Absolute assignment question

[FORCEOFONE]

I have been reading curlybens thread on assignment, clarification is in order on assignment

As the more senior members will know , assignments are either Equitable or Absolute (legal)

Assignments are carried out as to the Law of Property act 1925

Curlyben has stated with an absolute assignment the rights and DUTIES are assigned

I was under the impression only the rights can be assigned, to assign the rights and duties (Obligations), the assignment must be a Tripartite agreement under a Novation


interesting question this

[Nibbler]

Re: Absolute assignment question

At least as far as CCA regulates debt goes, this squished that idea.

http://www.bailii.org/ew/cases/EWHC/QB/2012/2402.html

[FORCEOFONE]

Re: Absolute assignment question

Still trying to understand this

Jones v Link defined who the creditor was

That is either equitable or an absolute assignment

Its the transfer of the duties or obligations of an agreement i am trying to nail down

Is a Novation still valid ??

Does the link financial case stipulate obligations or duties with rights along with an absolute/ equitable assignment On transfer

[gravytrain]

Re: Absolute assignment question

You are correct in that common law only permits the assignment of rights and not duties( unless under novation).

This issue was raised in Jones, where it was contended that the new owner of an assigned agreement could not enforce because they were not the "creditor" under the CCA. The reason being that as said, under common law (and the LOPA) only the rights can be assigned, and to fulfill the definition of " creditor" as per section 189 of the act the assignee had to have been assigned the duties.

This is indeed the case as far as common law goes, and the Jones case did not alter the position, duties under a contract cannot be transferred without the agreement of all parties.

However where the claimant got it wrong was: When the act said that the creditor was the assignee of rights and duties under the agreement, it was not referring to duties under the contract, it was referring to duties under the statute, duties to issue a DN for instance(in fact just the duties that would enable the new creditor to enforce). If these duties was not transferred the new creditor could not enforce because of the restrictions imposed by section 87 and 141 similarly they would fall foul of section 77-79.

[FORCEOFONE]

Re: Absolute assignment question

This is what i like with this forum, unlike others

Educated responses without the usual little corporal mentality

Thanks for the clear and objective response Gravytrain

[Nibbler]

Re: Absolute assignment question

Which is why the they used phrases such as "must stand in the shoes of" if they wish to enforce etc. It is a fine distinction, but as far as a debtor asking for statutory information goes, it does not matter. The buyer is obliged to do the duty of the creditor for those things.

[gravytrain]

Re: Absolute assignment question

As an interesting by product of this, it should be noted that even after a regulated agreement has been absolutely assigned any duties under the contract would still remain with the original creditor.

Which in my opinion would mean that if any refunds were due as per the contract they would have to be paid by the OC to the debtor not the new owner(to whom they owe no contractual duty).
This is relevant in PPI refunds. Unfortunately most agreements have a clause enabling the old creditor to by back the agreement and credit the refund to the acount .

[Nibbler]

Re: Absolute assignment question

As an interesting by product of this, it should be noted that even after a regulated agreement has been absolutely assigned any duties under the contract would still remain with the original creditor.

Which in my opinion would mean that if any refunds were due as per the contract they would have to be paid by the OC to the debtor not the new owner(to whom they owe no contractual duty).

That was always my understanding, anyway.

[gravytrain]

Re: Absolute assignment question

That was always my understanding, anyway.

Indeed but it is worth checking into when re claiming PPI on an agreement that has been assigned to a DCA.
Usually they just creidit the defaulted account, really they should re-imburse the debtor.
I believe that they may be a case for any term that stops this process being unfair under UTCC's(just my opnion)

[labman]

Re: Absolute assignment question

Indeed but it is worth checking into when re claiming PPI on an agreement that has been assigned to a DCA.
Usually they just creidit the defaulted account, really they should re-imburse the debtor.
I believe that they may be a case for any term that stops this process being unfair under UTCC's(just my opnion)

This is a VERY interesting point, and one another forum is attempting to address. Some financial institutions will reimburse the debtor, but most don't. Trying to pin this point down in law is a bit of a nightmare. Even when, as you say, the OC buys back the debt to deal with ppi etc... then resells it back to the DCA again, there is little chance with most institutions of the debtor ever seeing any of the money which is, buy rights, theirs as it should never have been taken from them.

[snowman]

Re: Absolute assignment question

As an interesting by product of this, it should be noted that even after a regulated agreement has been absolutely assigned any duties under the contract would still remain with the original creditor.

Which in my opinion would mean that if any refunds were due as per the contract they would have to be paid by the OC to the debtor not the new owner(to whom they owe no contractual duty).
This is relevant in PPI refunds. Unfortunately most agreements have a clause enabling the old creditor to by back the agreement and credit the refund to the acount .

Hi trying to get head round this. Did the judge say with certainty that only statutory duties contained within the CCA pass to the assignee? Once the assignment is made, the OC is not longer the creditor, so cannot be held liable for breach by the assignee of statutory obligations.

I understand that the borrower now has an obligation to pay the assignee and the assignee now has obligations towards the borrower under the CCA, but there has been no offer or acceptance for a new contract to be formed.

So, who is the contract between? The borrower and the OC or the borrower and the assignee?

[judgemental24]

Re: Absolute assignment question

patricia Jones v Link Financial Limited [2012] EWHC 2402. Mr Justice Hamblen (sitting in the High Court and on appeal) considered an important issue for buyers and sellers of regulated consumer credit agreements: whether the assignee of a debt was a ‘creditor’ for the purposes of the Act. In a sensible and pragmatic decision, the High Court decided that an assignee is a ‘creditor’ and is therefore entitled to enforce the agreement against the debtor.

[snowman]

Re: Absolute assignment question

patricia Jones v Link Financial Limited [2012] EWHC 2402. Mr Justice Hamblen (sitting in the High Court and on appeal) considered an important issue for buyers and sellers of regulated consumer credit agreements: whether the assignee of a debt was a ‘creditor’ for the purposes of the Act. In a sensible and pragmatic decision, the High Court decided that an assignee is a ‘creditor’ and is therefore entitled to enforce the agreement against the debtor.

Thanks for the fast reply. Yes, I see the assignee is entitled to claim it's rights against the debtor. I can see that the borrower now has an obligation to pay the assignee instead of the OC. I can see the assignee now has obligations towards the borrower under the CCA.

What I don't get is what has happened to the actual underlying contract?

Owing of obligations does not in itself mean there is a contract (e.g. a deed of guarantee is not a contract). Neither is having to pay taxes.

There originally was offer, consideration and acceptance between the OC and the borrower. If the debt has been sold on without consent of the borrower, there has been no new offer/acceptance between the assignee and the borrower.

So is the underlying contract (albeit devoid of obligations) still technically between the OC and the borrower? (The skeleton contract still existing but with the rights belonging to and duties owed by the assignee.)