Default Re: Me V Bank - defective DN and unfair relationship defence.

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Ok, I'll keep what I've already written for the WS so here is the tidied up defence with thanks LA,

1) It is admitted that the defendant signed the credit agreement numbered xxxxx/xxxxxxxxx between the defendant and the bank on 2 May 2008 and note specifically that this agreement is regulated by the Consumer Credit Act 1974 and that it contains terms and conditions which are subordinate to the provisions of the 1974 Consumer Credit Act.

2) The defendants’ entitlement to remedy the default according to Part VII of the Consumer Credit Act 1974 was removed unilaterally by the claimant in his notice of default of 4 March 2010 which demanded the balance as remedy.

3) The lawful arrears of xxx were paid on 29 March 2010, yet the claimant terminated the contract without entitlement (S87(1)(a)) on 8 July 2010

4) The claimant brings his claim to court without entitlement and where the breach was remedied according to the Act.

5) It is further claimed that the claimant forms an unfair relationship as per the Consumer Credit Act s140B(2) by taking action without entitlement and seeking money where he has no entitlement and I ask the court to consider an order be made for relief under S140A.

6) It is averred that no sums are due as CCA74 S87(1)(b) precludes any claim for unpaid sums where S88 is not complied with.

7) I believe the above statement to be true and factual to the best of my knowledge

Any other comments?

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

Solicitor? Counsel? Someone representing you?

Ah no - it's someone who's legally responsible for the debt.

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Could someone explain what this means please

a surety in any proceedings in any court

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

Er...yes but I wouldn't use the phrase "the court should", just that you seek an order on that basis from the court (otherwise it sounds like you're telling the court what to do).

I would just say;

It is claimed, as per S140B(2), that the claimant has caused the formation of an unfair relationship and I ask the court to consider an order be made for relief under S140A.

Something along those lines...? It would be sensible to support this in your WS but you have plenty of data now to do that and a strongly worded para to that affect would do no harm.

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

LA,

I like what you've done with the defence so if we take your's as a starting point and make point 5

5. It is further claimed that the claimant forms an unfair relationship as per the CCA 1974 S140A(1)(b) by taking action without entitlement and seeking money where he has no entitlement and thus the court should declare the agreement unenforceable per CCA 1974 S140B(1).

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

I'm not sure how all this squares with PT's high court ruling - I suppose the court could always say that the contract was not terminated (the OC had no entitlement without sending a good DN) but, as the OC dragged TMC to court on an error, the court should look at S140A(1)(b) and declare the entire agreement duff as per S140B(1).

It looks like TMC would have to specifically state this - see S140B(2);

(2) An order under this section may be made in connection with a credit agreement only—

(a)on an application made by the debtor or by a surety;

(b)at the instance of the debtor or a surety in any proceedings in any court to which the debtor and the creditor are parties, being proceedings to enforce the agreement or any related agreement; or

(c)at the instance of the debtor or a surety in any other proceedings in any court where the amount paid or payable under the agreement or any related agreement is relevant.

(I highlighted the bit that probably applies here).

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Para 1. now with DD bits

1) It is admitted that the defendant signed the credit agreement numbered xxxxx/xxxxxxxxx between the defendant and the bank on 2 May 2008 and note specifically that this agreement is regulated by the Consumer Credit Act 1974. I assert that no sums are still due under this agreement as the claimant had no legal entitlement to end the agreement due to a defective notice of default and by virtue of his unlawful repudiation is entitled only to the amount of arrears existing at the time of the unlawful termination and that any arrears due at that time have already been paid off.

Added a date to para 12

12) The claimant wrote to the defendant on 6.3.10 to advise the removal of the defendant’s overdraught facility with effect 30.3.30 thus removing the possibility to pay the default from this funding source.

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

If it were me, mine would be along the lines of;

1. Regulated agreement number xxx contains terms and conditions which are subordinate to the provisions of the 1974 Consumer Credit Act.

2. My entitlement to remedy the default according to Part VII of the Act was removed unilaterally by the claimant in his default notice of [date], which demanded the balance as remedy.

3. The lawful arrears of xxx were paid on [date], yet the claimant terminated the contract without entitlement (S87(1)(a)).

4. The claimant brings his claim to court without entitlement and where the breach was remedied according to the Act.

5. It is further claimed that the claimant forms an unfair relationship by taking action without entitlement and seeking money where he has no entitlement.

6. It is averred that no sums are due as CCA74 S87(1)(b) precludes any claim for unpaid sums where S88 is not complied with.


then shove the rest in the WS.

Diddy will come up with something much better...

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Thought I should post the POC for reference

The claim is for money due from the defendant under an agreement numbered xxxxx/xxxxxxx regulated by the CCA and between the Bank Ltd and the defendant on 2 May 2008 (the agreement). By a transfer agreement dated the 1st Feb 2010 and between Bank Ltd and the claimant the claimant aquired all if the assets of Bank Ltd including the benefit of the agreement, NOA of the agreement was given by the claimant to the defendant by letter dated 1 feb 2010.

Under the terms of the agreement, the Bank Ltd loaned the defendent the sum of £xxxxx to be repaid with interest at a rate of 9.4% by monthly installments of x over a period of x months

By failing to repay the sums due under the agreement the defendent is in breach of the terms of the agreement and the balance of x is outstanding

The Defendant was served with the notice of default under section 87(1) of the CCA on 4th Mar 2010. The defendant has failed to comply with the notice of default and the claimant claims the full amount outstanding under the agreement from the defendant.

The claimant confirms that they have complied with sections III & IV of the preaction conduct practice directions.

DD how much of the defence should I cull?

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

Much better TMC - also agree with diddy and you could add the bit from Brandon in your WS.

I guess that the OC is relying on his contractual term in which he can claim the balance on default, so you might need to add somewhere (in your WS?) that you understand that CCA74 takes precedence - and make sure the judge accepts this!

If pressed, I would say that that term was not individually negotiated and so you seek the protection of S87 in entirety, being your entitlement under any regulated agreement. That can wait under the hearing though - no need to swamp the judge with too much detail now!

[diddydicky]

Re: Me V Bank - defective DN and unfair relationship defence.

As he has apparently waived his rights to the provisions of the Act, you see no reason why further sums should be paid.


Read more at: Me V Bank - defective DN and unfair relationship defence. - Legal Beagles Consumer Forum

i think i would change that to:-

the claimant therefore does not have entitlement to legally enforce the alleged agreement and vy virtue of his unlawful repudiation is entitled only to the amount of arrears existing at the time of the unlawful termination

otherwise i agree- the defence is far too long - just respond in general terms to the POC and keep the rest for the WS
------------------------------- merged -------------------------------

There was a cover letter with the DN which told me the arrears but also easy to work out in this case as it was two monthly loan payments. The DN itself however didn't state the correct amount.

I paid the arrears on the 29th March over the phone, outside of the DN period stated or even as it should have been. The CCA says that if the default notice was complied with it should be treated as never happened, I appreciate that it was outside of the required period but they accepeted the payment quick enough but certainly didn't treat it as having never occurred as they then did a search on my credit file. Probably looking for any equity in my property.

then on second thoughts (and i still stand to be corrected on this) i would have thought that if you can persuade the court that from the attached statement of arrears- you worked out that the sum stated in the DN was a mistake and so paid what should have been paid to remedy the DN- that the creditor therefore unlawfully repudiated following your remedy of the DN

an interesting twist!
------------------------------- merged -------------------------------

There was a cover letter with the DN which told me the arrears but also easy to work out in this case as it was two monthly loan payments. The DN itself however didn't state the correct amount.

I paid the arrears on the 29th March over the phone, outside of the DN period stated or even as it should have been. The CCA says that if the default notice was complied with it should be treated as never happened, I appreciate that it was outside of the required period but they accepeted the payment quick enough but certainly didn't treat it as having never occurred as they then did a search on my credit file. Probably looking for any equity in my property.

then on second thoughts (and i still stand to be corrected on this) i would have thought that if you can persuade the court that from the attached statement of arrears- you worked out that the sum stated in the DN was a mistake and so paid what should have been paid to remedy the DN- that the creditor therefore unlawfully repudiated following your remedy of the DN

if they use the argument that you remedied outside of the DN stated period then you could quote Amex v brandon where the judge accepted that a DN could be remedied outside of the period stated in the DN!!


an interesting twist!

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Hi LA

So replace para 1 with this

1) It is admitted that the defendant signed the credit agreement numbered xxxxx/xxxxxxxxx between the defendant and the bank on 2 May 2008 and note specifically that this agreement is regulated by the Consumer Credit Act 1974. I assert that no sums are still due under this agreement as the claimant had no entitlement to end the agreement due to a defective notice of default and that any arrears due at that time have since been paid.

I knew suggested was not the right word but couldn't think what to use. So para 17 will now be as follows

17) It is claimed that the claimant has acted in a way pursuant to the Consumer Credit Act 1974 section 140A (1)(b) Unfair relationships between creditors and debtors
(1)The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—
(a)any of the terms of the agreement or of any related agreement;
(b)the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;
(c)any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).
(2)In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).
(3)For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.
(4)A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.
(5)An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C).

Read more at: Legal Beagles Consumer Forum - Reply to Topic

[Lord_Alcohol]

Re: Me V Bank - defective DN and unfair relationship defence.

It's good TMC but, and this is just my opinion, I would respond specifically to the POC (which presumably claim the balance of the loan) and state that, as you entered into a regulated agreement with the OC where all the provisions of CCA74 apply, you assert that no sums are owed because the claimant ended the agreement when he had no entitlement and the arrears are already dealt with.

It is, I think, up to the claimant to prove that sums are due; as far as you know, under a regulated agreement, no sum other than the arrears are due (and these are already paid).

I would add all the detail in your WS.

If you are asked the usual question "Did you borrow/accept/spend the money?" you can always reply that you did but on the basis of regulation and that you expected the OC to comply with CCA74. As he has apparently waived his rights to the provisions of the Act, you see no reason why further sums should be paid.

I would also change the word "suggested" where you mention S140 to "claimed", making your assertion stronger and requiring the court's time (a "suggestion" might be more readily dismissed).

Just my thoughts - feel free to ignore (I won't be offended!)

LA

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

Ok people, here is my first draught of a defence, never done one before so all comments good and bad welcome please.

Defence V Bank

1) It is admitted that the defendant signed the credit agreement numbered xxxxx/xxxxxxxxx between the defendant and the bank on 2 May 2008.

2) The Claimant contends that they have a claim to monies under an agreement between the defendant and the original creditor, the defendant seeks clarification of this fact and proof of legal assignment as required by Law of Property Act 1925.


3) It is admitted that the defendant received the notice of default served under the section 87(1) of the Consumer Credit Act 1974 dated 4.3.10.

4) It is noted that the default notice is defective to the requirements of the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment Regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237). To be valid, a Default Notice is required to be accurate in terms of both the scope and nature of breach and include an accurate figure and a prescribed number of days to remedy any such breach.

For a creditor to be entitled to terminate a regulated Credit Agreement where there is a breach, demand repayment in full or take any legal action to recover any monies due under the agreement, a creditor must serve a Default Notice under s87(1) CCA 1974 which states:

S87(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 any 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) to enforce any security

5) I note the opening part of section 88(1) CCA 1974, which states:

88 Contents and effect of default notice
(1) The default notice must be in the prescribed form…

The word “must” makes it clear that no variation is acceptable. Therefore it cannot be dispensed with as a de minimis issue. De minimis isLatin for “of minimum importance” or “trifling”. Essentially it refers to something or a difference that is so little, small, miniscule, or tiny that the law does not refer to it and will not consider it.

6) The prescribed format for this document is given by the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, as amended, in particular schedule 2(2) points 1 to 11 which set out the statutory form that a Default Notice must follow for it to comply with s87(1) CCA 1974.

7) It is noted that the Regulations do not allow any variation in the form of the Default Notice and therefore it is averred that where the Default Notice is not as laid down in the Regulations it is invalid and that termination or further enforcement action cannot take place until such time as a valid notice is served.

8) In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the court addressed in some detail the issue of the contents of a default notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the default notice invalid. I quote the comments of Kennedy LJ:

“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…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 in formation with precision. If he does not do so accurately then he cannot take…”the next step” “


9) Failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain & Co- (2001] GCCR 2255) but is an unlawful rescission of contract which would not only prevent the court enforcing any alleged debt, but would also give rise to a potential counterclaim for damages where damage occurs to my credit rating (Kpohraror v Woolwich Building Society (1996) 4 All ER 119)


10) As a result, I submit that the Default Notice is inaccurate, clearly the default notice does not allow time for service and the sum required to rectify the breach is the full amount of the outstanding loan, not the arrears as required. Therefore it is invalid and that termination or further enforcement action cannot be taken until such a time as a valid notice is served.

11) The claimant sent me a letter dated 8.7.10 terminating the agreement. This is an unlawful repudiatory breach of contract so as the creditors’ only remedy is now limited by the Consumer Credit Act 1974 section 87(1). All that is left for the creditor to recover is the sum truly in arrear at the date of the default notice.

Harassment

12) The claimant wrote the defendant to advise the removal of the defendant’s overdraught facility with effect 30.3.30 thus removing the possibility to pay the default from this funding source.

13) The claimant froze the defendant’s personal bank account on 19.3.10 which was prior to the date the notice of default should have stated for remedy.

14) The arrears actually due when the default notice was submitted were paid by the defendant on 29.3.2010.

15) In April the defendant wrote to the claimant requesting an agreement to reduce payments due to financial difficulty. This was denied. The defendant then phoned the bank to persuade them to accept the arrangement which was then agreed for three months with a review to happen in that time. The claimant again wrote to the claimant on 30.6.10 delivered by recorded delivery 1.7.10 with an increase in the monthly payment offer. This letter was ignored.

16) The defendant received two letters from the claimant both dated 8.7.10. The first was a “Formal Demand for Payment” for the full amount of the loan outstanding within seven days. The second letter was a “Final Notice” saying that I had failed to comply with the default notice and this failure results in the termination of the credit agreement unless payment is made with fourteen days.

17) It is suggested that the claimant has acted in a way pursuant to the Consumer Credit Act 1974 section 140A (1)(b) Unfair relationships between creditors and debtors
(1)The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—
(a)any of the terms of the agreement or of any related agreement;
(b)the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;
(c)any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).
(2)In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).
(3)For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.
(4)A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.
(5)An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C).


Conclusion

18) In view of the matters pleaded above, I respectfully request that the court gives consideration to whether the Claimant’s statement of case should be struck out since the account referred to in the Particulars of Claim is regulated by the Consumer Credit Act 1974, for a right to pursue action to exist, there are procedures which must be followed under the Consumer Credit Act 1974. A default notice must be issued under s87 (1) conforming to the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) which sets out the form and content which default notices must include, without such notice being issued the Claimant would not have such right to demand any monies.

19) For the reasons set out in this Defence, the Defendant’s position is that the Claimant’s Claim has no real prospect of success and discloses no reasonable grounds for it to be brought. The Defendant reserves the right to seek costs against the Claimant on the basis that such conduct is unreasonable and/or vexatious in bringing and/or pursuing this claim should the matter proceed to a full assessment.

Statement of Truth
20) I believe the above statement to be true and factual to the best of my knowledge

[toomanycalls]

Re: Me V Bank - defective DN and unfair relationship defence.

the DN argument looks pretty good- save for the fact that you apparently "paid the arrears"- which might have complicated things a bit!

i dont know how you worked out what the arrears were- and if you did so in response to the mis stated amount on the DN- the creditor might argue that although it made a mistake in the amount it claimed in the DN - you were knowledgeable enough to work out that the figure in the DN was an error and that you then worked out that you were required only to pay the arrears in order to remedy the DN and that is what you did.- its a bit devils advocate and i dont know if that argument on their behalf would wash!

There was a cover letter with the DN which told me the arrears but also easy to work out in this case as it was two monthly loan payments. The DN itself however didn't state the correct amount.

I paid the arrears on the 29th March over the phone, outside of the DN period stated or even as it should have been. The CCA says that if the default notice was complied with it should be treated as never happened, I appreciate that it was outside of the required period but they accepeted the payment quick enough but certainly didn't treat it as having never occurred as they then did a search on my credit file. Probably looking for any equity in my property.