Contracts, Termination, Repudiation and Rescission

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Incidentally, as this thread I think demonstrates, the question of termination following a defective DN is a very contentious one. Some argue that the defective DN also renders the termination defective, i.e. as if it never happened and that thus the agreement is still live. In that scenario (it is argued) the OC can then proceed to issue a new (hopefully) valid DN against the still valid agreement.

Quite what the legal position is if the account is sold whilst it is incorrectly defaulted and terminated I have no idea. Some say the new owner now owns a valid credit agreement and can issue its own DN. But it's a lot more complicated than that I suspect!!

[teaboy2]

Re: Contracts, Termination, Repudiation and Rescission

They haven't sued because they know the enormous bo**ocks they've dropped, with you and me both.

I queried my defective DN with EC and they sent me a new one with same date of issue and remedy but guess what only for the arrears not the full debt!! What a surprise. A clear case of deception if not fraud.

I haven't heard a thing since AK took over and from EC for over a year before that.

Well its a shame they did sue as i was itching to have a go at them lol.

Try send the letter to experto and i bet not long after the default on your file along with any history will be gone.

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Hi Basa

Your more than welcome to use the letter i used. I think mine and your account must have been sold in the same batch mate. If the dates and everything are exactly the same then it shows they do it by automatic process too.

One thing i know for sure is they sure as hell didn't want to risk taking me to court for me to counter claim for unlawful rescission/repudation in case i won and set a legal precedent in the high court, which i would have pushed for it to have been heard in. Which says to me they know in theory my views unlawful rescission is likely to succeed as i bet they had all their solicitors look at it before they decided to wipe my file clean to the point no history of any credit card account appears to have belonged to me.

If i was wrong, then what were they so worried about, because if i was wrong, then surely they should have been laughing all the way to the court and rubbing their hands with the thought of all the money they would get when award costs!

They haven't sued because they know the enormous bo**ocks they've dropped, with you and me both.

I queried my defective DN with EC and they sent me a new one with same date of issue and remedy but guess what only for the arrears not the full debt!! What a surprise. A clear case of deception if not fraud.

I haven't heard a thing since AK took over and from EC for over a year before that.

[teaboy2]

Re: Contracts, Termination, Repudiation and Rescission

Hi Basa

Your more than welcome to use the letter i used. I think mine and your account must have been sold in the same batch mate. If the dates and everything are exactly the same then it shows they do it by automatic process too.

One thing i know for sure is they sure as hell didn't want to risk taking me to court for me to counter claim for unlawful rescission/repudation in case i won and set a legal precedent in the high court, which i would have pushed for it to have been heard in. Which says to me they know in theory my views unlawful rescission is likely to succeed as i bet they had all their solicitors look at it before they decided to wipe my file clean to the point no history of any credit card account appears to have belonged to me.

If i was wrong, then what were they so worried about, because if i was wrong, then surely they should have been laughing all the way to the court and rubbing their hands with the thought of all the money they would get when award costs!

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

In response to teaboy2.

Hey have you stolen my identity ???!!!

The description of your dealings with MBNA/EC/AK exactly mirror my own in 2009, down to the defective DN, date of sale and confusion over EC or Varde owning the debt !!!

I shall copy your letter if I ever need to use it. (With your permission).

I never checked my CRA file because it is irretrievably screwed anyway !!!!! So I don't know when (or even if) they slapped a default on there.

PS:I would be interested in knowing more about the issue of Aktiv Zug's entitlement to sue a UK citizen being a Norwegian company (actually I thought Aktiv Zug were a Swiss company https://www.aktivkapital.com/our-com...l-switzerland/ )

[teaboy2]

Re: Contracts, Termination, Repudiation and Rescission

Well as must know i had an issue with MBNA credit card that was unlawfully terminated of the back of an invalid DN back in 2009. The default was dated the 12th august giving me to the date before the 29th (28th of august) to pay the full outstanding balance not just the arrears. I did not receive the DN till the 18th so it only gave me 10 days out of the statutory 14 days to pay. So it was invalid on a number of points. The account was sold to Varde investment Ireland Limited who appointed Experto Credite to collect, Experto stated it was sold by Mbna to Varde and maintained this all along. I wrote to Mbna asking for confirmation as to whom it was sold to and what. They wrote back stating it was sold on the 17th august 2009 (yes the day before i received the DN). So therefore confirming the sold and therefore terminated the account unlawfully as they sold/terminated it prior to me even getting the default notice let alone getting the 14 days to pay, therefore i got 0 days of my statutory entitlement of 14 to pay. Not only that in the same letter MBNA stated it was Experto credite that they sold the debt too, so for some reason, probably VAT reasons they did not want to acknowlegde they sold to a company in IRELAND, where they would not have to pay VAT on the sale due to sales to other EU companies outside of the UK being exempt from VAT.

Anyway, to cut a long story short, after 2-3 years of verbal back and forth, arguing about unlawful rescission/repudation. Aktiva Kapital bought the debt and i know form threads on this forum that they pursued people from the word go in court aggresively. So i immediately send experto, whom aktiva Kapital, an email to pass on to AK repeating my arguments and challenging them to take me to court, whilst i made it clear i would counter claim for MBNA's unlawful rescission/repudation of contract and was more then capable of taking it to the high court to make it a legal precedent and case law should i win.

Guess what, the default on my credit file disappeared completely along with all mention of the credit card account within weeks of me sending that email. A copy of which i have attached below:

Dear Sir/Madam

I write to you today in response to a letter received from Aktiv Kaptial informing me of the assignment of the account MBL1223 to Aktiv Capital, Zug Branch Limited.

Whilst i do not dispute Varde Investment (Ireland) Limited’s right to sell the account, i do however dispute their right to do so when there is evidently a clear and undeniable dispute between myself, Experto Credite, Varde Investment (Ireland Limited) and the original creditor MBNA. Also as i have written confirmation from MBNA dated 2009 that the account was sold by them to Experto Credite and not Varde Investment (Ireland) Limited as experto credite had stated and continued to maintain throughout all communication. Then as far as i am concerned their is a clear question as to whether Varde were ever the legal owners of the account at all. Which would therefore bring into doubt the legal validity of the assignment to Aktiv Kaptial!

As i am also TEABOY2 on the Legal Beagles consumer forums and formerly on Consumer Action Group, then i am more than aware of who Aktiv Kaptial are, and i am more than aware of their favourite solicitor Bryan Carter (whom i have dealt with very easily in the past). As such i am more than aware of the underhand tactics that both have become well known for and their disregard for the consumer credit act 1974, CPUTTR 2008 and all other relevant legislation/Regulations and guidelines. As such i will make it clear now, that if they even were to think about using such tactics against me, i will come down on them like a tonne of brick, and i promise they will not know what the hell happened.

If they were to bring legal proceedings, then i will defend against such proceedings (oh and Bryan carter better not try his dirty trick of not sending particulars of claims in order to get default judgement, or ill make sure he will not be able to practice law again). Not only will i defend, but i will issue a counter claim for the unlawful rescission of contract by MBNA, therefore making them a joint claiment, i will also counter claim for damages, as the unlawful rescission and unlawful registering of a default on my credit file (which was registered prior to the INVALID default being issued – In breach of ICO guidelines) cause my company that i was in the process of starting up at the time, to suffer a finanical deteriment, resulting in myself not being able to get credit accounts with suppliers, causing myself emotional distress, that could well have been compeltely avoided, if MBNA had as i had requested waiting just 1 more month. If they had then i would have been in a position to repay the whole debt and not just the outstanding amount. But they didn’t, they unlawfully rescinded the contract, they unlawfully registered a default on my credit file prior to even issuing me a defualt notice, which also turned out to be invalid as it failed to give me the required satutory 14 days to remedy. But not only that, it was invalid as 5 days after issuing the default MBNA terminated the contract, by selling to VARDE (OR experto credite as MBNA told me), as such they sold the account in breach of schedule 2 section 6f of the consumer (default, enforcement and termination) regulations 1983, which prevents them from enacted a provision of the contract of the back of an Invalid default, such provision can be a provision to terminate the contract, enforce the debt, or issue a default to a debtors credit file.

Now not only will i defend and counter claim in the event of Aktiv Kaptial taking legal action, i will also push for the case to be heard at the high court, as a matter of public interest, in order to set a legal precedent regarding unlawful rescission. IF successful which i have no doubt that will be, then not many debt collection companies or creditors will be happy with Aktiv, as such debt collection companies and Creditors, will as a result of a successful counter claim on unlawful rescission, be faced with having to compensate many of their customers who’s credit agreements were unlawfully rescinded, not to mention legal fees where consumers take the matter back to court in light of such a new legal precedent being set, in order to overturn any previous court order and sue for compensation.

As for the assignment itself, well i bet Experto failed to inform Aktiv Kaptial of who i actually am, or the fact that this account is basically a lame duck that they are never going to be able to successfully enforce, and which will likely cost them a small fortune if they try to do so. Not to mention the risk i pose to their credit license and or there chosen legal representatives ability to continue to practice law in the UK. I therefore suggest you pass this email along with all my previous email and written communication to Aktiv Kaptial. That way we will both see if they are stupid enough to take the account and myself on.

By the way, As its assigned to their ZUG branch Limited company, it is therefore no Aktiva Kaptial UK Limited as they are completely separate legal entities, and therefore i do not recognise ZUG branch Limited rights on this account, due to it being a foreign company, based outside of the UK courts jurisdiction, as such i do not recognise any rights they assume they have to enforce this account – As such if they wish to enforce this account, i expect them to adhere fully to relevant EU legislation and regulations and any agreements between the UK and Norway, in regards to enforcing a debt alleged to be owed by a citizen residing in a different EU nation to that of the claimant. I won’t tell you what those legislations, regulations and/or required treaties Between nations are as that's for Akitva Kaptial to find out, and yes i do know what they are and i will be watching very closely.

Yours Sincerely and Without Prejudice

The bit highlighted in red, informing them of the consequences to the industry as a whole no doubt helped in persuading them that it would be not only expensive to take me to court (well expensive for them since am certain they would have lost completely) but that it would have been expensive for all involved in the DCA industry, no doubt helped to pursuade them. especially since it would allow people to claim against them regardless of whether they lost in court previously when arguing the DN was invalid etc. It would have cost the industry millions if they took the risk and lost to me in court, and they knew it. Thats why i believe they choose to silently remove the default and not contact me again, not even to tell me the debt is written off or that the Default was removed along with all record of their ever being a credit card account from my file.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Hi SeeThumb

This is of interest to me too.

My understanding (currently) is that if your contract contains a termination clause (eg, it is a rolling credit agreement) then no notice is required to terminate before (I think) Feb 2011 because that was when s.98(A) came into effect, requiring the creditor to serve a notice first (this is the EU CCD taking effect).

For example, I have a terminated credit card agreement under which a wholly defective DN was served but, as the contract stipulates termination "for any reason" and the termination was prior to Feb 2011, the termination is effective. I think this was something argued in Brandon by the judge, if I recall correctly, who seemed to say that default and contractual termination are not mutually exclusive. Reading my own contract, this makes sense (to me at least).

If you are arguing that the termination was "unlawful" I have a feeling you won't get far with this. If it was "unlawful" then presumably it should be corrected, as there are no sanctions for the creditor under the Act (unless under s.140), which would mean putting the agreement back to the state it was in prior to the defective termination (assuming there is no contractual termination clause). The OC could then restrict credit or terminate contractually (if allowed).

My own view is that the only way you can get compensation or a reduction in the balance owed is to use s.13 of the DPA if there was adverse data recorded as a consequence of a DN that could not be satisfied due to a significant error, and the notice advising of the registration was contained within the DN or served at the same time. And if the creditor was particularly nasty have a look at the Harrison judgement.

LA

[SeeThumb]

Re: Contracts, Termination, Repudiation and Rescission

It is not that the termination was unlawful it is just that the crediotr was not entitled to issue it. There is no offence listed in the CCA for issuing a termination when not entitled.

Actually, I believe it is within either party's right to terminate at any time, though they face consequences. I believe the faulty DN does not prevent a creditor from terminating, but should they not have followed proper procedure, it is considered unlawful. The argument is that the faulty document cannot be assumed as termination as it is, for the reasons identified, a faulty document.

Sorry for waking up this tired old thread, but it is of great interest to me, as I have had an agreement terminated, but without any proper notice at all. The OC has not provided me with anything like the documents specified by CCA 1974 and the galling part of it is that I have not, nor at any point before the lender's repudiation, missed a payment. Despite warnings from me following a DN which was not just faulty, but plucked completely from the air, the OC engaged an agency to collect the outstanding balance, and despite repeated requests for the parties to desist in their unlawful actions, I have now received a further notice from the agency to pay. I am yet to receive anything other automatic notices from either in response to my communications.

I do not believe that in my case, where their actions could be considered as negligence, the OC can simply wind back the clock stating that their DN was faulty and they should be able to revert. This would be ridiculous. It would mean that they could defend cases in their favour based on their own incompetence, possibly encouraging sly use of faulty documents.

Surely the truth of this is that a faulty DN issued in a justified action cannot be considered to be implied repudiation, as it is merely a technical fault in an otherwise proper situation. The debtor could accept the faulty DN, if they so wished given that the content was truthful, even though the form was incorrect. In such a case the termination that followed would not in anyway be invalid as both parties were prepared to proceed; That is, it is not the faulty DN that repudiates, but further actions stemming from it, e.g. termination. In such a case, it could be seen that there is a duty on the part of, or at least that it would not be unreasonable to expect, the debtor to query the faulty DN within the timescale of the notice given. Not to do so may appear to be a little opportunistic if you then go on to claim repudiation by the OC. That does appear to be a little lacking in grace, and be as likely a reason for allowing the reissue of a DN as any.

However, if there is a DN, whether faulty, completely proper or simply cuckoo, and the OC terminates outside of CCA 1974 or their own stipulated conditions, then the termination may be considered unlawful, yet acceptable as the creditors repudiation of the agreement by the debtor, providing an opportunity to accept it as such and all the associated rights. I believe that this is the case with my unlawfully terminated agreement, and have informed the OC, but I would like to know what my rights would now be, assuming that what I have put here is correct.

Can anyone point me in the right direction, as some previous links on the site have expired.

[jax50]

Re: Contracts, Termination, Repudiation and Rescission

Did this end here, or has the discussion moved to another thread..?

[mystery1]

Re: Contracts, Termination, Repudiation and Rescission

Recent CCA Successes

RBS/Tesco Personal Finance had issued a claim against our Client Mr ‘E’ for repayment of an unsecured debt in the sum of £7,800. We defended the action on the basis that although the original agreement was enforceable, the procedure for terminating the loan agreement had not been carried out correctly, and RBS/Tesco Personal Finance have now discontinued their claim which brings the matter to an end for our client.

M1

Re: Contracts, Termination, Repudiation and Rescission

[quote=Lord_Alcohol;209477]I suppose the questions that arise from this are;

1. Why are liabilities subject to CCA post-termination? The creditor terminates (properly or otherwise), the agreement ends, the liabilities are considered. There is no agreement (it is terminated), but the debtor agrees to a payment plan. Why is this assumed to be regulated, unless it is the subject of a new restricted-use credit agreement?
2. As we saw in the Pumkinhead judgement, the judge decided that the liabilities were not subject to CCA because the debtor renounced all its provisions. Is this the same as the creditor terminating the agreement and not getting the debtor to agree to a new restricted use credit agreement to repay the liabilities?
3. If an agreement is improperly-terminated via a bad DN, how is it that the creditor escapes S87(1)(a) (termination of agreements) by refusing to reinstate the agreement as it was prior to termination? The termination is now recognised as being ineffective in law, so how does the creditor escape his responsibilities by refusing to resurrect the agreement?
4. What exactly does S89 mean, if it doesn't mean that the debtor can remedy the breach and cause the creditor to set things back to how they were as if the breach had not occurred?

I would also reiterate the fact that a DN is not a fait accompli - although for sure it is a notice of intended action, it is also just as much an opportunity for the debtor to fix his breach and so avoid that action. This aspect seems to have been overlooked in much of this thread.

Keep up the good work

All these questions are answered above

Peter

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

HI

I think the problem is that there is a basic missunderstanding of what termitaion of an agrement actually is.

As i said right at the begining of this thread a terminated agreement is not a void agreement the agreement still exists, it exists as a terminated agrement

Just because the contract is terminated and the terms under it no longer apply does not mean that statute does not apply to the loan. As long as there are liabilities left to be paid then it is a commertial transaction and still covered by statute.
A default notice is just a notice before action it does not need to be issued on a an active or unterminated account it can be issued at any time on any account that is regulated under the act.

The reason that it could not be issued on a default termination is because default termination is part of the enforcement as well as a remedy for the default, it is part of the default process. Therefore an inafecrtive default means an inafective termination.
The remedy that secton 89 offers in a case like this is mearly that enforcement is not commenced because the sum owing under the agreement is paid.

I know this is hard to undersatnd and the language is to an extent counter intuitive which makes it worse.

But given the vast amount of supporting evidence available i think it is time for some to forget previous missconseptions, accept the facts and move on.
Peter

I suppose the questions that arise from this are;

1. Why are liabilities subject to CCA post-termination? The creditor terminates (properly or otherwise), the agreement ends, the liabilities are considered. There is no agreement (it is terminated), but the debtor agrees to a payment plan. Why is this assumed to be regulated, unless it is the subject of a new restricted-use credit agreement?
2. As we saw in the Pumkinhead judgement, the judge decided that the liabilities were not subject to CCA because the debtor renounced all its provisions. Is this the same as the creditor terminating the agreement and not getting the debtor to agree to a new restricted use credit agreement to repay the liabilities?
3. If an agreement is improperly-terminated via a bad DN, how is it that the creditor escapes S87(1)(a) (termination of agreements) by refusing to reinstate the agreement as it was prior to termination? The termination is now recognised as being ineffective in law, so how does the creditor escape his responsibilities by refusing to resurrect the agreement?
4. What exactly does S89 mean, if it doesn't mean that the debtor can remedy the breach and cause the creditor to set things back to how they were as if the breach had not occurred?

I would also reiterate the fact that a DN is not a fait accompli - although for sure it is a notice of intended action, it is also just as much an opportunity for the debtor to fix his breach and so avoid that action. This aspect seems to have been overlooked in much of this thread.

Keep up the good work

Re: Contracts, Termination, Repudiation and Rescission

I do believe the Court of Appeal is going to be addressing the contractual right to terminate outside of the act shortly.

If, as is expected, the CoA upholds s173 as preventing a party from using a term of the contract to escape the 1974 acts requirements then the right to terminate at a moments notice without following the acts formalities may well be resolved.

HI Yes


The contractural termination of an open ended account is available within statute of course, courtessy of the european directive after 2 months notice. Which is i think a improvement on the previous situation where they could terminate, as you say at a whim.

I am not aware of the case you are refering to but it sounds very interesting.
Section 173 is of course what enables statute to regulate the contract.

Peter

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

I do believe the Court of Appeal is going to be addressing the contractual right to terminate outside of the act shortly.

If, as is expected, the CoA upholds s173 as preventing a party from using a term of the contract to escape the 1974 acts requirements then the right to terminate at a moments notice without following the acts formalities may well be resolved.

Re: Contracts, Termination, Repudiation and Rescission

Presumably this means a "payment arrangement" is also regulated by the Act, otherwise a notice served under S87 makes no sense (the wording required by the 1983 Regs requires that DNs are served under regulated agreements).

I think it's a pity that creditors "terminate" agreements, because if they merely restricted credit while keeping agreements live we would not have these apparently contradictory positions. The point being that a lender "terminates" but actually doesn't because he still wants to be able to serve DNs down the line if the debtor "defaults" on an arrangement.

It seems that the lender isn't "terminating" at all, he's just restricting credit. Service of TNs is, in my view, hugely misleading if this is the case.

What a total mess the Act is. I used to think Mr Bennion was a genius...now I just think he was mental.

HI

I think the problem is that there is a basic missunderstanding of what termitaion of an agrement actually is.

As i said right at the begining of this thread a terminated agreement is not a void agreement the agreement still exists, it exists as a terminated agrement

Just because the contract is terminated and the terms under it no longer apply does not mean that statute does not apply to the loan. As long as there are liabilities left to be paid then it is a commertial transaction and still covered by statute.
A default notice is just a notice before action it does not need to be issued on a an active or unterminated account it can be issued at any time on any account that is regulated under the act.

The reason that it could not be issued on a default termination is because default termination is part of the enforcement as well as a remedy for the default, it is part of the default process. Therefore an inafecrtive default means an inafective termination.
The remedy that secton 89 offers in a case like this is mearly that enforcement is not commenced because the sum owing under the agreement is paid.

I know this is hard to undersatnd and the language is to an extent counter intuitive which makes it worse.

But given the vast amount of supporting evidence available i think it is time for some to forget previous missconseptions, accept the facts and move on.
Peter