Common Law

[CYNthesys]

Re: Common Law

Loan to husband's business, supported by personal guarantee

[tomterm8]

Re: Common Law

Hm, is it possible to copy the entire contract (minus personal details). it would be very helpful.

In my view, you should have a look at The Unfair Terms in Consumer Contracts Regulations 1999, it can be used for many more purposes than reclaiming your bank charges.

[CYNthesys]

Re: Common Law

I dont have a scanner
The legal charge comprises 8 pages, and the guarantee is 4 pages

The charge was given in 1991, and the property was sold in 2000.

Ive just picked out a bit that may be relevant-

This security shall not extend or apply to any credit provided under
(i) a regulated agreement save to the extent that this security is specified as security therein or
(ii) any agreement which was not prior to the making of this security a regulate agreement but which (but for this provision) would become a regulated agreement on account of the combined effect of the agreement and this security.

For the purposes of this sub-clause the expression "regulated agreement" shall not include any agreement to overdraw on a current account but otherwise bears the meaning defined in the Consumer Credit Act 1974.

[CYNthesys]

Re: Common Law

I realise that a donor cannot revoke an irrevocable power of attorney, but it is my understanding that the attorney's authority to act under such a power ceases if the donor loses capacity.
http://www.dca.gov.uk/menincap/ch6.htm

In this case the donor had not made an Enduring Power of Attorney, and the Bank was aware that a Court of Protection Receiver needed to be appointed to handle his affairs, yet the Bank instructed LPA receivers to act on the patient's behalf to take possession of and dispose of his property.

I am currently looking at this case from multiple angles.
My thoughts so far are that the banks actions constitute dishonest appropriation

[Tools]

Re: Common Law

If you need this scanning Cyn just let me know and I`ll fetch the scanner over.

[tomterm8]

Re: Common Law

it would be really helpful if you do so.

This security shall not extend or apply to any credit provided under
(i) a regulated agreement save to the extent that this security is specified as security therein or
(ii) any agreement which was not prior to the making of this security a regulate agreement but which (but for this provision) would become a regulated agreement on account of the combined effect of the agreement and this security.

Not relevant, I'm afraid, since the agreement is not a regulated agreement... to be honest, I am afraid i still don't understand upon what authority the bank foreclosed, the section of contracts you've provided so far don't appear to do so.

[CYNthesys]

Re: Common Law

Will see what I can do re scanning.

As it was a pretty stanadard business account, and the contract (legal mortgage by owner to support customer account) included clauses making borrowings repayable at any time on demand, the bank didn't need "authority" to foreclose, and was not under any legal obligation to provide its reasons.

In the absence of a court order I don't understand how a contract can be legally enforced against a mentally incapable person.

[tomterm8]

Re: Common Law

Well, maybe so, but I would like to have a look at the agreement.

How much notice did he have? I assume at least three months notice, in accordance with the legal requirements of s103 of the Law of Property Act 1925, AND that this notice was served in accordance with the legal requirements and not, e.g. by 1st class post.

[CYNthesys]

Re: Common Law

Clause 9(a) states
The Bank shall become entitled to exercise the power of sale conferred on mortgagees by statute in case all monies and liabilities hereby secured shall not be completely discharged within one month after such monies and or liabilities shall have become or shall have been deemed to have become due and the restrictions contained in section 103 Law of Property Act 1925 shall not apply to this security.

[tomterm8]

Re: Common Law

It can state it if it wants to, but then again I can state that i am a green frog in a contract, regardless of this a court would find differently, in my view (I am not a qualified lawyer, blah blah etc)

[CYNthesys]

Re: Common Law

In answer to your questions-
1. The owner's/guarantor's company had ceased trading around 12 months before the bank foreclosed
2. The Bank was quite happy to accept the monthly Loan repayments made on behalf of the guarantor after the company closed.
3. The Bank foreclosed when it learnt of the owners mental incapacity.
4. Formal demand was made on the non-trading company
5. Then as a consequence of the company's non-payment, formal demand was made on the mentally incapable guarantor 10 days later

[tomterm8]

Re: Common Law

Step 5 is the important step. How long did they give him to repay the money, AND how long was it before the property was reposessed?

[CYNthesys]

Re: Common Law

After formal demand had been made on the guarantor, the bank wrote asking him for his repayment proposals.
I replied by saying that as xxxx was suffering from Alzheimers Disease I had been advised that before I could act on his behalf I needed to be appointed his receiver.
The bank asked me to let it know when I had obtained the necessary authority in order that they could deal with me.
For a number of reasons no-one was ever appointed as his receiver, but the Bank relentlessly pressured me into complying with its demands, threatening that any failure to cooperate on my part would result in xxxx's property being repossesed.
It was about 18 months after foreclosure that the bank appointed LPA Receivers

[tomterm8]

Re: Common Law

After formal demand had been made on the guarantor, the bank wrote asking him for his repayment proposals.
I replied by saying that as xxxx was suffering from Alzheimers Disease I had been advised that before I could act on his behalf I needed to be appointed his receiver.
The bank asked me to let it know when I had obtained the necessary authority in order that they could deal with me.
For a number of reasons no-one was ever appointed as his receiver, but the Bank relentlessly pressured me into complying with its demands, threatening that any failure to cooperate on my part would result in xxxx's property being repossesed.
It was about 18 months after foreclosure that the bank appointed LPA Receivers

Hm, that's a real pity. in that case the line of argument I was pursuing isn't worth investigating (to be honest, i don't think it was all THAT useful, anyway. I'll PM you with the URL of a document that might be useful (once I've uploaded it), but apart from that I think we are beyond my competance, so I'm afraid I can't help you;(

[CYNthesys]

Re: Common Law

tomterm,
Thank you for the info, a couple of things jumped out at me that support what I've been arguing all along.

1. Nothing in the Mental Capacity Act 2005 expressly overrules the common law

2.Once the patient's property has become subject to the jurisdiction of the judge, creditors are without remedy; they cannot obtain any payment unless the judge makes an order in their favour, and, if they apply, an order may be made or refused to all or any in his discretion. Where necessary for the due protection of the property in this sense, the judge will make an order for bringing it into court. However, creditors who have obtained judgment before incapacity will not be deprived of their rights by the incapacity if execution has been levied before the patient has become subject to the jurisdiction of the judge.

The fact that the Bank knew the owner was mentally incapable suggests they acted without a Court Order so they could defeat an intended trust