Abbey's new "no breach" defence

[MissPhonic]

Hi,

 

I recieved the new defence, signed by Willem Basson, typed up in full in my thread (link below). #67.

 

In all honesty, I'm feeling very overwhelmed by all of this. I'm reading and re-reading everything but find alot of it hard to understand!

 

I received the standard 'We will apply for a stay / OFT test case' letter today, still not heard from the court yet though.

 

Would someone mind looking at my thread and advising me of my options please. http://www.consumeractiongroup.co.uk/forum/abbey-bank/90560-missphonic-abbey.html

 

Thank you in advance!

 

Vicki

[Redrob]

It's now 2 months since I applied to have the defence thrown out, but I haven't heard anything about it yet. And now today I have received a letter saying my case has been stayed. Should they not have ruled on my N244 first?

[abroadgirl]

hello its abroadgirl here i am not sure if i am in the right thread sorry if i am

the only defence i have got is when they sent there defence to the court and i got a copy it seems there defence says the same as everyone else's

but as im in court with abbey is there another defence or any papers i should have got from abbey?

as it is all getting confusing now for me

i am in court on the 8th jany at 2pm

thvm for any help you can give

hugs

happy new year

abg

[GaryH]

In light of the recent High Court judgment on the issue of whether historic terms can amount to penalties, anyone who has applied to strike out an Abbey defence on the basis discribed above is advised to withdraw the application; either now or immediately after the stay is lifted. A simple letter to the court will do stating that the cliamant's application dated xx/xx/xx is hereby withdrawn.

 

For anyone who doesn't know, the High Court have found that even despite the clear wording of the terms, Abbeys charges do not in fact arise from breach of contract. Therefore they cannot amount to a penalty at common law.

 

This however certainly does not mean that they are not unlawful - the issue of whether they are unfair under the Unfair Terms in Consumer Contracts Regulations is still to be decided and is likely to run into next year.

[Lula]

Wotcha!!! I cannot even remember if I did that, would it have been done with the AQ?

[GaryH]

Hey! Still skulking round in the Abbey forum then I see!

 

Doesn't matter if it was an informal application on an AQ - only need to actually withdraw it if it was a formal aplication on an N244.

[Lula]

excellent, I wouldnt know an N244 if it jumped up and bit me on the behind lol

[adelita]

Anyone who has recieved the new defence please post here. I can't attach it here becouse I'm out of attachment space, but mine is 5 pages long and has 14 paragraphs. Para 3 is;

 

Also, anyone who has recieved the old one (which admits a breach of contract) recently can you please post here with details of when it was recieved.

 

Thanks.

hi there i was wondering if anyone could help me with this

i started to try and get my money back from abbey back in 2006, on several occasions they refused to return the charges, unfortunatly i was in and out of hopital and i could not commit myself to see it to court as i was not well enough, but know im better i wrote to them giving them another opportunity to resolv this matter but to no availe.

soi thought i would go in at the deep end and take them to court, i never actually thought that they might defend, wich they have now replied to the courts with a defence.

please can anyone help me as their defence is all very confusing to me. i also have to fill in a allocations questionaire n150 and i dont have a clue what to put. the defence they sent me is as follows.

 

INTRODUCTION

 

1. In this Defence

1.2 References to an "unauthorised" overdraft are to an overdraft permitted by the Defendant without prior application and arrangement under clause 6.1 of the Conditions.

 

2. It is admitted that the Claimant held an account with the Defendant, account number xxxxxx ("the Account"). It is admitted and averred that the contractual provisions between the Claimant and the Defendant in relation to the Account are set out in the Conditions.

 

3. It is denied that those charges payable and that rate of interest applicable upon a customer going into unauthorised overdraft or exceeding an authorised overdraft constitute a penalty at common law. It is denied that those charges and that interest are payable on a breach of contract.

4.The true position is as follows

 

4.1 Each and every payment instruction presented by or on behalf of the Claimant to the Defendant which would, if honoured, take the Account into unauthorised overdraft or beyond an authorised overdraft, constituted a request (in law, an offer) by the Claimant to the Defendant for a loan of the requisite amount on the terms set out in the Conditions (alternatively on the Defendant's usual terms as to such overdrafts as at the date of the payment instruction in question).

 

4.2The defendant was free to accept or reject each such request

 

4.3 If the Defendant honoured the payment instruction in question, the Defendant thereby accepted the Claimant's offer.

 

4.4 Accordingly, the Claimant became bound to pay interest and charges in relation to that loan at the stipulated rate.

 

5. It is denied (if it be alleged) that, on a proper construction, clause 6.3 of the Conditions provides that a customer going into unauthorised overdraft or exceeding an authorised overdraft constitutes a breach of contract (for which the customer is liable to pay damages). It is averred that clause 6.3 of the Conditions operates as a trigger to bring into effect certain other provisions of the Conditions.

 

6. It is denied that those charges payable upon the Defendant dishonouring a payment instruction presented by the Claimant by reason of the state of the Account (namely that had the Defendant honoured the instruction in question, it would have taken the Account into unauthorised overdraft or beyond an authorised overdraft) constitute a penalty at common law. Such charges are not payable on a breach of contract. They are, by clause 6.4 of the Conditions, a fee.

 

7. The Defendant understands the Claimant's allegation to be that the fees and interest payable in respect of an unauthorised overdraft and an overdraft in excess of an authorised overdraft and fees in respect of the dishonouring of payment instructions are not binding on the Claimant by reason of regulation

8(1) of the Unfair Terms in Consumer Contract Regulations 1999 ("the 1999 Regulations").

 

8. The Regulations, by regulation 1, came into force on 1 October 1999 and are of no application to any event occurring before that date

 

9. Regulation 6(2) of the 1999 Regulations provides that;

 

"In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate -

(a) to the defenition of the main subject matter of the contract, or

 

(b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."

 

10. The fees and interest payable in respect of an unauthorised overdraft and an overdraft in excess of an authorised overdraft and fees in respect of the dishonouring of payment instructions are: (i) set out in plain intelligible language in the Conditions, and (ii) amount to the "price or remuneration" in respect of that provision of such overdraft or such dishonouring.

 

11. Accordingly, by regulation 6(2) of the 1999 Regulations, the provisions of the Conditions as to the fees and interest payable in respect of an unauthorised overdraft and an overdraft in excess of an authorised overdraft and in respect of the dishonouring of payment instructions are not liable to assessed for fairness under those regulations.

 

12. It is denied that paragraph 1(e) of Schedule 2 to the 1999 Regulations is applicable. As pleaded above, the fees and interest payable in respect of an unauthorised overdraft and an overdraft in excess of an authorised overdraft and fees in respect of the dishonouring of payment instructions are not payable on a breach of contract by the Claimant.

 

13. Alternatively, if (contrary to the Defendant's primary case pleaded above), the provisions of the Conditions as to the fees and interest payable in respect of an unauthorised overdraft and an overdraft in excess of an authorised overdraft and fees in respect of the dishonouring of payment instructions fall to be assessed for fairness under the 1999 Regulations, the Defendant's case is as follows:

(a) Regulation 5(1) of the 1999 Regulations provides that:

 

"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."

 

(b) Regulation 6(1) of the 1999 Regulations provides (so far as presently relevant) that:

 

" ... 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 .... "

 

© It is denied that the Conditions breach that provision of the 1999 Regulations. In particular, (i) the Defendant's charges and interest rates are published and provided to its customers from time to time and are expressed in clear language; (ii) the incurring of charges and interest in respect of an unauthorised overdraft and an overdraft beyond that agreed and fees in respect of the dishonouring of payment instructions is a result of the Claimant's actions; and (iii) the Defendant's charges and interest rates are not, in the circumstances, excessive in relation to the value of the services provided in relation thereto.

 

(d) The Defendant reserves the right to plead further in this regard on the provision of full and proper particulars of the basis on which the Claimant contends that the Conditions contravene regulation 5(1) of the 1999 Regulations.

 

14. Save as expressly pleaded to above, each and every allegation contained in the Particulars of Claim is denied as if the same were individually traversed.

 

STATEMENT OF TRUTH

 

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

 

Signed: L .1L8W L.J Blacker

 

Name; Laura Blacker

 

POSITION; PARALEGAL

 

DATE 03/11/2008

 

 

 

MY PARTICULARS OF CLAIM ARE AS FOLLOW

 

 

1. The Claimant had a current account with the Defendant which was opened on or around 2000 to 2005, with sort code XXXXXX and account number XXXXXXXXXX

 

2. During the period in which the Account was operating the Defendant debited numerous charges to the Account in respect of breaches of contract on the part of the Claimant or in respect of various purported services provided by the Defendant. The Defendant also charged interest on the charges once applied. The Claimant understands that the Defendant contends that the charges were debited in accordance with the terms of the contract between itself and the Claimant.

 

3. A list of the charges applied is attached to these particulars of claim.

 

4. The Claimant contends that:

a) Insofar as they may be penalties, the charges debited to the Account are punitive in nature; are 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 extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach, but

instead act in terrorem to ensure contractual compliance and to deter a breach on the part of the Claimant.

b) Insofar as they purport to be services provided by the Defendant, the High Court on the 24th April 2008 rejected the notion that the blocking of cheques, direct debits and so forth were services in the sense commonly understood. Furthermore the High Court held that the Defendant's charges were subject to tests of unfairness under the Unfair Terms in Consumer Contracts Regulation 1999.

Whereas, at all material times the Claimant was a consumer within the meaning of the Regulations and the Defendant was a supplier within Regulation 3(1), and

The banking contract was conducted on the Defendant's standard terms

The terms imposing the charges levied by the Defendant are contrary to the requirement of good faith. Furthermore The terms imposing the charges cause a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer in that:-

• Bank accounts have become a basic essential service

• The Defendant is a wholly dominant partner in a non-negotiable standarddform contract.

• There are a limited number of providers of banking services all whom exercise similar dominance over their customers in non-negotiable standard form contracts.

• These banks exercise a collective dominance in the market.

• The charges of all banks are highly similar in nature and in cost and so the consumer in general and the claimant in particular has no real choice between banking service providers and is forced to acquiesce to the charges.

• The charges exceed actual costs by several thousand percent

• They are applied unilaterally in a standard form contract without the possibility of negotiation

• The Defendant raises the charges or restructures its charging scheme at will without discussion with its customers

• The Charges are of subsidiary importance to the customer in the context of the Banking Contract as a whole and would not influence the making of the Banking Contract.

• The customer had no means of assessing the fairness of the Charges at the time of entering the contract

• The charges reflect a markup of several thousands of percent on the costs of dealing with the claimant's "delinquency" episodes. This is an extraordinary markup for any UK business. The normal markup on the High Street is less than 100%.

• Many of the Defendants charges are levied on previous charges incurred in preceding months. Therefore the Defendants are themselves causing the impecuniosities which then trigger more charges. Therefore the Defendants have caused much of the claimant's impecuniosities and it is the Defendants who are causing the charges to be levied with a view to their own profit.

• The Defendant operates its high level of charges in order to cross-subsidise other banking services which it provides to other customers at less than cost price - "free-banking".

• The charges could be imposed repeatedly and interest at a higher rate could be charged on those accumulated charges

• The Defendant's charges structure depends upon the impecuniosities and vulnerability of its poorer customers to provide free-banking services for those in a better position.

• The overall charging regime operated by the Defendant is disproportionately applied to a minority of its customers, often those who are least able to afford it.

• As established by the High Court (OFT v Abbey & 7 Ors) the customer would receive no service or benefit in return for the imposition of charges.

 

In the premises the terms imposing the charges are unfair within the meaning of Regulation 5 (1) and thus not binding on the Claimant under Regulation 8.

5. Accordingly the claimant claims:

 

a) the return of the amounts debited in respect of charges in the sum of £ 4087.70

b) Interest charges which have been paid on the above charges in the sum of £ 199.09

c) The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year, 30/11/2001 to 20/10/2008 of £240.24 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of 0.90 pence

 

Amount owed £4087.70 + £199.09 = £4286.79

 

£240.24 at 8% interest a year for a period of approximately 6 years = £1441.44

 

Total amount £4087.70 + £1441.44 = £5529.14 and also daily interest at the same rate up to the date of judgment or earlier payment at a daily rate of £1.21

 

(d) Court costs or other costs as allowed by the court.

 

The defendant has been aware that the claimant has been on benefits for a number of years as she has three children to support and look after.

The defendant still proceeded to take her benefits when they incurred the charges on her. The category of benefit that the Claimant is receiving is deemed as inalienable under the Social Security Administration Act 1992 (s.187) which states as follows:

187.-(1) Subject to the provisions of this Act, every assignment of or charge onn(a) benefit 8S defined in section 122 of the Contributions and Benefits Act;

(b) any income-related benefit; or

© child benefit,

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a

beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

 

WOODS V. THE ROYAL BANK OF SCOTLAND 1913 1 S.L.T.499

"A weekly payment, or a sum paid by way of redemption thereof, shall not be capable of being assigned, charged, or attached, and shall not pass to any other person by operation of law, nor shall any claim be set-off against the same. "

 

 

The defendant is also in breach of the data protection act subject access request as they have failed to prOVide all the information required, for example, the claimant is still waiting to receive a copy of the original contract from when she opened the current account, the original terms and conditions, bank statements and manual interventions.

The claimant seeks the help of the court to reclaim the money owed to her as she is still facing financial hardship, the claimant is currently in receipt of income support, child tax credits and child benefit.

[Leecabs]

Hi I put my claim in February last year do I need to change anything?

[srfrench]

I'll apologise in advance for what I'm about to say.

 

Can someone clarify for me please insofar as what it means if I have their original defence admitting breach of contract.

 

Many thanks chaps

[GaryH]

Not a lot now, really. Even though Abbey state explicitly in their own terms and conditions that overdrawing beyond an agreed limit is a breach of contract, and dispite the fact they admit that the charges arise from a breach in their defence; since the High Court judgment the law is that they do not in fact arise from a breach of contract. So they could now just amend their defence.

 

Forget penalty/breach of contract - it all comes down to the UTCCR issues now.

[srfrench]

Thanks for that Gary, much appreciated.

 

[Steven Latiff]

Hi I saw on the news the other day that banks can still charge for overdrawing money from cash point. How can office of fair trading not be able to decide if it is fair for banks to charge us so much. I am still not able to make a claim from the banks for money that they took from me a few years ago I am confused about what to do next

[mert gowder]

This helped me alot