CCA Posts from Hillesden Thread

"Hell even Labman put you in your place yesterday over credit unions and DMP. Would you care for me to elaborate on that for the whole forum to see. Its time you accepted that you are not more knowledgable then the first of us, that your opinion is not always right and that you should stop being an egotistical prick."


Must admit i take great exception to this, what do you mean"Even Labman" i will have you know i have the greatest respect for labmans knowledge as for anything that you think need airing please feel free, i thought the issues raised were resolved.

Peter
"

[charitynjw]

Re: CCA Posts from Hillesden Thread

129 Time orders.E+W+S+N.I.

(1)[F1Subject to subsection (3) below,] if it appears to the court just to do so—
(a)on an application for an enforcement order; or
(b)on an application made by a debtor or hirer under this paragraph after service on him of—
(i)a default notice, or
(ii)a notice under section 76(1) or 98(1); or
[F2(ba)on an application made by a debtor or hirer under this paragraph after he has been given a notice under section 86B or 86C; or]
(c)in an action brought by a creditor or owner to enforce a regulated agreement or any security, or recover possession of any goods or land to which a regulated agreement relates,
the court may make an order under this section (a “time order ”).
(2)A time order shall provide for one or both of the following, as the court considers just—
(a)the payment by the debtor or hirer or any surety of any sum owed under a regulated agreement or a security by such instalments, payable at such times, as the court, having regard to the means of the debtor or hirer and any surety, considers reasonable;
(b)the remedying by the debtor or hirer of any breach of a regulated agreement (other than non-payment of money) within such period as the court may specify.
[F3(3)Where in Scotland a time to pay direction or a time to pay order has been made in relation to a debt, it shall not thereafter be competent to make a time order in relation to the same debt.]

Hi LA

The way I read it,(1)(a) is in relation to the debtor's right to request a time order, (1)(c) affords similar rights to the creditor.
If the creditor sells the debt without a valid DN/TN, the debtor loses this right
.

[Lord_Alcohol]

Re: CCA Posts from Hillesden Thread

Could it be argued that, if the DN is invalid, & the debt is sold (assigned), the debtor has been unlawfully deprived of rights under s129 (ie to apply to court for a time order), as this right under the CCA is triggered by serving a valid DN?

That looked promising, until I re-read S129(1)(c)

[charitynjw]

Re: CCA Posts from Hillesden Thread

Could it be argued that, if the DN is invalid, & the debt is sold (assigned), the debtor has been unlawfully deprived of rights under s129 (ie to apply to court for a time order), as this right under the CCA is triggered by serving a valid DN?

Re: CCA Posts from Hillesden Thread

Let me quess you replied to a spam post?

Yes.

[Lord_Alcohol]

Re: CCA Posts from Hillesden Thread

I wonder then what the position is in respect of S89;

89: If before the date specified for that purpose [ie, the remedy of the breach] in the default notice the debtor or hirer takes the action specified under section 88(1)(b) or (c) the breach shall be treated as not having occurred.

Clearly, if the account is sold to a DCA or goods are repossessed, then there is no prospect at all of S89 being applicable. Could it then be argued that this is a fatal breach of contract (or non-performance of contract) which, by the creditor's mistake (and not the debtor's original breach), has ended the contract permanently? This must be a repudiatory breach on the part of the creditor, because it is the creditor that has decided to end the contract on his own terms whereas the debtor had merely not-performed his obligations but was entitled, under the regulations, to be given a statutory "last chance" (a DN) to remedy his mistake, an entitlement that was denied by the creditor (by design or not).

What happens next is still a mystery to me. The contract was regulated. The debtor breached but could not remedy (the DN was bad and so the creditor breached the regulations); the account was sold to a DCA meaning that S89 is forever denied to the debtor, effectively another breach of the regulations by the creditor.

This can only mean a repudiation by the creditor; he has made a decision to end the contract permanently on his own terms (he did not adhere to the regulations). PT argued that the debtor had already repudiated by failing to make the payments which caused a DN to be served, but this doesn't necessarily mean a repudiation (IMO) - it might just mean that the debtor has lost his job and is struggling to make ends meet (temporarily). For example, there must be instances since 1974 of DNs being served and satisfied and of the agreement continuing as before. To say that service of a DN implies a repudiation of the agreement by the debtor is also to say that no DN is ever satisfied and S89 has never been invoked. Which I think is nonesense.

Another way to look at this is to accept that the debtor repudiates by failing to make payments, after which a DN is served. But the DN enables the repudiation to be withdrawn. Satisfaction of the DN tells the creditor that the debtor withdraws his repudiation and requires that the agreement continues as before (S89).

But if the creditor repudiates there is no going back. It is a permanent termination of contract. The debtor has no means of serving a notice on the creditor advising him of his breach. The repudiation is final; the creditor is in breach of contract and the contract is ended.

The problem I have is understanding what options are open to either party when this happens. Do the liabilities disappear? Can the debtor seek compensation (eg, a reduction in liabilities) or does he have to wait for the creditor or DCA to make his life hell first (as we saw in Harrison)?

Bear in mind that no creditor or DCA is ever going to hold up his hands and admit his mistake and try and reach an amicable and reasonable compromise; he will inevitably embark on a program of recovery activity that will amost certainly involve telephone calls, threats of court proceedings, a letter stating that no further correspondence will be entered into, and so on.

Where a credit card agreement is ended in this way but the debtor sees that he has paid more in than taken out, can he demand that the contract be properly rescinded and that he is paid the difference?

If the agreement is a loan, can the debtor demand that a level of compensation (which is a function of the effort he has put in to sort the problem out, the amount of aggravated recovery action persued by the creditor, and the adverse data recorded on the debtor's credit file) is subtracted from the balance and the remainder repaid over a term no more onerous than before?

If the account is assigned to a DCA, on what basis should the balance (if any) be repaid?

[teaboy2]

Re: CCA Posts from Hillesden Thread

Just to throw another worm into the can.

I know of no ruling, law or section of any Act that prevents a creditor selling an account whether it is 'live', dead or subject of a Default Notice (valid or invalid - remedied or not remedied).

You confusing the issue. Yes they can sell an account at any time to another creditor where who takes over the running of the account and the debtor is not prejudiced by the sale e.g. can still use the card as if nothing had happened.

Though in DN cases, they are not permitted to sell in view of termination (which is in all honesty the only reason why they sell in DN cases), until a VALID DN has been issued and the date for remedy has passed without remedy. Section 88(2) is clear on that the creditor shall not take any action under section 87 (1) until a valid DN and the full 14 days have passed.

[basa48]

Re: CCA Posts from Hillesden Thread

Just to throw another worm into the can.

I know of no ruling, law or section of any Act that prevents a creditor selling an account whether it is 'live', dead or subject of a Default Notice (valid or invalid - remedied or not remedied).

[teaboy2]

Re: CCA Posts from Hillesden Thread

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. - True thats the same for all valid DN but if the creditor sells the account prior to the effective date of remedy then they have done so when they are not entitled too, as such the DN becomes ineffective as the remedy date is no longer valid due to them taking action prior to the full stutory 14 days allowed for the debtor to remedy. As you said the benefits of section 89 are removed form the debtor when the account is sold, therefore if sold prior to the remedy date the debtor has therefore been denied his statutory right for the breach to have been deemed as not having occured. Not to mention section 87 denies the creditor the right to sell/terminate prior to the remedy date on a valid DN.

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. - But your forgetting about the damage done to credit files, and the effect it has on the debtors ability to gain credit, that also counts as actual damages that are a direct result of the unlawful termination of the agreement and the inaccurate (and libellous) registering of a Default to file. Which they are not allowed to do when the DN is invalid.

Moreover, S170 removes the concept of sanctions against a lender for any breach. Section 170 is regarding enforcement of the consumer credit act 1974 istself by the authorities (OFT), and not the enforcement of the agreements or breaches of agreements regulated by the act, or breaches of the act that is a result of a breach of an individual agreement by the creditor. Therefore Section 170 appiles to OFT and how the enforce the act, when a creditor breaches it as made clear by section 161. If section 170 had applied then the following case would not have resulted in a £20,000 debt being wiped out by the judge - Harrison V Link Financial Limited (http://www.bailii.org/ew/cases/EWHC/...e/2011/B3.html)

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. I agree damages should apply, and whilst the account is stilled owned by the creditor the invalid DN means the termination is nullified and therefore the account is not deemed terminated. However once they sell the account, then it's a different kettle of fish and the account has clearly been terminated and agreement ceases to exist between debtor and creditor upon the sale of the account. They simply can not buy back the account and reinstate without the debtors consent, as though the sale had never occured, because legally the sale did occur.

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. Yes, but he failed to elaborate on whether he was referring to accounts that have not been sold off the back of the DN or accounts that had been sold. If it has been sold the creditor no longer has any rights under the act to issue the debtor with a valid DN as the agreement regulated by the act no longer exist between the debtor or the creditor.

Just my view of course ...

I actually ment to say "they can not issue a valid DN when the account has been sold". Have edited my post that you qouted to correct it.

I think the key issue here is not about termination of the back of an invalid DN whilst the account remains with the creditor but about the sale of the account of the back of a invalid DN. As such a sale means the agreement no longer exists between the creditor and debtor and the creditor no longer holds any rights under said agreement as a result of selling the account to a 3rd party. Off course you then have the 3rd parties rights as well. Yes its a whole can of worms, but it is not one we should ignore just because it may seem a difficult one to find an answer or effective legal argument too, that favours the consumer.

[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 ...

[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.

[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 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

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

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.

[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??