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Originally posted by kezyvette
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Okay, I hope it is okay to check once more, R0b - I've put it all together and neatened it up a bit. Hope this is okay and I'll get it sent off today.
Dear [name],
I am writing further to your e-mail dated 05/12/2018 and would like to raise a number of complaints, outlined below.
In that letter, you mentioned that the hire-purchase agreement refers to excess mileage being charged on a pro-rated basis in the event that the agreement ends early. Whilst I do not dispute this, you will know that the agreement is subject to and regulated by, the Consumer Credit Act 1974 (“CCA 1974”). Therefore, the hierarchy of laws dictate that Acts of Parliament (in this case the CCA 1974) takes precedence over any common law contract. This is further clarified in Section 173 of the CCA 1974 confirming that contracting out of the Act is strictly forbidden and any attempts to do so will render the relevant contractual provision void and unenforceable.
In a recent County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.
Furthermore, your interpretation that misrepresentation " allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early" is not correct. A claim for misrepresentation requires there to be a pre-contractual statement of fact by the statement maker which is relied upon and to induce the recipient of the statement to enter into the contract and, but for that statement, the recipient would not have entered into the contract at all. I do not accept that the mileage I said I would cover over the term of the agreement was a misrepresentation and my reasons are threefold:
1. At the time of speaking to your sales agent, I was asked to estimate the number of miles that I would expect to be driving. I therefore gave an honest opinion of the number miles I might cover on an annual basis; the mileage stated was both a statement of opinion and an estimate of a future intention. It is well established in law that neither statements of opinion nor estimated future intentions are considered to be a statement of fact.
2. The stated mileage was not in fact a representation rather it was a statement which was intended by both sides to be incorporated into the contract as a contractual term. Indeed, this is further verified by the fact that annual mileage has been clearly stated on the first page of the contract. The Courts have, on several occasions, confirmed that a statement which is incorporated into the contract, is unlikely to be considered a representation.
3. Notwithstanding the above, the stated mileage was not something which would have induced FCA to enter into the contract nor was it material. On the contrary, the decision to enter into the contract was largely the result of a credit check carried out by FCA to determine whether or not I would be capable of meeting the monthly repayments.
In the circumstances, I do not believe that your claim for excess mileage charges under the common law of misrepresentation has any force and my position remains the same, namely that the charges are not recoverable by FCA. If, however, should you choose to pursue this matter, then that is entirely your own prerogative but I am fully prepared to defend any claim brought against me.
With regards to liability in relation to the alleged outstanding balance for excessive damage to the vehicle, this is denied.
The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.
In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.
Turning to the issue of the outstanding balance in respect of the GAP insurance (the “GAP agreement”), the sales agent at the time explained to me that the insurance policy would cover me for the course of the hire-purchase period, hence the relatively large sum I agreed to pay for the policy. However, I have since contacted the insurance provider and to my surprise, I was informed that the GAP insurance policy had expired in 2016, only one year after I entered into the hire-purchase agreement. As well as failing to provide any terms and conditions headed ‘Separate Agreements’ (or even my own copy of the agreement), the sales agent never explained to me that the GAP insurance would only cover me for the first 12 months of the hire-purchase agreement.
The term of the insurance policy was a fundamental piece of information that ought to have been disclosed to me at the time and the absence of that influenced my decision in taking out the policy. Had I known that I would not have been covered for the full period, I would have never agreed to take out the policy in the first place and instead would have sourced my own GAP insurance covering me for the whole period of the hire-purchase. In my opinion, this is not only a clear misrepresentation, but the omission of the policy term when explaining the key details of the policy is also a breach of the Consumer Protection from Unfair Trading Regulations 2008 for which you are deemed to be responsible.
Even if, as you suggest, the GAP agreement is deemed a separate agreement, I was never provided with any pre-contractual documentation or terms and conditions relating to the GAP insurance prior to or at the time of signing the hire-purchase agreement. Under section 55 of the CCA 1974, you are required to provide me with pre-contractual documentation (as further described in Consumer Credit (Disclosure of Information) Regulations 2010). Failing to comply with this requirement means that the agreement is improperly executed and may only be enforced by an order of the court (see section 65 of the CCA 1974).
Notwithstanding all of the above, on the assumption that the hire-purchase and GAP agreement are two separate agreements, I should point out that I have only exercised my right to terminate the hire-purchase agreement under Section 99 of the CCA 1974. At no point did I indicate or allude to the fact that the GAP agreement would also be terminated at the same time. On the contrary, you have decided to unilaterally accelerate the repayment of the GAP insurance money and demand that I immediately repay the unpaid balance. Your conduct and actions imply that you are:
(a) depriving me the right (as agreed under the arrangement) to continue to repay the outstanding GAP insurance by instalments; and/or
(b) treating the GAP agreement as having been terminated.in breach of the terms and conditions so much so that your actions amount to a wrongful termination of the agreement.
Furthermore, I have reviewed the terms and conditions (which are the 2018 terms and conditions and not the terms that I originally signed up to) and there is nothing to suggest that you have the right to terminate the GAP agreement for convenience. For these reasons, you are in repudiatory breach and I am electing to accept your repudiatory breach and terminate the GAP agreement. The effect of this means that all obligations under the agreement are discharged, namely the outstanding sums due that you claim to be owed.
I trust that this response clarifies where I stand and I do not expect there to be any need for further correspondence except where legal proceedings have commenced.
Yours faithfully,
Many thanks in advance (again!!)
Dear [name],
I am writing further to your e-mail dated 05/12/2018 and would like to raise a number of complaints, outlined below.
In that letter, you mentioned that the hire-purchase agreement refers to excess mileage being charged on a pro-rated basis in the event that the agreement ends early. Whilst I do not dispute this, you will know that the agreement is subject to and regulated by, the Consumer Credit Act 1974 (“CCA 1974”). Therefore, the hierarchy of laws dictate that Acts of Parliament (in this case the CCA 1974) takes precedence over any common law contract. This is further clarified in Section 173 of the CCA 1974 confirming that contracting out of the Act is strictly forbidden and any attempts to do so will render the relevant contractual provision void and unenforceable.
In a recent County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.
Furthermore, your interpretation that misrepresentation " allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early" is not correct. A claim for misrepresentation requires there to be a pre-contractual statement of fact by the statement maker which is relied upon and to induce the recipient of the statement to enter into the contract and, but for that statement, the recipient would not have entered into the contract at all. I do not accept that the mileage I said I would cover over the term of the agreement was a misrepresentation and my reasons are threefold:
1. At the time of speaking to your sales agent, I was asked to estimate the number of miles that I would expect to be driving. I therefore gave an honest opinion of the number miles I might cover on an annual basis; the mileage stated was both a statement of opinion and an estimate of a future intention. It is well established in law that neither statements of opinion nor estimated future intentions are considered to be a statement of fact.
2. The stated mileage was not in fact a representation rather it was a statement which was intended by both sides to be incorporated into the contract as a contractual term. Indeed, this is further verified by the fact that annual mileage has been clearly stated on the first page of the contract. The Courts have, on several occasions, confirmed that a statement which is incorporated into the contract, is unlikely to be considered a representation.
3. Notwithstanding the above, the stated mileage was not something which would have induced FCA to enter into the contract nor was it material. On the contrary, the decision to enter into the contract was largely the result of a credit check carried out by FCA to determine whether or not I would be capable of meeting the monthly repayments.
In the circumstances, I do not believe that your claim for excess mileage charges under the common law of misrepresentation has any force and my position remains the same, namely that the charges are not recoverable by FCA. If, however, should you choose to pursue this matter, then that is entirely your own prerogative but I am fully prepared to defend any claim brought against me.
With regards to liability in relation to the alleged outstanding balance for excessive damage to the vehicle, this is denied.
The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.
In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.
Turning to the issue of the outstanding balance in respect of the GAP insurance (the “GAP agreement”), the sales agent at the time explained to me that the insurance policy would cover me for the course of the hire-purchase period, hence the relatively large sum I agreed to pay for the policy. However, I have since contacted the insurance provider and to my surprise, I was informed that the GAP insurance policy had expired in 2016, only one year after I entered into the hire-purchase agreement. As well as failing to provide any terms and conditions headed ‘Separate Agreements’ (or even my own copy of the agreement), the sales agent never explained to me that the GAP insurance would only cover me for the first 12 months of the hire-purchase agreement.
The term of the insurance policy was a fundamental piece of information that ought to have been disclosed to me at the time and the absence of that influenced my decision in taking out the policy. Had I known that I would not have been covered for the full period, I would have never agreed to take out the policy in the first place and instead would have sourced my own GAP insurance covering me for the whole period of the hire-purchase. In my opinion, this is not only a clear misrepresentation, but the omission of the policy term when explaining the key details of the policy is also a breach of the Consumer Protection from Unfair Trading Regulations 2008 for which you are deemed to be responsible.
Even if, as you suggest, the GAP agreement is deemed a separate agreement, I was never provided with any pre-contractual documentation or terms and conditions relating to the GAP insurance prior to or at the time of signing the hire-purchase agreement. Under section 55 of the CCA 1974, you are required to provide me with pre-contractual documentation (as further described in Consumer Credit (Disclosure of Information) Regulations 2010). Failing to comply with this requirement means that the agreement is improperly executed and may only be enforced by an order of the court (see section 65 of the CCA 1974).
Notwithstanding all of the above, on the assumption that the hire-purchase and GAP agreement are two separate agreements, I should point out that I have only exercised my right to terminate the hire-purchase agreement under Section 99 of the CCA 1974. At no point did I indicate or allude to the fact that the GAP agreement would also be terminated at the same time. On the contrary, you have decided to unilaterally accelerate the repayment of the GAP insurance money and demand that I immediately repay the unpaid balance. Your conduct and actions imply that you are:
(a) depriving me the right (as agreed under the arrangement) to continue to repay the outstanding GAP insurance by instalments; and/or
(b) treating the GAP agreement as having been terminated.in breach of the terms and conditions so much so that your actions amount to a wrongful termination of the agreement.
Furthermore, I have reviewed the terms and conditions (which are the 2018 terms and conditions and not the terms that I originally signed up to) and there is nothing to suggest that you have the right to terminate the GAP agreement for convenience. For these reasons, you are in repudiatory breach and I am electing to accept your repudiatory breach and terminate the GAP agreement. The effect of this means that all obligations under the agreement are discharged, namely the outstanding sums due that you claim to be owed.
I trust that this response clarifies where I stand and I do not expect there to be any need for further correspondence except where legal proceedings have commenced.
Yours faithfully,
Many thanks in advance (again!!)
thanks
Endeavorer
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