CL finance clamform - old MBNA debt

[gramtrad2]

I am posting up a copy of a document sent to me by Lewis, part of CL Finance (who I am being chased by in court for an alleged debt originally to MBNA).

 

Advice that I have had so far indicates that it is not sufficient proof of ownership of debt/ assignment and that they cannot rely on this in court!

ASSIGNMENT OF DEBT TO CL FINANCE.pdf

[DonkeyB]

Interesting. Did you get a default notice from MBNA before they sold it?

[rhodium78]

Don't know how to break this to you but this is a notice of assignment... as per s 136(1) of the LoP 1925. It is not meant to be proof of assignment or any contractual document between MBNA and CL Finance.

 

The Notice of Assignment:

 

- must be in writing to the debtor;

- doesn't have to be formal;

- takes effect from the date it is received by the debtor;

- must have a date that is accurate if mentioned;

- must have an accurate figure for the debt.

 

They can rely on this in court if they want to prove they complied with s 136 of LoP act 1925 and hence have the same remedies and relief as the assignor. Therefore, they would only rely on this in court if you bring into dispute their right to take you to court.

 

To make this notice ineffectual, you need to determine whether the date of 21st May 2009 is correct and that the amount is correct.

 

You will also need a copy of the assignment contract (see my earlier post above about how to get it) and thus it would be a good time to include in your defence the query whether CL Finance has a right to pursue you in regards to this debt.

[DonkeyB]

There are quite a few cases like yours on the forum at present, and in almost every case there are problems with the DN and termination. So digging out your DN is important.

 

As rhodium78 says, the actual assignment deed or document may be a factor - you need to request to see the actual deed of assignment or the sale agreement - these can often be revealing, and we've found a few that are incorrectly executed. They may redact it, but I'm sure you have a right to view it.

[gramtrad2]

DonkeyB said:

Interesting. Did you get a default notice from MBNA before they sold it?

 

Yes, on 8th May 2009.

 

@rhodium78

Thanks for that information.

 

By way of background to the MBNA case in question - CL Finance, the alleged owners of the debt secured a CCJ against me (my fault; let my guard down and the date for replying to the writ passed).

 

I applied to have it set aside and attended court in person. The judge asked me to submit my full defence and I did this (appended).

 

Part of my defence relates to the assignment, as you will see.

 

The Court Hearing on this one is 6th May and the deadline for either party to submit docs has passed (19/4), so I am guessing that CL Finance are not going to produce any further documentation.

CL Finance re set aside.pdf

[DonkeyB]

So, DN issued 8 May.

 

Debt sold on 24 June via agreement dated 21 May to CL Finance.

 

Suggest you PM vint1954 and diddydicky about this - alas I'm up to my neck in work, but I think this may be a significant breach if there was anything wrong with the DN.

 

What was the content of the DN? What date did it give for paying the arrears? If it was faulty, they have terminated on the back of a faulty DN. You should have been given till at least 27 or 28 May.

 

Just had a trawl, and MBNA DNs from this period - if issued - are usually faulty. Look forward to hearing the important date...

Edited April 26, 2010 by DonkeyB

[someone_else]

You may also want to check the amount on the assignment, as when one of our MBNA accounts was sold to CL Finance, the balance CL Finance claimed to have bought was higher than the balance from MBNA.

[gramtrad2]

Thanks; this looks like a very useful breakthrough.

 

I have uploaded two letters from MBNA - one is dated the 1st April 2009, which threatens a default notice; the other, dated 8th May 2009 is the default notice, giving me until 25th May 2009 to pay up.

 

Ok, so if the Agreement has been terminated on the back of a faulty default notice, then presumably it would follow that MBNA could not have given good title to CL Finance ?

 

It would be most satisfying to shoot these CL Finance guys out of the water!

Letters from MBNA re default.pdf

[DonkeyB]

That DN is defective. There is insufficient time to remedy. Is that amount the arrears, or the whole balance? They should have given you until 27 May if the DN was provably sent 1st Class.

 

The debt was assigned on 21 May, so they have sold it before you had a chance to remedy.

 

Oh dear. Cohen's are chasing a turkey.

[gramtrad2]

Great news, thanks.

 

The amount referred to is the arrears not the balance.

[DonkeyB]

At least they got that right!

 

Suggest you PM Vint1954 or diddydicky for advice on how best to take this forward - I'm off forum all day tomorrow.

[gramtrad2]

Thanks. I will do as you suggest.

[vint1954]

Hi gramtrad,

 

I have repllied to your PM.

 

The DN is defective even if posted first class, which they never do. It is out by 2 days if first class or 4 if second class\uk mail, which you must maintain is the case form here on.

 

Also the date of termination is important. You need to pin down the date of assignment between MBNA and cohen's.

 

If they terminate on the back of a defective DN, they unlawfully rescind the agreement:

 

"Failure of a default notice to be accurate not only invalidates the default notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is a unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but gives rise to a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119"

 

The requirement for a valid Default Notice to lawfully Terminate an Account whilst in default

 

1. Notwithstanding the matters pleaded above, the Claimant must under Section 87(1) of the Consumer Credit Act 1974 serve a valid Default Notice before they can demand early payment of sums not yet due under a Regulated Credit Agreement.

 

2. Under the Interpretation Act 1978 Section 7, it states:

 

Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

 

2. Practice Direction

Service of Documents - First and Second Class Mail.

 

With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1). Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.

2). To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-

(a) in the case of first class mail, on the second working day after posting;

(b) in the case of second class mail, on the fourth working day after posting.

"Working days" are Monday to Friday, excluding any bank holiday.

3). Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.

4). This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

 

8th March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division

 

 

 

You will also have to try and amend your defence quickly to incorporate the above. Send a copy to the court and a copy to the claimants solicitors.

 

You will also have to convince the court that you have only just become aware of the Unlawful Rescission.

 

Section 87. Need for Default Notice

 

(1) Service of a notice on the Debtor or hirer in accordance with section 88 (a "Default Notice ") is necessary before the creditor or owner can become entitled, by reason of any breach by the Debtor or hirer of a regulated Agreement -

 

(a) to terminate the Agreement, or

 

(b) to demand earlier payment of any sum, or

 

© to recover possession of any goods or land, or

 

(d) to treat any right conferred on the Debtor or hirer by the Agreement as terminated, restricted or deferred, or

 

(e) to enforce any security.

 

9. The Act also sets out via Section 88(1), that the Default Notice must be in the prescribed form, as below:

 

Section 88. Contents and effect of Default Notice

 

(1) The Default Notice must be in the prescribed form…

 

 

 

Some possible points to include in your defence.

 

In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the Court addressed in some detail the issue of the contents of a Default Notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the Default Notice invalid I quote the comment of KENNEDY LJ: "This statute was plainly enacted to protect consumers, most of whom are likely to be individuals" the judgment appears to confirm the consumer credit legislation made under the Consumer Credit Act 1974 as plainly enacted and set out to offer protection to the consumer. Therefore it is suggested that the failure of the Claimant to set out the Default Notice in accordance with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

The Claimant’s failure to issue a valid Default would prevent any subsequent assignment to a third party additionally making any termination of the Agreement unlawful, as statute provides the procedure that must be followed. Since the Original Creditor and the Claimant has failed to adhere to statutory procedure it is averred that the Claimant does not have a right of action, and neither can never now have a right of action having terminated the Agreement unlawfully.

 

14. Furthermore, the Arrears Total outlined cannot be accurate, as the Balance on the Account was at least partly comprised of Unlawful Charges plus additional Charges and Interest added unlawfully whilst the Account was in Dispute. Therefore, the Arrears claimed cannot be accurate, as they are themselves calculated using a Total that was itself inaccurate.

[gramtrad2]

I am in court on 6th May and have some new evidence to introduce, which this forum has thrown up. The problem is that the date for serving any papers that I am to rely on in court, has passed (19/4).

 

How best should I approach this, please?

[mabadilico]

How about novation. These assignments are fake. There should be novation before DCA gets permission to take up your debt in full.

[DonkeyB]

Quick question on novation: how does it differ from an assignment? Must the account holder be informed? I'm thinking of this scenario.

 

When company A buys out company B and its assets - such as the management buy out of Robinson Way by a new company with a similar name, or HFO and its two HFO Capital Ltd companies. Should account holders be informed? Surely as the owner of the debt has changed, they should be.

[rhodium78]

It depends... in the case of company A buying out company B and company B still exists as a legal entity, then no... it is only the shares/directors that are exchanged, not the vehicle itself.

 

Company B is a separate legal entity with its own rights to enter into agreements without the say so of Company A.

 

Novation is where there is a contract in existence and a new contract is substituted for it, either between the same parties or different parties. In the old days, it was a method of assigning a contractual right.

 

In modern law, assignment is now used which assigns the contractual rights without the consent of the promisor.

 

Novation occurs where a contract between Company A and Company B is transformed by the agreement of ALL parties into a contract between Company A and Company C. Company B can now withdraw itself from the contract and is replaced by Company C. Without the agreement of ALL 3 parties, there is no chance of novation and neither can Company A or B be released of their obligations under the original contract.

 

Consideration is required for there to be a valid novation as per normal contract law (read case law).

 

Legal assignment of a "chose in action" (read debt) is based on statute such as the Law of Property Act 1925, the Supreme Court of Judicature Act 1873 previously going all the way back to Grantees of Reversions 1540.

 

The effect of a legal assignment is to enable the assignee to sue in their own name without the assignor being a party.

 

Now, there can't be an assignment of a burden of contract such as a unilateral assignment without the consent of all parties or prior assent from the other contracting party but there can be an assignment of the benefit of a contract which does not require the consent of the other contracting party. A debt is classified as a benefit of a contract.

[gramtrad2]

How about novation. These assignments are fake. There should be novation before DCA gets permission to take up your debt in full.

As far as I am aware, I did not receive any letter from MBNA to demonstrate the debt had been sold on to CL Finance.

 

CL Finance produced the document that I have uploaded indicating assignment to CL Finance as a direct response to my action to have the CCJ removed. The document was sent directly to the court and presented to me by the judge when I attended the hearing (Cohens did not attend).

 

It went through my mind that the document may be a mock up! If so, CL Finance could be in a lot of trouble. This is dynamite and I will wipe the floor with them!

[rhodium78]

Generally (excluding the cases where someone fabricates a NoA), a NoA is not "fake" and has grounding in law. Novation does not come into it. A DCA or any other legal entity does not need Novation to take on board your debt. They can do that via legal assignment.

 

Also, the LoP Act does NOT specify that the notice must be given by any particular person (see Bateman v Hunt [1904]) so not having a notice from the assignor but having one from the assignee is still a valid NoA.

[lilly white]

ok

 

in general terms all posting are correct........ however there must be an assignment.

 

If so we want to see it............. if not how can the judge agree to it,,, it beggars belive

 

Any absolute assignment by writing under the hand of the assignor where is it.......

 

It is expressly denied the Defendant is liable to pay any money pursuant to contract or otherwise to the Claimant.

 

 

Lilly .....

Edited April 28, 2010 by lilly white

[rhodium78]

Don't think all postings are correct but avenues to secure the document of assignment must have a legal standing and that is the nut to crack.

[DonkeyB]

Interesting stuff rhodium.

 

So, in the case of Robinson Way, for example: a new company was created to buy out the old, albeit with a similar name. Should the account holders have been told, and would the sale of the assets been equivalent to an assignment?

 

Technical I know, but this is important and relates to a couple of tricky cases on the forum.

Edited April 28, 2010 by DonkeyB

[lilly white]

yes i do see ok

 

THIS IS THE DEFENCE WHICH I NOW USE..........THESE ARE NOT MY WORDS

 

HOWEVER YOU WILL GET THE DRIFT...........

 

1. It is denied that the matters pleaded in the Particulars of Claim actually disclose any cause of action. In particular:-

 

 

a) It is denied that that the Defendant can have liability to "pay" the Claimant sums of money simply on account of "requests for payment" in relation to a egg credit card- the only matters pleaded.

 

 

No cause of action known to English Law exists on the basis of such "requests for payment" (whether repeated or not).

 

 

 

b) Neither the Claimant being xxxxxxx which it appears (on the face of the Particulars, although due to their vagueness it is hard to know) to be being alleged were due

 

 

c) In any event, it is denied that the Defendant has or ever has had liability to pay - whomever that may be - any sum whatsoever.

 

2. It is expressly denied the Defendant is liable to pay any money pursuant to contract or otherwise to the Claimant.

 

3. Without prejudice to the above contentions, the Defendant asserts that in particular, given that the original of the liability is said to be a credit card given by " egg (which is a person / entity / company not known to the Defendant), it will be the case, taking into account the amount of the liability, that the transaction and the underlying agreement (if any) between egg credit card and the Claimant would be regulated by the terms of the Consumer Credit Act 1974.

 

4. It is the express contention of the Defendant - again without prejudice to the contention that there is in fact no agreement - that any such agreement as exists does not comply with the Act. It is impossible to plead further in the absence of a pleading by the Claimant as to what the agreement was and what its terms were and the Defendant reserves the right further to plead Particulars of failure to comply in the event that the Claimant amends it Particulars of Claim to allege the agreement

[rhodium78]

Interesting stuff rhodium.

 

So, in the case of Robinson Way, for example: a new company was created to buy out the old, albeit with a similar name. Should the account holders have been told, and would the sale of the assets been equivalent to an assignment?

 

Technical I know, but this is important and relates to a couple of tricky cases on the forum.

 

If for example, Robinson Way took over everything and closed down the old company, then certain contracts would be novation and others would be assignment. For example, contract with a BT for an internet circuit, or another company or contractor would come under novation whilst existing debt owed to it would come under assignment. There are some circumstances where novation would cover a creditor and a debtor but that would cover the debtor passing on his debt to someone else (burden of a contract) and not the creditor passing on the debt to another company (benefit of a contract).

[rhodium78]

4. It is the express contention of the Defendant - again without prejudice to the contention that there is in fact no agreement - that any such agreement as exists does not comply with the Act. It is impossible to plead further in the absence of a pleading by the Claimant as to what the agreement was and what its terms were and the Defendant reserves the right further to plead Particulars of failure to comply in the event that the Claimant amends it Particulars of Claim to allege the agreement

 

I have used this in a direction in the past:

 

The Defendant would like the Court to ask the Claimant to produce the document of assignment between themselves and xxxxx as the Defendant does not believe that the Claimant has the power to give a good discharge of the alleged debt without the concurrence of the assignor as per s 136(1)c of the LoPA 1925.