Hire Purchase PCP - Excess Mileage Charges.

[akt101]

Hi Forum I am a newbie here so please treat me with care :-)

I am also happy to pay for advice and happy to donate to the forum I understand there is nothing as a free lunch.

In 2017 I entered into a PCP agreement with Volkswagen Financial Services.

In 2021 March I exercised my right under section 99 of the consumer credit act 1974 to terminate the agreement and delivered the vehicle back.

As I had paid more than half of the total amount payable I thought that would be the end of it. The salesman even advised me to do the VT.

Roll on today - a few years later I received a claim form asking for £4684.77 in excess mileage charges. Made up as follows:

Excess mileage charge 0.132 x 35490 miles.

The salesman at the time said if I VT the car I would not have anything else to pay and this is the first time I have heard from them again.

Do I need to just pay this or was the sales man correct in once they accepted my VT I was free from any excess charges.

Please advise and many thanks

[des8]

The SHORTCUTS panel on the right of this page includes a guide to voluntary termination which includes a comprehensive section on excess mileage charges which you might useful

[akt101]

Hi thanks for the guide. The issue I have though is I am time bound by the court process and do not have time to complain to the FOS as the court process has already started. If I defend the claim that has been issued and cite the following my defence (taken from the guide) will I prevail at court or will judgement be entered against me:

Having terminated the agreement in accordance with Section 99(1) of the CCA 1974. It imposes a statutory limit on the amount of liability owed by the debtor to the creditor under a hire-purchase agreement which is defined as one half of the total price payable. “total price” is defined (see Section 189) as, “the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement.” Accordingly,

Furthermore, 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, amongst other things, 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.

Please advise I am happy to pay for the advice if anyone wants to reach out to help me defend this claim.

[des8]

I'm tagging our expert on VT for you R0b as hopefully he will be able to advise

[R0b]

Sorry I am not really online at the moment. The best I can do is suggest you read the thread below as I remember there’s a defence example I uploaded in there for excess mileage charges so you could use that as a starting point for drafting your defence.

what is the date of the claim form and have you acknowledged the claim?

https://legalbeagles.info/forums/for...larke-pls-help

[akt101]

Hi Rob

The date of the claim is 30th August 2023
I have filed the acknowledgement of service. So this buys me an extra 14 days

Looking back through my email I found the following from the showroom manager.

"Hi Anil
Don’t worry about the mileage, its only applicable at the end of the 4yf fixed term, in fact if you want to change the car during the term, we can do what’s called a Early Voluntary Termination (EVT), this means as long as you have made 50% of the car payments, which you have almost done, and will have done if your were to order a brand new vehicle, you could simply hand back the Q7, with what ever mileage it has and just take out a new agreement on the new purchase.
Let me know what your thoughts are, happy to show you our latest models etc.
Thanks
****
****** ***************
Showroom Manager"

So I am a bit suprised that they have now after all these years of doing the VT are trying to claim back the excess mileage.

Thanks for the thread I will have a look as I start to craft my defence.

Happy to send you a drink for the help. It is most appreciated so please share some details with me.

[akt101]

Hi again Rob. I looked through the thread and saw your amended version of a defence for the other member - the document was very legal sounded and I actually felt quiet clever amending it :-) . Is there any chance I could redact my version (based on yours ) and post it for you too look at? Thank You.

[des8]

If R0b isn't available someone else will usually step up

[akt101]

As the Claimants POC only mentioned excess mileage charges. I have used Robs defence and amended it for use myself. Hopefully someone can have a look at the redacted version and give it a once over. Many thanks see attachment

[R0b]

Assuming this was done through money claims online you should have 33 days from the date of the claim form to file your defence. I’m not able to look at your defence until around mid September as I do not have access to internet much, so if you are prepared to wait until then I will take a look.

You could also write to the company or if they are legally represented, their solicitors and ask them for an extension of time under CPR 15.5 which allows either party to extend by a further 28 days. A request of 14 days would be reasonable and explain that you are currently looking for further advice given the complexity of the issue and nature of the claim as well as the fact you are a litigant in person.

Remind them that they should not refuse unreasonably for the sake of refusing because you reserve the right to make an application to the court to extend time and then seek costs for their refusal. If they do refuse then ask them to give their reasons why.

If they agree an extension the. You should email the court and copy the other side in confirming you have agreed an extension to file a defence of X days in accordance with CPR 15.5 and the deadline for filing a defence is Y date.

[akt101]

That's great Rob if you could that would be great. As I have used your defence i have only put in the relevant sections. I just need to brush up on the law in the various sections so i can defend my postion if it comes to a hearing, Thansk again in advance.

[R0b]

Are you able to post up a copy of the particulars of claim as it would be helpful to see how they have set the claim out and better enable you to respond to those allegations. Make sure to remove or redact any personal information from the document and if you are using word then don’t use the highlight function to set personal information to black as it can easily be unpredicted by removing the highlight.

I will look at it at the weekend and let you know my thoughts

[akt101]

Hi Rob sorry I have not been in touch, Both parents are seriously ill. This thing has been plodding along in the background and today is really the first day I have had a chance to look at it properly. Sadly it has not gone away. I attach the POC and a letter where they threaten to strike out my defence and then the following day another letter whereby they are offering me a 30% reduction to settle the claim. Please can you have a look at this for me when you get some time so I can work out what is the best course of action to take.

I noticed in the directions questionnaire there solicitor insisted on a hearing as she wanted to cross examine me. I think i may need to brush up on the things I have mentioned in my defence so I dont come across as a poor witness.

[akt101]

Hi i have received the hearing date of the 26th April 2024 - is there anyone who can have a quick look at the poc and the offer letter to see if I am walking into an ambush in which case i will look to settle this

[R0b]

Unfortunately, I can't tell you whether you want to settle or not, but I take it they haven't made an application to strike out your claim as being totally without merit...because it is a valid defence. The decision to settle or pursue this will be for you to weigh up, but I have some comments and thoughts about their POC.

1. In paragraph 3a. of the POC, they are pleading that section 100 of the CCA says that the hirer is liable to pay for one half of the goods and sums due immediately before termination. This language equates to section 100(1) which says:

Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.

However, in their letter to you, they seem to be arguing that you failed to take reasonable care of the goods. This actually is a reference to section 100(4) and not section 100(1) as above. My immediate reaction is that I would be arguing to the judge saying that the claimant hasn't actually pleaded in their POC that you have failed to take reasonable care of the goods, rather they are seeking to argue that the sums were due immediately before termination. Therefore, the judge should prohibit them from trying to make submissions on that point as the court is required to determine what the POC state and they are now trying to ambush you by introducing new legal submissions through the back door at the hearing.

another issue is that their letter refers to the relevant terms of the contract which they point out in clause 11.1 that the sums accrued will be payable on demand i.e. when they sent you a demand for payment. So my question is, did VWFs at any point issue a demand for excess mileage charges before the VT date was exercised? If not, their claim fails because it was not immediately due, only after termination.

Alternatively, even if they argue something else, you could rely on the County Court decision Mercedes Benz v Estrella Cahalane which you can find the judgment to on this thread below - see post 56 by Amethyst for the download link. Essentially, MBFS were arguing similar to what VWFS are saying. The judge in this case said that the excess mileage charges had accrued each mile but they only crystallised on termination, not before. What the judge was saying is that the earliest the charges became due was on termination and because section 100(1) says you are liabel for charges immediately due immediately before termination, you cannot be liable. The language in the MBFS contract is different to this one as you will see when you read the judgment but it is a back up argument. It is only a county court decision so not legally binding but should be persuasive since there are next to no decisions on these excess charges.

*** WON !! *** VT Excess Mileage MBFS County Court Claim Mortimer Clarke Pls Help - LegalBeagles Forum


2. My other point of contention is their argument around Section 100(4) and the failure to take reasonable care of the goods. My interpretation of this meaning is that taking reasonable care means physical care. If you do not take physical care, then you are liable to compensate them for any additional repairs. VWFS are trying to argue that this extends to what is known as a pure economic loss. In law, pure economic losses are not recoverable except for very, very limited circumstances, which I do not think applies to hire purchase agreements.

If you look at my VT Guide again I think I added some commentary about pure economic loss and why it wasn't applicable. The leading case on that is White v Jones and there may be a selected part of that judgment I included in the guide to explain the legal position. That would also support your case if you had to argue it, but as I mentioned above, the POC doesn't actually plead a case of a failure to take care of the goods so you had no reason to expect this was something that would be argued in court.