PCP voluntary termination excess mileage charges court claim

[shane07]

Re: PCP voluntary termination excess mileage charges court claim

Thank you Rob. I created a new thread, please see below. Let me know what you think.
http://legalbeagles.info/forums/show...008#post746008

[shane07]

Re: PCP voluntary termination excess mileage charges court claim

[MENTION=76545]cjm128[/MENTION]

Hi cjm128, any update on this? I'm in the same situation as you but a couple of steps behind so hearing from you would be really helpful!
I've received the letter from mortimer clarke and currently deciding what to do next.

thank you

[RachRad]

Re: PCP voluntary termination excess mileage charges court claim

Hi [MENTION=105579]shane07[/MENTION]

I am in the same boat. Received letter from MC and then a court claim. Have decided to defend!

[cjm128]

Re: PCP voluntary termination excess mileage charges court claim

Hi All,

Sorry for the delay in posting this. Took ages to find software to redact the scan. So, I filed the defence that R0b very kindly put together for me. The claim was put on hold while Mortimer Clarke responded. I've attached the response with personal details removed.

I've now had a response from the county court business centre - "N149A Notice of proposed allocation to small claims court" along with form "N180 Directions questionnaire (small claims track)". the latter form asks if I would like to be referred to the free mediation service, and asks to confirm the county court hearing centre I would prefer the claim to be heard at.

Some Questions for R0b -
Whats is your option on the response to the defence?
I'm not sure that there is any point going to mediation, form suggests there is no obligation but would it in anyway count against me in this case?
I thought from conversations with my own solicitor last year that I would not need to attend the hearing bu the form suggests I would - what is your view?
Would I need to / should I revise the defence in advance of a hearing?

Many thanks,

CJM.

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

I'll probably need to re-read the letter a few times but it sounds pretty much like a fishing expedition as to what your arguments in court will be. However if your defence is based on the one above and included the relevant case law, then the defence clearly sets out your basis as to why those charges are not applicable.

If you want to respond you can do but you shouldn't give away any tactics as to what you will say in court, you can re-iterate parts of the defence as to what your basis is. There's a couple of concerns particularly about the VAT, I am almost 99% certain that there is legislation that says for consumer contracts VAT must be included as part of the price.

You don't have to attend but you would have a much better chance of defending the claim than if you were not to attend - which is your nearest court?

Either way the next steps is to write a Witness Statement and, if you do attend, I would suggest you prepare a Skeleton Argument. I've already started doing an example template which I'll upload soon as a starting point.

If you want to draft a letter I can help if you want, in which case I would just selectively refer to the parts of your defence i.e. the definition of 'total price', and the case law.

[cjm128]

Re: PCP voluntary termination excess mileage charges court claim

Many thanks again R0b, much appreciated.

I was a bit perplexed by the response also, having spoken to another Forum user a bit ahead of me (Arnie365) it sounds like he got the same response in terms of questioning the legal basis for defence. I'd pretty much decided it was pointless responding.

The main thing I'm not sure about right now is deciding on the offer of mediation. It feels like it would be pointless but would it count against my defence in anyway not to do it?

Many thanks,

CJM

[Amethyst]

Re: PCP voluntary termination excess mileage charges court claim

There's a couple of concerns particularly about the VAT, I am almost 99% certain that there is legislation that says for consumer contracts VAT must be included as part of the price.

.

Think it's this [MENTION=71570]R0b[/MENTION] - Application to PCP mileage charges I have no idea on though - presumably the mileage charge is ONE mile so a unit price ? ( might be entirely irrelevant though )

http://www.legislation.gov.uk/uksi/2.../contents/made

“selling price” means the final price for a unit of a product, or a given quantity of a
product, including VAT and all other taxes;

Article 4 requires traders to indicate the selling prices of all products oVered for sale to
consumers except those oVered in the course of the provision of a service, those sold by auction,
works of art or antiques (article 3(1)) and products sold from bulk. Article 1 defines the selling
price as the final price including VAT and other taxes

“unit price” means the final price, including VAT and all other taxes, for one kilogram,
one litre, one metre, one square metre or one cubic metre of a product, except (i) in respect
of the products specified in Schedule 1, where unit price means the final price including
VAT and all other taxes for the corresponding units of quantity set out in that Schedule;
and (ii) in respect of products sold by number, where unit price means the final price
including VAT and all other taxes for an individual item of the product.

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

Mediation is an option but only if both parties a possible able to come to an arrangement, in this case you both seem to be quite far apart n whether you are liable or not and the only real way of resolving it is to have it decided by a judge. It is unlikely that mediation will settle the matter and not likely to count against you, but again it does not prevent you from offering to settle outside of the small claims process mediation process.

I would suggest in C1 box of the N180 you write something like this case revolves around the interpretation of contract and statute law, you anticipate the hearing lasting between 2-3 hours. Sometimes courts will block list a case and you could be waiting around but if its not as straight forward they may allocate a specific time for you. Next steps are a witness statement and would advise (particularly if you attend court) to prepare a trial bundle and skeleton argument.

In terms of responding to Mortimer, a short brief letter along the lines would suffice. As an aside, do you have copies of the case law or do you need me to send them?

------------

Dear Sir or Madam,

I write further to your letter dated [date], the contents of which have been noted.

I am somewhat surprised that in your letter you say that you are unsure as to the basis of my defence. My defence clearly sets out the basis upon which I deny any liability as alleged by your client and with reference to several provisions of the Consumer Credit Act 1974 ("CCA 1974") including authorities to support this position. Nevertheless and to summarise what is already repeated in the defence:

• Where a hirer validly exercises his right to terminate the agreement under section 99 of the CCA 1974, then he shall be liable in accordance with section 100. That is to say, a hirer is liable for one-half of the total price payable and any sums due in respect of the total price immediately before termination. The definition of 'total price' under the CCA 1974 explicitly excludes compensation and/or damages for breach of the agreement. This appears to be something both you and your client have either overlooked or ignored. Furthermore, this point has been affirmed in Julian Hodge Bank Ltd v Hall [1998] C.C.L.R. 14 in which the Court of Appeal held that communication charges and interest for non payment were excluded as part of the 'total price'.

• Despite your client's own belief, the price of the vehicle (whether purchased or sold upon return) is no guide to the condition of a vehicle and this was made clear in Brady v St Margaret's Trust [1964] Q.B. 2 Q.B. 494. The burden of proof rests with your client and in any event I will be relying on a condition report confirming that the vehicle was within a reasonable condition. Mere speculation is not sufficient to discharge this burden.

• As regards to the addition of VAT to the excess mileage charges, I am sure I need not remind you that a term of a contract is not necessary legal or enforceable. I would refer you to the case of Financial & General Print Ltd (LON/95/1281A) where it was held that liquidated damages or compensation for breach of contract is not a taxable supply and therefore VAT falls outside of this scope. This position is further supported by HMRC which you can find here: https://www.gov.uk/hmrc-internal-manuals/vat-supply-and-consideration/vatsc35600

It is also noted in your letter confirming that your client is not seeking to claim rental charges. I would refer you to the Particulars of Claim whereby it specifically says that "... the defendant agreed to pay any costs or charges associates with vehicle damage, excess mileage and or rental. These sums are now due and payable" (emphasis added). The particulars therefore imply that your client is seeking recovery of rental charges but have now backtracked, and I have expended unnecessary time and costs in preparing a defence to this allegation for which your client had no intention of claiming. Accordingly, I reserve the right to bring both your letter and this one to the Court's attention for an order of wasted costs against your client, or you, or both.

As you will see, there is sufficient evidence and authorities to support my defence and it is appears that your client is choosing to selectively pick out provisions of the CCA 1974 in an attempt to justify its claim. In the circumstances, I therefore invite your client to discontinue its claim. If your client pursues its claim against me, I will ask the court to consider whether your client has chosen to bring this claim unreasonably and, whether a costs order should be made for unreasonable conduct together with the pursuit of an unmeritorious claim.

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

Think it's this @R0b - Application to PCP mileage charges I have no idea on though - presumably the mileage charge is ONE mile so a unit price ? ( might be entirely irrelevant though )

http://www.legislation.gov.uk/uksi/2.../contents/made

Yes Ame, I think it is however after further reflection the excess mileage is not for the purchase of goods or services and so I don't think that could be relied on - though as above I did refer to the VAT manual which makes more sense. Think our posts crossed at the same time.

[cjm128]

Re: PCP voluntary termination excess mileage charges court claim

Many thanks Again R0b.

Thank you for your opinion on mediation. I'm leaning towards rejecting the mediation offer.

Reading your letter I think it is definitely worth replying, thank you for that.

No, I don;t have access to the case law, I would very much appreciate it if you could send it.

Cheers,

CJM

[cjm128]

Re: PCP voluntary termination excess mileage charges court claim

@R0b,


I have had a run through the skeleton witness statement and have some questions, and would very much appreciate some guidance on further points.


Really I've added the references and removed the section on rental charges as MBFS are only claiming excess mileage.


The two key arguments MBFS make are the reasonable condition one, and that the excess mileage charges were due before termination, so in reference to the above, should I keep this in and change the focus to be on evidencing that excess mileage charges are not valid pre-termination?


The skeleton statement is worded differently tot he defence that you kindly helped me with, although the same points are there, should I bring them in line or does this not really matter?


Something else I have been pondering that may not be worth mentioning is that the dealer that sold the car were aware I needed more that the contracted mileage as this was my second PCP agreement with the same dealer, I traded the previous car in that was contracted at 60k and was over the mileage too. The salesperson encouraged me to take a lesser mileage to reduce the payments on the basis I could trade in at a similar position at the end of the agreement and be now worse off (as the mileage is not relevant if not handing back to MBFS). Also, I kept the vehicle maintained as per the manufactures guidelines however it was due a service at point of termination so not sure how relevant that would be for MBFS to argue with?


Finally, with regards to case low, one of the items referenced in the defence was Brady v StMargaret's Trust that is not referenced in the witness statement; do you think this is still relevant? Two case law references I don't have are Munn v Baker (1817)171 E.R. 638. and Arnold v Britton andothers [2015] UKSC 36 if you could please send copies to me?


Many thanks for your help again.

CJM

PS. apparently you have exceeded your private message quota

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

@R0b,


I have had a run through the skeleton witness statement and have some questions, and would very much appreciate some guidance on further points.


Really I've added the references and removed the section on rental charges as MBFS are only claiming excess mileage.


The two key arguments MBFS make are the reasonable condition one, and that the excess mileage charges were due before termination, so in reference to the above, should I keep this in and change the focus to be on evidencing that excess mileage charges are not valid pre-termination?


The skeleton statement is worded differently tot he defence that you kindly helped me with, although the same points are there, should I bring them in line or does this not really matter?


Something else I have been pondering that may not be worth mentioning is that the dealer that sold the car were aware I needed more that the contracted mileage as this was my second PCP agreement with the same dealer, I traded the previous car in that was contracted at 60k and was over the mileage too. The salesperson encouraged me to take a lesser mileage to reduce the payments on the basis I could trade in at a similar position at the end of the agreement and be now worse off (as the mileage is not relevant if not handing back to MBFS). Also, I kept the vehicle maintained as per the manufactures guidelines however it was due a service at point of termination so not sure how relevant that would be for MBFS to argue with?


Finally, with regards to case low, one of the items referenced in the defence was Brady v StMargaret's Trust that is not referenced in the witness statement; do you think this is still relevant? Two case law references I don't have are Munn v Baker (1817)171 E.R. 638. and Arnold v Britton andothers [2015] UKSC 36 if you could please send copies to me?


Many thanks for your help again.

CJM

PS. apparently you have exceeded your private message quota

I'm onto this and will get back to you today regarding the above - I've freed up my inbox now so should be able to receive messages and here's a link to the relevant case law you ask for (you'll also be wise to include the Starbuck case too as it refers at the end about the court having to speculate when the defendant could have provided proper evidence but chose not to).

https://www.dropbox.com/sh/ot1vpsvtf...zP36ROk6a?dl=0

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

Following on from my last post, see below comments

The two key arguments MBFS make are the reasonable condition one, and that the excess mileage charges were due before termination, so in reference to the above, should I keep this in and change the focus to be on evidencing that excess mileage charges are not valid pre-termination?

I suspect MBFS will argue excess mileage on two points. First being that it was due before termination (and perhaps referring to section 99(2) of the CCA) however, this seems illogical assuming that prior to you sending the termination letter, your account was up to date and not in arrears, so the excess mileage was not already due at that point. It was only triggered upon termination of the agreement and, according to the CCA, as soon as you comply with section 99, your liability is capped under section 100. One piece of evidence that could assist you is if MBFS provided you with a confirmation letter that the agreement is terminated, and usually lenders will mention somewhere in the letter that you have no outstanding liability at the time of termination. That would also prove to the court or at least go some way to show that the excess mileage charges were not due immediately before termination, otherwise the letter would have said differently.

You should also now have a copy of the Government's consultation on VT under sections 99 and 100 which explicitly confirms Parliament's position in that liability is limited at 50%.

The second point is that they may try as an alternative argument that by virtue of the excess mileage, you were negligent in taking reasonable care of the car. To quote from another thread I posted on this very point:

"section 100(4) is really a question of whether you have been negligent whilst the the car has been in your possession. Breaching the agreed contractual mileage does not, on the face of it, create a presumption that you have been negligent. They are two separate causes of action founded on different principles. There is already case law on what a debtor should be required to do when looking after the car, so even if the agreed mileage has been exceeded the question of negligence will rest on the facts. In my opinion, the excess mileage (which they will argue affects the value of the car), is not sufficient to warrant a court holding a debtor liable for negligence - there has to be some evidence to that effect and that's why I stress that you should ensure it is has a valid MOT and is serviced and repaired when necessary which goes some way to showing that you reasonably looked after the car."

I suspect they will argue that the excess mileage means the car is valued less than it would have been but, section 100 does not concern itself simply with the value of the vehicle. This is where you refer to Brady v St Margaret's trust where Lord Denning says that the price of the vehicle is not evidence of the car's condition (see top of page 7) and the paragraph goes on further to suggest what is reasonably expected of the person in that position. I think that the service being required at the time you terminated the agreement is not fatal, nor should you be expected to have done that. It just means it was due around that time, it doesn't have to have been done before you terminated.

Another argument to make is that the charges claimed by MBFS are simply dressed up as contractual charges under the agreement and not really for negligence. The last few paragraphs in Brady suggest that there should be evidence of the car's market value in a reasonable condition compared to the market value of its current condition and the difference awarded (if found to be negligent) - not a contractual formula. The Starbuck case in the last few paragraphs also say that the court will not speculate where evidence could have been properly provided. Given that MBFS did not seek evidence and relied on speculation without carrying any conclusive assessment, the court should not allow their claim under this head.

The skeleton statement is worded differently tot he defence that you kindly helped me with, although the same points are there, should I bring them in line or does this not really matter?

I think the defence I originally gave as an example is pretty much the same as the revised one on the VT Guide albeit it is tidied up a little better. The legal arguments are pretty much the same points just more expanded in the Skeleton.

Something else I have been pondering that may not be worth mentioning is that the dealer that sold the car were aware I needed more that the contracted mileage as this was my second PCP agreement with the same dealer, I traded the previous car in that was contracted at 60k and was over the mileage too. The salesperson encouraged me to take a lesser mileage to reduce the payments on the basis I could trade in at a similar position at the end of the agreement and be now worse off (as the mileage is not relevant if not handing back to MBFS). Also, I kept the vehicle maintained as per the manufactures guidelines however it was due a service at point of termination so not sure how relevant that would be for MBFS to argue with?

If it wasn't in your defence then you won't be able to argue that, though you would find it difficult to win a judge over because it is a he said she said situation, unless there is evidence to that effect you can put before the judge.

Hope that helps.

[R0b]

Re: PCP voluntary termination excess mileage charges court claim

[MENTION=76545]cjm128[/MENTION]

As I said I would, I've attached an relatively short example of a skeleton argument loosely based on your arguments. You will see that there are gaps missing in brackets which will need to be filled in and completed by yourself but also there is reference to [tab/page number]. If you are including a bundle then this will need to mirror the tab and page number in the bundle for the judges reference - it will need to be accurate! p.s. there are some additional references to "para." which means the specific paragraph of that case but some of the cases don't have numbered paragraphs so you may not be able to do this all for all of them.

Finally, you'll see that at the top of the page in italics, I referred to authorities in the bundle only containing the relevant references and full copies provided on the day of the hearing - this is just to reduce the size of the bundle as some of the cases only require a small portion of text for reference (ordinarily and good practice will require you to include full copies but as this is small claims you should get away with it if you provide a full copy on the day). It is up to you as to how you want to do it but if you are including only the relevant references then I would suggest you include the first page of the case which has the parties name and then then the relevant page numbers. This should also be the same for others such as the legislation and the VT consultation paper too.

I did say I've got some notes on attending court and tips that I have and I will try to look for that today/tomorrow for you.

Hopefully this will hep you.

[cjm128]

Re: PCP voluntary termination excess mileage charges court claim

Many thanks [MENTION=71570]R0b[/MENTION] very much appreciated!