DN demands payment in full - can they do this? (Judge thinks they can)

[jessie_girl6]

Reason I ask is that in my recent court case the Judge listened to the Claimant's lawyer defending the fact that the DN I had received was valid because, under the contractual T&C's, the company was able to terminate at any time. Therefore, by asking for the full amount in the DN (and not the arrears) they were simply stating what they viewed I had to do to rectify the breach - that is, pay in full!

I did point out that CCA regulations stipulate that sums not yet due could not be demanded, yet the Judge took the view that as I had borrowed the sums, they could now be seen to be due.

Can someone point me to case law or words or something where it categorically says that the DN should only be asking for the correctly calculated arrears, and not for any figure that the Debt company would like us to pay?

Hope I'm explaining this properly - am somewhat aghast that I may have lost what I thought was an open and shut case (especially when they tried to say that the DN they were presenting (which had correctly calculated arrears on it) was the correct one and that the one I had received through the post (and which only had the full amount to be paid) was a reconstituted one!). And if someone can point me to something I can use, i intend to fight this decision one more time.

Thx
JG

[mystery1]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

Were the sums in fact due ?

What was the contractual term for termination ? I suspect the notice period will be greater than that of the default noice.

M1

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

I suppose that is the question I am now asking.
The alleged balance was c. £16k and the arrears sums I now know were in the order of £2,600. They were asking for the £16k. so was that sum due?

There is no term for termination - they say they can (i) demand whole balance if agreement ends and (ii) they can end the agreement if they write to tell me that they are so doing and, if they have a valid reason, they can end it immediately.
Other point being they sold it to a DCA prior to rectification date on the DN.

[mystery1]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

So the sum was not due, it was owed but not due.

Can you type up the clause the relied on please ? or scan the agreement ?

M1

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

When the Judge accepted my 'reconstituted' DN as the correct one, the lawyer had to change her plea and went to the contract for the first time, therefore there is nothing written down in their argument. However, I made a note of the clause she used and it runs as follows;
8f You, or your legal representatives, must pay your whole balance if:
* this agreement ends;
* you fail to make a payment in full when it is due;
* you break an important part of this agreement or repeatedly break this agreement and fail to sort the matter out
* a bankruptcy order is made against you, or you make a voluntary arrangement with your creditors or
* you die
8g If we demand any payment under above para, we will immediately let you know why
10a We may end this agreement at any time if we write to you first to tell you that we are doing so. If we have a valid reason, we may end the agreement immediately and write to you as soon as we can afterwards to tell you why we have done so.

What is the legal implication of 'owed' vs 'due'?

[Guest]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

I take it that this is a credit card ?

If so the default notice can only demand sums needed to remedy the breach, they cannot demand sums not already due under the agreement.

If they had terminated the contract under a contractual term they would still not be ale to demand full repayment, because a contractual termination cannot be used in this way, it is contrary to common law.
In order to reclaim all sums due there must be a repudiatory breach of contract, in a consumer credit agreement the process of accepting the repudiation of contract is interrupted by the issuance of the statutory default notice, once the notice is remedied their is no cause for action.

[mystery1]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

If you owe someone £100 quid but have an agreement to pay it back next week it is owed but not yet due.

Judging from what you write they did not contractually terminate. http://www.bailii.org/ew/cases/EWCA/Civ/2011/1187.html also i guess the statement of case was made on a default and not a contractual termination.

M1

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

Hi Andy
Thx for your input.
Yes, it was an MBNA credit card
My argument that the DN can only demand the sums needed to remedy the breach (e.g. the arrears) fell on deaf ears because the lawyer had already shown the T&C saying they could terminate at any time and this is what they were doing via the DN.
My argument that the DN is governed by the CCA and not the contractual terms also fell on deaf years as the Judge thought that the sums owed were the sums due

The lawyer basically said that they could do what they liked either (1) terminate under the CCA or if that failed (2) terminate by the contract and therefore the message in the DN held. I was an idiot and went along as a LIP and lost on that basis. I needed your words then.
Only reason I am asking now is that the Judge has asked for my email address to, I think, get clarification on a few points before issuance of decision - which, judging by the Judge's manner and approach - is against me and with the lawyer

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

Hi M1
Thanks for your attention to this.
I now get the owed vs due and I presume that is very relevant to the wording in CCA - it specifically calls out that SUMS NOT YET DUE cannot be requested without a valid DN. And we had an agreement saying I could pay back what I owed over a period of time (open ended)
I felt that they were going down the DN route but because the Judge took my DN as the one to judge on, they decided - in the court room - to confirm that they could always submit it as a contractual termination and that was what they intended to do. I managed to pull the AMEX case out, but this was then read as the fact that AMEX were incorrect in trying to pull the contractual argument so much later down the line, whereas in my case they are now doing it at the County Court level - it actually worked against me!

[mystery1]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

If they haven't pleaded it they can't argue it in court. (can't = shouldn't get to obviously)

M1

[Guest]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

Hi Andy
Thx for your input.
Yes, it was an MBNA credit card
My argument that the DN can only demand the sums needed to remedy the breach (e.g. the arrears) fell on deaf ears because the lawyer had already shown the T&C saying they could terminate at any time and this is what they were doing via the DN.
My argument that the DN is governed by the CCA and not the contractual terms also fell on deaf years as the Judge thought that the sums owed were the sums due

The lawyer basically said that they could do what they liked either (1) terminate under the CCA or if that failed (2) terminate by the contract and therefore the message in the DN held. I was an idiot and went along as a LIP and lost on that basis. I needed your words then.
Only reason I am asking now is that the Judge has asked for my email address to, I think, get clarification on a few points before issuance of decision - which, judging by the Judge's manner and approach - is against me and with the lawyer

There is lots of case law, starting with woodchester vs swain, through Harrison which supports the facts that that an action cannot be brought for the recovery of any sums not yet due under the contract without the issuance of a default notice.

Whilst it is true that a contractual term can be used to terminate the contract, if the agreement has not been proven to be breached and a compliant statutory notice issued, a demand for premature repayment cannot be enforced, it would be against the statute.

enforcement of the contract is prevented by the statute if you like

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

OK - Thank you both
I will await the clarification questions from the Court and hope that, by using your statements I can explain the facts more clearly - I obviously did a really bad job on the day!
They started the Court Case on the back of an invalid DN/CCA - they did not go down the contractual route because they had no case so to do. I assume that my argument against their contractual terms (as quoted above) is that they are unfair to the individual and again, this is against CCA guidance?

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

Me again
Am just putting together my thoughts on the subject and am still confused as to WHY they can't now demand full payment in the DN. Whilst I have the relevant words from CCA, the Judge obviously heard that the Claimant was entitled to demand payment of the entire balance outstanding by reason of my default and pointing to the contractual terms.

They say that the CCA sets out no definition of what a breach or default is - this is for us to agree. Is this correct?

And as per your statement above, Andy58, what should be done under contract to terminate correctly? If in this case they used a DN to ask for all the monies within 17 days - is that valid? What statute prevents the enforcment?

I am in panic mode now as this is my very last chance to get the 'words' right and show the judge that they cannot do both CCA and contractual termination on the back of a faulty DN - and to prove that, I have to show that the DN was faulty because it was asking for full payment.

Thx

[Guest]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

I think , forgetting about the legalese for minute, it is important to understand that the purpose of the DN is to give the debtor chance to remedy the breach and avoid action being taken against him to recover all sums due under the contract(woodchester, Harrison, Amex).

The contractual term may well give the creditor the right to terminate the contract(as it does) however the statute prevents an action being commenced for the recovery of the full amount owed, if the arrears on the account are paid within 14 days the facility to repay remains as per the agreement.
In effect all the creditor has done is terminate the debtors right to draw down additional credit.

The statute prevents the action being taken until the requirements of section 87 are met.

[jessie_girl6]

Re: DN demands payment in full - can they do this? (Judge thinks they can)

But if the other side are saying that, in their view, 'the nature of the alleged breach' is that I have broken the contract and, as per clause (8) above, to remedy the breach I must make full payment, So where does the CCA actually spell out that it is only the arrears they must ask for? I get the bit about 'owing' vs 'due' and that they can't 'demand earlier payment of any sum' but I can't see where it says specifically that only the arrears are required?
Our agreement is for monthly repayment of a sum loaned; how do I word the fact that by asking for that whole amount, they are indeed demanding earlier payment?