CCA Posts from Hillesden Thread

[Streetwise]

Re: CCA Posts from Hillesden Thread

OK I've read the original thread and the OPs opening statements.

IMO the situation is this.

There was clearly a financial relationship between the OP and the OC and the statements will prove that a debt exists.

A record of defaulted payments on a CRA file has no connection whatsoever to a Default Notice issued under the Act or Regs. Whether the lender can demonstrate the payments are in default without the agreement to specify the payment regime is an argument I will leave to others, save to say trying to get a default marker off a file using this argument would be an uphill struggle probably not worth the effort.

A valid DN is required however before the lender can 'take the next step' toward enforcing a debts repayment, but in the meantime can threaten all sorts in an effort to persuade the OP to make payments. A valid DN by definition presupposes a valid credit agreement.

The Act says "The court shall not make an enforcement order ..... unless a document ......containing all the prescribed terms of the agreement was signed by the debtor......."

Clearly the easiest way to prove a valid agreement is to produce the original document to the court. But I agree with Peterbard that this is NOT the only way. This is where the judge lottery kicks in as to what proof is required.

Personally my head hurts when I try to determine the legal effect of an account 'terminated' and sold on to a DCA following an invalid DN issued by the OC.

Finally IMO 'enforcement' does not start until a lender asks a judge to issue a CCJ.

Signed by the debtor and the creditor,:beagle:

[labman]

Re: CCA Posts from Hillesden Thread

See Post 23!

[teaboy2]

Re: CCA Posts from Hillesden Thread

OK I've read the original thread and the OPs opening statements.

IMO the situation is this.

There was clearly a financial relationship between the OP and the OC and the statements will prove that a debt exists.

A record of defaulted payments on a CRA file has no connection whatsoever to a Default Notice issued under the Act or Regs. Whether the lender can demonstrate the payments are in default without the agreement to specify the payment regime is an argument I will leave to others, save to say trying to get a default marker off a file using this argument would be an uphill struggle probably not worth the effort.

A valid DN is required however before the lender can 'take the next step' toward enforcing a debts repayment, but in the meantime can threaten all sorts in an effort to persuade the OP to make payments. A valid DN by definition presupposes a valid credit agreement.

The Act says "The court shall not make an enforcement order ..... unless a document ......containing all the prescribed terms of the agreement was signed by the debtor......."

Clearly the easiest way to prove a valid agreement is to produce the original document to the court. But I agree with Peterbard that this is NOT the only way. This is where the judge lottery kicks in as to what proof is required.

Personally my head hurts when I try to determine the legal effect of an account 'terminated' and sold on to a DCA following an invalid DN issued by the OC.

Finally IMO 'enforcement' does not start until a lender asks a judge to issue a CCJ.

But it all boils down to whether the creditor is entitled to enforce in court and enact the benefits they are entitled too when a debtor fails to remedy a DN thats must be VALID. Invalid DN means a court can not enforce regardless of the credit agreement being presented, and until a valid DN is issued they can issue as many invalid ones as they like as until the VALID one is issued they are not entitled to take any action on the account (including registration of a default on credit file) as the default is deemed to have not have occured until a valid DN and the satutory 14 days to remedy have past without remedy. Proof that a debt exists in this case is not relevant to a court, what the creditor needs to prove is that the DN was valid and as such they were entitled to register a default and make a claim to the court, if its not VALID then they are not entitled to register a DN or make a claim to the court to enforce the debt.

[labman]

Re: CCA Posts from Hillesden Thread

I agree Teaboy. I think what basa was trying to say was that rather than test untested ground, the first step should always be to check their right to collect the debt and check the debt 'exists.' If it is proven to exist, and they have a right to collect then this sort of thing kicks in. :tinysmile_grin_t:

[basa48]

Re: CCA Posts from Hillesden Thread

I agree Teaboy. I think what basa was trying to say was that rather than test untested ground, the first step should always be to check their right to collect the debt and check the debt 'exists.' If it is proven to exist, and they have a right to collect then this sort of thing kicks in. :tinysmile_grin_t:

Well yes, the existence of a debt is almost always a 'given', in that the lender can easily demonstrate (with account statements) that credit was made available and the debtor used that credit to obtain goods and services.

The crux of the argument is that the lender must demonstrate - with a 51% probability - his right to enforce the debtor to repay the debt with two things:

1. The debtor entered a valid credit agreement.
   
2. The debtor failed to remedy a valid Default Notice.

The business with default markers on CRA files is really peripheral to the main arguments and to discuss these in a court will just p*ss off the judge.

If a debtor can convince a judge the lender has no right to enforce then he can request removal of default markers on CRA files.

[Lord_Alcohol]

Re: CCA Posts from Hillesden Thread

I'm still unclear what happens if a new (valid) DN is served before or after a hearing and which is satisfied by the debtor.

Should the agreement be reinstated or should the creditor serve a notice under the updated S98A, giving 2 months notice of termination? If the latter, then is the agreement reinstated in the meantime?

If the agreement is not reinstated, or notice served, is the creditor in breach of contract (non-performance of its terms and conditions) by failing to reinstate when it had no cause to terminate?

What happens if the creditor does nothing following satisfaction of a new DN? Is this non-performance?

If the debt is assigned to an unlicenced DCA before the new (valid) DN is satisfied and the contract is not (as it can not be) reinstated or a notice served, then is this non-performance?

If non-performance is the case, then is this repudiation (eeek!) and could the contract be properly rescinded?

Bear in mind that the creditor claims non-performance by the debtor as the cause of the problem.

If the contract cannot be rescinded (eg, the creditor has repossessed goods), then what relief/compensation is available to the debtor?

What a total mess CCA is!

[teaboy2]

Re: CCA Posts from Hillesden Thread

Well yes, the existence of a debt is almost always a 'given', in that the lender can easily demonstrate (with account statements) that credit was made available and the debtor used that credit to obtain goods and services.

The crux of the argument is that the lender must demonstrate - with a 51% probability - his right to enforce the debtor to repay the debt with two things:

1. The debtor entered a valid credit agreement.
2. The debtor failed to remedy a valid Default Notice.

The business with default markers on CRA files is really peripheral to the main arguments and to discuss these in a court will just p*ss off the judge.

If a debtor can convince a judge the lender has no right to enforce then he can request removal of default markers on CRA files.

Ohh i agree, the arguement should only be used to remove a registered default when it is clear the creditor didn't have the right to enforce the debt or enact a provision that would allow them to register the Default.

So yes its a side argument away from the main argument of the creditors right to enforce, but Peter was arguing that the creditor could register Default to account status willy nilly, which although true to a certain extent for unregulated agreements, it is not the case for regulated agreements. So the arguement should really only be used to have the Default removed, or if the creditor refuses knowing they had no right to enforce the debt and the default was registered of the back of an Invalid DN, then the debtor would have a claim for liable, where they can use the argument too.

I'm still unclear what happens if a new (valid) DN is served before or after a hearing and which is satisfied by the debtor.

Should the agreement be reinstated or should the creditor serve a notice under the updated S98A, giving 2 months notice of termination? If the latter, then is the agreement reinstated in the meantime? If you mean when the creditor has already sold the account to a 3rd party, then they would have to have the debtors consent to reinstate the agreement. Basically if they have sold the account of the back off an invalid DN then its unlawful rescission, the agreement ceases to exist and the creditor can not reissue a DN as a result, unless the debtor has agreement to reinstate the agreement. If the creditor issued a invalid DN and terminated the account but did not sell it, then everything after the DN is nullified and the creditor can reissue a valid one upon realising the original DN was not Valid.

If the agreement is not reinstated, or notice served, is the creditor in breach of contract (non-performance of its terms and conditions) by failing to reinstate when it had no cause to terminate? They would be in breach prior to any attempt to reinstate if they had sold the account to a 3rd party off back of invalid DN - Its called unlawful rescission, though some may argue otherwise. But the way i see it, they were not entitled to sell the account and as such they have unlawfully rescended the agreement when they sold the account.

What happens if the creditor does nothing following satisfaction of a new DN? Is this non-performance? If you have satisfied the DN, then no default is deemed to have occured and the account reverts back to the original status quo

If the debt is assigned to an unlicenced DCA before the new (valid) DN is satisfied and the contract is not (as it can not be) reinstated or a notice served, then is this non-performance? The DN would be deemed invalid as they failed to allow you the 14 days to satisfied before selling the account, it is again unlawful rescission regardless off whether it was sold to a licenced or unlicenced DCA. MBNA did the same trick with me, issued a DN on the 12th august, i received it on the 18th with only 10 days left to remedy. (14 days start from date it is served i.e received by debtor) only for MBNA to have actually sold the account on the 17th, the day before i received the DN. They also registered the Default on the 31st july. So i have them for unlawful rescission and inaccurate recording of a default on my file. All this was before i started my business too, which is a shame, as if i already had my company i would have had the funds back then to wipe the floor with them in court.

If non-performance is the case, then is this repudiation (eeek!) and could the contract be properly rescinded? Its unlawful rescission

Bear in mind that the creditor claims non-performance by the debtor as the cause of the problem. But an invalid DN means the creditor has failed to comply with section 87(1) and therefore denied the debtor their rights. And as such the creditor is not entitled to enforce the debt in court anyway.

If the contract cannot be rescinded (eg, the creditor has repossessed goods), then what relief/compensation is available to the debtor? Well they would not be entitled to repossess any goods on an hire agreement of the back off an invalid DN to behonest, though it probably won't stop them trying. If they did then the debtor of course can sue them for breach of contract.

What a total mess CCA is!

Agreed the CCA is not clear cut but originally it was created to protect the debtors rights and still is more on the debtors side then on the creditors side especially when it comes to defaults and terminations of the agreement. Some may not agree with what i state above, but its all open to interpretation so it boils down to how you interpret the law. I know peter was against the unlawful rescission arguement stating the statue law i.e. the CCA 1974 doesn't allow for it, when really it does not entitled the creditor to terminate of the back of an invalid DN, though by peters reckoning a creditor would be incapable of breaching such legislation and terminating. Off course when the creditor still has ownership of the account then unlawful rescission does not apply and the invalid DN means such termination is nullified - However once sold to a 3rd party its not as simple, and the agreement ceases to exist between you and the creditor once the account has been sold, which then opens the door for unlawful rescission as the sale can not simply be nullified.

MBNA simply have not had the guts to test the unlawful rescission arguement in court with me, and they know full well that is the core of my argument with them. So if i was wrong, then why are they choosing to give up and no longer chase me for the debt, when they could simply take me to court if i was wrong? Says alot really doesn't it.

[CleverClogs]

Re: CCA Posts from Hillesden Thread

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[teaboy2]

Re: CCA Posts from Hillesden Thread

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deleted

Let me quess you replied to a spam post?

[basa48]

Re: CCA Posts from Hillesden Thread

I really don't like that term 'rescission' !!

Quote:

Rescission is an equitable remedy and is discretionary. A court may decline to rescind a contract if one party has affirmed the contract by his action (see Long v Lloyd [1958] 1 WLR 753) or a third party has acquired some rights or there has been substantial performance in implementing the contract. Furthermore, because rescission is supposed to be imposed mutually upon both sides to a contract, the party seeking rescission normally must offer to give back all benefits he or she has received under the contract (an "offer of tender").

This whole argument is a minefield.

When is a repudiation (by the lender refusing to lend to a defaulting debtor) not a repudiation? Maybe if the lender didn't realise his DN was invalid and sold the 'still live' debt.

If you elect to accept the repudiation and claim the contract is terminated, but the judge accepts the lenders non-performance was an honest mistake, then conceivably you become the repudiator - ooops!!

On the other hand if you don't accept the lenders perceived repudiation, have you then affirmed the contract as on-going?

Confused - you will be by the next episode of:

"Faulty Default Notices" are they really good to go to court with??

[basa48]

Re: CCA Posts from Hillesden Thread

........................

MBNA simply have not had the guts to test the unlawful rescission argument in court with me, and they know full well that is the core of my argument with them. So if i was wrong, then why are they choosing to give up and no longer chase me for the debt, when they could simply take me to court if i was wrong? Says a lot really doesn't it.

I am in the identical situation. (I believe MBNA have since learned what a valid DN looks like !! LOL).

But mine is complicated (for MBNA/DCA) by a blatant attempt at deception/fraud.

[teaboy2]

Re: CCA Posts from Hillesden Thread

I really don't like that term 'rescission' !!

Quote:

Rescission is an equitable remedy and is discretionary. A court may decline to rescind a contract if one party has affirmed the contract by his action (see Long v Lloyd [1958] 1 WLR 753) or a third party has acquired some rights or there has been substantial performance in implementing the contract. Furthermore, because rescission is supposed to be imposed mutually upon both sides to a contract, the party seeking rescission normally must offer to give back all benefits he or she has received under the contract (an "offer of tender").

This whole argument is a minefield.

When is a repudiation (by the lender refusing to lend to a defaulting debtor) not a repudiation? Maybe if the lender didn't realise his DN was invalid and sold the 'still live' debt.

If you elect to accept the repudiation and claim the contract is terminated, but the judge accepts the lenders non-performance was an honest mistake, then conceivably you become the repudiator - ooops!!

On the other hand if you don't accept the lenders perceived repudiation, have you then affirmed the contract as on-going? Yes - But as they are in breach you do not have to perform your part of the contract same for unlawful rescission by the creditor - In other word, Never accept either.

Confused - you will be by the next episode of:

"Faulty Default Notices" are they really good to go to court with??

Thats why the creditors rescission i.e. termination is deemed unlawful rescission, i.e. they did not have the right to terminate/rescind the contract in the first place. So its the opposite to mutual rescission as one party has not agreed to the others rescission of the contract.

Repudiation does not apply as by the time you have pointed out to them they have issued you an invalid DN, they would have plenty of time to reissue a valid DN, prior to selling the debt. So they can not claim honest mistake. If they go onto sell the debt prior to the date of remedy, then given they would have known the date of remedy and that they are not entitled to sell before that date (it would be ignorant of a financial institution to claim they were not aware legislation prevented them selling the debt), then again they can not claim honest mistake. If they sell the account after the date of remedy on an Invalid DN and after you have informed them the DN is invalid, then again they can not claim honest mistake as they would have had the chance to investigate. So unlawful rescission still stands as you never agreed to the rescission, nor were they entitled to rescind the contract either if it was an invalid DN. Not only that they have not repudiated the contract e.g. refuse to perform. They have terminated/rescinded it completely.

A company that unlawfully rescinds a contract is not entitled to claim anything from the other party. The keyword heres is not the word Rescission, but the word Unlawful - e.g. Recission (lawful rescission) is different to unlawful rescission.

"Failure of a Default or Termination Notice to be accurate not only invalidates the Default or Termination Notice (Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give the Claimant a claim for damages. (Kpohraror v Woolwich Building Society [1996] 4 All ER 119)"

Admittedly i have not read up on the case law you referred too, but the above case law i have qouted above would take presedence over the case you referred too. Off course its all open to personal interpretation and is a hotly debated argument.

I am in the identical situation. (I believe MBNA have since learned what a valid DN looks like !! LOL).

But mine is complicated (for MBNA/DCA) by a blatant attempt at deception/fraud.

Ohh i know exactly what you mean, they tried the same fraudaulent and misrepresentation off law (claimed a new legislation allowed them to enforce despite unlawful rescission did experto credite, though when challanged they couldn't tell me the name of said legislation only that i should look for it on the OFT website WTF!! lol I responded with a letter containing a P.s. at the end containing the following statement, "Now go sit on your middle finger and go swivel for it". Lol haven't hear much from them since then, just 1 letter last janaury i believe, usually it was 1 every 6 months and same for phone calls, now they are 6 months overdue with their next letter.

Shame as i really enjoy rubbing their noses in it. Even invited them to take me to court and so i could wie the floor with them and have them laughed out. Atlas they so far have not taken me up on my invitation lol. My whole argument is based on the invalid DN and unlawful rescission.

[basa48]

Re: CCA Posts from Hillesden Thread

I agree that a lenders actions to terminate (e.g. by selling) a contract following an invalid DN gives the debtor grounds to cease performance of the contract (i.e. cease regular payments), but exactly what those grounds are still eludes me.

Note this explanation of Breach of Contract & Rescission:

Non-performance or Breach

One party to a contract can rescind it because of substantial nonperformance or breach by the other party. The party who knowingly and willfully fails to perform cannot complain that the other party to the contract has injured him or her by terminating the contract. The right to rescind does not arise from every breach but is permitted only when the breach is so substantial and fundamental that it defeats the objective of the parties in making the agreement. The breach must pertain to the essence of the contract. The act must be an unqualified refusal by the other party to perform and should amount to a decision not to be bound by the contract in the future. A party to a contract who is in default cannot, however, rescind because of a breach by the other party.

An unconditional notice by one party that he does not intend to perform a contract is a ground for rescission by the other party. In order to justify rescission, the refusal must be absolute and unconditional.

When one party to a contract abandons it and refuses further performance or her conduct shows that she is repudiating the contract, the other party is entitled to rescission. A disagreement over the terms of the contract and a subsequent refusal to perform in a particular manner by one of the parties do not constitute an Abandonment of the contract justifying rescission.

This appears to me to say that the breach or repudiation by the lender (refusing to extend credit) allows the debtor to rescind the contract. But I still worry that rescission means both parties roll back the contract to a point where it never happened, i.e. BOTH parties repay whatever monies changed hands.

PS my head hurts and I'm going to bed !!!!!!!

[teaboy2]

Re: CCA Posts from Hillesden Thread

I agree that a lenders actions to terminate (e.g. by selling) a contract following an invalid DN gives the debtor grounds to cease performance of the contract (i.e. cease regular payments), but exactly what those grounds are still eludes me.

Note this explanation of Breach of Contract & Rescission:

Non-performance or Breach

One party to a contract can rescind it because of substantial nonperformance or breach by the other party. The party who knowingly and willfully fails to perform cannot complain that the other party to the contract has injured him or her by terminating the contract. The right to rescind does not arise from every breach but is permitted only when the breach is so substantial and fundamental that it defeats the objective of the parties in making the agreement. The breach must pertain to the essence of the contract. The act must be an unqualified refusal by the other party to perform and should amount to a decision not to be bound by the contract in the future. A party to a contract who is in default cannot, however, rescind because of a breach by the other party.

An unconditional notice by one party that he does not intend to perform a contract is a ground for rescission by the other party. In order to justify rescission, the refusal must be absolute and unconditional.

When one party to a contract abandons it and refuses further performance or her conduct shows that she is repudiating the contract, the other party is entitled to rescission. A disagreement over the terms of the contract and a subsequent refusal to perform in a particular manner by one of the parties do not constitute an Abandonment of the contract justifying rescission.

This appears to me to say that the breach or repudiation by the lender (refusing to extend credit) allows the debtor to rescind the contract. But I still worry that rescission means both parties roll back the contract to a point where it never happened, i.e. BOTH parties repay whatever monies changed hands.

Point is, as far as credit agreements are concerned, the Creditor was never entitled to rescind the contract of the back of an invalid DN, and invalid DN means the debtors breach e.g missed payments. Is deemed to have not occured. Basically the creditor can not legally or lawfully rescind the agreement without a valid DN, to do so is unlawful rescission and as such the debtor is not obliged to repay anything nor is the creditor entitled to claim any debt owed by the debtor. Bascially the CCA1974 does not allow the creditor to rescind the agreement due to a debtors breach, until a valid DN is issued. They can not issue a valid DN when they have sold the account without the debtor agreeing to the reinstatement of the agreement. As such the agreement ceases to exist and the debtor can counter claim for unlawful rescission.

[Lord_Alcohol]

Re: CCA Posts from Hillesden Thread

They can issue a valid DN when they have sold the account without the debtor agreeing to the reinstatement of the agreement. As such the agreement ceases to exist and the debtor can counter claim for unlawful rescission.

Not sure about this.

If the debtor remedies the breach described in the new DN, S89 should apply and the agreement continue "as though the breach never occurred". The benefits of S89 are removed to the debtor where the account is sold to a DCA.

The wording required under S88 to be inserted in a DN (as described in the 1983 enforcement notices regs) certainly implies that an agreement should run as before (and not be ended).

A counter claim for "unlawful rescission" is I think a can of worms. Like Basa I don't like the term at all, especially in view of the complete absence of CCA-related case law. My understanding is that all that can be claimed for breach of contract is actual losses incurred by the injured party, nothing more. If you owe £10K on an "unlawfully rescinded" contract, you have no losses.

Moreover, S170 removes the concept of sanctions against a lender for any breach.

I think the position of the agreement following a dodgy DN has to be that it is not terminated but that a debtor could claim for damages (poss under S13 of DPA for a default marker if the default is unfairly applied), unless it really is terminated (eg, the lender has repossessed goods, successfully sued the debtor, etc). Long term credit card ags could easily be mutually rescinded as it is quite possible that the sums paid on either side are similar.

Even in Harrison the judge saw nothing wrong in serving a revised DN, but annoyingly didn't indicate if that might mean the agreement continued. On this particular point I think there is still a huge amount of confusion.

Just my view of course ...