car2403 -v- GMAC-RFC

[car2403]

Hi everyone,

 

I'm at the stage where GMAC have just entered their Defence, which is;

 

1. The Particulars of Claim are inadequately pleaded and are largely unparticularised. In the circumstances the Defendant reserves the right to amend this Defence in the event that the Particulars of Claim are further substantiated or if relevant information regarding this claim becomes available in the future.

 

2. It is admitted and averred that the Claimant and Mr X (“the Borrowers”) entered into a contract (“the Mortgage Agreement”) with the Defendant on the Defendant’s standard terms and conditions. Without prejudice to the generality of the foregoing:

3. Pursuant to the Mortgage Agreement, the Defendant loaned a basic amount of £X to the Borrowers, such loan to be secured by way of a Legal Charge against the property known as X (“the Property”).

3.1 The Mortgage Agreement was contained in (i) the Defendant’s Offer Schedule dated 31 March 2003 (ii) the Special Conditions (iii) the Defendant’s Standard Offer Conditions; (iv) the Defendant’s Mortgage Conditions 2000; (v) the Defendant’s Mortgage Guide and Tariff of Charges (vi) the Acceptance of Offer signed by the Borrowers on 7 April 2003. All the documents referred to in this paragraph were provided to the Borrowers prior to the parties entering into the Agreement.

3.2 The Mortgage Agreement provided for a Repayment mortgage with monthly repayments over a 25 year term. The rate of interest was agreed to be the Defendant’s LIBOR base rate (as defined at Part C of the Defendant’s Standard Offer Conditions) plus 1.95%,subject to the rate being fixed at 5.65% until 1 April 2005.

4. The Defendant will refer at trial to true copies of the documents referred to at paragraph 3.1 above for their full meaning and effect. Without prejudice to the foregoing:

4.1 The Acceptance of Revised Offer contained, inter alia, the following relevant term:

“I/We acknowledge receipt of the current edition of the Mortgage Conditions, the Standard Offer Conditions and the Offer dated 6 October 2003 together with the Mortgage Guide, Mortgage Code booklet and also the leaflet You and Your Mortgage. I/We confirm that I/We have read and understood all the terms and conditions contained therein.”

4.2 The Mortgage Conditions 2000 contained, inter alia, the following relevant terms (terms defined in clause 1 of the Mortgage Conditions 2000 being italicised here and in the original):

‘5. Payment of the Mortgage Debt

“5.2 The borrower will make a monthly payment to the Company on each

payment day. Each monthly payment will be made by direct debit from a current account nominated by the borrower and approved by the

Company. If any direct debit is refused, the Company will be entitled to charge a fee for each unsuccessful application for payment...

“5.8 The amount of the monthly payment set out in the offer is based on:

a) the amount of the loan and any further advance;

b) any fees, charges and expenses which the borrower is obliged to pay...

“10. Power to recover costs and other expenditure

“10.1 The borrower will pay the Company’s reasonable costs and expenses reasonably incurred in connection with the following matters:

“a) administering the mortgage debt. This includes any costs and expenses incurred by the Company as a result of the borrower not

paying any money it owes to the Company when the borrower is obliged to pay it;

“b) making any unsuccessful application for payment of a direct debit;...

“m) taking any reasonable action as a result of the borrower’s breach of these Conditions;...

“10.2 The Company’s costs and expenses are recoverable from the borrower on demand. The borrower must pay the Company’s costs and expenses in full.

“10.3 The Company’s right to recover its costs and expenses entitles it:

“a) to recover the costs and expenses which it has to pay to third

parties; and

“b) to recover its internal costs by charging administration fees in accordance with its published tariff.

“10.7 All costs and expenses will be charged to the borrower’s mortgage account and form part of the mortgage debt. They will bear interest at the interest rate as follows:

“a) where costs and expenses have been paid by the Company to a third party, they will bear interest from the date on which the Company pays them;

“b) where the Company recovers its internal costs and expenses by imposition of an administration fee, the fee will bear interest from the date on which it was imposed...

“10.8 The Company may add new administration fees to its published tariff, or remove existing fees from it, to reflect changes in the nature of the work for which the fees are charged. The Company may change the amount of any fee listed in its tariff to reflect the change in the cost of doing the work in question or in the value of money. The Company will give the borrower a copy of its current tariff at any time on request. It will also send a copy of the tariff to the borrower each year if there have been any changes to it.”

5. The Standard Offer Conditions contained, inter alia, the following relevant conditions:

“Power to Recover Costs and Expenses

We have the right under the Mortgage Conditions to recover any reasonable costs and expenses which we incur reasonably in connection with the mortgage. Our right to recover costs and expenses entitles us not only to recover the sums which we have to pay to third parties, but also to recover internal costs by charging administration fees in accordance with our published tariff (you will find a copy of our current tariff enclosed). We may add new fees to the tariff, or remove existing fees from it, to reflect changes in the nature of the work for which fees are charged. We may also change the amounts of the fees listed in the tariff to reflect changes in costs we incur in doing the work in question, or in the value of money. We will give you a copy of our current tariff at any time on request. We will also send you a copy of the tariff once a year if there have been any changes to it.”

5.1 The Tariff of Charges (dated May 2002) specified, inter alia, administration fees for the provision of services in relation to the Mortgage Account and in relation to its specified costs and expenses. The Tariff of Charges provided as follows:-

“We make charges for some of the additional services which we carry out. We have produced this leaflet so that you may take these into consideration when using our services

5.2 In accordance with clause 10.8 of the Mortgage Conditions 2000, the Defendant, from time to time published revised versions of the Tariff of Charges in which the sums and description of fees may have changed.

6. Notwithstanding that the Claimant has failed to particularise the fees that are alleged to be the subject matter of the claim (“the Disputed Fees”), it is admitted that the Defendant applied fees to the Account, from time to time. The fees were levied following the occurrence of the relevant events described in the Tariff of Charges (“the Trigger Events”), the relevant parts of which are reproduced at paragraph 5.1 of this defence. It is averred that the Defendant was entitled under the terms of the Mortgage Agreement to levy such fees.

7. The Defendant reserves the right to amend this defence in the event that the Claimants particularise the Disputed Fees. Without prejudice to the above, notwithstanding the Claimant’s failure to particularise the Disputed fees, the Defendant pleads as follows:

THE COMMON LAW

8. To the extent that the Claimant is alleging that the Disputed Fees are unlawful at common law as penalties, the Defendant pleads as follows: 8.

It is denied that the relevant terms of the Mortgage Agreement giving rise to the Disputed Fees are liable to be struck down at common law as penalty clauses.

 

 

FEE TYPE (All fees are inclusive of VAT where applicable)

£

Arrears Fee is charged each month your account is greater or equal to 1 month in arrears

50

Unpaid Direct Debit charged when a direct debit is returned unpaid by our bankers, for example, due to insufficient funds in your account or because you have cancelled the instruction to pay the direct debit

30

 

 

8.2 In so far as the Disputed Fees do not arise as a consequence of breach of the Mortgage Agreement, the Disputed Fees are not within the scope of the law on penalties. Pursuant to the Mortgage Agreement, the Defendant provided a service to the Borrowers, namely the provision of a loan and the administration of that loan throughout its life. The Disputed Fees were the prices agreed in the Mortgage Agreement for various parts of that service.

8.3 The Disputed Fees amount to the price for parts of the loan service that the Borrowers required but some borrowers do not require.

9. Further or alternatively, without prejudice to the foregoing, if the Defendant’s contractual entitlement to charge the Disputed Fees does come within the scope of the law on penalties, it is denied that the relevant terms of the Mortgage Agreement constituted penalty clauses because such fees represented a genuine pre-estimate, at the time the Mortgage Agreement was entered into, of the costs incurred following the Trigger Events. Without prejudice to the generality of the foregoing:

9.1 Accounts in arrears require and are subject to greater scrutiny by the Defendant’s employees and agents than accounts that are paid up to date, and require additional communications (usually by letter and/or telephone) with the customer, all of which include overhead costs such as staff and premises costs. Further, such accounts carry an increased credit risk over and above that of loans to borrowers who do not fall into arrears, and further involve credit above that level initially agreed under the Mortgage Agreement.

9.2 When a cheque or Direct Debit instruction is returned unpaid, this requires time and administration costs in communicating with the borrower, determining next steps, and seeking payment by other means, such administration costs stemming from staff and premises and other overhead costs.

9.3 The Defendant could absorb all costs into its general overheads and pass them on through its interest rates or application fees, but to do so would unfairly require customers that never go into arrears and always pay by Direct Debit (for

example), i.e. who only require a cheaper loan service, to subsidise those that do not do so, and therefore making charges to particular customers is fairer.

9.4 To charge each customer the actual costs incurred upon each Trigger Event (such as going into arrears) would increase costs by necessitating the performance of the disproportionately expensive exercise of calculating the exact actually incurred costs. It is therefore cheaper and better to charge groups of customers (such as all customers going into arrears) a general, rounded, amount.

9.5 It is almost impossible to precisely pre-estimate the costs arising in the above situations, since they vary from customer to customer and from particular occurrence to particular occurrence.

9.6 In the premises, the Disputed Fees were a genuine pre-estimate of the costs incurred upon occurrence of the relevant events.

 

THE UNFAIR TERMS IN CONSUMER CONTRACTS REGULATIONS 1999

10. The Claimant alleges that the contractual provisions permitting the Defendant to levy the Disputed Fees were unenforceable under the Unfair Terms In Consumer Contracts Regulations 1999. The Claimant has given insufficient particulars of his claim that the contractual provisions permitting the Defendant to levy the Disputed Fees were unenforceable under the 1999 Regulations and the Defendant will plead more fully to the claim when if such particulars are provided.

10.1 Without prejudice to the above, it is denied that any term under which th Disputed Fees are imposed or can be imposed is unfair within the meaning of the Regulations.

10.2 The contractual provisions permitting the Defendant to levy the Disputed Fees do not fall for assessment for unfairness under Regulation 5 of the 1999 Regulations, as any assessment would relate to the definition of the main subject of the contract and/or to the adequacy of the price or remuneration, as against the goods or services supplied (see Regulation 6 of the 1999 Regulations).

10.3 Without prejudice to the above, paragraph 1 C e) of the Schedule 2 of the 1999 Regulations is not applicable in so far as the as the Disputed Fees were not consequent upon a breach of contract.

10.4 Further or alternatively, and without prejudice to the above, in so far as the

Disputed Fees were payable as a consequence of the Breach of Contract by the

Borrowers, it is denied that the Disputed Fees were disproportionate. The

Disputed Fees represented a genuine pre-estimate of the loss the Defendant

would suffer as a consequence of the trigger events.

10.5 The terms relating to the Defendant’s entitlement to charge the Disputed Fees were clearly stated in the contractual documents and the Borrowers confirmed that he had read and understood the relevant contractual provisions in signing the Acceptance of Revised Offer. In the circumstances the Defendant dealt fairly and equitably with the Borrowers.

 

Generally

11. It is denied that the Claimant is entitled to recover £640.29 from the Defendant on the grounds alleged or any grounds.

12. The Claimant’s entitlement to interest is denied. Without prejudice to the foregoing, the basis of Claimant’s the calculation of interest is denied.

STATEMENT OF TRUTH

I believe that the facts stated in this Defence are true.

Signed Dated&4May 2007

Full Name: David Beattie

Position Held: In House Solicitor, GMAC-RFC Limited

Served and Filed this day of May 2007 by Eversheds LLP, 1 Callaghan Square, Cardiff,

CF1O 5BT, Solicitors for the Defendant

 

 

I've already sent the letter here;

 

No Allocation Questionnaire

 

Is it now just a case of waiting to hear back from the Court as to the Order for Directions, or should I be doing something more at this time?

 

Thanks in advance for the help!

[mrsfoot]

Hi, seems a standard defence to be honest. I would be building the bundle now, the template for which can be found in the forum.

 

The court will contact you in the next week to 10 days. A good piece of advice is read bona v gmac. It is a fantastic thread and they are slightly ahead of you so you will be able to see whats coming!

 

Keep your thread updated. Gmac tend to take it to the wire and as it is only arrears charges i would imagine it wont end up in court, rather you will get a settlement, after reading other threads.

[car2403]

Sounds promising, but they don't seem keen on paying - I probably wouldn't neither, though...

 

I'm sorting the bundles out this weekend.

[car2403]

One quickie on the bundle - I notice that "Robinson v Harman [1848] 1 Exch 850" is mentioned in the statement of evidence, but the details of that case aren't in the court bundle.

 

Is this because the legal facts stated in the statement are all that is required? (It seems to be showing the legal principle, but without referring to a case summary - which I thought would have been necessary)

[car2403]

I've just received the notice of transfer of proceedings form from Northampton - but they've transferred the case to the Defendant's local County Court, which is in Burnley! Is this a mistake, as I live in Northumberland and don't fancy taking this claim to Burnley?

 

With the notice is an allocation questionnaire - which is strange, considering the number of claims being transferred from Northampton without needing an AQ. Is this another mistake, or do I just fill it as per the step-by-step instructions?

[mrsfoot]

I've just received the notice of transfer of proceedings form from Northampton - but they've transferred the case to the Defendant's local County Court, which is in Burnley! Is this a mistake, as I live in Northumberland and don't fancy taking this claim to Burnley?

 

With the notice is an allocation questionnaire - which is strange, considering the number of claims being transferred from Northampton without needing an AQ. Is this another mistake, or do I just fill it as per the step-by-step instructions?

 

Hi fill in the allocation questionnaire and request the hearing to be moved to your local court. See the example allocation questionnaire for what to write and how to put it.

 

I would now contact the Solicitors and negotiate an out of court settlement....you will probably find them very accommodating.

[Bona]

Hi watching your case with interest Im after gmac but going a different way hope to be in court in July where they will have to account for their charges

[car2403]

I'm bamboozled by this now, as Eversheds have sent ME a copy of the AQ they've sent to the Court - does this mean I should have sent them a copy of mine, because the Court didn't "order" me to do that and I never considered it.

 

Strangely, they have asked for the case to stay with the Burnley County Court "for the benefit of the Claimant"? Surely that should be "for the benefit of the Defendant"?

 

They have also said they have 1 expert that they wish to call, but haven't said who that is or if they have a report of their evidence - is that a mistake as well?

 

Honestly, they must be completing so many of these that the whole thing falls down when they make simple mistakes like this.

[mrsfoot]

The AQ should be sent to both the court and the other party. It states on page 1 of it whether you have sent a copy to the other party and you have to tick yes / no. If you ticked no then the court normally send a copy on your behalf.

 

Call the Sols and ask them for clarification on the statement "for the benefit of the claimant"

 

As a side have you tried contacting them for a settlement? I beleive they are quite happy to settle charges before a court date is set.

[Bona]

who are you dealing with at eversheds

[car2403]

I'll send them a copy of the AQ now and call them to see if they'll agree to settle - the claim appears to be dealt with by Elaine Phillips, although the letters are just signed "Eversheds LLP".

[car2403]

I rang Elaine who said that she thought Burnley was my local Court - she is going to ring the Court tomorrow to straighten that out.

 

I asked her if she wanted to settle and she said "I'm seeking instructions from my client, so will write to you in the next few days". I won't post any more about the discussion as it will probably identify who I am if they are reading these forums - although, that might be a good thing!

 

Sounds promising anyway.

 

Elaine was really nice and helpful though, not at all what I expected her to be.

[Bona]

Dont be taken in They are always nicre and helpful on the phone and then turn what you said against you so dont be disapointed just keep going for it

[mrsfoot]

I have to say I found Eversheds very helpful when helping a friend. She was claiming charges only and it took one call after the AQ to get the full amount in settlement.

However I have read Bonas thread and understand this may be a one off!!

Keep going, let them contact you now via post, I have a feeling you may be about to be surprised!

[car2403]

No sign of a letter from Eversheds, but I have received a Notice of Transfer to MY local County Court.

 

Just waiting for that elusive hearing date/directions now...

[Bona]

I have am having a vigorous exchange of views with eversheds at the moment keep at it

[Bona]

Just looking at there defence how can u have an inhouse solicitor from a firm????????????????????????//

[car2403]

Probably just means he is assigned to GMAC on a permanent basis - doesn't mean he is always right though...

[car2403]

Hearing date set for this is 3rd of August, which is bizarre as one of my other claims was just set for 31st of August a few weeks ago - I'm assuming they've taken in to account the time spent transferring the case to my local Court, which works in my favour.

 

In the hearing allocation;

The Judge has considered your case suitable for mediation and you are therefore invited to use the free Small Claims Mediation service. The Court Mediator will be notified of your case. Please contact the Court Mediator on...

 

What does that mean? I've tried to solve this without Court action and have evidence that I have - I think I'll email them with all this and see what they say.

 

Still nothing from GMAC, though. Tsk, tsk!

 

Court Bundle on it's way anyway... (Sending early has worked to get settlement quicker in my other claims)

[car2403]

Well, it's 14 days to the hearing and I've received this from Eversheds;

 

We note that we do not have a contact number for you. We would be grateful if you could write to us and provide us with a telephone number or indeed call our offices where you will be put you in touch with Elaine

 

Sounds ominous?

 

No Defence information, so I've replied with the first Directions non-compliance letter from here;

 

http://www.consumeractiongroup.co.uk/forum/lloyds-bank/58011-directions-non-compliance-letters.html#post485266

 

I'll also be calling them on Monday.

[mrsfoot]

Hi Carr

just catching up with your thread. Seems they are wanting to negotiate a settlement bu what you have put in your last thread.

Just remember, let them do the talking, write down notes of what they are offering and tell then you will get back to them after you have discussed t with partner. Dont just jump in whith a response, it could cost you. Then make sure you stick to your timetable, if you say you will call back with an answer by 4pm then make sure you stick to it!

Good luck, Im hoping you will get your settlement monday

[car2403]

Well, I rang today and got a surprise, really!

 

GMAC have instructed to settle the claim by £30 less than the total amount, but they want a stay on the hearing for a month to allow the settlement to take place. (Hearing set for 3rd August)

 

I'm torn now, as I want settlement - which they know - but I also don't want to change the hearing date. I did point out that I originally wrote to them on 5th April and have no substantial response to any correspondance sent since!

 

I have asked that a letter be sent with the terms/conditions of settlement for me to consider, but I have agreed I would be looking to settle "in principle".

 

I suppose I wait to see what the letter says, but is there any advice that anyone can offer?

 

BTW - I'm not on a crusade here, I'm only interested in getting my money back. They also said they will only settle with a condition of confidentiality attached, which I'm not keen on.

[Bona]

say you will agree to an order that you will accept in full and final settlement the sum of xxxxxx of you claim with costs to be paid by what ever they have agreed iw both sides there own and stipulate in the order that payement must be by a 14 days from the 3rd August this will means that you dont have to go to court but if they dont pay you can put the bayliffs in I can draw up an order if you want this way you have the upper hand if they wont gree to the order go to court they will in the end

Good luck Bona

[Bona]

How much were you claiming

[car2403]

PM sent, Bona...