askl - Natwest

[askl]

Re: askl - Natwest

Hi, the hearing has been put back to 15 January 2010.............

[askl]

Re: askl - Natwest

Amethyst,

Hi I like your seasonal icon!

I need to start preparing my case ahead of my hearing on 15th January. Would you or another member of the team be around for suggestions?

The hearing is to strike out NatWest's Claim for failure to provide their breakdown of the costs for each bank charge.
NatWest's request will be heard together with mine;
1) To lift the stay of proceedings "because the case is not affected by the OFT Test case in relation to charges",
2) Summary judgement against me "because the Defendant has no real prospects of successfully defending this claim",

NB NatWest requested a Witness Statement from (I think it was 10 days before the hearing).
------------------------------- merged -------------------------------

I don't agree with your claim for damages as I have said previously. I would pull out the counterclaim and continue with defending the charges.

How do I do this?

[Amethyst]

Re: askl - Natwest

Hi Askl, will have a look back over everything after school etc is sorted this morning.

1) is out anyway
2) is the tricky one which we need to deal with.

talk in a bit tho xx

[Amethyst]

Re: askl - Natwest

Okay the hearing is

a) to look at your request to strike out the claim because Natwest failed to comply with the courts order to provide a breakdown of costs

The read across from the test case, which needs to be taken into account as we know they have successfully done this in many other cases on the penalty charges judgment, will now say the charges are part of the price for the overall package of services (as per Lord Philips), not penal (as per Justice Smith) and thus they do not need to provide a breakdown of costs as it is irrelevant. (not saying thats correct just what they will likely argue) This is different for the later 01-03 charges - I thought they had taken £1800 off the account for the 2001-2003 charges ? So need to double check that part as those are the charges you can legitimately fight under common law, and they will have to provide breakdown of costs for - so really have to know exactly what the situation is with those ?



b) to look at their request to lift the stay as the OFT Test case doesnt relate

Well as it doesnt relate to anything at the moment. Do you want it to continue being stayed, see what the OFT are going to do (although we should know well before this needs to go in) - other arguments such as misrepresentation etc WILL apply to business accounts, but of course the UTCCR doesn't.

c) to look at their request for summary judgment against you as you have no reasonable prospect of defending the claim

Thats the biggie and I'll go back through the thread in a while and sort out what you can/can't use, and look again at this counterclaim.

Have you had anything else from Natwest or Court between times ?

[askl]

Re: askl - Natwest

Hi, thanks for taking a look.

So if I understand you correctly you are saying Lord Philips overturned Andrew Smiths conclusions about NatWest 2001 charges being penalties - even though NatWest never appealed this.

So we are left with misrepresentation argument - presumably helped by the common understanding that the price paid for a business account was the account charge and not the unauthorised borrowing fee.

That said I think there is a defence against a read across as the Supreme Court was looking at UTCCR 6(2) and discusses free if in credit which is very different to a business account.

Nothing new from NatWest or Courts.

[gaz2006]

Re: askl - Natwest

Hi, thanks for taking a look.

So if I understand you correctly you are saying Lord Philips overturned Andrew Smiths conclusions about NatWest 2001 charges being penalties - even though NatWest never appealed this.

So we are left with misrepresentation argument - presumably helped by the common understanding that the price paid for a business account was the account charge and not the unauthorised borrowing fee.

That said I think there is a defence against a read across as the Supreme Court was looking at UTCCR 6(2) and discusses free if in credit which is very different to a business account.

Nothing new from NatWest or Courts.

Did he overturn Nat Wests charges being penal he ruled that OFt couldnt go down one route did it specifical mention Nat Wests charges as being or not being penal ? Gaz

[Kafka]

Re: askl - Natwest

The Supreme Court did not address the issue of penalties considered in the test case because the OFT did not appeal the test case ruling that the bank charges did not class as penalties (though penal in nature).

Regarding the NatWest ones, Smith stated that the T&Cs examined were 'not incapable of being penal', so basically it wasn't clear to him and therefore there could still be a case to argue that they were penalties. The Supreme Court did not revisit this, so Smith's judgment still stands.

[Budgie]

Re: askl - Natwest

The Supreme Court did not address the issue of penalties considered in the test case because the OFT did not appeal the test case ruling that the bank charges did not class as penalties (though penal in nature).

Regarding the NatWest ones, Smith stated that the T&Cs examined were 'not incapable of being penal', so basically it wasn't clear to him and therefore there could still be a case to argue that they were penalties. The Supreme Court did not revisit this, so Smith's judgment still stands.

Re so basically it wasn't clear to him

Neither the banks nor the OFT actually argued as to whether the terms were actually penal.
They only argued as to whether the terms were not incapable or not capable of being penal. nSo it is irrelevant as to whether it was clear to Smith or not as to whether the term he described as being "not incapable" was actually penal or not.

The term in question is not incapable of being penal so the decision as to whether it is actually penal or not has yet to be argued.

[askl]

Re: askl - Natwest

I had understood the test for whether it was penal was simply whether the cost exceeded the charge. At least that is what was being suggested by the media such as the BBC etc. at the time.

[askl]

Re: askl - Natwest

Here is my draft statement to be finanlised by Thursday;

SECOND WITNESS STATEMENT OF


I will state as follows:-

• I am the Defendant at the above address and I make this Witness Statement believing the information is true and accurate.

• Throughout this Witness Statement I refer to copy documents now in an Exhibit marked DP2. Unless otherwise stated the contents of these documents are true and accurate.

• I make this Statement further to the Claimant’s Second Witness Statement of 4th August 2009 following the order of District Judge Jacey dated 7th July 2009.

Hearing to strike out Claim

• District Judge Jacey's orders on 7th July '09 that “Unless the Claimant do by 4.00pm on Tuesday 04 August 2009 file and serve a Witness Statement explaining the method of calculation of all individual charges made herein, the Claim for such charges and all interest there-on do stand struck out.” Although this is the fifth such order from four District Judges over one year, the Claimant has not explained the method of calculation. Therefore the Defendant asks that the Claim to be struck out as the District Judge orders.

• The Claimant’s Second Witness Statement fails to explain the method of calculation of charges and so does not comply with the Court Order. Instead in paragraph 19. it states “the charges that applied are standard charges set by the bank”. It then attaches Terms and Conditions dated August 2002 and a list of Tariffs dated December 2008, neither of these explains the method of calculation of the charges. Furthermore the charges in dispute occurred before the date of these documents therefore they have no relevance.

• I first disputed the charges in November 2000 when the Company’s bank account was well within the credit banking facilities provided in consideration for my £32,000 guarantee. I disputed the existence of the charges, but not their size as at that time I believed the bank when it said in its notices to me that “As dealing with unpaid cheques means extra administrative work, I have charged a fee of £30 to your account to cover these costs”.

• It has only within the past few years come to light that NatWest materially misrepresented the costs of the “extra administrative work” in its notices – [see examples on where a single cheque was charged £30 six times for over 3 months]. This misrepresentation and the unlawfulness of these charges was not known about at the time the charges were first disputed and was not known for many years after the company ceased existence.

• In Claim number: 7QZI 5766 Kevin Fraser v Citifinancial Europe Plc, see attachment, the bank provides the cost and basis of calculation. If this bank can provide the method of calculation, so can the Claimant.

• The Claimant reduced its personal account charges for bouncing cheques from £35 to £5 in October 2009 see attachment. This suggests that the extra administrative cost of referring a cheque is considerably less than the £30 charged in 2001.

• It was established in Dunlop Pneumatic v New Garage [1915]AC 79 along with Murray v. Leisure Play [2005] EWCA Civ 963. If the charges claimed exceed the cost to the Claimant they are penalties and unenforceable under common law.

• The Claimant’s Second Witness Statement omits the balance on Account 60-50-58 44099622 which continues to have £5.52 in credit.

• The Claimant’s Second Witness Statement omits the Account 60-50-06 80550193 which was in credit by £55, when the company ceased to exist. The Claimant’s Second Witness Statement also omits all its charges to this account of £83.

• The Claimant’s Second Witness Statement also contains errors and omissions in its list of charges to Account 60-50-06 80531741 as follows;
  • 27 Jun '00 £27.50
  • 6 Mar '01 £30.00

• The Claimant’s Second Witness Statement contains a material error in the calculation of interest on the charges as it fails to account for accumulated interest. In its calculation it has simply divided 29.5% by 365 days in the year, and then applied this over 1370 days. In practice the bank charges interest monthly based on the previous month’s balance including interest. Thus the first month was £3.08 as the bank rightly calculates, but the second month’s interest charge was £3.16 per day. The daily interest increased by December 2003 to almost £9 per day.

• The corrected total of charges and interest thereon exceeds the balance of the corrected claim at 5th December 2003 by xxxx see attachment xxx.

Defence of the Claim

• The re-amended claim of £28,551.56 dated 28 February 2008 remains unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.

• The original claim of £12,637.40 dated 25 January 2007 remains unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.

• The first demand for payment on 27th October 2003 [see exhibit] of £12,122.15 is unsupported by evidence submitted in the Claimant’s First and Second Witness Statements.

• The only balance supported in either of the Claim or Witness Statements is the £11,620.43 on 5th December 2003, in paragraph 26 to the Second Witness Statement, which is said to have been the balance at the time the guarantee was called up. This balance is supported by a bank statement for one account. However this amount fails to take account of the credit balances on Account 60-50-58 44099622 and Account 60-50-06 80550193.

• The two guarantees of £14,000 and £19,000 see exhibit xxxx both state that the Guarantee is in consideration for the bank providing time credit banking facilities. At the time of signing the guarantees this was understood by both parties to mean that the Claimant would provide the Company with a banking facility equivalent to the guarantee for the duration of the guarantee. Guarantees sate in paragraph 4 “the guarantee shall be additional to any other guarantee or security now or hererafter held in respect of the liabilities hereby secured.”

• If it had been the intention of either the Claimant or myself to limit the credit facility to £19,000 we would have mutually agreed to destroy the £14,000 guarantee dated 20th June 2000. The Claim and Claimant’s Witness Statements remain silent on my second guarantee to the bank of £19,000 see exhibit xxx and its corresponding credit banking facility.

• I entered into sales and purchase agreements on behalf of my company on the basis of my guarantees in the certain knowledge that a credit bank facility was in place. However within a few days of me signing the second guarantee on 24th October 2000, Company cheques started bouncing. I entered into dispute with the bank in November 2000 when I tried to force the bank to honour their side of the agreement.

• The demand for payment under the guarantees in exhibit x demonstrates that the bank was aware of both guarantees.

• The penalty charges to this account were exceptionally high and punitive. 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”.

• 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 £5 currently being charged. 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.

• 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 guarantee of £33,000 more than covered the Company’s overdraft of £1,500 at that time.

• Because of these penalties and the bank refusal to provide the agreed credit finance the Company was forced to ceased trading in March 2001 and collected all remaining debts up to December 2001. There were no payments made after trading ceased.

• All bank borrowings were paid off except for the disputed bank charges and interest thereon. The amount paid to the bank exceeded the amount paid out of the bank by £1,351.05 see exhibit xxxx.

• As established in 12 above the Claim is for Charges and interest thereon, interest on charges being the greater figure in xxxx, yet interest was incorrectly applied at 29.5%.

• In point 7. to its re-amended Claim the Claimant states Account 80531741 "From September 2000 11.00% PA up to £19,000.000 borrowing and then 29.5% PA in excess of this limit." Yet the bank incorrectly treated the account as over its £19,000 overdraft limit and charged excess interest. By example see page xxxx where bank charged £2,827.26 interest for the year to 31 September 2002 on a balance at 31 September 2001 of £8,715.34. That is an interest rate in excess of 32% PA.

• The Claim includes 29.5% interest to judgement. This excessive rate is not justified and the delays up until August 2009 have all been caused by the Claimant asking to stay the proceedings pending the outcome of the OFT case, which it now concedes is irrelevant as this is a business account.

• The bank has rallied undertaken a campaign of intimidation against me and my family, from

• In the event that the court is persuaded by the Claimant that it did not need to provide credit banking facilities in exchange for my guarantee and that the charges it made were fair and reasonable, then the Defendant asks for judgment for £3,943.91 being the sum of bank charges that constitute the entire Claim. I ask that no interest be applied as I have held £4,000 in a Current Account, or that if interest need be applied that it is not at the 29.5% rate requested by the Claimant but at the statutory rate of 8%.

Counterclaim

• I counterclaim for loss of my personal earnings of £16,000 for a year from 2001. A schedule of my income in 2002 is on page 9 to this witness statement.

• Furthermore consideration should be given for the stress caused by the bank bouncing cheques when a facility was in place, pursuing me for unlawful penalty fees which it increased at 32.4% per annum and using a debt collection agency which contacted friends, neighbours and my parents. And lastly for sending me personal data for another customer living a short distance from my parents, see page to this statement for which I concluded that another customer must be in possession of the personal data that the claimant meant to send me.

Statement of Truth
I believe the facts as stated in these Particulars of Defence and Counterclaim are true.

[Amethyst]

Re: askl - Natwest

In Claim number: 7QZI 5766 Kevin Fraser v Citifinancial Europe Plc, see attachment, the bank provides the cost and basis of calculation. If this bank can provide the method of calculation, so can the Claimant.

Is that broken down? or the generic £13.46 ? Nice touch tho

• In the event that the court is persuaded by the Claimant that it did not need to provide credit banking facilities in exchange for my guarantee and that the charges it made were fair and reasonable, then the Defendant asks for judgment for £3,943.91 being the sum of bank charges that constitute the entire Claim. I ask that no interest be applied as I have held £4,000 in a Current Account, or that if interest need be applied that it is not at the 29.5% rate requested by the Claimant but at the statutory rate of 8%.

Counterclaim

• I counterclaim for loss of my personal earnings of £16,000 for a year from 2001. A schedule of my income in 2002 is on page 9 to this witness statement.

• Furthermore consideration should be given for the stress caused by the bank bouncing cheques when a facility was in place, pursuing me for unlawful penalty fees which it increased at 32.4% per annum and using a debt collection agency which contacted friends, neighbours and my parents. And lastly for sending me personal data for another customer living a short distance from my parents, see page to this statement for which I concluded that another customer must be in possession of the personal data that the claimant meant to send me.

Think this needs some more work. It seems a bit random to me. Will have a go at it if you like?

The rest though is great. Its not overly legal and spells out your position quite clearly IMO. You have shown the charges were imposed unfairly and why and not solely relied on them being found to be penal.

[askl]

Re: askl - Natwest

In Claim number: 7QZI 5766 Kevin Fraser v Citifinancial Europe Plc, see attachment, the bank provides the cost and basis of calculation. If this bank can provide the method of calculation, so can the Claimant.

Is that broken down? or the generic £13.46 ? Nice touch tho

http://www.consumeractiongroup.co.uk...tml#post815161

CITIFINANCIAL DEFAULT FEE COST JUSTIFICATION
Basis of calculation:

sum of (relevant direct costs + relevant indirect costs)
sum of (default fees levied)
Definitions:
Relevant direct costs: All direct costs that arose due to the failure of a customer to pay credit card debt in line with terms and conditions, including but not limited to staff that have contact with the customer to collect the debt, staff involved in managing accounts to identify and minimise Citifinancial’s exposure to loss following breach, together with any other costs that arise due to support this activity.
Relevant indirect costs: All necessary business overhead to support the relevant direct costs, including local management costs, correspondence and communication costs, facility costs and relevant IT costs for development, support and maintenance of relevant systems. Where necessary, indirect costs have been allocated to fees on the basis of a ratio of the number of people involved directly as a result of breach to the total people in the organisation.
Default fees levied: The total number of fees levied during the relevant period.
Measurement period: Calculated on the basis of actual and forecast expense for 2006, together with actual and expected frequency of fee
billing for 2006.
Result : Z(relevant direct costs + relevant indirect costs) = £12.88


This comes via Varagian's £13.46
http://www.penaltychargesforum.co.uk...highlight=Citi
but better as it's earlier and I have the case details, although I don't have original documents as Varagian's provided.

Think this needs some more work. It seems a bit random to me. Will have a go at it if you like?

The rest though is great. Its not overly legal and spells out your position quite clearly IMO. You have shown the charges were imposed unfairly and why and not solely relied on them being found to be penal.

I know you and others think the counterclaim is too remote. The reality of me guaranteeing £33,000 but providing a fraction of this, meant I was left with no security to move to another bank and gain working capital there. Therefore the bank breaking its contract damanged my source of income, and left me unemployed for a year.....


Please please have a go at it. Thanks for your and everyones input.

[Amethyst]

Re: askl - Natwest

Just need to work out what you are saying first lol.

In the event that the court is persuaded by the Claimant that it did not need to provide credit banking facilities in exchange for my guarantee and that the charges it made were fair and reasonable, then the Defendant asks for judgment for £3,943.91 being the sum of bank charges that constitute the entire Claim.


The £3943.01 figure isnt mentioned anywhere else in the WS. Think you need to put a paragraph saying what that figure is.

I ask that no interest be applied as I have held £4,000 in a Current Account, or that if interest need be applied that it is not at the 29.5% rate requested by the Claimant but at the statutory rate of 8%.

Need to specifiy what interest you do not wish to be applied, ie interest claimed by the Claimants. Also why the £4000 in the current account is relevant ? Was it in the personal account at the time and could the bank have used their right of offset against it as opposed to putting more and more charges on you ?

[askl]

Re: askl - Natwest

Amethyst,

I hurried this.
In layman terms the scary bit is the 32% interest that the bank put on the charges during the time I was disputing them, not the actual charges themselves.
So what I'm trying to say is if the court thinks I'm wrong, so be it, but don't punish me for an honest disagreement with excessive interest. Even statutory interest at 8% brings the total to about £8k.



...
In the event that the court is persuaded by the Claimant that it did not contract to provide credit banking facilities in exchange for my guarantee and that the charges it made were fair and reasonable, then the Defendant asks for judgment for £3,943.91 being the sum of bank charges that constitute the entire Claim (exhibit xxx).

[askl]

Re: askl - Natwest

Hi I've been working on this bit;
The High Court on 21 January 2009 concluded that NatWest’s historic contract was unique amongst bank contracts in that it was capable of being penal. Specifically;
“You must not use your Card to go overdrawn on your Account unless we have previously agreed this with you”.
For example as can be seen on page 25 to the Claimant’s Second Witness Statement, on the 24 October 2000 the account stood at £657.42 when I understood that the bank had agreed to extend £19,000 additional credit finance in exchange for the £19,000 guarantee.
The card payment then went through on 30 October 2000 creating an overdraft. The bank broke the agreement to provide finance and instead it charged a penalty for what it considered a breach of its contract not to use the card to go overdrawn, see exhibit page 26.