Once regulated - Always regulated?

[andrew1]

Hi, been away from here for a while but curious to know what anyone makes of this:

John Story of Story & Pallister v NatWest fame suggested to me that an Agreement which was a Regulated Agreement should remain regulated if absorbed into another loan by the use of s.82 CCA '74 particularly s82 (3).....I'd like to ask anyone legal on here what they think? ( No disrespect John, just covering my butt with lots of opinions)


In Johns case, his loans were all NatWest and the terms varied, but he still insists that a situation like mine should be the same.

I took a 2nd Charge Loan from a finance company for circa£60k - when I signed up for it the broker insisted I cleared any existing arrears or charges to any other finance company or Mtg.

I had arrears of 24k on my mtg ( don't ask!)
I had a 2nd Charge Regulated loan from GE for £14,500
and I got the cash balance of £22k

So the mtg arrears were paid by the new finance company and a transfer of funds went direct from the new loan company to them.

Same with the GE Loan.

The cash was sent by check to me.

I had a multiple agreement effectively but documented as an Unregulated loan.

The situation has already been to court and I have a pending appeal subject to the outcome of Heath v Southern Pacific being heard next week actually. The Recorder at my hearing said my agreement was unenforceable being a 3 part loan...but it was found for the claimant as the Heath case had been to appeal previously in January and failed so that stood as a higher precedent than mine.

That leaves me with an appeal of my own potentially and I wish to explore the s.82 angle as far as I can because on the face of it the agreement is with a different lender than GE so therefore how can the terms be varied?

John Story believes that this s.82 ensures that if the agreement was a regulated agreement then it cannot be absorbed into an unregulated one, but must remain regulated?

Now before I go on any longer, may I first drum up some initial responses to this point? This is s.82:

82.--(1) Where, under a power contained in a regulated agreement, the creditor or owner varies the agreement, the variation shall not take effect before notice of it is given to the debtor or hirer in the prescribed manner.

(2) Where an agreement (a modifying agreement) varies or supplements an earlier agreement, the modifying agreement shall for the purposes of this Act be treated as--

(a) revoking the earlier agreement, and

(b) containing provisions reproducing the combined effect of the two agreements, and obligations outstanding in relation to the earlier agreement shall accordingly be treated as outstanding instead in relation to the modifying agreement.

(3) If the earlier agreement is a regulated agreement but (apart from this subsection) the modifying agreement is not then, unless the modifying agreement is for running-account credit, it shall be treated as a regulated agreement.

(4) If the earlier agreement is a regulated agreement for running-account credit, and by the modifying agreement the creditor allows the credit limit to be exceeded but intends the excess to be merely temporary, Part V (except section 56) shall not apply to the modifying agreement.

(5) If--

(a) the earlier agreement is a cancellable agreement, and

(b) the modifying agreement is made within the period applicable under section 68 to the earlier agreement,then, whether or not the modifying agreement would, apart from this subsection, be a cancellable agreement, it shall be treated as a cancellable agreement in respect of which a notice may be served under section 68 not later than the end of the period applicable under that section to the earlier agreement.

(6) Except under subsection (5), a modifying agreement shall not be treated as a cancellable agreement.

(7) This section does not apply to a non-commercial agreement.

Let me just conclude with John Storys post and reasoning following a post I put to him OTR about monies coming from one's own purse actually making a difference: His words:

"If the debt was not repaid from the debtor's own purse" I got it from the OFT in the mid '90's whilst discussing the meaning of the Act's various regimes where agreements did not run their allotted course as per their original agreed terms - eg S 11(1)(c) with refinancing of existing agreements, & S 82 where terms are "tinkered with" (it was the OFT who informed me of "tinkering" in 82 (modification, variation, supplementation)and of the "once regulated always regulated" maxim in 82(3) - this refers especially to the debtors own purse, as does S 11(1)(c) where the term "whether to the creditor or another person" specifies that another creditor may pay off a debt, but the agreement remains regulated because it is not repaid from the debtor's own purse - to deter eg a broker or any other financier or agent, arranging refinancing on terms beneficial to himself - even eg an RBS loan paying off a NatWest loan, etc. I dunno how this is affected by a non-commercial repayment (eg family) - but this is unimportant because we are discussing commercial moneylending here where the trader has a licence with the OFT to worry about !


Thanks

[andrew1]

Re: Once regulated - Always regulated?

E bai gumm this is a quiet forum!:tinysmile_hmm_t2: