Bill Of Sales and repossession of goods - NOTE: much of this is now out of date - dx 2016

[tomterm8]

There are a number of companies operating on the basis of loans secured on property, for example cars.

These loans are often provided for relatively small amounts of money, with very high rates of APR (often, over 100, and cases of APR’s over 200% are not uncommon).

 

In many cases, the results of even minor infractions of the rules on these agreements are severe; resulting in the repossession of the goods, and charges that can often amount to hundreds of pounds, while the debtor remains liable for more than the original cost of the loan.

 

However, in almost all cases due to technical mistakes by the creditor, the securities offered by these agreements are null and void even if the underlying debt is not.

 

What is a bill of sale?

 

The definition is so broad that it includes any security on private goods (other than a house or land), but do not include any agreement where the goods automatically pass to the lender.

 

But a bill of sale is not a pawnbroking agreement, where the debtor parts from possession of the goods, and redeems them at the end of the contract, or a “sale and buyback” scheme, where the customer sells the goods to the creditor (who then owns them, and gains possession of them), with the “debtor” having an option to purchase the goods back after a period of time), or a hire purchase scheme.

 

for the formal definition look up http://www.statutelaw.gov.uk/content.aspx?LegType=All+Legislation&title=bills+of+sale&Year=1878&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&parentActiveTextDocId=1054646&ActiveTextDocId=1054652&filesize=4315

 

 

The statutory requirements for a bill of sale to be valid.

 

1. The bill of sale must be in the correct form and contain the prescribed information contained in the 1882 act.

 

2. The bill of sale must be registered.

 

If either requirement is not met, the bill of sale is void

(that is, the security will not be enforceable, although the underlying debt may be).

 

Form and Content of a Bill of Sale.

 

The language for some of the wording is is archaic, which most ordinary people today wouldn’t understand.

Nevertheless, if not in the prescribed form, it renders the bill of sale void.

 

It will be rendered void if it does not contain:

 

• The date of the bill
  
• The names and address of the parties
  
• A statement of Consideration
  
• An acknowledgement of the receipt of the advance
  
• An assignment by way of security of particular goods, capable of description
  
• Statements of the sum secured, the rate of interest, and the instalments by which repayments are made,
  
• Agreed terms for the maintenance of security
  
• A clause limiting the grounds of seizure to one of the following:
  
  • Default with the repayments or any covenant of the bill
    
  • Bankruptcy or seizure of the goods for rent, rates, or taxes.
    
  • If the granter fraudulently removes goods, or arranges for their removal
    
  • If execution has been levied against the goods
    

   

  [*]A schedule containing a description of the chattels

  [*]Execution (signature) by the granter (borrower)

  [*]A statement in the form of the 1882 act

  [*]Attestation by a witness not a party to the bill

  [*]Registration

The consideration is the amount the borrower receives for the bill of sale; NOT the sum secured by the bill (which would include interest and costs). For example, if the agreement is regulated by a consumer credit agreement, it would have to use the amount that was advanced to the borrower BEFORE charges, costs and interest.

 

The bill of sale must contain a statement in the form provided by the act. Here is the wording: http://www.statutelaw.gov.uk/content.aspx?LegType=All+Legislation&title=bills+of+sale&Year=1882&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&parentActiveTextDocId=1055715&ActiveTextDocId=1055738&filesize=2273 . This is often missing.

 

If a credit agreement regulated by the consumer credit act is secured on a bill of sale, and the bill of sale is void, the credit agreement may also void by virtue of the act, although the law on this is VERY unclear. I would recommend getting into contact with the national debt line on this issue.

 

So. You’ve got a copy of the bill of sale, and it is a rare bill of sale that complies in all respect with the acts.

 

Can it be enforced?

 

Registration

 

A bill of sale can only be enforced if it was properly registered. Since this is an expensive and difficult process, it is rare that this actually happens. However, failure to register the bill of sale renders it void, and so renders any security on goods void.

 

Consequently, before allowing any creditor to gain possession of your goods, ask to see a registered copy of the bill showing the supreme courts seal.

 

You can also call the national debt line, and ask them how to search the registry yourself.

 

Requirements of the consumer credit act

 

Most bills of sales are also regulated by the consumer credit act. Such a security will be no more valid than the consumer credit agreement. The requirements of the consumer credit act include:

• A description of the security should be included/embodied in the credit agreement
  
• The bills of sale must be presented to the debtor at the time the credit agreement was signed
  
• The creditor will normally have to issue a default notice before calling in the debt.
  
• The terms of the bills of sale must be consistent with the credit agreement.
  
• The agreement must not be extortionate ( if made before 2007) or constitute an unfair relationship(after 2007)
  

All the other, normal requirements of the consumer credit act apply. It is also possible to apply for a time order to prevent the repossession of goods under the consumer credit act 1974.

 

Enforcement of Bills of sale

 

Before you are required to give up your property, they must (if you ask for it) provide a valid bill of sale exists, that bears the stamp of the Supreme Court.

 

However, repossession does not need to be carried out by a certified or professional “enforcement officer” given this, the professional conduct of those actually repossessing goods is of serious question, AND I ADVISE ANYBODY when presented by a bill of sale to call the police immediately, informing them that you are afraid of a breach of the peace and asking for their attendance.

[postggj]

just curiouse

 

if a vehicle is taken by the finance company

the finance company sells the debt to a dca

if the bill of sale is crap, can the dca default you or take you to court

and if the oc has defaulted you, can you insist it be removed

[tomterm8]

The fact a bill of sale is crap does not invalidate the underlying credit agreement.

[postggj]

thanks tomterm8

just

educating my self to something new

one more question

again if the bill of sale is crap,

how would a dca try to enforce the agreement through the courts if the agreement is worthless

[tomterm8]

For a regulated agreement (by the CCA 1974), the agreement could be enforced like a unsecured loan (assuming the credit agreement itself is enforceable)... the bill of sale would not secure the agreement, but not invalidate it either.

 

if it is a pure bill of sale agreement, then of course it could not be directly enforced.

[JonCris]

Very informative thread Tom........as usual

 

However I will take issue with you on one point & that is that lenders DO register the BoS within the required 7 days & that is certainly the case with LBL

 

Although not that important, unless they haven't done it, that to accompany the BoS must be a sworn affidavit confirming the validity of the BoS. Also this affidavit can only be sworn by a solicitor or other officer of the court

 

I will return with further comment

[postggj]

still getting my head around this one

 

if the bill of sale has not been sworn before a court official, or has the court seal,

 

how does that effect the oc or dca enforce the agreement in court, say if its a regulated agreement by the cca

[JonCris]

Not a court 'official' but a court 'officer'............which is different. A court official works day to day within the court......an officer does not

[The GodMother]

does this mean that the OP would have had to attend court to swear the document aswell.

 

If not how can they say that it is his signature?

[JonCris]

Godmother No it's a matter for the lender alone

[The GodMother]

Ok.

 

Its just when ever i have had to swear documents with another signature on in they have had to be present aswell.

[tomterm8]

Right, a bill of sale must be attested "The execution of every bill of sale by the grantor shall be attested by one or more credible witness or witnesses, not being a party or parties thereto" (i.e. someone must witness your signing the bill of sale. this makes the agreement properly executed. )

 

The second part of the process is registering the bill of sale. This involves the credible witness to the execution of the bill of sale swearing an oath that they saw you sign the bill of sale:

 

"Such bill, with every schedule ... every attestation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale being made or given, and of its due execution and attestation, ...shall be filed with the registrar within seven clear days after the making or giving of such bill of sale..."

 

It's not the debtor, or (in my opinion) the creditor that needs to swear the oath, it is the witness. I'm not aware of any case law to back this assertion up, it is just what makes sence.

[tomterm8]

Very informative thread Tom........as usual

 

However I will take issue with you on one point & that is that lenders DO register the BoS within the required 7 days & that is certainly the case with LBL

 

Although not that important, unless they haven't done it, that to accompany the BoS must be a sworn affidavit confirming the validity of the BoS. Also this affidavit can only be sworn by a solicitor or other officer of the court

 

I will return with further comment

 

I am certainly willing to concede the point that they could register the bill of sale, or they should, and it may just be a coincidence that in the cases I've dealt with I've never found a bill of sale in the proper form, attested and registered in the correct way.

 

Certainly, if all the requirements are fulfilled, then they have every right to take your property.

[The GodMother]

how can u find out if the BoS has been attested and registerd in the proper way. If and when you request the documentation so a copy of the affidavit come with it as well or would u have to seperatly apply for that from the courts.

[postggj]

sorry to ask this question again

 

if the bill of sale has not been actioned in the court,

how does this affect a dca enforceing the agreement in court

[tomterm8]

how can u find out if the BoS has been attested and registerd in the proper way. If and when you request the documentation so a copy of the affidavit come with it as well or would u have to seperatly apply for that from the courts.

 

You pay the prescribed fee, and send a letter off to the high court in london for a copy. all the required documentation should be provided to the court, with the court seal on the bill of sale. Precise details of the current fees / address could easily be obtained from citizens advice or the national debt line (I know these details have changed since the last time I applied for a copy), alternatively if you PM sequenci I am sure he would be able to give you the current fees and address.

 

sorry to ask this question again

 

if the bill of sale has not been actioned in the court,

how does this affect a dca enforceing the agreement in court

 

They couldn't reposess any property named in the bills of sale, but they could enforce the debt like any other unsecured credit agreement in the court.

[sequenci]

Make a written application with a £40 fee (recorded/special/registered delivery)

 

Provide the name and address of themselves and the other party

 

The address is Judgement and Orders Section, Room E15, Royal Courts of Justice, Strand, London, WC2A 2LL

[Feyis]

Right, a bill of sale must be attested "The execution of every bill of sale by the grantor shall be attested by one or more credible witness or witnesses, not being a party or parties thereto" (i.e. someone must witness your signing the bill of sale. this makes the agreement properly executed. )

 

The second part of the process is registering the bill of sale. This involves the credible witness to the execution of the bill of sale swearing an oath that they saw you sign the bill of sale:

 

"Such bill, with every schedule ... every attestation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale being made or given, and of its due execution and attestation, ...shall be filed with the registrar within seven clear days after the making or giving of such bill of sale..."

 

It's not the debtor, or (in my opinion) the creditor that needs to swear the oath, it is the witness. I'm not aware of any case law to back this assertion up, it is just what makes sence.

 

 

The above has been very informative, my problem is that I have requested the evidence of the bill of sale and have been sent a bill of sale and an affidavit signed 2 days after the BoS by a commisioner of oaths at a local solicitors shop. (I Checked out the address) No court stamp visible, will I be right in concluding that this is an invalid BoS?

[JonCris]

It wasn't a Wimbledon solicitor was it??.

 

I assume you copy was sent by the creditor & not sealed by the court. If so it won't be valid also have you applied to the court for copy just to make sure

[JonCris]

Forgot to mention that, as seems most likely, the attester was the agent of the creditor then the BoS may be invalid is they are not an independent attester/witness as required in law

 

As I recall the witness should not be a beneficiary (receive payment which would include wages, commission or some other incentive directly linked to the transaction) of any document they witness.

[Feyis]

Forgot to mention that, as seems most likely, the attester was the agent of the creditor then the BoS may be invalid is they are not an independent attester/witness as required in law

 

As I recall the witness should not be a beneficiary (receive payment which would include wages, commission or some other incentive directly linked to the transaction) of any document they witness.

 

 

I think that nails it then, the BoS is invalid, as it was signed by the ACF Salesman, who is paid for the transaction (and ACF is owned by Cygnet) etc.

 

Thank you ver much, I'm in the process of drafting a letter to the finance company informing of the invalidity of the BoS and requesting them to take the car back. I only wonder if there is a letter template anywhere for this. Cheers.

[caro]

I've just been directed to this thread and moved it to the Log Book Loans / Bills of Sale forum as a sticky.

 

A rather belated thanks to Tom and other contributors.

[JonCris]

PS I disagree with Toms assertion that even if the BoS is rubbish the debt is still enforceable via the credit agreement. IMHO the incorrectly executed BoS, as in Wilson v the Pawn Broker, poisons the whole of the transaction with the money advanced becoming a windfall again as in Wilson

[sequenci]

PS I disagree with Toms assertion that even if the BoS is rubbish the debt is still enforceable via the credit agreement. IMHO the incorrectly executed BoS, as in Wilson v the Pawn Broker, poisons the whole of the transaction with the money advanced becoming a windfall again as in Wilson

 

I agree with Tom.

 

In the Wilson case it was found that the charge for credit in the actual regulated agreement was wrong, thus rendering it improperly executed and by virtue totally unenforceable. A bill of sale is made up of two totally seperate agreements as I'm sure you know.

 

1) for the credit

2) for the security

 

I would argue that (so long as it has been completed correctly) the credit agreement could still stand allbeit one which has no chattles secured.

[tomterm8]

PS I disagree with Toms assertion that even if the BoS is rubbish the debt is still enforceable via the credit agreement. IMHO the incorrectly executed BoS, as in Wilson v the Pawn Broker, poisons the whole of the transaction with the money advanced becoming a windfall again as in Wilson

 

It's a matter of construction, JonCris, in the case of the consumer credit act the words are that the agreement is unenforceable by the creditor. The contract is not void. Therefore, the law of restitution does not apply.

 

 

In the Bill of sales act, there are two different scenarios. The first is that the BoS is not attested and registered correctly, in which case the BoS is "otherwise such bill of sale shall be void in respect of the personal chattels comprised therein". I.e. you can't reposess the goods. But the BoS is not utterly void, a debt still exists.

 

Where the form of the BoS is incorrect (i.e. language is wrong) the BoS is is void.

 

The use of language is very important. In CCA 1974, the debt is rendered unenforceable by the court in respect of the debtor. The debtor still has a right of action against the creditor. There's a rather humerous part in the verdict that allows the debtor to still draw upon the credit agreement.

 

In BoS act, the Bill of sale is rendered void. The effect of this is that the law of restitution comes into play. And, under the law of restitution, the minimum that will happen is both parties are returned to the situation they are in before a contract is made.

 

The BoS is a seperate legal entity to the consumer credit regulated debt it secures.

Edited July 21, 2009 by tomterm8