Getting payments back due to lack of credit agreement

[paulwlton]

I've come across a disturbing case where a pensioner was bullied into paying a debt spanning over 14 years. The debt was not hers but it was taken out at her address by another family member who then disappeared.

 

The person is now in her seventies and after seeking advice through her niece she made a CCA request. The creditor then fraudulently doctored the agreement to suite. (i have a copy) Included in the agreement was ppi. Why would a pensioner need this insurance?

 

The police are going to be made aware shortly. My question: Has the old dear any chance of claiming all her payments back?

 

PW

[elsinore]

My question: Has the old dear any chance of claiming all her payments back?

 

PW

 

My instinctive reaction is yes. The debt was not hers, she was coerced into making repayments and the lender will be unable to substantiate the whole debt. But I'll ask some more legally minded people to give an opinion.

 

Els.

[tomterm8]

Absolutly, there is no bar on fraud... as long as you can prove the statetment you made.

[paulwlton]

Absolutly, there is no bar on fraud... as long as you can prove the statetment you made.

 

 

Beyond reasonable doubt. By the way the APR is 91%

[elsinore]

By the way the APR is 91%

 

:o :o

 

I hope it makes the press.

 

Els

[tomterm8]

Doesn't need to be reasonable doubt, just on the balance of probabilities (although, the burden is harder if you alleged fraud). Gizmo is the mod you need for that, though.

[rosa28]

I've come across a disturbing case where a pensioner was bullied into paying a debt spanning over 14 years. The debt was not hers but it was taken out at her address by another family member who then disappeared.

 

The person is now in her seventies and after seeking advice through her niece she made a CCA request. The creditor then fraudulently doctored the agreement to suite. (i have a copy) Included in the agreement was ppi. Why would a pensioner need this insurance?

 

The police are going to be made aware shortly. My question: Has the old dear any chance of claiming all her payments back?

 

PW

 

 

This is an appalling story. Is there a separate thread on this?

[out of cash]

hi rosa28,

 

just wondered who the cred is??

[nicklea]

I would welcome any comments on the below

 

I was just rereading tomterm's original post as I referred to it in a reply I made to somebody and I just noticed where he said this:-

 

At that point, IMHO if your claim relies on equity, it fails. Firstly, the money was not paid by mistake of fact (since money was owed under a credit agreement, and no enforcement took place) but mistake of well established law and in equity you have a duty to know the law.

 

I was just looking into this recently for another reason and mistake of law is a valid basis for a defence/ claim and there is no longer a "settled understanding of the law" defence in common law for the creditor to use.

 

This, it appears, could also be used where there has been an absolute assignment of a debt, the Law of Property Act has not been complied with and the debtor has been making payments to the dca. This could also be done as a misrepresentation of the law.

 

Also if a DCA - mentioning no names - misrepresents the law (by saying they don't need to comply with the CCA for example) and the debtor makes payments afterwards then it is also possible to claim for a misrepresentation of law rather than fact

 

Here is something I came across:-

 

1. This is a restitutionary claim based on the principle of mistake of law recognised in the House of Lords decisions in Kleinwort Benson Ltd v Lincoln City Council [1998] UKHL 38 (“Kleinwort”) and Deutsche Morgan Grenfell Group Plc v Inland Revenue & Anor [2006] UKHL 49.

2. In Kleinwort, Lord Goff of Chievely ruled on five issues:-

Issue 1: The present rule, under which in general money is not recoverable in restitution on the ground that it has been paid under a mistake of law, should no longer be maintained as part of English law, from which it follows that the facts pleaded by Kleinwort Benson in each action disclose a cause of action in mistake.

Issue 1A: There is no principle of English law that payments made under a settled understanding of the law which is subsequently departed from by judicial decision shall not be recoverable in restitution on the ground of mistake of law.

Issue 1B: It is no defence to a claim in English law for restitution of money paid or property transferred under a mistake of law that the defendant honestly believed, when he learnt of the payment or transfer, that he was entitled to retain the money or property.

Issue 2: There is no principle of English law that money paid under a void contract is not recoverable on the ground of mistake of law because the contract was fully performed.

Issue 3: Section 32(1)(c) of the Limitation Act 1980 applies in the case of an action for the recovery of money paid under a mistake of law.

3

4. Arden LJ said in Mainstream Properties Ltd v Young & Ors [2005] EWCA Civ 861:-

[84] Originally at common law there was no relief where a party acted under a mistake of law. However, in Kleinwort Benson v Lincoln City Council [1999] 2 AC 349 the House of Lords decided, with respect to the rule precluding the recovery of money paid under a mistake of law, that the distinction between money paid under a mistake of fact and mistake of law could no longer be maintained. The House held that the law must be allowed to develop appropriate defences to provide protection to recipients of money paid under a mistake of law in those cases where justice or policy did not require them to refund the money. Following this decision, this court held in Brennan v Bolt Burdon Ors [2004] EWCA Civ 1017 (Sedley and Maurice Kay LJJ and Bodey J) that a common mistake was now capable of vitiating an agreement even if it was one of law, rather than fact. Maurice Kay LJ said that the effect of the decision in the Kleinwort Benson case "now permeates the law of contract" (at [10]). Likewise in Pankhania v Hackney LBC [2002] EWHC 2441 (Ch), Rex Tedd QC sitting as a deputy judge of the Chancery Division held that a claim lay for a misrepresentation of law, rather than fact, so that in this case too ignorance as to the law was no bar to the claimant's claim.

5. She then said in Monro v HM Revenue & Customs [2008] EWCA Civ 306:-

[7] The common law does not recognise a "settled understanding of the law defence" (see Kleinwort Benson)

6. Lord Hoffman said in Deutsche Morgan Grenfell Group v Inland Revenue & Anor [2006] UKHL 49:-

[9] Before the decision of the House of Lords in Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, this mistake would not have given rise to any cause of action because it was a mistake of law. That rule has now been abandoned.

7. Lord Hope of Craighead said in Sempra Metals Ltd v Revenue & Anor [2007] UKHL 34:-

[22] I think that it can now be taken as settled that, under the Kleinwort Benson principle, a cause of action at common law is available for money paid under a mistake of law.

[46] As Lord Goff said in Lipkin Gorman v Karpnale [1991] 2 AC 548, 578C-E, and stressed again in Kleinwort Benson [1999] 2 AC 349, 385A-F, the recovery of money in restitution is not, as a general rule, a matter for the discretion of the court. A claim to recover money at common law is a matter of right

 

 

 

Any comments from anyone?

[nicklea]

I also noticed this comment by Tomterm:-

 

It’s interesting to note even Wilson did not attempt the recovery of monies paid under the agreement. We’re talking about one of the most famous rogue debtors… so, have you wondered why she didn’t do so, if it was a realistic possibility?

 

As a matter fact in the cases Wilson v Pawnbrokers [2005] EWCA Civ 147 and Wilson v Robertsons (London) Ltd [2006] EWCA Civ 1088 she did get all the money back!

 

However, I do agree with tomterm's comment below and would never consider launching a claim for this, however I wonder if this could be used as a defence of set-off when being pursued by a creditor?

 

The banks are well versed in the consequences of these actions, and frankly I would expect any case brought would be defended by the leading barristers in the field. Not one barrister, if I were the banks I would send dozens.

 

The case would probably be transferred over to the commercial or mercantile courts. And you would pay costs if you lost. And those costs would probably NOT be in the same order as the amount of money at stake.

 

You are talking about a claim worth billions to the banks, and about companies that could easily spend 10 million on the case without putting a dent into the shareholders Champaign at the general meeting.

 

What are your prospects of success?

 

Ok. If you ignore the fact that if the banks have any sense, they will bring the best and brightest minds in law against you, even if we go to the base law, your chances do not look good to me.

[andrew1]

Where would this fit into the argument then s.106 (d) CCA 74:

 

106. Where, under any provision of this Act, this section is applied to any security provided in relation to a regulated agreement, then, subject to section 177 (saving for

registered charges),--

(a) the security, so far as it is so provided, shall be treated as never having effect;

(b) any property lodged with the creditor or owner solely for the purposes of the

security as so provided shall be returned by him forthwith;

© the creditor or owner shall take any necessary action to remove or cancel an

entry in any register, so far as the entry relates to the security as so provided;

and

(d) any amount received by the creditor or owner on realisation of the security

shall, so far as it is referable to the agreement, be repaid to the surety.

 

 

Also, Toms otherwise excellent contribution states the 'morals' - a Judge recently told me when I said "I appreciate the moral of challenging this case your honour "( I felt guilty!) only to be told "we are not here to Judge Morals, just the facts"...

 

Sarah

[tifo]

looking at the CCA 2006 and it's part on 'unfair relationships', i believe this may be used to reclaim all that you have paid the creditor, if it is shown they have acted unfairly at any time, this includes things such as not complying to legislation, guidelines, undue harassment etc. (sounds familiar?). This applies to pre-2006 agreements from this April, so can now be used.

 

i also believe the debt agency (where a debt has been sold) is not entitled to the whole amount they ask for. This is because they have part settled the account by making a percentage payment (normally 10%) and the rest was written off by the bank.

 

i've had recent decisions from the FOS where i had settled an account years ago by part payment for the whole amount. When i reclaimed charges, the bank got to keep this refund towards the write off, and coincidently they offered exactly the same as they wrote off ... hmm, makes you think.

 

in other decisions, the FOS has said the refund should be paid to the debt agency as i am not entitled to it.

 

the thinking was that i am not entitled to the refund as i had not paid the money, so it would be unjust enrichment.

 

i'm now thinking, if the DCA part settles and is entitled to these refunds, why is it unjust enrichment for me to get that money? Shouldn't the same reasonings apply?

 

i'm exploring possibilities as i don't want to lose my refunds to DCAs on accounts which are unenforceable or their has been an 'unfair relationship'.

[The GodMother]

just a question which might have been answered. Tom refers to banks threw out the original link but does this apply to catalogue companys awell?

Sparkie1723 has advise OP they can get back the payments they paid to studio cards cause of no cca on this thread wescot .please help.

[The GodMother]

Ok need someone with a legal brain to look at this. http://www.consumeractiongroup.co.uk/forum/show-post/post-1665492.html

 

his is a case from Aprit 07 saying the debtor is entitled to all money back they paid the creditor on the assumption there was a CCA. Does this now mean every company we have paid money to assuming there is a CCA has to pay us back?

[andrew1]

I've got a feeling that you might find it hard to get all the monies back. It has been suggested elsewhere that one can claim the interest but not the capital. However, don't hold me to that. It might just relate to 'unenforceable agreements. AS far as I can see, no agreement means there's no debt. No debt or agreement means you have paid by 'mistake' ( a legal term I gather) and they have provided you with a 'gift' ( another term used in case law somewhere)

therefore you should get the lot back - be a fight, but possible.

[The GodMother]

rite. Do u have any knowleadge of the case mentioned. I have tried googling it but it just comes up with a mortage refinance company and does not mention the bit sparkie has mentioned.

[andrew1]

rite. Do u have any knowleadge of the case mentioned. I have tried googling it but it just comes up with a mortage refinance company and does not mention the bit sparkie has mentioned.

 

Sadly not and I really don't have the time to go searching just now. Sorry.

[The GodMother]

Its ok it has been found by PT it is the mortgage one.

[Chalkitup]

rite. Do u have any knowleadge of the case mentioned. I have tried googling it but it just comes up with a mortage refinance company and does not mention the bit sparkie has mentioned.

 

He He .... you beat me to it ....... I will leave post here for anyone else who is interested!!

 

Hello GodMother,

 

The case is here ... Wilson & Anor v Hurstanger Ltd [2007] EWCA Civ 299 (04 April 2007)

 

And pt2537 says this ...

I think its an issue of interpretation, my reading of the case is different to that of sparkie and it is my belief that to return monies paid would amount to the debtor being unjustly enriched and furthermore such an order for repayment would most likely be met by an order for return of goods or monies under the contract so that both parties were returned to their pre contract position.

 

Which is how I see it!!

 

Onwards and Upwards

 

Chalkitup

[andrew1]

Sir Andrew Morrits Judgment in the Court of Appeal in the Wilson vs FCT case, noting that the House of Lords have not disturbed this part of his judgment:

Quote: “In effect, the creditor - by failing to ensure that he obtained a document signed by The Debtor which contained all the prescribed terms--must (in the light of the provisions in ss 65(1)and 127(3) of the 1974 Act) be taken to have made a voluntary disposition, or gift of the

loan moneys to the debtor. The creditor had chosen to part with the moneys in circumstances in which it was never entitled to have them repaid;”

and… using the words of Lord Denning giving the opinion of the Privy Council in Kiriri Cotton Co Ltd v Dewani [1960]

"It is not correct to say that everyone is presumed to know the law. The true proposition is that no man can excuse himself from doing his duty by saying that he did not know the law on the matter. Ignorantia juris neminem excusat. Nor is it correct to say that money paid under a mistake of law can never be recovered back. The true proposition is that money paid under a

mistake of law, by itself and without more, cannot be recovered back. James, LJ pointed that out in Rogers v Ingham. If there is something in the defendant's conduct which shows that, of the two of them, he is the one primarily responsible for the mistake - then it may be recovered back.

[The GodMother]

I cant find the bit that sparkie mentions tho.

[Chalkitup]

I cant find the bit that sparkie mentions tho.

 

 

If you mean ..

 

on terms discharging the debtor from having to pay any sum payable under the agreement (section 127 (2)).

 

 

Section 11 of the case.

 

Onwards and Upwards

 

Chalkitup

[The GodMother]

sorry trying to do to many things at once.

 

Driving instructor has not turned up again.

[don leocornay]

very useful. subscribing!

[spartathisis]

If you mean ..

 

on terms discharging the debtor from having to pay any sum payable under the agreement (section 127 (2)).

 

 

Section 11 of the case.

 

Onwards and Upwards

 

Chalkitup

 

Does it not state the discretionary power may be exercised? Surely this is as it states and not blanket for all?

 

Hope im wrong, but seems to be that the court/judge is able to discharge, but at their discretion not guaranteed to do it.