Court claim issued by HSBC on a faulty DN & TN

[pt2537]

Re: Court claim issued by HSBC on a faulty DN & TN

I don't know how else to put it - I don't see how this is a good result??

Or am I not seeing something positive. I feel we can't have the whole picture here.

i wish to fc uk i could tell you, but i cant

you would agree then if you saw the judgment, it is still draft and therefore not ready to be handed out.

I can tell you, the press want this story, the bbc want it, and all the legal databases have said they want it too.

So it is a huge victory and i cant even tell you what the outcome was other than we won

[Amethyst]

Re: Court claim issued by HSBC on a faulty DN & TN

March isn't that far off

[basa48]

Re: Court claim issued by HSBC on a faulty DN & TN

i wish to fc uk i could tell you, but i cant

you would agree then if you saw the judgment, it is still draft and therefore not ready to be handed out.

I can tell you, the press want this story, the bbc want it, and all the legal databases have said they want it too.

So it is a huge victory and i cant even tell you what the outcome was other than we won

OK I guess I will just have to be patient.

It's just I have a creditor with a well duff DN and I've told him to shove the debt where the sun don't shine!

[diddydicky]

Re: Court claim issued by HSBC on a faulty DN & TN

Okay

I agree with PT that if the creditor takes me to court basing his case on an invalid DN followed by a termination/demand for sums not yet due – then his claim –if (as it usually does) it includes sums not yet due will fail- because without a valid DN – he may not take “the next step”

That has NOTHING to do with whether the debtor was prejudiced – it is written into the CCA and supported by a high court ruling.

WOODCHESTER
The consumers are the people the Act was intended to protect. The creditors with their vast resources and so forth are the people who are supposed to be able to get things right. And Kennedy LJ was not slow to criticise and slap Woodchester down when they got their DN wrong.

This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If the hirer is said to have broken its terms, the hirer needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and the resources to give that information with precision. If he does not do so accurately then he cannot take what Mr Gruffyd conveniently referred to as "the next step".

This leads me to amend what i have always previously advised.....- to write and confirm acceptance of the unlawful repudiation occasioned by the invalid DN

Instead it would clearly be better to ACT in accordance with having accepted an unlawful repudiation but not alert the creditor to the fact that his DN is faulty- the more so since most – if not all creditors do not keep a hard copy and therefore one should not alert them to the failing- lest they then attempt to serve a second DN

Thus the claimant is likely to start an action based- unknown to him........ on an invalid DN

However,even if the creditor does notice his mistake there is still a problem in the creditor attempting to serve a subsequent VALID DN

Going back to woodchester- and the underlined sentence- the creditor has committed to writing (and is therefore bound by his words) following the first invalid DN that the agreement is terminated and /or demands immediate repayment of sums not yet due

The hapless debtor can only take the creditor at his word- after all the OFT went to the trouble of enclosing a leaflet with the DN explaining its importance and need to comply- the debtor therefore can hardly take a subsequent termination letter as anything other than termination.

"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".
[per Lord Wilberforce in Gallie v Lee (1971)]

'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'
[per Scott LJ in Norwich & Peterborough Building Society v Steed (1992)]


If, at the time of serving the first Dn the creditor was unaware it was invalid- how is the debtor supposed to work it out?

So, in this second DN which the claimant intends to be valid- he must state what the alleged “breach” is – and what the debtor must do to put it right.

So what figure will he claim is due in respect of arrears in the DN which- if the debtor remedies- will restore the status quo (s89)?

The claimants reason for serving a second DN would be that the agreement endured- since the DN preceeding the termination was invalid-so if he attempts again to claim sums not yet due under the agreement - then again he has served an invalid DN since until the DN is not complied with - there is no entitlement for the creditor to claim sums not yet due>

That leaves him with claiming that the debtor has breached the agreement by not making monthly payments (again the creditor maintains that the agreement endures) so what figure will the creditor put in the DN which can be accurate.?

If he claims arrears of payments due since he terminated following the first DN ..... he will be wrong – because at the time that he terminated he told the debtor that the agreement was terminated and all sums not yet due at that time (which would be those in the intervening period) were no longer due to be paid monthly but forthwith.

Is that the creditor “leaving the debtor in no doubt”?

how can the creditor claim that the debtor is in breach of the agreement in respect of monthly payments since the termination letter and the second DN - when the creditor had told the debtor that these payments were no longer to be paid monthly! If the creditor claims that the agreement endured- then at least his termination letter was an agreement between the two parties that no further monthly payments were payable and therefore the debtor would not have breached that "sub agreement"


alternatively perhaps the creditor will seek only to claim the arrears that were stated in the original DN (which might be correct but the DN was invalid for some other reason)...... but then what of the payments for the intervening months between the first and second DN’s- if the claimant claims the agreement is still live when he serves the second DN - demanding only the arrears accrued at the time of the first DN- and states that by remedying this default within the given time that (s89) it will be as if the breach had never occurred- it would be a lie because as soon as the debtor remedied the second DN he would still be in breach of the enduring agreement in respect of the months of payments in the intervening period between the termination letter following the first DN and the second DN therefore s89 cannot be acheived

It is true that in MOST cases there will be a considerable time frame between the first and second DN (usually at the point of legal action when the creditor realises his mistake) and this will be many months if not more than a year

However, the creditor has encouraged the debtor not to pay any more payments by telling him in the termination letter following the first DN that all sums due were no longer due monthly but forthwith............ therefore the debtor was totally unaware of any obligation to make any further monthly payments as he was told the agreement was terminated.

It is NOT the fault of the debtor that the creditor told him the agreement was terminated when it was not

It is not the role of the debtor to make an assumption that the termination letter might not in fact really be a termination letter but might be a mistake which he the debtor is supposed to work out whilst the sophisticated creditor and his legal and accounting muscle did not- that would be to turn the whole ethos of the CCA upside down.

Having (or so he thought) terminated the agreement - it is likely that the creditor would then be in breach of recent legislation as to regular statements of account - which if in breach he is again prevented from enforcement



It seems to me that a judge who would take the position of the creditor in such a situation, in addition to being immediately breathalysed........ would have to overrule much legislation pertaining to the creditor being bound by his word in a written document (house of lords). Woodchester and of course the intent and purpose of the CCA and in particular sects 77-89 not to mention turning the CCA upside down and making the debtor responsible for the responsibilities that the act firmly places upon the creditor


Jesus – thats one hell of step for judge kind and a huge leap for the poor old consumer

IMO

[Lord_Alcohol]

Re: Court claim issued by HSBC on a faulty DN & TN

Guys

I think PT's news is absolutely BRILLIANT....!!

He is bound to silence (of course!), but just consider the implications: the OC terminates via a duff DN, an action he has no entitlement to. If he realises his mistake quickly, no harm done.

BUT...if he has subsequently taken action, then he is in serious poo. By 'action' I'm not sure, but surely it would include anything done that is to the detriment of the debtor (stress/anxiety of threats of court, CRAs, etc). If the OC goes further and takes the debtor to court, that's even worse.

As it is Section 87 that has been breached, I would think that no provisions within that section could thereafter apply. Section 89 is a no-going-back clause, forming a vicious circle for the OC; he cannot remedy his mistake without breaching s89. And, of course, it is s87 that provides for the OC's entitlement to claim the balance. If he attempts this, he cannot avoid the implications of s140.

(Have a look at s140, which applies to all ags (even pre-2006). If the OC has formed an unfair rel (which he clearly has - there can be little doubt), then the courts have the power to find very much in the debtor's favour, even to the extent of causing the OC to repay to the debtor everything paid!)

We need to wait until PT can give us the full picture, but right now I can see all sorts of ways to use this to our advantage.

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Blimey what a read. I have just read all the posts and they are terrific. Thanks to all who have put some very valuable information on my thread not only for me to read and learn but for many others too.
I have still not received a court date for my hearing since filing my defence and my case at the moment is stayed. My agreement was terminated on the back of a faulty DN......... and then action upon action was taken against me.

I do not know if this judgment will have any effect on my case personally but if it helps others then that will be real cool. LA you really do post food for thought LOL, hope your doing well.

PT has given many and DD a lot of excellent advice, I just wish I knew where I stood at the moment with my claim as at the moment I don't think HSBC know their head from their arse LOL.

Thanks to all

[basa48]

Re: Court claim issued by HSBC on a faulty DN & TN

As it is Section 87 that has been breached, I would think that no provisions within that section could thereafter apply. Section 89 is a no-going-back clause, forming a vicious circle for the OC; he cannot remedy his mistake without breaching s89. And, of course, it is s87 that provides for the OC's entitlement to claim the balance. If he attempts this, he cannot avoid the implications of s140.

(Have a look at s140, which applies to all ags (even pre-2006). If the OC has formed an unfair rel (which he clearly has - there can be little doubt), then the courts have the power to find very much in the debtor's favour, even to the extent of causing the OC to repay to the debtor everything paid!)

This is the bit I really can't get my head around.

Can the court not just say the agreement endures and the clock 'wound back' to the date of the (faulty) DN.

I don't see s89 as an insurmountable problem either - if the debtor satisfies the new DN then everything is as it was pre DN and 140A doesn't come into play. If the debtor fails to satisfy the DN then the whole debt becomes due.

The court can interpret these things in the best interests of the banks,

Can't you tell I'm not a lawyer!!!!

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Basa I can understand your anxiety and tying yourself up in knots trying to find the answers to your questions but............as PT has advised lets be patient and see what comes out from this judgment.

Once it is out I am sure that PT will answer any questions that are disturbing you and many others including myself, but as PT has said his hands are tied.

Hopefully things will be more clearer soon.

[toomanycalls]

Re: Court claim issued by HSBC on a faulty DN & TN

I'm in a similar situation, have a faulty DN - full amount claimed and no time for service, followed by a termination letter 4 months later. Received a money claim 6 months after which is now. I've filed an AOS but still need to do my defence.

Any advice to what I should put as a defence? Sounds like I shouldn't go into too much detail beyond a faulty default notice or they will just re-issue it.

Really confused...

Edit: started my own thread http://www.legalbeagles.info/forums/...506#post194506

[Lord_Alcohol]

Re: Court claim issued by HSBC on a faulty DN & TN

Can the court not just say the agreement endures and the clock 'wound back' to the date of the (faulty) DN.

Yes, I think that could be the case, but I assume only if no significant collection/recovery activities have taken place and the debtor has not been troubled by the OC's mistake.

I would also think that issuing duff DNs, claiming they are compliant, and taking all those steps threatened in the DN when not entitled would come under S140.

I don't see s89 as an insurmountable problem either - if the debtor satisfies the new DN then everything is as it was pre DN and 140A doesn't come into play. If the debtor fails to satisfy the DN then the whole debt becomes due.

I would say that there has only been one breach, and S89 requires that the OC allows the debtor to remedy so that "the breach shall be treated as not having occurred". But if there has been a period between the bad and the good DN in which the debtor has been seriously disadvantaged, I would think that S89 could never be satisfied, even if the new DN was fully compliant.

If Part VII of the Act is read as a whole, then this must mean that remedy could never happen because remedy requires that the breach is treated as never having occurred. The OC may have taken actions such as recording the default with the CRAs, and it could be that the debtor has had to put up with this for a year or more, incurring damages costs and more. Therefore the breach can never been viewed as "never having occurred"; there has been too much cr*p thrown at the debtor in the intervening period for that ever to be true.

I would also think that this type of caper by the OC would very definitely fall under the "unfair relationship" category, whether brought to court or not. The court's powers seem very wide under S140, and causing the OC to repay the debtor is one of them.

Just my view, of course. Hopefully PT will be able to enlighten us soon. In the meantime I still think this is great news...

[basa48]

Re: Court claim issued by HSBC on a faulty DN & TN

Yes, I think that could be the case, but I assume only if no significant collection/recovery activities have taken place and the debtor has not been troubled by the OC's mistake.

I would also think that issuing duff DNs, claiming they are compliant, and taking all those steps threatened in the DN when not entitled would come under S140.



I would say that there has only been one breach, and S89 requires that the OC allows the debtor to remedy so that "the breach shall be treated as not having occurred". But if there has been a period between the bad and the good DN in which the debtor has been seriously disadvantaged, I would think that S89 could never be satisfied, even if the new DN was fully compliant.

If Part VII of the Act is read as a whole, then this must mean that remedy could never happen because remedy requires that the breach is treated as never having occurred. The OC may have taken actions such as recording the default with the CRAs, and it could be that the debtor has had to put up with this for a year or more, incurring damages costs and more. Therefore the breach can never been viewed as "never having occurred"; there has been too much cr*p thrown at the debtor in the intervening period for that ever to be true.

I would also think that this type of caper by the OC would very definitely fall under the "unfair relationship" category, whether brought to court or not. The court's powers seem very wide under S140, and causing the OC to repay the debtor is one of them.

Just my view, of course. Hopefully PT will be able to enlighten us soon. In the meantime I still think this is great news...

Well yes I didn't think of s89 in that way.

Of course I have defaults on my CR files and have been threatened and cajoled by several DCAs and solicitors over the 15 months since the DN date. I suppose I could claim damage to my credit status plus psychological stress, but no real pecuniary loss.

[Angry Cat]

Re: Court claim issued by HSBC on a faulty DN & TN

Damage and distress, is very hard to prove (DPA)

[Lord_Alcohol]

Re: Court claim issued by HSBC on a faulty DN & TN

Just trying to think what this might mean for the creditor, and the only conclusion I have come to is that it must be a total nightmare!

Consider this...

A bank has terminated a credit card account on the back of a duff DN. There then follows a lengthy period (possibly a year or more - certainly in my case!) of collection activity, letter-writing, research into the CCA, loss of creditworthiness, stress.

The bank then realises its mistake (thanks to PT!!). But what now are its options?

It can just send a new DN that is compliant and which identifies the original breach (there can be no other) and just forgets about its previous harrassment of the debtor. The debtor could just pay and then the agreement would have to continue. The bank may then just terminate the agreement under non-breach rules, or allow it to continue.

But if it follows this route, it opens itself up to a claim under S140, because there can be little doubt that its actions prior to the compliant DN have formed an unfair relationship, and the unfairness is then compounded by conveniently forgetting about its previous mistake and pretending it never happened.

As the court's powers under S140 are very wide, I would argue that it is very unlikely that a creditor would risk this as it may open the floodgates for a raft of litigation.

Also, I think that the 2008 CPRs "come under" S140, so there is the additional bonus of looking at misleading trading practices; I would think it is highly misleading to claim that an entitlement to terminate is allowed through defective documention.

Alternatively, the bank might write to the debtor, apologising for its mistake, offer compensation and allow the agreement to continue as before. I think this would be extremely unlikely, given the stupidity and greed of our banks.

I reckon the most likely outcome is that the creditor would feel forced to settle in some way, fearing a S140 assault and being reluctant to reopen an agreement to what it must surely still consider a wayward customer.

I think that the only real downer with the HC result could be where there has been very little time between the bad DN and the good, so that the debtor suffers little or no detriment.

Bottom line is that the creditor will have to find some way to deal with the fact that he made a very big mistake, caused serious difficulty (probably) to the debtor, probably breached the T&Cs of the agreement itself, breached Principle 1 of the DPA (the need for fairness and lawfullness) and maybe even dragged the debtor to court; all of which when he had no lawful entitlement.

Some debtors may have been very seriously disadvantaged; for example, losing a car or even a house, when the creditor had no entitlement. I really cannot wait to see the claims about to be made against the banks in these cases.

One final point; let's not forget that a DN is a very, very simple document and very easy to get right first time, especially with all the resources available to the banks. The fact that banks get it wrong so often is, to me, deeply suspicious and I cannot help feeling that it is a deliberate ploy to get the debt sold to a DCA and/or transferred to court for a quicky judgement. After all, it's likely that many defaulters will not be best placed to easily defend on the basis of legal defects, so my view is that if the banks get a good kicking because of this then that is how it should be and it's made me very happy.

Oh, one more final point (), perhaps this might be a way to restrict banker's bonuses? Instead of paying out billions to the risk-takers, they could use a chunk of that to compensate all the poor sods they have unlawfully shafted over the years with their cavalier approach to the regulations?

Just a few thoughts...apologies if this is jumping the gun (which it is!), but patience isn't one of my virtues...



(and let's not forget S89...)

[jumper999]

Re: Court claim issued by HSBC on a faulty DN & TN

Oh LA always love reading your posts............you make so much sense and I agree with all you say and if only things were as simple as you make them.............but unfortunately sometimes they are not.

I am playing the waiting game at present and ain't got a clue what is going on or what is going to happen. All I know is that my claim is stayed. Maybe HSBC are waiting for something before they decide what to do as I know the Brandon case appeal is coming up on the 3 Feb 2011 and also from what PT says too about this recent HC judgment.

If HSBC turned around and agreed to let me pay what I owed without applying for judgment and agreed to take off all the penalty charges trust me I would have been more than happy to agree to that. But I have exhausted all avenues to try and reason and have not got anywhere. This case of mine has been going on for so long and is really dragging me down as there are other things that I need to concentrate on.

Alas I have no choice but to continue to wait although reluctantly. All these sections....section 78 section 89 bloody hell I think by the time my case is finished I will need to be sectioned at a loony hospital LOL

Take care and fingers crossed we get this judgment PT has advised about soon

[diddydicky]

Re: Court claim issued by HSBC on a faulty DN & TN

Yes, I think that could be the case, but I assume only if no significant collection/recovery activities have taken place and the debtor has not been troubled by the OC's mistake.

I would also think that issuing duff DNs, claiming they are compliant, and taking all those steps threatened in the DN when not entitled would come under S140.



I would say that there has only been one breach, and S89 requires that the OC allows the debtor to remedy so that "the breach shall be treated as not having occurred". But if there has been a period between the bad and the good DN in which the debtor has been seriously disadvantaged, I would think that S89 could never be satisfied, even if the new DN was fully compliant.

If Part VII of the Act is read as a whole, then this must mean that remedy could never happen because remedy requires that the breach is treated as never having occurred. The OC may have taken actions such as recording the default with the CRAs, and it could be that the debtor has had to put up with this for a year or more, incurring damages costs and more. Therefore the breach can never been viewed as "never having occurred"; there has been too much cr*p thrown at the debtor in the intervening period for that ever to be true.

I would also think that this type of caper by the OC would very definitely fall under the "unfair relationship" category, whether brought to court or not. The court's powers seem very wide under S140, and causing the OC to repay the debtor is one of them.

Just my view, of course. Hopefully PT will be able to enlighten us soon. In the meantime I still think this is great news...

i am not quite sure that the point wtih regard to making adverse entries on your credit reference files could be succesfully argued- since even had they not served a DN- those entries would after 6 months of non payment- have been put on your file noting a default on the account in any event.
------------------------------- merged -------------------------------