Will you get payments back because of the lack of a credit agreement?

[tomterm8]

Gizmo has asked me to post further about the reasons why I think it is extremely risky to bring a case to recover monies already paid under a credit agreement, and why I don’t think such cases have a reasonable prospect of success.

Before going into further detail on this, I would like to give the normal provisos. I am not a lawyer, although I have gone into this subject in some detail because of the personal benefit to myself if I could find some way to get the courts to award such a verdict. Even trained barristers can be surprised when a judgement of the House of Lords comes in. And, if you don’t think that a case on these principals would go to the House of Lords if you won it, you are very much mistaken.

What are the consequences for the banks?

The first things to consider are the consequences for the banks of such a verdict. Frankly, this would be astronomical. People could reclaim monies back for credit agreements lasting for decades. The statute of limitations would probably not apply, since the verdict would be one of mistake, and the likelihood is that several major banks would be bankrupt, leading the economy into recession.

The banks are well versed in the consequences of these actions, and frankly I would expect any case brought would be defended by the leading barristers in the field. Not one barrister, if I were the banks I would send dozens.

The case would probably be transferred over to the commercial or mercantile courts. And you would pay costs if you lost. And those costs would probably NOT be in the same order as the amount of money at stake.

You are talking about a claim worth billions to the banks, and about companies that could easily spend 10 million on the case without putting a dent into the shareholders Champaign at the general meeting.

What are your prospects of success?

Ok. If you ignore the fact that if the banks have any sense, they will bring the best and brightest minds in law against you, even if we go to the base law, your chances do not look good to me.

Firstly, you should be aware that, as a basic fact of law, the existences of an improperly executed credit agreement DOES NOT void that agreement. The fact there never was a properly executed agreement, also DOES NOT void the agreement. Only the lack of an executed (that is signed) agreement at all would do that.

This is the reason the court returned the car in the Wilson case; the agreement existed, and continues to exist, BUT it was not enforceable without the consent of Wilson. It’s interesting to note even Wilson did not attempt the recovery of monies paid under the agreement. We’re talking about one of the most famous rogue debtors… so, have you wondered why she didn’t do so, if it was a realistic possibility?

In your case, you handed over money related to the agreement, and I believe that any judge would consider that the payment was made as a consensual act under a consensual agreement. The Parties believed the agreement to exist, both parties intended it to be enforceable, and no part of the relevant statute law requires the repayments of money paid under an unenforceable credit agreement.

Either the payment was made as the result of consensual enforcement OR there was no enforcement technique (within the meaning of the law) used, and so any repayments made would not have been prevented by either the consumer credit act 1974 or any other enactment.

Remember, the agreement is neither void nor voidable. The agreement is merely unenforceable by one party. But that party did not seek to enforce it through the courts prior to your payments.

So, the court is not required by statute law to return your money, in my opinion.

Equity and clean hands

Now, people readily accept that there is no basis in statute law, but they bring up the argument of equity…payments were not required to be made by law, and they weren’t aware of this fact, and so the money was paid by mistake.

However, a court will look at the facts in the round. Firstly, was there a credit agreement? The answer is yes (according to the Wilson case). Second, was the agreement void? The answer is no (according to the Wilson case). Thirdly, are you entitled by statute law to reclaim monies paid (IMHO, No).

At that point, IMHO if your claim relies on equity, it fails. Firstly, the money was not paid by mistake of fact (since money was owed under a credit agreement, and no enforcement took place) but mistake of well established law and in equity you have a duty to know the law.

Secondly, on moral but not legal grounds, you made an agreement that is not void, and you are attempting to reclaim monies paid under that agreement. There is a presumption in equity that, unless there is some grievous unfairness, both parties should abide by their agreement. Yet, you are manifestly attempting to deprive the creditor of some or all of their historical benefit from the contract, while retaining all of the benefit. This remains true EVEN if your claim is only for interest and not principal, since you are attempting to deprive them of the time value of the money.

Thirdly, there is a defence of change of position – the creditor has used the money by paying it out to shareholders or reinvesting it, and is reliant upon the payment. You had the right at the time not to pay any money, but you did not excerpt this right. The law does not require you to assert the right not to repay monies due under a credit agreement.

These are only “off the top of my head” defences. And you can be sure that the banks, if they are sensible, will hire the best legal brains in the business and use every obscure precedent and argument in the history of law to thwart you.

So good luck, if you bring this case, and I wish you well. If you win, I would really love to know your case, as it would net me thousands of pounds myself.

[gizmo111]

Thanks Tom

 

I have started a new thread where you can discuss this post here.

[sequenci]

unstuck