HP termination under s.99 dispute. LEGAL OPINION REQUESTED

[craigybcheck23]

Is it possible for a creditor to insist that in order to exercvise my rights to VT under s.99 CCA74, i need to sign their own VT letter stating that i agree to be liable for any damages to the vehicle where liability for those damages is in dispute? It seems to me that the creditor is protected under s.100 (4)CCA74, in any event, and that they are attempting to place me under duress by insisting that in order to execute my s.99 termination i agree to be lilable for the repair costs. (The electrical box is gone) i dispute liability for this.

I am of the opinion that any damages dispute should be ancilliary to the matter of termination and may be challenged later and dealt with via ADR or legally. I want them to initiate my VT which they received on the 16th September. I even agreed to sign their own VT albeit i crossed out the paragraph relating to the clause for any repairs stating the matter was in dispute. They are refusing to accept this until i sign it accepting all liability for any repairs.

Is it technically legal for a creditor to insist that i agree to be liable for any damages prior to executing my s 99 VT which was received by them on the 16th September?

I would appreciate a legal opinion if anyone here is suitably qualified. I have tried FOS technical desk and they are unsure.There are no authorities on the matter as far as i am aware. I am a specialist debt adviser myself although im not in work and have no access to speciliast support services. I tried emailing Gough Square chambers for an opinion but they didnt respond.

Thanks in advance.

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

You are right, section 100(4) protects the creditor insofar as they can be compensated if the hirer is negligent in looking after the car whilst in his custody. Those types of letters I have seen are generally worded in a way to impose liability for all and any damage to the vehicle, irrespective of whether the damage occurred whilst it was in your possession. This is crucial for second hand cars where it may have had one or two previous owners and that you have negotiated the price based on any damage that the car has already sustained. It is unreasonable for you to be held accountable for damage which did not happen if it was as a result of any previous owner. If the car is brand new, you could still argue that you only need to take reasonable care and certain damage is inevitable especially as the car becomes more used with age.

Going back to your question, is it technically legal for the creditor to insist that you agree to be liable for damages before the termination of the agreement is accepted? The answer is no. The right to terminate under section 99 is indefeasible, and is not conditional or subject to any requirements except that you may terminate at any time during the course of the agreement providing your notice is given before the final payment becomes due. If the right to VT was subject to accepting all liability for damage to the vehicle then the CCA would have explicitly made this clear, but it does not.

Therefore once you give notice to terminate the agreement, it will end on the date you give in your letter, whether it is immediately or 14 days after or whenever. Once notice has been given, it cannot be revoked and you are stuck with your decision. If the creditor is trying to impose the obligation to sign the agreement before accepting the VT, it is contrary to section 173 of the CCA since there is no obligation in the first place. Even if you did sign it and they tried to rely on it, section 173 would kick in since you are only required to take reasonable care - the letter would impose additional liability beyond this.

To put it bluntly, the FOS are not very good in this area (my view) of law, particularly in relation to damages / excess mileage. However, you have a couple of options that are available to you.

Option 1
Engage in their formal complaints process, set out your complaint and also that they have insisted you must sign their paperwork before the VT is accepted. I would ask them to specifically state which section of the CCA imposes this obligation on you. More likely than not they will either ignore that point or say that it is policy or a requirement for you to do so.

Option 2
Provided that you have given notice and obtained proof of postage receipt (if post, or keep copy of email) and it could also be implied by the fact they have posted you VT paperwork, then assuming the agreement has now terminated as per your notice, treat the contract as having ended. You've suggested they have received the VT notice on 16 September so you might want to take a more aggressive stance by sending them a letter giving notice of your intention to sell if they don't collect the vehicle.

Third option would be to play ping pong correspondence, not recommended but that's up to you.

If you haven't already, I would suggest you read the link below which provides a guide to VT. The second link leads you to template VT letters where the notice of intention to sell the goods is at the very bottom.

http://www.legalbeagles.info/forums/...on-Your-rights

http://www.legalbeagles.info/forums/...tter-Templates

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Ah thanks. I had that opinion, i just needed someone else to confirm it. I am looking into making an application for a delaration under s.142, but i think this only applies if they attempt to enforce the agreement, or not sure if i could make an application under s.140 of the 2006 act under the unfair credit provisions. I want to force them to take possession of the vehicle. Its a 10 year old car btw i have paid exactly 50% of the total amount due under the agreement and have no arrears. This is common ground.

FOS technical said that they were unsure if it was unreasonable for them to demand i VT with the "all damages clause" included. I understand what you are saying about selling the vehicle route if they fail to act but....sigh...what a faff on. I want a declaration that the agreement is terminated!!!

I am pushing the complaints procedure. I even said i would sign their VT with the clause amended to state that i will accept liability for any damages (except for the electrics box) subject to the outcome of ADR or legal proceedings.

They have just responded.... i will see what theyve said now. I really appreciate that opinion. thanks a bunch.

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

S.142 not applicable, since it refers to an enforcement order. 'enforcement order' is defined as:

an order under section 65(1), 105(7)(a) or (b), 111(2) or 124(1) or (2)

You could perhaps use S.140 but it will cost you in fees, and perhaps costs if you are not successful. The cheaper and easier route would be the notice of intention to sell the car, usually that gives creditors a bit of a scare and they come to collect after that, but it is of course your choice.

If you want a declaration that it is terminated then you need to look at section 103 which relations to termination statements.

(1)

(1) If an individual (the “customer ”) serves on any person (the “trader ”) a notice—

(a)

(a) stating that—

(i)

(i) the customer was the debtor or hirer under a regulated agreement described in the notice, and the trader was the creditor or owner under the agreement, and

(ii)

(ii) the customer has discharged his indebtedness to the trader under the agreement, and

(iii)

(iii) the agreement has ceased to have any operation; and

(b)

(2) requiring the trader to give the customer a notice, signed by or on behalf of the trader, confirming that those statements are correct,
the trader shall, within the prescribed period after receiving the notice, either comply with it or serve on the customer a counter-notice stating that, as the case may be, he disputes the correctness of the notice or asserts that the customer is not indebted to him under the agreement.

(2)

(3) Where the trader disputes the correctness of the notice he shall give particulars of the way in which he alleges it to be wrong.

That way you can force their hand, they would have to declare that the agreement is terminated, or if they disagree they would have to explain why it is not terminated. They would sound pretty silly to say that the agreement is not terminated because you've not signed their VT letter!

The prescribed period for responding is 12 working days

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Awesome mate. I was not aware of this provision. Is it legally required that they provide a declaration to the effect that the agreement was terminated on the 16th Septembe, and what is the effect of non compliance within the prescribed period. Are there any templates for this? Im sure i could draft one but it would help to see a template. BTW they have just responded saying they cannot accept the VT unless i sign their own version with the carte blanche costs clause....

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

A breach of section 103 is actionable as a breach of statutory duty in that you could issue proceedings for an order to compel them to comply. This particular section is usually used where there is still outstanding information recorded on your credit report and you may have lost out on a particular deal with a good rate but was refused on the grounds of a finance agreement still in place. So the remedy is usually damages under this heading or breach of the data protection act.

There's no template I have seen, I've only done it myself once and didn't get a reply but then again it was resolved by the time the prescribed period expired so it wasn't necessary. I will have to check to see if I have the letter but its unlikely, though all you need to do is set out the description of the agreement, that you believe you have discharged your duty having paid 50% of the total amount payable and that the agreement is now terminated. Reuqest that they confirm this information by response and within 12 working days. You could add to remind them that this is a statutory duty purusant to s.103 and remind them any breach is actionable.

Who is the lender? Whichever way you go is a a bit of a faff and not going to be quick. The intention to sell the car in my view is a favourable one because it doesn't require you to spend any money issuing a claim, and if you do sell it and they object, then it is up to them to bring a claim for damages against you. As above, there is nothing within the legislation that says the right to terminate is subject to any other condition or provision whether in the contract or elsewhere in the CCA.

I'd love to hear them try and argue that in court!

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

I'd like to add that, if the creditor confirmed that you are no longer indebted and the agreement is terminated - it is binding on them.

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Thats great advice. I have issued a formal request for a notice under 103 asking for them to confirm the agreement was subject to VT as of the 16th September, and if that is in dispute to outline their reasons (s.103 (2)) as to how my notice was invalid.

I have also asked for the complaint to be escalated in a seperate email continuing the to and froing and stated that the issue of costs is ancilliary to the matter of VT and should be dealt with after taking back their goods.

The company in question is The Car Finance Co (2017) Ltd...

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Good luck, these smaller type businesses don't always understand the CCA properly and no matter how much you argue with them, they won't change their mind. I am always of the view of letting the other side do all of the legwork and make them run around as opposed to yourself.

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

yeah thats true. Theyre bloody annoying, I will change tactic if i cant get the deadlock. They have 8 weeks as well from the date i first initiated a complaint which was yesterday, and as you said and i discovered, maybe FOS is not the most appropriate solution to this yet.

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Ah Lord the saga continues... (BTW im acting on behalf of my brother in law- its not my agreement). They have again refused to even action the complaint until he signs their own VT with the damage costs clause. This is just wrong wrong wrong. They have 8 weeks to do this until the FOS can look at it as well, unless i can pursuade them to do it sooner. I was wondering if you had any experience with the FLA, as im wondering if i should raise the matter with them? This is purely about the matter of termination now.

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

No experience with the FLA direct as I've never really dealt with a situation like this. If they have stated in writing of their wilful refusal, then I would take as their final response and raise a complaint with the FOS. You could also raise it with the FLA since they are a member but I am not sure to what extent they would take any action - though if there is any code of practice and they are in breach of any of it, they will probably want to be made aware.

I agree it is a matter of termination, which has already been effected as a matter of law. Your brother in law is still in possession of their vehicle so the longer he is in possession he still has obligations to take reasonable care of it.

Personally, I don't like to beat around the bush but I admire you for going down the longest route possible. As already said, the cheapest and easiest route is to force their hand will be to put them on notice of his intention to sell the vehicle. That way, they would need to weigh up whether it is worth sticking to their guns, or allowing your brother in law to sell their own vehicle.

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Yea, i agree with you. My concern is ultimately having to defend this in Court and having to draft skeleton arguments and statements etc. Its been 6 years since i was last dealing with these things in Court and i am scared of possible costs impations - even though i am totally confident of the legal position i fear it could become very complicated and require barristers etc. They have referred the matter up the chain of command i have just been informed although they have reminded him he is still lilable for repayments!!!!For an agreement that wasa terminated on the 16th September....These idiots.

[R0b]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

That would be all part of the process if you decided to take them to court in the first place. There's always going to be a risk of having to go to court, what are you going to do if the FOS disagree with you? Court?

You've clearly tried doing things the nice way, it hasn't worked. The lender doesn't even seem to know what they are talking about themselves, no doubt you are talking to someone who is fairly low level in the company - you are going to get nowhere with them.

Section 99(1) is explicit and isn't difficult to understand, the central words in that provision are "at any time ... the debtor shall be entitled to terminate the agreement." Those words are not a legal term of art in which they require specialist and legal knowledge to understand their meaning. It does not say that the debtor must give 14 days notice, or that they must sign their documentation nor is any termination subject to the lender's acceptance of it - the words are plainly clear.

Your brother in law has two choices, go down the complaints route, spends a couple of months or longer battering correspondence back and forth, eventually getting somewhere or even worse nowhere all while he remains in possession of the car. Or he can exercise his legal rights in a much faster way, take the risk he may be threatened by court, or indeed taken to court which in my opinion, the lender would have a hopeless claim which would warrant a costs order for unreasonable conduct.

I am sorry if my response comes across as abrupt but, it is my opinion. Lawyers and debt specialists are perhaps considered as always risk averse, but the long game is not always beneficial or the best. Of course, try the nice approach at first but if that doesn't work, sometimes you need to step it up.

Any claim by you or them is likely to end up on the small claims track so costs are limited unless your conduct is unreasonable.

[craigybcheck23]

Re: HP termination under s.99 dispute. LEGAL OPINION REQUESTED

Now i have got them to deadlock it, just waiting for the official notice. I am going to test the matter with FOS entirely on the matter of termination. They are quoting sections of their T&Cs in relation to termination, (i.e. that he will be liable for costs to repair if he wishes to exercise his rights under s.99. I dont think these terms are enforceable however. My brief to the FOS will ask that they only consider the matter of whethere or not the agreement was terminated on the 16th September. It was correctly done however it contained a notification that he would not accept liabilty for the damage to the electrics, which was contrary to their T&Cs but not s.99.

I have noted your comments about FOS as regards matters of termination. I will have to set out the crux of the complaint clearly. and state that regrdless of their t&cs, the matter of damages is an implied term under s.100 (4) and that it cannot be dealt with until they are in control of the vehicle, and should not detract from the fact that the agreement was terminated correctly.

Any thoughts?