Default Notices: time to remedy

[Lord_Alcohol]

Dear all

Can anyone advise on how flexible courts view the period to remedy a s87(1) Default Notice?

I've seen posts here and elsewhere that say quite clearly that it is not necessary for an OC to comply with the 14 days + 2 or 4 days for service of a DN. And that a discrepancy of a "few" days would be dismissed by a court as irrelevant.

My difficulty is that the wording of the 1974 Act and the 1983 Consumer Credit (Enforcement, Default and Termination Notices) Regulations seem to be very clear; the OC must comply with the requirements set out in that statute, including those that prescribe timescales.

This is puzzling if courts can then rule that a deficient time period is irrelevent. If they can do this (and I believe that they do), then what are the real limits available to a debtor to remedy a breach?

I ask as I received a DN that gave me 3 days to sort out a breach. The dates given provided for the allowed 14, but no time for service. I cannot prove I only had 3 days to fix the problem, so am looking at defects to assist.

Any ideas?

Ta
LA

[theturningworm]

Re: Default Notices: time to remedy

Lord_Alcohol

I don't reply to many posts as I'm always conscious of giving bad advice, however, this particular issue really does get my back up.

You state that the courts sometimes rule that the time period is irrelevant which they may do BUT they only do this IF YOU ALLOW THEM TO!

If the judge says that the time period is irrelevant, ask him if he is saying then that the CCA 1974 is irrelevant? The CCA states that 14 days are required. Not ABOUT 14 days or NEARLY 14 days or 14 days-ish. As you have posted, the Act and other regulations state quite clearly that 14 days are required FULL STOP!

A creditor will argue that you are in breach of the CCA and that gives him the right to sue you. Why then would you not use the same argument against him? Is he excluded from the law? does he have special permission to ignore the same Act? NO - he MUST himself comply with that Act and DO NOT LET A JUDGE TELL YOU ANY DIFFERENT.

The judge is there to rule on points of law AS THEY STAND - not his or the creditors version of them. 14 days is 14 days and when taking in account the time required for service (which must not be ignored either and which also needs to be proved) and with reference to the Interpretation Act, an invalid DN can and SHOULD be fatal to their case!

Good luck - stick to your guns and dont let them OR THE JUDGE bully you!

[Shepherdess]

Re: Default Notices: time to remedy

Totally agree. In my view it should not even get to court as without a valid DN they simply do not have right of action.

[pompeyfaith]

Re: Default Notices: time to remedy

The problem here i believe is the 2 law system common law and statute law many judges will be swayed towards common law if allowed many POC's state cca 1974 so it stands to reason that is the law that must be used and not let the claimant or judge sway from that law all agreements under £25000 are also regulated by this act so it stands to reason that must be used

You need to make that very clear from the start

[New_Age_Biker]

Re: Default Notices: time to remedy

Re post 3 from Shepherdess
What if this does happen? ie a creditor tries to enjoy the fruits of the CCA without having served a valid Dn or having already terminated?
Should their solicitor have advised them prior to court action?

[Angry Cat]

Re: Default Notices: time to remedy

A creditor, must allow 14 "clear days", after the date of service of the DN.
If the creditor fails to do so, the DN will be invalid (ineffective) and;
the claimant will be unable to bring the claim.
Until the ineffective DN has been rectified.

In the case of an agreement that has been terminated on the back of an ineffective DN;
the creditor will only be able to collect the arrears and not the whole balance

[New_Age_Biker]

Re: Default Notices: time to remedy

I have a case where the OC had terminated prior to issuing a faulty Dn.
I am now debarred from defending
However as I pointed out this out to the judge, the judge has surely misdirected himself
It is my understanding that there is a specific path to litigation
Have valid agreement
Issue valid DN
Take action

Where action is taken that does not comply with this path what recrimination does the debtor have?

[Angry Cat]

Re: Default Notices: time to remedy

Failure to provide a Default Notice is a breach of the 1974 Act. The creditor could just re-serve the DN to rectify this but not after the agreement has been terminated.

[New_Age_Biker]

Re: Default Notices: time to remedy

I agree AC
However the point I am making (badly) is when an OC has been provided with copies of the Term notice & subsequent Dn & persits in action surely he has no grounds to take that action because he has not complied with his obligations under the CCA
These documents were also brought to the courts attention

[Shepherdess]

Re: Default Notices: time to remedy

Hi Biker,
What exact stage is your case at now?
This shouldn't happen but sadly does happen as the OC will argue that black is white and hope that the judge is either ill informed enough or pro creditor enough to allow it.
If faced with this situation in court and even concise and clear arguments on the debtors side are being ignored, then if all else fails
you need to respectfully ask the judge to give concise clarification of his reasoning in allowing the creditor to enforce without going through the lawful procedures as defined in the Consumer Credit Act 1974, s. 87 (1), in order to assist the appeal.

[Angry Cat]

Re: Default Notices: time to remedy

Hi Biker,
What exact stage is your case at now?
This shouldn't happen but sadly does happen as the OC will argue that black is white and hope that the judge is either ill informed enough or pro creditor enough to allow it.
If faced with this situation in court and even concise and clear arguments on the debtors side are being ignored, then if all else fails
you need to respectfully ask the judge to give concise clarification of his reasoning in allowing the creditor to enforce without going through the lawful procedures as defined in the Consumer Credit Act 1974, s. 87 (1), in order to assist the appeal.

Yes, Sheperdess!

Why is this judge ignoring the legislation as laid down within the Act?

1. a default notice is required by s87(1) of the Act before the credit agreement can be enforced or terminated

2. By s88(2) of the Act [as amended by s14(1) of the Consumer Credit Act as from 1 October 2006] that date must be not less than 14 days after the date of service of the default notice.

[Angry Cat]

Re: Default Notices: time to remedy

1. A default notice is required if the lender is to terminate the agreement.

The fact that New_Age_Biker may not be able to draw down on the facility does not amount to a termination requiring the service of a default notice (see section 87(2) of the Act). For the sake of completeness I set out the text of section 87 below:-

'87 - Need for default notice.

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a 'default notice') is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,-

(a) to terminate the agreement, or
(b) to demand earlier payment of any sum, or
(c) to recover possession of any goods or land, or
(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or
(e) enforce any security.

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsectuion (1) is not to apply to agreements described by the regulations'.

2. Should the lender seek to terminate the agreement a default notice would have to be served. There is no penalty for seeking to terminate without serving a default notice;
the consequence is that the purported termination is ineffective. If the creditor brings proceedings for the whole debt it will have to serve a default notice in accordance with section 88 before terminating and enforcing;
if it fails so to do, New_Age_Biker would have a defence to the claim for the amount due on termination.

[Note] Any failure on the part of the creditor to serve a default notice can be rectified by discontinuing the proceedings, serving a default notice and re-issuing a claim; therefore the failure to serve a default notice does not create an irredeemably bar to enforcement"

[New_Age_Biker]

Re: Default Notices: time to remedy

Following advice OTR I basically failed to file a defence, I then was ordered to submit a particularised defence within a time frame. I waited for them to comply with CPR requests, they did not so I submitted a holding defence. When I tried an application to ammend I was not allowed and debarred ( I had been peviously warned of this) from defending. In my opinion - for what it's worth- the judge should not have been hearing the case because of the S78 failure and DN issue. However as it's FT the costs of arguing escalate very quickly. I am unsure of what action I can now take.

Sorry to hijack your thread LA but this detail has a little bearing on your original question as I have a faulty Dn and a preceeding TN.

[Angry Cat]

Re: Default Notices: time to remedy

Following advice OTR I basically failed to file a defence, I then was ordered to submit a particularised defence within a time frame. I waited for them to comply with CPR requests, they did not so I submitted a holding defence. When I tried an application to ammend I was not allowed and debarred ( I had been peviously warned of this) from defending. In my opinion - for what it's worth- the judge should not have been hearing the case because of the S78 failure and DN issue. However as it's FT the costs of arguing escalate very quickly. I am unsure of what action I can now take.

Sorry to hijack your thread LA but this detail has a little bearing on your original question as I have a faulty Dn and a preceeding TN.

Sounds to me, that you will need to obtain specialist advice now, in order to correct the mistakes that have occured prior;
take the public access route to obtain same.

[New_Age_Biker]

Re: Default Notices: time to remedy

Thanks for your input AC
Am I right in thinking public access is where you approach a barrister directly?

Also I believe a small mistake in your post 12
I believe a valid DN is only required if the OC wishes to terminate because of a breach