BMW vs Hart and Statute Barred Debts

[Guest]

Re: BMW vs Hart and Statute Barred Debts

This is fro the Hart judgment itself, I cannot reproduce the whole thing as I am unsure of the copyright implications, with it not being generally available

25. In my view, the judge was wrong to think that that decision applied to the present case.In
this case, the right to recover the sum set out in clause 12 did not arise unless and until the
hirer gave notice to terminate the contract. That was a right that he could choose to exercise
or not, but unless he elected to do so, the contract continued in existence and instalments of
hire would have fallen due at the stipulated intervals. Under section 5 of the Limitation Act
1980 time in a case of this kind runs from the date when the cause of action accrues. In this
case, the cause of action to recover the amounts claimed under clause 12 did not accrue on
the customer's default alone, but only upon the election of the hirer to terminate the contract.
26. In my view, therefore, the claim is not time-barred. For those reasons, as well as the
reasons given by Rix L.J., I agree that the appeal should be allowed.
Lord Justice Lewison:

Seems pretty clear.

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

as i said,

IN THIS CASE

Not a one size fits all approach im afraid.

In American Express Card Services Europe v Sahota , unreported, it was argued when the bad default was raised, that Amex terms gave rise to an automatic termination for whatever reason without notice, this term appears to be a standard credit card clause and is in agreements such as MBNA, and therefore my problem is this, if a credit card can terminate for non breach relying on contractual termination without notice ( now i know about s98A) but that was the argument run by James Ross of Gough sq then this causes a real issue, because if under the contract a failure to make payment allows a contractual term to be engaged which allows automatic immediate termination and therefore the right to sue in theory, how can BMW v Hart say that the creditor can wait to serve his default notice before his cause of action accrues, the cause of action accrues when he has the right to sue to recover the monies as confirmed in Glass and BMW v Hart, and therefore under the contract for most credit cards containig this type of term, the right to sue is when the debtor fails to make a payment, isnt it?

Just to point out Sahota was appealed to a High Court judge who actually approved the ruling.

And then of course, theres the Kings hill no1 vs Morrell ruling which says the creditor can reduce the credit limit to £0, thus becoming immediately entitled to ask for the full balance to be repaid and not needing a default notice at all.


As i said before, HART isnt one size fits all, law is about applying the law to the facts of the individual case!!

[charitynjw]

Re: BMW vs Hart and Statute Barred Debts

Thanks andy58,

Sure, no argument from me re the decision.

But I thought we we debating as to whether, in our opinion, it was the right decision?

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

This is fro the Hart judgment itself, I cannot reproduce the whole thing as I am unsure of the copyright implications, with it not being generally available

Its on BAILII and its a judgment of an open Court, there is no copyright issues surely lol

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

http://www.bailii.org/ew/cases/EWCA/Civ/2012/1959.html yup there it is

[labman]

Re: BMW vs Hart and Statute Barred Debts

Given all the above, and I understand the view of both sides, please could someone answer the following. By registering a default with a credit refereence agency, presumably (stating the obvious) because the debtor is in default and has missed at least one payment due, can the creditor take court action purely because of this one missed payment? Why / why not?

I'm pretty sure I know the answer, but want it spelling out in black and white for me.

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

Given all the above, and I understand the view of both sides, please could someone answer the following. By registering a default with a credit refereence agency, presumably (stating the obvious) because the debtor is in default and has missed at least one payment due, can the creditor take court action purely because of this one missed payment? Why / why not?

I'm pretty sure I know the answer, but want it spelling out in black and white for me.

he could take court action, yes, could he win? now thats different

[labman]

Re: BMW vs Hart and Statute Barred Debts

he could take court action, yes, could he win? now thats different

The cause of action (when the limitation period starts running) for simple contract debts, is usually when your agreement says the creditor is able to take court action because you have fallen behind with payments. This is normally after one or two missed payments.

So, using the above, from National Debtline, which was why I asked the question, they can take action, so the SB period is triggered. If they then did take action and lost, would the SB period continue uninterrupted, be reset, or what?

[Guest]

Re: BMW vs Hart and Statute Barred Debts

Its on BAILII and its a judgment of an open Court, there is no copyright issues surely lol

Phew thanks , couldn't find it on there, wouldn't want to get anyone in trouble.

[Guest]

Re: BMW vs Hart and Statute Barred Debts

Given all the above, and I understand the view of both sides, please could someone answer the following. By registering a default with a credit refereence agency, presumably (stating the obvious) because the debtor is in default and has missed at least one payment due, can the creditor take court action purely because of this one missed payment? Why / why not?

I'm pretty sure I know the answer, but want it spelling out in black and white for me.

In order to take court action to recover all sums under an agreement the agreement must first be terminated.

Before this time the debtor is entitled to repay the loan under the terms of the agreement, so the creditor is not entitled to demand early repayment.

On an unregulated loan the termination of the agreement would be the result of the debtor missing payments and breaching the agreement, the creditor accepts the repudiation of the agreement and terminates.
On a regulated agreement the creditor has to issue a default notice after the missing of payments and before the commencement of proceedings, in order to give the debtor the chance to remedy the default.

The registering of a default with a credit agency is a completely different procedure and is simply a record of the payment history, it has nothing to do with the mutual contractual obligations of either party.

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

On a regulated agreement the creditor has to issue a default notice after the missing of payments and before the commencement of proceedings, in order to give the debtor the chance to remedy the default.

No he doesnt, the Court of Appeal ruling in Brandon makes it clear that contractual termination is open to the creditor if he elects to rely upon it.

This is the point i made above, if the creditor can in effect choose what he wishes to rely on, breach or non breach, then i can see some serious problems for the Courts trying to manage their way through this Hart issue.

Limitation cannot turn on what argument the creditor wants to rely on afterall, that certainly wasnt the intention or will of parliament when the 1980 Act was passed.

[Guest]

Re: BMW vs Hart and Statute Barred Debts

as i said,

IN THIS CASE

Not a one size fits all approach im afraid.

In American Express Card Services Europe v Sahota , unreported, it was argued when the bad default was raised, that Amex terms gave rise to an automatic termination for whatever reason without notice, this term appears to be a standard credit card clause and is in agreements such as MBNA, and therefore my problem is this, if a credit card can terminate for non breach relying on contractual termination without notice ( now i know about s98A) but that was the argument run by James Ross of Gough sq then this causes a real issue, because if under the contract a failure to make payment allows a contractual term to be engaged which allows automatic immediate termination and therefore the right to sue in theory, how can BMW v Hart say that the creditor can wait to serve his default notice before his cause of action accrues, the cause of action accrues when he has the right to sue to recover the monies as confirmed in Glass and BMW v Hart, and therefore under the contract for most credit cards containig this type of term, the right to sue is when the debtor fails to make a payment, isnt it?

Just to point out Sahota was appealed to a High Court judge who actually approved the ruling.

And then of course, theres the Kings hill no1 vs Morrell ruling which says the creditor can reduce the credit limit to £0, thus becoming immediately entitled to ask for the full balance to be repaid and not needing a default notice at all.


As i said before, HART isnt one size fits all, law is about applying the law to the facts of the individual case!!

A none default termination clause generally does not enable the creditor to recover all sums under the agreement(although this would be a matter for the court) certainly not in CCA contracts.

I understand this, but it makes absolutely no difference, you are arguing here about if a DN needs to be issued in order to default, as far as the SB start point is concerned all that is required is that the agreement is first terminated, however this is done. Because only then is the creditor entitled to call in the loan.

There is no getting around this, it is as plain as day, the cause of action can only start form the tort, the tort which presents the cause of action for the recovery of a debt has to be the acceptance of the repudiation of agreement and its subsequent termination.

[Guest]

Re: BMW vs Hart and Statute Barred Debts

No he doesnt, the Court of Appeal ruling in Brandon makes it clear that contractual termination is open to the creditor if he elects to rely upon it.

This is the point i made above, if the creditor can in effect choose what he wishes to rely on, breach or non breach, then i can see some serious problems for the Courts trying to manage their way through this Hart issue.

Limitation cannot turn on what argument the creditor wants to rely on afterall, that certainly wasnt the intention or will of parliament when the 1980 Act was passed.

I think you will find that the contractual termination was only applied once the DN was issued.

[Guest]

Re: BMW vs Hart and Statute Barred Debts

Incidentally if it is being implied that a creditor can terminate an agreement without a default notice it makes a nonsense of Harrison Woodchester and all the other DN centered deferences.

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

Incidentally if it is being implied that a creditor can terminate an agreement without a default notice it makes a nonsense of Harrison Woodchester and all the other DN centered deferences.

i quite agree, but the Courts are seemingly disagreeing with the both of us. Worryingly