Hire Agreement and Termination

[hammerton]

We had an equipment 'Hire Agreement Regulated by the Consumer Credit Act 1974' for our business with a company called Kennet Leasing. Essentially this was for 5 years and the onus was on us to terminate the agreement at the end of 5 years with one's months in advance for us to obtain ownership of the equipment and be able to stop paying the monthly charge. Halfway through the agreement the debt must have been sold by Kennet to another company called OnePM, so the monthly payments went to this company from that moment onwards.

We terminated the agreement in writing to both KENNET and ONEPM last March however it was brought to our attention that payments had still been coming out up until March this year, so they did not cancel the agreement and have been taking unauthorised deductions from us for one year.

We contacted ONEPM to arrange refund of the money they have unlawfully taken, but they have refused, despite showing evidence of the letters we sent, dated March last year. We do not have any proof of postage at the moment as still searching for that, but the letters were sent.

I understand as the agreement is a commercial one it does not fall under the realms of the Financial Ombudsman to force them to refund this money. So I am wondering what is the best way to get them to pay up as they are in the wrong.

My initial thoughts are to go through the small claims, but this would cost £600 as the amount is over £11k. I am happy to do this as I will get the small claims issue fee back, but do not want to go down this route if it is isnt the best route to take.

Is the small claims route the best way to force them to pay what they wrongfully took? Or is their another route? OnePM did mention I could take it up with the NACFB complaint scheme but I have been told by a few people that is a mickey mouse company and will be a waist of time as they have no power to force them to do anything.

Any advice will be much appreciated, thank you in advance.

[R0b]

Hello

Small claims cases are limited to a value up to £10,000 so you would need to submit a claim for that amount, otherwise it falls outside and legal costs are a potential issue.

Since it is a commercial agreement, I suggest you look at the terms and conditions and specifically for a clause about giving notice. If the contract has been drafted properly, I would expect to see a standalone clause called "Notice" or "Notices" or you might find it in the "General" section. A notice clause is what we call boilerplate because it is something that doesn't usually change. For most agreements, the notice clause will say that you need to give notice in writing by first class or registered post and then notice will be deemed delivered after X days.

Check your contract and see what it says. If you haven't complied, then it will be you that is in breach of contract. If you are struggling, suggest you upload the terms and conditions and we can take a look.

[hammerton]

Hi Rob, thank you for your reply, really appreciate it. I have attached the agreement in full. As far as I can see they do not really have a leg to stand on, as I have abided by the agreement. Unless I have missed something in the agreement. All payments were made by DD and we have not missed any payments.

This is a case of their word against ours. However, we have evidence in the form of scanned and physical copies of the letters sent, with correct addresses to both Kennet Finance (Company on Agreement) and new owners of debt 1PM finance. Would be great to get your opinion.

Also you are right on the limit on £10k but on the small claims, however there seems to be option to claim over £10k where you pay 5% of the claim amount for the small claims service. Maybe its called something else over that amount.

Any advice greatly received.

[R0b]

So the second page says in the box that the contract will be for the minimum term and continue thereafter until you give one months' written notice. There's no formality that I can see on how to go about giving notice so email/post is fine.

Where are you getting your information that you pay 5% over £10k for small claims as I don't think that is true. Cases that get allocated on the small claims track have a limited of up to £10k and the only other way I can suggest it goes onto the small claims track is if both parties agree to that. There are also other factors that determine whether it goes on the small claims track but aside from the value, there's nothing that would indicate this is a complicated dispute.

Having the letters would be a starting point but they could easily say you've just mocked them up now to try and get out of it. However, if the copies have been uploaded onto a system or some process to verify it was sent, and you can get further employees to provide a witness statement to that effect, then that is likely to add more weight to the current circumstances.

It is a case of balance of probabilities and how much you can persuade the judge you are telling the truth over the finance company. It may be worth a punt going to court anyway but it depends on the reasons why they are rejecting your claim.

In any event, a lesson to be learnt moving forward is to comply with the notices given in the contract and if it's silent on recorded delivery, make sure to get proof of postage at least, or the more preferable will be signed for delivery.

[hammerton]

Thanks Rob, yes there are certainly lessons learnt as this was admin mistake our end, by not picking up the recurring charges. We have no evidence other than the copies we have, but I can get a witness statement from the member of staff that sent the letter.

Your right their argument will be that we could have just mocked up the letters and would come down to our word against there's. But what we do have is that we are telling the truth and ultimately we paid all the money due for the agreement and this extra money, should morally be returned really. The judge would be a very harsh person to favour on the side of a finance company over extra money they shouldn't have taken, especially during the time we are in. But of course nothing is for certain in these times.

Is NACFB complaint scheme a route worth going down or is it a waste of time? Or any other better options?

If we went down the MCOL route I don't think I would need to get a lawyer involved for this particular case if it went to courts and I would imagine the other party (finance company) wouldn't either, I think it would be better talking to the judge in person on the day anyway, we have nothing to hide. So I would imagine it should be weighted in our favour seeing as it's our word against there's and we do have something i.e.letters and witness statements as evidence, whereas they just have them saying we didn't get the letters.

I have attached the MCOL pricing, you can see the option for over £10k is 5% of the cost of the claim.

I am thinking I will send the witness statement and say we have started the claim and ready to click the proceed button, but are willing to give them 7 days to response else we will start the claim and see it through to court mentioning the extra 5% that will be added on top, so within there interest to pay this claim now to avoid extra cost.

The other question is presumably I should be claiming from ONEPM the company that took the excess payments? As appose to KENNET the original company we took the hire purchase agreement out with?

Again your thoughts would be most appreciated on this again.

Thanks
Lee

[hammerton]

Hi Rob, can you help with advice still please? Basically just need to know whether you think it is worth going down the small claims route. Happy to pay the 5% cost but obviously not if this is the wrong route to take.

[hammerton]

Can anyone help with this? We know we are in the right, but concerned about spending 5% of the claim for the small claims fee? Is small claims the route to take? Any advice greatly received.

[ostell]

If you are over £10,000 then it's likely not go into small claims track. If you win you get the the court fees back, if you lose you can also be paying your opponents costs if it's not on the small claims track.

A finance company will gave a legal team anyway so will use them for any court proceedings.

You don't just talk to the judge on the day, you have to prepare all the paperwork in advance

[hammerton]

Hi Ostell, thank you so much for your reply. Could you help with advice still please? Basically just need to know whether you think it is worth going down the small claims route. We know we are in the right and we have all the paperwork, but concerned about spending 5% of the claim for the small claims fee? Is small claims the route to take or is it wrong route to take? Any advice greatly received.

[ostell]

As has been said many times there is a ceiling of £10,000 for the small claims track. Court fees are claimed back if you win