s127(3) query

[charitynjw]

I thought I had a reasonable understanding of s127(3) of the 1974 Act re 'unenforceable' - now repealed - & the Carey decision, etc., which mainly concerns s77-79 info.

I have now come across this little gem from the OFT.

2.19 Often consumers and their advisors assume that if a signed copy is not provided by the creditor or owner, this necessarily means that the agreement cannot be enforced: either on the basis that section 77(1),
78(1) or 79(1) (as the case may be) has not been complied with, or in reliance on section 127(3) (in the case of agreements to which that subsection still applies). This overlooks the fact that there is no obligation on an information request to provide a copy which includes a
copy of the signature. It also overlooks the fact that section 127(3) does not apply merely because a signed document is not available at the court hearing; the section requires that a document containing the prescribed terms 'was' signed by the debtor or hirer. The creditor or owner may be able to provide evidence that its practice was always to require a signature to its agreements and that its agreements always complied with section 61(1)(a) of the Act and the debtor or hirer may be unable to satisfy the court that he or she did not sign an agreement.

Now I'm confused!
Does this mean that, to all intents & purposes, the debtor/hirer now has a much greater burden of proof?
Given the importance of the creditor's/hirer's need to ensure that 'prescribed terms' are correct, this guidance seems out of kilter with the 1974 Act.

[charitynjw]

Re: Reasonable pre-estimate or penalty?

Sorry - title should read 's127(3) query.

Could some kind Mod change it?

[Curlyben]

Re: Reasonable pre-estimate or penalty?

If the OC cannot supply the agreement then how can THEY show that the prescribed terms where indeed included in said document and that YOU signed it

See S61, CCA 74.

Remember to read the connecting clauses and sections as a whole and not as seperates..

[basa48]

Re: Reasonable pre-estimate or penalty?

If the OC cannot supply the agreement then how can THEY show that the prescribed terms where indeed included in said document and that YOU signed it

See S61, CCA 74.

Remember to read the connecting clauses and sections as a whole and not as seperates..

Exactly, but also don't forget, the debtor/hirer has to affirm that they never did sign any document that the lender is purporting to be a copy of the agreement. (Unless of course the debtor/hirer did sign and the lender has a copy of that signed agreement).

[Shadowcat]

Re: s127(3) query

Very important for the batch of Welcome Finance agreements that seem to have fallen into a black hole after PPI reclaims.

[charitynjw]

Section 127(3) query

If the OC cannot supply the agreement then how can THEY show that the prescribed terms where indeed included in said document and that YOU signed it

See S61, CCA 74.

Remember to read the connecting clauses and sections as a whole and not as seperates..

My take on the OFT's guide is that the OC can say "With all the checks & balances we had/have in place, we would not have arranged a contract without a CCA compliant agreement."
The agreement itself, or even a 'copy' of it, would not need to be produced!

All this on the dubious interpretation of the phrase 'was signed'.

Btw, this guidance is the version produced for 'Guidance to businesses in relation to their duties.......'

[Shadowcat]

Re: s127(3) query

In not seeing an agreement is ridiculous as how does anybody, including the court, get to see Terms and Conditions attached to that agreement. If the customer is completely unaware of T&C's then they can't be applicable.

It makes a mockery of an agreement to never have had one.

[charitynjw]

Re: Reasonable pre-estimate or penalty?

In not seeing an agreement is ridiculous as how does anybody, including the court, get to see Terms and Conditions attached to that agreement. If the customer is completely unaware of T&C's then they can't be applicable.

It makes a mockery of an agreement to never have had one.

Presumably, the OC would submit a copy of the T & Cs applicable at the time of the signing, & would supply 'proof' that they always given to the debtor at the relevant times in order to comply with the CCA.

[Shadowcat]

Re: s127(3) query

So it boils down to word against word and they can afford barristers. It should be taken into account the number of people alleging non-receipt but is that evidence enough. Maybe the FOS/OFT need to stipulate that all CCA's should be sent via recorded postage at the commencement of the loan as well as any given on site. It seems this area needs a bit of clearing up.

[charitynjw]

Re: s127(3) query

To be fair, the guidance here is aimed at s127(3), so it won't be applicable to regulated agreements under the 2006 Act.
However, I'm sure that many agreements still in existence were signed under the 1974 Act

[basa48]

Re: Section 127(3) query

.......................the OC can say "With all the checks & balances we had/have in place, we would not have arranged a contract without a CCA compliant agreement."

The agreement itself, or even a 'copy' of it, would not need to be produced!

All this on the dubious interpretation of the phrase 'was signed'.

Consider then in Carey:

Judge Waksman - Issue 2:

Q: [69]. “If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?”


A: [108]. Accordingly, I conclude that Reg. 7 requires a copy of the executed agreement in its original form as well as a statement of the terms as they are at the time of the request.

How many pre 2006 agreements have NOT been varied.

[teaboy2]

Re: s127(3) query

You also have section 127 (4) too.

Section 127(3) states that an enforecement order cannot be granted by the court if the requirement of section 61 are not met and the prescribed terms are not contained within the signature document.

Section 127(4) states that an enforcement order cannot be made unless the requjirements of section 62 are met and a copy agrement is left with the lender at the time of signing.

I believe in order for the creditor to proof they are entitled to enforce they would have to produce a true copy of the original signed agreement, as without a signiture the agreement is not properly executed, and they can have as many witnesses as they wish stating it was signed. But all the witnesses are biased as they work for the creditor in 100% of the cases, and you can easily argue, how many agreements they process a day means it would be impossible for them to remember specific agreements or if said agreement was signed. Basically with that counter argument, the defendant is demostrating that it is impossible for the witness to remember a specific individual agreement he/she processed out of hundreds/thousands she/he has processed since then - Therefore making the witness statement as not being a valid argument for the creditor to rely upon or for the court to be able to rely upon either as the witness statement when counter argued as above fails to prove anything. Basically the creditor has not evidence the agreeement existed or was signed let alone is enforceable and as a result their only course of action would be to produce the original in court.

So the only course of action a creditor would have would be to produce hard evidence by producing a copy of the origina. Also the agreement is what their whole claim is based on, they have to produce originals off all documents such as DN, TN and assignement letters that their case also relys on, so why not the agreement. How is the defendant suppose to fully defend against a claim is they do not have a true copy of the original agreement? The defendant won't fully know what he is defending against without a true copy.

So stricting the claiment to proof of service of the agreement and prove it was signed by the debtor and was properly excuted by producing a true copy of the original is the only way the creditor can prove beyond reasonable doubt that they are entitled to enforce the agreement or that the agreement is enforceable.

[Guest]

Re: s127(3) query

Hi
Yes i have mentioned this a number of times on here as have some others.
I believe this first reared its head in the manchester cases, when the judge mentioed it in an asside.

The fact is that section 127 does just say "was signed" so in order to comply all the creditor has to do is to show that on the ballance of probabilities this was the case, and the requirememt would be satisfied.

The ballance of probabilities would be moved slightly in favour of the lender if they were defendant but it is still possible for a court to enforce without a signed document, in section 127 terms any way.

There is of course the larger argument that says that a commertial credit agreement must be reduced to writing in order to be binding on either party.

This argument could be used over and above to argue the existance of a document, and in my view would have to be particularised seperately and appart from the unenforceability argument, there is contract law to support this possition also(i cant recall what it is at the moment)

Peter

[Guest]

Re: Section 127(3) query

Consider then in Carey:

Judge Waksman - Issue 2:

Q: [69]. “If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?”


A: [108]. Accordingly, I conclude that Reg. 7 requires a copy of the executed agreement in its original form as well as a statement of the terms as they are at the time of the request.

How many pre 2006 agreements have NOT been varied.

However if you look at this section in context you will see that they were discussing the issue of if an original copy should be sent as well as the latest copy after a section 78 request.

The point was that it should, they were not talking aboput what form the copy should take, the copy they refer to(in its orriginal form) means a true copy as defined ellswhere in the judgement.

Peter

[Guest]

Re: s127(3) query

This is the section from Carry appologies if it has appeared earlier in this thread.

229. Mrs Thompson says that such an inference can and should be made. She referred me to paragraph 2.9.4 of the OFT Draft Guidance. What this says is that often consumers and their advisers assume that if a signed copy is not provided it necessarily means that the agreement cannot be enforced either under s78 or under sl27 (3). But this overlooks the fact that there is no obligation to produce a copy of the signature and that "sl27 (3) does not apply merely because a signed document is not available at the court hearing; the section requires that a document containing the Prescribed Terms "was" signed by the debtor...The creditor may be able to provide evidence that its practice was always to require a signature and that its agreements always complied with section 61 (1) (a) and the debtor ...may be unable to satisfy the court that he or she did not sign an agreement." I do not see how that passage helps Mrs Thompson on this application.