Re: Cause of Action Discussion



Hope the site team do not mind, I have copied my reply on here from anther thread, as te issue is broader than that being raised elswhere, hopefully the debate will attract some new blood, as it is I think an interesting one..

Just read BMW (again). this case should be read and re-read IMO, not not dismissed as being irrelevant. There is much commentary on there which is applicable to all contracts and links other authorities which are useful if we are to understand the COA issue.

As said it seems that most agree that the COA will be dependent on the contract on CC and in fact on any credit agreement. This is certainty the case in BMW and all the associated case law and authority referred to in it.

I think as also stated before, the only real issue is if this can be deferred by the issuance of the termination notice in a regulated agreement.

It is interesting to see that many T and cs mention statutory notices within their termination clause, for these at least I think it would be safe to assume that a DN and subsequent termination would be a prerequisite for the creditor to be "able to demand full payment".

This as Jon says raises the problem which like it or not exactly parallels that raised in BMW where at 25 the judge says;

25. In my view, the judge was wrong to think that that decision applied to the present case. In
this case, the right to recover the sum set out in clause 12 did not arise unless and until the
hirer gave notice to terminate the contract. That was a right that he could choose to exercise
or not, but unless he elected to do so, the contract continued in existence and instalments of
hire would have fallen due at the stipulated intervals. Under section 5 of the Limitation Act
1980 time in a case of this kind runs from the date when the cause of action accrues. In this
case, the cause of action to recover the amounts claimed under clause 12 did not accrue on
the customer's default alone, but only upon the election of the hirer to terminate the contract.

Similarly the creditor can chose when to send a DN and indeed after that can choose when to send a termination notice.

this was referred to in the quote from squire sanders. http://www.lexology.com/library/deta...7-21b6701a273e

If the Court of Appeal had come to any other conclusion it would have been contrary to the wording of the CCA. This envisages that the balance does not become due (and cannot be demanded as being due) until after the expiry of the notice period. The Court of Appeal’s decision can also be used in appropriate circumstances by lenders wanting to stop the limitation period running. It seems clear that, subject to an argument that the lender has affirmed the agreement by not taking steps to accept a debtor’s repudiation, termination could be delayed until the end of the term of the agreement. This would allow lenders to delay (most obviously where the debtor is in a difficult financial position or cannot be located) issuing proceedings until the last moment, like BMWFS did, and avoid being time-barred.

Of course it may e that when a regulated agreement comes to court a judge will say that the statute is only a procedural bar, and all this should be disregarded, the COA would then rest purely on the contractual right to demand full payment..

Interesting though