HP agreement was exceptionally low but that he had to make a down payment of £30,000. The purchase price being £92,000. Taking his case into consideration it could conceivably be the case that even on day one, there is already a 'beneficial' interest in the machine.

 

So they come and take the tractor but it doesn't realise half of what was expected and hoped for, there isn't even enough to pay off the outstanding finance. So who is liable for the shortfall, the person whose levied the tractor or the farmer and does that mean that the original debt is still there with not a penny paid off it?

 

After all, the farmer is now £30,000 out of pocket.

[Peterbard]

Interestingly, yesterday I had lunch with a group of friends (one of whom is a dairy farmer) and he was talking about a brand new tractor that he has just taken delivery off and interestingly he was saying that the interest rate for his HP agreement was exceptionally low but that he had to make a down payment of £30,000. The purchase price being £92,000. Taking his case into consideration it could conceivably be the case that even on day one, there is already a 'beneficial' interest in the machine.

 

No not really. If the goods where terminated due to contractual breech the goods would be taken and sold, granted the result of the sale would probably be more than the purchase price of the vehicle but out of that sum their would also be taken the finance charges due under the contract calculated under the early settlement regulations, dependant on the terms of the agreement and its length these could be substantial. The agreements are usually front loaded, so the large percentage of the interest is due in the first part of the agreement.

 

In any case any money the debtor pays are for the hire of the vehicle, not for its purchase.

[Conniff]

In any case any money the debtor pays are for the hire of the vehicle, not for its purchase.

 

And that is how I see it. There is no difference in Hire purchase and Hire. On one the company says they don't want it back, you can keep it which the ordinary hire firm could say having made enough profit on the rental premiuns and tax relief on the depreciation that will finance the purchase of another piece of machinery to hire out.

 

Also, would early settlement come into it, after all, the finance company doesn't have any form of agreement or contract with the bailiff company, there agreement is with the farmer, and it is he who would be entitled to an early settlement discount.

Edited August 31, 2015 by Conniff

[Bailiff Advice]

 

P.s why are bailiff companies going crazy over this judgement?

 

How can they implement it in their internal procedures? It's merely a county court judgement, persuasive force of law at most.

 

In the first instance, I am perfectly satisfied that in the vast majority of cases a 'beneficial' interest would not be applicable.

 

For many years it has always been the case that vehicles that are subject to hire purchase could not be 'levied' upon and this was generally assumed to be the case under the new regulations. As confirmed by the above commentary, the change of wording from 'equitable' to 'beneficial' (interest) is a radical one and time alone will tell how this may affect bailiff enforcement.

 

Almost certainly it is no longer the case that debtors can simply assume that if they have a Hire Purchase agreement that it provides security against having their vehicles 'taken into control' by bailiffs. Furthermore, it will lessen the grounds for making a complaint (that the bailiff had taken control of a vehicle that is subject to hire purchase).

 

I have little doubt that what will now follow is that the enforcement agent will want to know (and require evidence) about any downpayment (or part exchange) and details of the term remaining under the Hire Purchase Agreement. If a debtor is faced with bailiff enforcement it would also be wise to get a valuation of the vehicle as well. It has always been the case (and this remains the position) that bailiffs do not actually want to take goods. Instead, they would prefer payment. This radical change in the definition of 'interest' provides the bailiff with grounds to 'threaten' that a vehicle subject to hire purchase can legally be taken into control.

 

On the other hand bailiffs also face difficulties if they take control and remove a vehicle that is subject to hire purchase given that there is a clause in most agreements terminating the agreement if vehicles have been seized by a bailiff. If this were to happen, it would be for the finance company to take legal action and I assume that in time this will likely be the case.

[obiter dictum]

I did not know this was only a county court judgement, and not high court

 

 

Why are we so worried?

 

Statute has been maintained and as stated, a county court does not set precedent

 

Why are we blowing this out of all proportions??

[Conniff]

There are just too many ifs and buts that haven't been thought through on this.

 

When that 'car' on finance has been taken into control by the bailiff company, who is then responsible for the payments until sale? The hirer can insist that the goods are now under the bailiff control and they are liable for future payments.

[Conniff]

Why are we blowing this out of all proportions??

 

Because even though this was county, the bailiffs think they have a major victory and can now take HP goods, they are jumping up and down with glee.

[Bailiff Advice]

So they come and take the tractor but it doesn't realise half of what was expected and hoped for, there isn't even enough to pay off the outstanding finance. So who is liable for the shortfall, the person whose levied the tractor or the farmer and does that mean that the original debt is still there with not a penny paid off it?

 

After all, the farmer is now £30,000 out of pocket.

 

It's even worse than that given as soon as our friend took delivery of his tractor it significantly DECREASED in value by the amount of VAT charged.

[Peterbard]

And that is how I see it. There is no difference in Hire purchase and Hire. On one the company says they don't want it back, you can keep it which the ordinary hire firm could say having made enough profit on the rental premiuns and tax relief on the depreciation that will finance the purchase of another piece of machinery to hire out.

 

Also, would early settlement come into it, after all, the finance company doesn't have any form of agreement or contract with the bailiff company, there agreement is with the farmer, and it is he who would be entitled to an early settlement discount.

 

Yes if agreement is prematurely terminated the amount till owing under the agreement is always calculated using the early settlement regs. Not forgetting that the agreement would have been terminated through breach of a term in that agreement.

[Peterbard]

Also as John says, the goods will be the property of the Lender completely once terminated and they could take action to have the vehicle returned to them, the bailiff would have no option but to comply.

[brassnecked]

Because even though this was county, the bailiffs think they have a major victory and can now take HP goods, they are jumping up and down with glee.

 

I have to agree with John Kruse's summary that this was not entirely intended, givn how it seems to drive a coach and horses through CCA and Contract Law

 

"If this county court interpretation is confirmed, it would represent a major statutory change to bailiffs’ powers. A number of factors lead me to suggest that this is an ‘unintended’ change to the law, a product of a drafting choice rather than any clear policy decision. "

 

Conniff, I feel the bailiffs filled with glee will have their collective pigs killed for them when a finance company faced with the loss of several vehicles mid term on a HP agreement where the debtor has paid virtually little or no principal of the debt, do indeed sue the bailiffcos.

 

MOJ themselves will come in for censure by the finance industry as a result probably for allowing this change to slip through with no consultation or debate, as it could shift the goalposts significantly for HP. It could even kill off HP in favour of personal lease where someone never owns a vehicle so the bailiffs will have killed their own pigs if they go on a seizing spree.

[brassnecked]

Also as John says, the goods will be the property of the Lender completely once terminated and they could take action to have the vehicle returned to them, the bailiff would have no option but to comply.

 

Agree DB, Unless they have foolishly already sold them and rely on that County Court judgment as defence when the finance company goes after the bailiff. I would love to see the result of a case like that, the Finance Co barristers would no doubt use the drafting error or chang of terminology to "Beneficial Interest" having an altogether chilling effect by apparently unilaterally changing and usurping Statute and established caselaw.

 

Beneficial interest is so wide and vague, say the debtor's next door neighbour has a valuable cat, a pedigree but it goes onto the debtor's property and kills mice it finds there, that could constitute a beneficial interest in the cat to the bailiff if the debtor lets the cat catch rodents on his property, vague I agree but beneficial to the debtor.

 

That Termination on breach, and losing control of the goods to a bailiff would definitely constitute said breach will be the pain in the bailiffs backside he cannot cure. Other issue will be if early into the agreement there will be little if any equity in the goods, so losers allround, debtor, Finance Company and bailiff.

[Peterbard]

I think that it would be naive to believe that this has anything to do with actually raising money, it is about being able to back up the threat of seizure of HP goods with some kind of authority. It is about being able to apply the extra pressure to the debtor.

 

A doubt has been introduced and that is all they needed.

[brassnecked]

I think that it would be naive to believe that this has anything to do with actually raising money, it is about being able to back up the threat of seizure of HP goods with some kind of authority. It is about being able to apply the extra pressure to the debtor.

 

A doubt has been introduced and that is all they needed.

 

Problem is it has opened a can of worms that may well affect consumer credit adversely.

[Peterbard]

There are just too many ifs and buts that haven't been thought through on this.

 

When that 'car' on finance has been taken into control by the bailiff company, who is then responsible for the payments until sale? The hirer can insist that the goods are now under the bailiff control and they are liable for future payments.

 

The contract is still between the lender and the hirer, so the hirer will still be liable for repaying the balance due under the agreement, this is a reason why the car should be returned to the owner(the lender) so it can be sold and knocked off that balance.

[obiter dictum]

There are so many things wrong with this

 

If the Baliff is taking control of the goods

 

What about this

 

92 Recovery of possession of goods or land.

 

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

 

So unless the bailiff has a taking back of goods warrant issued by the court if subject to HP (Statute) This county court judgement means squat and means nothing as it does not make case law.

 

I have not even mentioned section 90

 

Or am i missing something??

[brassnecked]

There are so many things wrong with this

 

If the Baliff is taking control of the goods

 

What about this

 

92 Recovery of possession of goods or land.

 

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

 

So unless the bailiff has a taking back of goods warrant issued by the court if subject to HP (Statute) This county court judgement means squat and means nothing as it does not make case law.

 

I have not even mentioned section 90

 

Or am i missing something??

No you aren't missing anything, the change of wording and the County Court judgment in question is being regarded by bailiffs as usurping all the provisions you quote along with CCA and caselaw, the term Beneficial Interest being sufficient to take HP goods and sell them and pay off the Finance Co if anything left.

 

It is so wrong headed as to be untrue, A major mess up by MOJ imho.

[Peterbard]

It should also be mentioned for anyone who has a motorbility car and is getting anxious, that this will not effect you, apart from anything else your vehicle is on contract hire not on HP.

[brassnecked]

It should also be mentioned for anyone who has a motorbility car and is getting anxious, that this will not effect you, apart from anything else your vehicle is on contract hire not on HP.

Apart from a minority who indeed purchase on HP under Motability, would have thought the Disabled Taxation Class and Blue Badge would prevent seizure even under beneficial interest.

 

Mobility Scooters might be seizable as they do often come under Hire Purchase, so I await an article in the tabloids when a bailiff takes one. The bailiff saying that a manual wheelchair could be used rather than the scooter.

[Bailiff Advice]

I repeat what I had said on the initial thread that this judgment followed the recommendation of a highly inexperienced individual (with a distinct misunderstanding and grasp of bailiff legislation) who claims be be a 'lawyer' and a professional McKenzie friend. He is neither. That person charged the debtor almost £1,000 in fees and the debtor was ordered to pay £3,200 costs to the local authority for this failed injunction.

 

The truth of the matter is that this is just another in a long line of court failures that the individual has had a hand in and to date, (despite absurd boasts to the contrary) there is no evidence whatsoever of a single court victory or 'redress' claim.

 

Following the judgement he had the sheer audacity to suggest to the debtor that he should issue further proceedings (this time a private prosecution in the Magistrate Courts) against the enforcement agent and bailiff to allege 'fraud'. Thankfully the debtor had the common sense to bin the drafted document sent to him by this individual 'Guru".

[Peterbard]

No you aren't missing anything, the change of wording and the County Court judgment in question is being regarded by bailiffs as usurping all the provisions you quote along with CCA and caselaw, the term Beneficial Interest being sufficient to take HP goods and sell them and pay off the Finance Co if anything left.

 

It is so wrong headed as to be untrue, A major mess up by MOJ imho.

 

What they will say is that they are not the creditor or owner they are collecting goods under the provisions of schedule 12. This is aganst the meaning of the CCA of course and makes a nonsense of the protected goods status.

I suspect this will have to be sorted by a high court case brought by one of the finance companies, unless someone can get the FCA interested.

[Bailiff Advice]

I think that it would be naive to believe that this has anything to do with actually raising money, it is about being able to back up the threat of seizure of HP goods with some kind of authority. It is about being able to apply the extra pressure to the debtor.

 

A doubt has been introduced and that is all they needed.

 

You have 'hit the nail on the head'. I could not have expressed it any better.

 

Excellent.

[mch1991]

Dodgeball, I'm sorry, what?

 

The vehicle is the possession and property of the finance company, the bailiff shouldn't be seizing it. This is contrary to the legislation passed by parliament over the past 50 years regarding hire purchase, consumer credit agreements, contractual law, enforcement agent legislation/taking control of goods legislation and the aims set down by parliament, regardless of what has been adjudged in the county court.

 

The bailiff can return the vehicle to the lender, however, if the hirer is up to date with all payments, then the lender can not sell the vehicle under any circumstances, as then they'll be in breach of their contract with the hirer. So effectively the bailiff is just wasting their money and time.

 

The finance company will most likely give the vehicle back to the hirer and invoice the costs involved to the bailiff.

 

It's clear that the proper protocol was not followed by the debtor, most likely annoying the court and making the judge feel as if the debtor is simply trying to avoid payment and making vexatious applications through the court.