BMW vs Hart and Statute Barred Debts

[labman]

Re: BMW vs Hart and Statute Barred Debts

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.

Yes, I get that, thanks. :beagle:

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 what National Debtline are really saying here is that the creditor will usually issue a default notice after one or two missed payment, thus triggering the termination of the agreement 14 days later, if the default is not remedied, and starting the SB clock.

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.

So, as above, this would usually be after one or two missed payments according to National Debtline. People get confused between the default on their CRF and the DN issued to trigger termination of the contract as they tend to happen roughly around the same time.

So going to the next step (excuse me having to be led throught this), we all seem to be agreed, I think, on the casue of action for a simple contract which affects most of what we do on LB.

As National Debtline says, this is when the creditor could take court action. If they do, that's when solicitors do their jobs and win or lose. More significantly, if they don't, they can take court action five years later, and retart the Statute Barred clock.

Have I got this right? :beagle:

[Guest]

Re: BMW vs Hart and Statute Barred Debts

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

It certainly would be, but if the only cause for concern is Brandon, it must be remembered that this was not the main issue in the judgment, in that it was awarded due to lack of prejudice even though the required remedy period was not met on the DN termination.( the contractual termination issue was a contested late addition to pleadings which was not really decided upon.)

Also of course the summary judgment itself was overturned on appeal.

[Guest]

Re: BMW vs Hart and Statute Barred Debts

Yes, I get that, thanks. :beagle:



So what National Debtline are really saying here is that the creditor will usually issue a default notice after one or two missed payment, thus triggering the termination of the agreement 14 days later, if the default is not remedied, and starting the SB clock.



So, as above, this would usually be after one or two missed payments according to National Debtline. People get confused between the default on their CRF and the DN issued to trigger termination of the contract as they tend to happen roughly around the same time.

So going to the next step (excuse me having to be led throught this), we all seem to be agreed, I think, on the casue of action for a simple contract which affects most of what we do on LB.

As National Debtline says, this is when the creditor could take court action. If they do, that's when solicitors do their jobs and win or lose. More significantly, if they don't, they can take court action five years later, and retart the Statute Barred clock.

Have I got this right? :beagle:

Yes, and this is the reall issue IMO .

Because if the SB date does not start until the agreement is terminated which seems to be the case. This is relatively fine on a fixed sum loan where the agreement terminates anyway at the end of its term, but what happens on an open ended agreement, a credit card or overdraft, which is not terminated ?

In theory the SB clock would never start, until the creditor decided to terminate.

[labman]

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.

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.

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

Yes. In Brandon there was a DN issue demanding a sum and stating termination would take place. On non-payment, Amex wrote again invoking the clause which stated it could terminate at any time and demand all sums payable, or stop Brandon using the card. It was this contractual termination that was fatal to Brandon's defence.

Despite reaching its conclusion, it is widely accepted the Court of Appeal was unhappy with its judgement. Effectively all Amex needed to do was reissue the DN, amend its POC's to rely on the DN, and set out its position on the clause about contractual termination.

It really just clarified that defective DN's have to be argued, and each case stands or falls on its own merits.

In the context of Brandon even if the court decides that a notice is defective, it should be remembered that a default notice is only required to (a) terminate an agreement, (b) demand earlier repayment of any sum, (c) recover possession of goods, (d) treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred or (e) enforce any security. It is not required to recover arrears under the agreement which have fallen due by the time of trial. (in part accredited to Practical Law)

(I think! :beagle

[cornish pasty]

Re: BMW vs Hart and Statute Barred Debts

This is interesting reading.
I have a defaulted MBNA credit card which was sold to Cabot. No payments ever made since the default.
I have not heard nothing from them or any of their agents for years, but to day got a letter from cabot saying that CCS was now assigned to collect.
It is due to be statute barred 27th October 2013.

[labman]

Re: BMW vs Hart and Statute Barred Debts

I'd be inclined to play safe and let it go a while beyond that date. What exactly are you taking as the cause of action?

[cornish pasty]

Re: BMW vs Hart and Statute Barred Debts

I'd be inclined to play safe and let it go a while beyond that date. What exactly are you taking as the cause of action?

I intend to do exactly that, I never ever respond to DCA's, they can go F**k themselves. Pay 5-10% for the debt them demand the initial balance plus their extortionate charges. Cabot have added £4k plus in charges since they bought it from MBNA, but they can add what they like, they are never going to see a penny after they way they treated me with their threats and intimidation.

I was uninformed then, but not now, so say bye bye to ever recouping anything off me Crapot

[Ihaterbs]

Re: BMW vs Hart and Statute Barred Debts

I intend to do exactly that, I never ever respond to DCA's, they can go F**k themselves. Pay 5-10% for the debt them demand the initial balance plus their extortionate charges. Cabot have added £4k plus in charges since they bought it from MBNA, but they can add what they like, they are never going to see a penny after they way they treated me with their threats and intimidation.

I was uninformed then, but not now, so say bye bye to ever recouping anything off me Crapot

So according to this judgment a creditor could wait twenty years or more until the borrowers financial position had changed before issuing a default notice. In effect the creditor determines when the debt becomes stat barred.

[catquest]

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!!

Does anyone know when MBNA changed the wording by inserting "subject to us sending any notice required by law" before demanding immediate payment ?

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

Does anyone know when MBNA changed the wording by inserting "subject to us sending any notice required by law" before demanding immediate payment ?

yes, but to a large extent it will depend on when the notice of variation was sent as that will be when the term takes effect in an amended contract

[Amethyst]

Re: BMW vs Hart and Statute Barred Debts

Apologies for bumping this, repossession of the vehicle, does it terminate the agreement ? (Black Horse)

[mystery1]

Re: BMW vs Hart and Statute Barred Debts

It's difficult to see any circumstance whereby the agreement continues in the absence of the goods. Certainly breaching s90 automatically terminates. If they haven't breached s90 they'd have a court order (if more than 1/3 paid).

M1

[pt2537]

Re: BMW vs Hart and Statute Barred Debts

Apologies for bumping this, repossession of the vehicle, does it terminate the agreement ? (Black Horse)

Youd need the agreement to be sure unless as M1 says it was breach of s90

[Amethyst]

Re: BMW vs Hart and Statute Barred Debts

Thanks guys, we don't have the agreement yet so just checking we're okay arguing stat barred for a repo in 2008 where the DCA claim termination wasn't till Oct 2010 ( in case they do come up with the agreement )

[Worthington]

Re: BMW vs Hart and Statute Barred Debts

I have read this very interesting thread and it definitely applies to a leasing loan and not a money loan regulated by CCA. I also note that the floodgates haven't opened yet in creditors trying to circumvent statute of limitations, which makes me wonder if it applies only to leases?

I have a claim against me due to be heard in the CC in a few months where the creditor is using cause of action and going for a summary judgement. As their initial defence was that the agreement allowed this. When my defence showed this to be untrue they then said that as the agreement was never defaulted then the cause of action was on loans maturity date. When I then submitted my new defence showing an attached default notice, they are now alleging that the default notice never was registered.
In court I will show 2 things:

1. The default notice as shown on my Experian file for 6 years.

2. The actual copy of the credit agreement that I kept and didn't send back-unsigned and undated

They have a scanned copy of the same agreement with my signature on. But I suspect this cane from the credit card loan I had with same lender and I took out the loan to repay the credit card balance as it was a lower interest.

I spoke to a solicitor who said that even in statute bar cases judges can rule in favour of creditors because there is no dispute that the money is owed.
What are my chances here and should I talk to a different solicitor?

I would have thought that even if statute bar was allowed to be circumvented here, he who has the actual agreement and unsigned rather than a "true copy" scanned and signed is on the better footing?
Oh and they have overstated the balance owed by 100% as they got their numbers wrong and I have brought this to their attention