Re: aski - Natwest
do you have anything in writing regarding the guarantees of £14 and the further £19k ?
How much are the actual charges and interest charged on the charges that you have counterclaimed for ?
is the claim for damages £16k ?
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Re: aski - Natwest
PARTICULARS OF DEFENCE - Dated 19 December 2008
made in the absence of overdue information from the Claimant demanded in two Court Orders, a Part 18 Requests for Information and Subject Access Request
1 I, XXXXXXXXXX am the defendant in this action and make the following statement as my defence and counterclaim to the re-amended particulars of a Claim started by National Westminster Bank Plc (the "Claimant") on 25 January 2007.
2 I owned and directed XXXXXXXXXX (the "Company").
3 I dispute the entire Claim of £28,551 as it results from unarranged overdraft fees erroneously charged by the Claimant to the Company and disproportionate to the Claimant’s costs, and interest applied at a disputed and excessive APR of 33%.
4 The Claimant’s amended particulars of claim are vague and are not sufficiently particularised in accordance with CPR part 16 and Practice Direction 16.
4.1 The entire Claim of £28,551 is made of unarranged overdraft charges and interest, yet even after repeated requests the Claimant has not provided a full statement of account.
4.2 But for the disputed bank charges and interest the Claimant would have owed the Company £442, which already accounts for contractual bank charges of £930, without which the Claimant would have owed the Company £1,372.
4.3 The Claimant does not provide any contracts used as its basis for making unarranged overdraft charges and interest charges, even when asked to by Court Order on two separate occasions.
4.4 The Claimant does not provide the calculation of each interest charged to the account.
5 Further to this case and in an attempt to ascertain the precise grounds the Claimant is bringing this action and to allow me to prepare my defence and counterclaim, I requested on 9 April 2008 vital information from the Claimant. I repeated this on 16 December 2008 as a Part 18 Request for Information:
5.1 A complete set of statements held in my name or that of XXXXXXXXX (the “Company”) listing the date, value and nature of all transactions including;
5.1.1 A list of all Cheque Return Fees with the amount and date of the charge, and cheque number and value to which they relate.
5.1.2 A list of all Excess Borrowing Charges with the amount and date of the charge.
5.1.3 A list of all interest charges including method by which each charge was calculated, with rate, principal and number of days.
5.2 Full copies of all contracts which [you] believe exist or have existed between myself or the Company and [your] organisation, including true copies of any documents [you] hold in support of the same.
5.3 Copies of all documents including contacts or invoices, notices, letters, emails or computer records containing information, or any records which pertain to me or the Company, this includes transcripts of all telephone conversations recorded and any notes made in relation to telephone conversations by the Claimant or agent.
5.4 Full copies or transcripts of any correspondence in postal, email or any other format which [you] have entered into with any individual, organisation or third party which contains information which pertain to me or the Company, including any information passed to a credit checking agency.
5.5 A breakdown of “the extra administrative work” stated as being be the basis of the return cheque fees found on the charge notice; “As dealing with unpaid cheques means extra administrative work, I have charge a fee of £30 to your account to cover these costs.”
5.6 Similarly a breakdown of the extra administrative work used as the basis for charging the Company daily for unauthorised overdrafts.
5.7 The overdraft facility provided by the Claimant to the Company, its variation over time and correspondence to me or the Company with regards to changes in the level of overdraft facilities offered.
5.8 Any other documents [you] seek to rely on in court.
6 I have also asked for and paid for a Subject Access Request to find another way of obtaining information including a full statement of account.
7 Further to the above information request, District Judge Zimmels sitting at Lambeth County Court, also ordered that by consent "Permission to the Claimant to file and serve by 25th April 2008 amended particulars of claim to include a breakdown of the Claimant’s charges for administering Defendant’s unpaid cheques and the daily charge for unauthorised overdraft as well as details of the contract giving use to the contractual rate of interest claimed." This Court Order was repeated at the Direction Hearing in September 2008.
8 The Claimant has not yet provided any of the information requested in the Part 18 Request for Information, Subject Access Request or Court Orders.
8.1 All I have received in relation to my Part 18 Request for Information is an email stating, "statements attached for accounts 44099606, 80531741 and 80586082 as requested" and its attachment. On the attachment is a single figure of £11,620.43. The detail is insufficient and the amount does not equate to that being claimed.
8.2 The only response the Claimant has made to either of the Court Orders is a list of charges rather than a breakdown of the Claimant’s charges. Furthermore it has only listed charges made to the company after March 2001 the date the Claimant forced the Company out of business.
8.3 It has proven difficult to compose my defence and counterclaim without disclosure of all the above requested information, especially since I am a Litigant in Person in this case.
9 I respectfully request that the Claimant be ordered to disclose all the requested documentation and that the court grant me permission to amend this defence and counterclaim accordingly.
Guaranteed borrowings
10 £21,212 of the Claim results directly from unpaid cheques and the daily charge for unauthorised overdraft. I dispute the Claimant’s bank charge for excess borrowings as the Claimant incorrectly treated the Company’s account as over its limit and refused to honour certain cheques when borrowings were less than the total guaranteed.
11 On 4 May 2000 the Claimant entered into an agreement with me in person. The agreement was for the Claimant to provide the Company with a £14,000 overdraft facility in consideration for my guaranteeing the Company’s liabilities up to £14,000. The clear agreement with the Claimant and the sole reason for me agreeing to the guarantee was in consideration for the Claimant providing the Company with total banking facilities equivalent to the total guaranteed and for the duration of the guarantee. In practice the Claimant provided me with a facility that was 35% greater than my guarantee. That is until I agreed to increase my guarantee to £33,000.
12 On the 24 October when the Company's bank balance was nearly £20,000 the Claimant persuaded the Company to take out a loan for £19,000. In addition I persuaded the Claimant to increase the banking facility to £33,000 as the Company had just won a contract worth roughly £20,000 profit and needed finance to pay contractors in advance of receiving income. The increased banking facility was in consideration for a second personal guarantee of £19,000. Increasing the borrowing facility was the sole reason for me agreeing to the personal guarantee.
13 With a clear understanding that the £33,000 borrowing facility was in place I entered into various contracts and paid some suppliers by cheque. However within a week and without written notice the Claimant refused to pay these cheques, even though the overdraft account was less than £1,000. The Claimant refused to honour the borrowings agreement and I was forced to find alternative and a more expensive means of completing our £25,000 contract.
Interest
14 £25,370 of the Claim is for interest charged at the rate of 33% APR. This includes £17,589 interest which results directly from the disputed excess borrowing charges.
15 I dispute the basis of charging interest as it is unclear and inconsistent with agreements and communications. The original Claim made in January 2007 was for £12,604 resulting from an overdraft interest rate of Base plus 6.5%. In its latest Claim the Claimant has tripled the interest charged to £25,140 by escalating the interest rate to an APR of 33% and backdating it.
Excessive fees for unpaid cheques and administering an unauthorised overdraft
16 £1,942 of the Claim, or £11,878 after interest, was the Claimant’s charge for it not paying about 30 cheques. The Claimant charged the Company £30 each time it refused to pay each cheque. The notice sent out with each charge makes it clear the Claimant's basis; "As dealing with unpaid cheques means extra administrative work, I have charged a fee of £30 to your account to cover these costs." I dispute these charges and have refused to pay them as I do not believe that the account was over its limit and don't believe the charge accurately represent the cost of the Claimant’s extra administrative work. The Claimant has refused to justify its charge even after I have repeatedly asked it to.
17 In the absence of the Claimant’s breakdown of the charge for an unpaid cheque I have used my skill and experience as someone who qualified as a Chartered Accountant with the Institute of Chartered Accountants in England and Wales, who worked for PriceWaterhouseCoopers and has audited a financial institution to estimate the charge. My estimate of the actual cost to the Claimant is £1 per notice calculated as follows:
Breakdown of extra administrative work applicable to each unpaid cheque notice
Average of 1 minute for account manager to consider balance and sign notice £0.50
(Cost based on total cost of manager and related overheads of £30 per hour)
Production of computerised notice, processing and sending £0.25
Stamp £0.25
Total extra administrative work per unpaid cheque notice £1.00
18 This estimated breakdown of the charge of £1.00 is for the extra administrative work required to consider the balance and sign each notice. There is no obvious extra administrative work that results from more than one cheque being notified as unpaid on the same notice. Thus the extra administrative work suffered by the bank for not paying two cheques would still be £1, and not two times the charge as the Claimant charges.
19 For instance on 4 September 2000 the Claimant sent two separate notices to the Company. The Claimant specified the charge on one notice was £82.50 for unpaid cheque numbers; 162, 171 and 172. The charge on the other notice was £55 once again for unpaid cheque numbers; 162 and 172. As can be seen two of the cheques were "bounced" on both notices and were therefore both charged £55 each on the same day. The same two cheques "bounced" again on separate occasions. On both notices it clearly states that the fee is to cover “extra administrative work”.
20 At best sending two notices out on the same day for two identical cheques strongly suggests that very little administrative skill and time can be being applied, probably less than the 1 minute estimated above. Therefore £27.50 per bounced cheque cannot possibly be proportionate for the "extra administrative work" as is stated on the notice. Put another way the total charge of £137.50 on this day must buy sufficient administrative time and skill, to ensure that multiple notices are not sent out showing the same cheques bouncing more than once on the same day.
21 In another example a key cheque for £2,249 "bounced" on 1 March 2001 and then on another five separate occasions including two months later on 2 May 2001, costing a total of £180 plus interest thereon. As with most other occasions this cheque should have been paid as the account was within the overdraft facility limits and my guarantees of £14,000 more than covered the Company’s overdraft of £1,500 at that time.
22 It has been widely reported by the media, including the BBC that an employee at the Yorkshire Bank carried out an internal review and estimated the actual cost of administering unauthorised overdrafts was £2 each time the overdraft limit was exceeded.
23 The charge for unpaid cheques appears to be disproportionate to the cost. It would therefore appear that the charges and the interest thereon totalling £11,878 are unenforceable under common law.
24 £1,681 of the Claim, or £9,334 after interest, was the Claimant’s charge for administering the account during the year it treated it as over its overdraft limit. Again I dispute these charges and have refused to pay them as I do not believe that the account was over its limit and don't believe the charge accurately represent the cost of extra administrative work. The bank has refused to justify its charge even after I have repeatedly asked it to.
25 My estimate of the actual cost to the Claimant is 20p per day calculated as:
Breakdown of extra administrative work for an unauthorised overdraft
Average of 10 minutes for account manager each month £5.00
(Cost based on total cost of manager and related overheads of £30 per hour)
No additional computerised notices or stamps, as statement contains details £0.00
Total extra administrative work per month £5.00
Total extra administrative work per day £0.20
26 The Claimant’s charge for administering excess borrowings of £3.50 per day or about £100 per month appears to be disproportionate to the cost. It would therefore appear that the charges and interest thereon totalling £9,334 are unenforceable under common law.
27 As charges for unpaid cheques and administering an unauthorised overdraft are liquidated damages it has been established in Dunlop Pneumatic v New Garage [1915] AC 79 along with Murray v. Leisure play [2005] EWCA Civ 963 that they must not exceed the actual cost or remuneration involved in dealing with such. In the absence of any information to the contrary requested from the Claimant, I contend that the Claimant’s charges exceed the actual cost or remuneration involved in dealing with my unpaid cheques.
Counterclaim
28 I counterclaim for the entire Claim of £28,551 as it is made of disputed unarranged overdraft charges and interest.
29 Despite trading difficulties caused by the Claimant not honouring cheques, the Company made a profit and paid into the account held by the Claimant a net total of £16,065 in 2001, the Company’s last year of trading. Had it not been for the Claimant breaking its agreement to provide finance in consideration for the personal guarantees, and for the size of its cheque return and excess borrowing fees, the Company would have continued making an ever increasing profit providing me with a similar increasing annual income.
30 As a result of trading difficulties I spent 8 months between April 2001 and November 2001 inclusive collecting Company debt without being able to trade or otherwise generate an income for myself. It took me a further 4 months before I started working again. £16,000 represents the Company’s last year’s earnings. Arguably I would have earned more than this had the Company continued trading. By way of relevant example a competing UK based electronic publishing company, Magicalia Ltd, was sold for £13Million in June 2006 to Exponent Private Equity LLP.
31 I therefore counterclaim for £16,000 damages caused by the Claimant forcing the Company to fail;
31.1 By breaking the terms of its agreement to provide finance in consideration for my guarantees and by refusing to pay cheques within the limit of the guarantees.
31.2 And even without the agreed borrowing facility, the Company would have had sufficient funds to survive had it not been for the Claimant’s excessive charges for unarranged overdraft fees and interest thereon.
I COUNTER CLAIM
I I dispute the entire Claim of £28,551and therefore counterclaim for it.
II In addition I counterclaim £16,000 for damages as part compensation for loss of trade from 2001 caused by the Claimant breaking the terms of its agreement to provide on-going finance in consideration for my guarantees.
III Interest pursuant to Section 69 of the county Courts Act 1984 at the rate of 8% per annum from 2001 to payment both before and after judgement.
IV I also demand that the Claimant ensures that its Claim and my counterclaim do not effect my credit rating with any credit rating agency and that therefore my ability to set up accounts or request credit in the future from any bank or other financial institution is not prejudiced by events surround this Claim.
STATEMENT OF TRUTH
I believe the facts as stated in these Particulars of Defence and Counterclaim are true.
xxxxxxxxx
Dated 19 December 2008
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Re: aski - Natwest
Note the breakdown of the Claim;
The Bank owed the Company £442
The Bank tried to charge the company - then me....
Charges for bounced cheques -£1,942
Interest at 33% -£9,936
Charges for being over the limit -£1,681
Additional interest at 33% -£7,653
Interest incorrectly charged at 33% -£7,781
Total original claim -£28,551Leave a comment:
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Re: aski - Natwest
Amended Claim brought by NatWest along with draft order to strike out my defence etc, (although I have not defended this newly amended claim)
Dated 15 June 2009 received Saturday 20 June.
I xxxx, a solicitor at Shoosmiths ........ state as follows;
1. I am a Solicitor acting on behalf of the Claimant at the above address, I have care and conduct of this matter on behalf of the Claimant, under the supervision of my Principals. I make this Witness Statement believing the same to be true and accurate from information provided to me by the CMS Unsecured Defended Team. I believe that the information provided to me by the CMS Unsecured Defended Team is true and accurate.
2. Throughout this Witness Statement I refer to copy documents now shown to me in an Exhibit market CP1. Unless otherwise stated the contents of these documents are true and accurate.
3. I make this Statement in support of the Claimant's Application for Summary Judgement pursuant to CPR Part 24 and in opposition of the Defendant's applicant to strike out the claim.
The Claim
4. The Defendant signed a guarantee on 20th June 2000 guaranteeing to repay the debts of XXXXX ("the Company"). The guarantee was limited to the sum of £14,000 plus interest and costs since demand. A copy of the guarantee is attached at pages 1 to 6 of bundle CP1.
5. The Company held the following accounts:
........
The Defence
6. The Defendant's initial Defence stated that he did not personally hold the account with the Claimant. The Claimant has since amended its Particulars of Claim to make clear that it is pursuing monies due under a guarantee. It appears that the Defendant now accepts that the Company held this account.
7. The Defendant is now defending the Claim on the basis of bank charges that have applied.
8. The Defendant has also entered a counterclaim of the sum of £25,395 for bank charges plus £16,000 in damages which he states he lost as a result of the Claimant breaching the terms of the agreement. The Defendant then takes off the amount claimed by the Claimant and states that this Counterclaim is reduced to the sum of £12,844.
9. The Defendant is therefore asking the Court to set off the Bank Charges against the Claim and states that he should be awarded damages for the Claimant breaching the terms of the agreement.
Background of Proceedings
10. Proceedings were issued online through the County Court Bulk Centre on 29 January 2007.
11. The Defendant entered a Defence on 23 February 2007.
12. On 5 June the Court ordered that the Claimant clarify its claim by providing further information and/or amending the Claim Form. The Claimant filed and served amended Particulars of Claim on 25 October 2007.
13. The Claimant then made an application to lift the stay on proceedings and transfer the matter to the Defendant's local County Court on 19 December 2007. The Court ordered that a Directions Hearing take place on 10 April 2008. At the Directions Hearing the Court granted permission for the Claimant to file and serve the amended Particulars of Claim to include a breakdown of the Claimant's charges for administering the Defendant's unpaid cheques and the daily charge for unauthorised overdrafts as well a details of the contract giving use to the contractual rate of interest claimed. The Defendant was then [asked] to file and serve an amended Defence by 16 may 2008 with Allocation Questionnaire's to be filed by 31 May 2008.
14. The breakdown of charges was then files and served on 17 September 2008. There was a delay in responding to this as the Claimant had to order statement and documentation and this took some time to arrive. We agreed by Consent that the Defendant could file his amended Defence by 1 October 2008.
15. The Court ordered on 27 November 2008 that the Claimant's time for compliance of the Order sated 3 September 2008 be extended till 13 November 2008 and that the Defendant could file his Defence by 19 December 2008.
16. On 16 December 2008 the Defendant made a part 18 Request for Further Information stating that he would not be in a position to file his amended Defence until he received the response.
17. The Defendant then filed a Defence and Counterclaim on 19 December 2008.
18. The Defendant states that he disputes the bank charges applied were fair and also states that the Claimant has not provided any contract for its basis for making unarranged overdraft and interest charges.
19. A further directions hearing was scheduled for 28 January 2009.
20. The Court ordered the Claim be stayed pending the outcome of the OFT Litigation or upon the Claimant's application that the above mentioned litigation is not relevant to its claim.
21. The Court ordered that subject to paragraph 1, permission to either party to lift the stay or seek further directions.
22. The Court also ordered that the Claimant shall serve in writing a response to the Defendant by 28 February 2009 a method of calculation or the breakdown that give rise to the cheque return fees and the method of calculation for the excess borrowing. [MB the actual wording is "the method of calculation, or the break-down, that gives rise to "cheque return fees" being claimed in the sum of £30.00 per item" and similarly "the sums claimed against the defendant as "excess borrowing"].
The Claimant's Position
23. The Claimant is unable to provide any further breakdown in relation to charges other than what had already been supplied. This has been made clear to the Defendant. [NatWest have only provide a list of items to date, not the calculation or break-down of the £30 charge itself - the Judge became quite angry with NatWest's barrister sent to the January hearing for saying that a list of charges was sufficient, although the Judge accepted the original wording was not as clear as it could have been - that is why the Judge rephrased it and ordered NatWest to provide it by February - and why we are having our hearing on 7 July.]
24. The Claimant's claim is not affected by the OFT Test Litigation in relation to charges as the charges applied here are on the Company borrowing and not personal accounts which the OFT Test Case is looking to determine. I therefore ask that the stay on the proceedings be lifted.
25. The Defendant is not entitled to bring a counterclaim nor an argument of set off against the Claimant on behalf pf the Company. If the liquidator felt that it was the Claimant that caused the Company to go into liquidation then it would have been for the liquidator to bring a claim against the Claimant. The Defendant cannot bring this claim on behalf of the Company.
26. I therefore respectfully suggest that the Claimant be awarded summary judgement for the sum claimed plus interest and costs. In the alternative I ask that the Claimant be awarded judgement for the sum of £27,336.76 being the balance claimed minus the charges with the balance relating to the charges to go to trial.
Statement of Truth etc............
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Re: aski - Natwest
Just a little thing
you say they were claiming £28k and have taken off £1500 for the penalties incurred since March 2001 ?
So basically they have said ok fair enough 2001 terms charges are penalties and we'll refund them (ignoring interest paid on them etc) but we'll still claim the rest ?
Is that right or have i misunderstood your post ?Last edited by Amethyst; 27th June 2009, 10:47:AM.Leave a comment:
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Re: aski - Natwest
I hope these 'commentators' have actually read the 2001 business account conditions.
Its not, as I am sure you aware from Justice Smiths judgment, just the wording but the location and document and context the term is contained in.
I would think the fact they havent supplied the terms would mean the judge will be unable to take natwests word that they differ - and I would expect the Judge, if natwest do intend to go down that route, will order them to supply said terms in their bundle.
have you had a read of the barclays salford judgment information?Leave a comment:
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Re: aski - Natwest
Amethyst,Originally posted by Amethyst View Post
There is no material difference except that there is a monthly bank charge for business accounts, therefore there's no cross-subsidisation. However, that aside since before the OFT case started my defence has been that NatWest's notification of a charge for unpaid cheques (or invoice if you like) reads;
"As dealing with unpaid cheques means extra adminitrastive work, I have charged a fee of £30 to cover these costs".
It says to cover these costs. It does not say or suggest that the admin costs are less than £30 per cheque ala; the "charges cross subsidise other parts of banking" stated by Jonathan Sumption QC in the House of Lords (OFT v Banks June 09).Last edited by askl; 27th June 2009, 13:56:PM.Leave a comment:
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Re: aski - Natwest
Thanks everyone especially - NatWestStaffMember - you are a genious! Resolved a riddle.
As you can tell I no lawyer.
In the last paragraph to its updated particulars received this week NatWest has included the following;
"I therefore respectfully suggest that the Claimant be awarded summary judgement for the sum claimed plus interest and costs. In the alternative I ask that the Claimant be awarded judgement for the sum of £27,336.76 being the balance claimed minus the charges with the balance relating to the charges to go to trial."
Then there is a schedule listing charges since March 2001 totaling £1,151.55 (this is misses about £2k worth of charges prior to March 2001 for no apparent reason).
I have now worked out the £27,336.76 is arrived at taking the original claim of £28,551.56 - £1,151.55 and - a spurious £63.25.
NB their claim is entirely made up of bank charges and interest.
So;
a) They have only included penalties since March 2001 (is that because the case started in Feb 2007 - therefore 6 years - again strange as they are claiming pre-March 2001 penalties from me).
b) They are not taking off the interest they have charged on the penalties themselves - approximately £10k on the above £1,151.55 penalties.
I will try to type out the new Claim today, it's only three pages long - but I'm no typist.Leave a comment:
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Re: aski - Natwest
That is why I can't work out why NatWest have asked for the claim to be lifted. Banks' do not tend to want to do this unless they have a chance of success. Could they be willing to reduce the amount being claimed by accepting that the charges were unlawful? And I hope the schedule of charges are absolutely 100% accurate or they may look at the minutiae of the case.Leave a comment:
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Re: aski - Natwest
Natwest hoping they can do same as Barclays using the read over from the test case judgement and get the case struck out (or in this case summary judgment in their favour) as having no merit.
Not sure what their thinking is on the 2001 part of the Judgment but I havent looked at the similarties or differences between 2001 personal current account terms and 2001 business account terms for natwest.
the wording and layout etc would need to be materially the same and not the same as later personal account conditions which were found incapable of being penal.
I presume askl has looked at these indepth already probably a post with both to compare would be of interest.Leave a comment:
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Re: aski - Natwest
I don't get why NatWest are seeking that the stay be lifted, I can see the judge perhaps at his own volition but not the bank. That is why I have queried the case law.Leave a comment:
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Re: aski - Natwest
I guaranteed the banking facility for a Company in 2000.
In 2000/ 01 the bank did not honour this guarantee,
I will await your particulars as I'm not quote understanding of the circumstances but it would appear this is the crux of the case, the penalties being 2001 and under the only set of terms the judge in the high court caid could possibly be capable of being penal, and the refusal of natwest to disclose costs on order - all sounds favourable really doesnt it.
look forward to seeing more tmw.
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Re: aski - Natwest
If it's not in the POC now then we could be in real trouble....Leave a comment:
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