JustAnotherPerson
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well it's either a contract of sale or it's not. If you are saying part of the agreement is a contract of sale then the HP agreement would effectively be two agreements, one contract of sale and the ther something else. I'm sure you can see where I'm leading to with this which is why you avoided the question. It's a part hire agreement, part sale and he sale only kicks in at the end of the hire period.
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Interesting that you say HP agreements contain a contract of sale. If part of the HP agreement is a contract of sale, what is the rest of the agreement?
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Scenario B is a contract of sale and you claim that HP is a contract of sale so surely the debtor in a HP agreement is a co-owner too because hes contributed to the purchase price has he not? If so, why is the BI different specifically for HP but not in other instances of contracts of sale?
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Of course cars don't appreciate unless they are rare collectors items, they almost always depreciate. Because of the interest charges added to HP agreements the car is almost never worth more than what is owed and the car will depreciate faster than the amounts being paid off. I have never seen a car depreciate slower than the amount owed, simply because the car would be required to be kept in top condition and that doesn't happen generally. You also have to take into account those who have poor credit and therefore the total price is much higher than what its actually worth. For those reasons, the car would have to have a positive equity value to stand any chance of it being able to pay off the agreement with some money left over. The only instance I guess that the car might depreciate slower than the payments is 0% interest is added subject to the make and model of the car. But anyway, your definition of BI would have to apply to not just HP agreements but all other cases when bailiffs seize goods where a debtor has a BI and that's the issue because you have tailored the definition of BI to apply to HP agreements only but not taken into account circumstances where there is no HP agreement.
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The issue with your definition of beneficial interest Dodgeball is that it is flawed and only works in certain circumstances. Compare the following two scenarios: SCENARIO A Debtor enters into HP agreement for £10,000, debtor owes TP sums and uses bailiffs to recover the sums. Bailiff seizes car which has a positive equity of £500 and a win for the bailiff. SCENARIO B A & B agree to buy a car to use together. B gives A £4,000 towards the purchase price which is £10,000 and A then purchases the car. B gets into debt related issues which results in the bailiff seizing the car and the car then sells for £12,000. Applying your definition the equity value of the car is £2,000 (being the difference between the initial value and its current value) and despite B initially advancing £4,000 he is down by £2,000 and can only claim the equity value. The above definition does not work because it can only be applied in certain circumstances for it to work but in others it will not. However, the correct approach (which the courts have devised) to quantification would be that the debtor's beneficial interest is a % of the value of the goods based on his direct contributions: SCENARIO A Car is worth £10,000 and debtor has already paid £5,000 of the total price which is 50%. Car is now worth £10,500 so the debtors interest would then be £5,250 e.g. 50% of the total current value. SCENARIO B In this scenario, B has contributed 40% of the purchase price. B's interest overall would therefore be £4,800 based on the car being worth £12,000. You will see that the correct approach doesn't benefit bailiffs because the debtor's interest is is much lower and will likely leave a debt owing to the finance company, so I understand why bailiffs are arguing that the BI is the equity value but it just doesn't work across the board. It would mean the courts would have to come up with several definitions of BI for the purposes of the TCE and I doubt very much that is what parliament intended.
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I'm making the assumption, because as we all agree the debtor has no legal interest because the HP agreements have carved this out. So if he has no legal ownership to the car or of the cars equity value by virtue of a legally binding contract (unless the option is exercised), then his only other right to those is through an equitable interest. The old English courts used to be divided into courts of law and courts of equity, and legislation combined the two and a person's legal right will always prevail except where it is unconscionable to do so which is when equity will step in i.e. an equitable interest. A contract which sets out the strict legal rights and ownership says the car belongs to the finance co. the only plausible explanation which the judge concluded was that the debtor had an equitable interest by way of the payments allowing him to rule that the car could be seized. @dodgeball, beneficial interest is only mentioned once in Schedule 12 as I can see, but Schedule 12 does not explain what it actually means, its just two words so how can you say someone has a beneficial interest if there is no real definition to it?
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Are you objecting to me resurrecting the thread? The reason why I posted again was as stated, I came across dodgeball's definition of what he believes is beneficial interest from the John Kruse book and wanted his thoughts that was suggested by JK for example, bailiffs being liable for seizing goods on HP if there is a clause which gives rise to termination upon seizure, as well as JK's other opinion that goods under ROT clauses can't be seized. So I don't think the reasons for me posting were unclear, I made that clear in the first sentence of my post: "Interestingly I came across what I believe to be your source on this definition of "beneficial interest" so I thought it would merit a further post". Dodgeball has said he did not get his definition from that book so either coincidentally the definitions are pretty much exact, or that he received it from another source who maybe read the book, or perhaps its restated in any more modern books of JK given that the book I referred to was 2009. Either way, it just goes to show that neither JK nor Dodgeball have fully grasped that any argument on beneficial interest would result from equity law and how you should quantify an equitable/beneficial interest. There has to be a legal principle behind it all and the fact that there is no definition of beneficial interest in the TCE then the court has to work out what that definition is. Fortunately, that definition as already mentioned has been around for hundreds of years, so i'll assume the judges in the CC cases applied that definition. As soon as everyone accepts that being the case, then the real discussion to take place is whether or not the debtor has an equitable interest and if so, how much of an interest does he have but I think that has already been answered in a roundabout way.
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There is a stark difference between the debtor saying "go ahead and seize the car" and the bailiff saying "i will seize the car", if its the latter I don't think you can stretch that to saying the debtor permitted the goods to be taken. That's like saying if you leave your back door open in the summer, you permit people to enter your property.. absurd is the word that springs to mind. Just because the car is available to seize and the bailiff does indeed seize the car, does not mean the debtor has given permission for it to be taken.
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Yes I do remember you saying that, which is quite funny because I also remember you saying that equity has no part in this yet you have just cited one of the equitable maxims, substance over form. No need to reply to that though, I already know what you will say.. equity plays no part.
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Interesting to see how you've skipped over my reference on Halbury's, I'll assume that you think it is wrong I don't get what you mean about HP and an agreement that goes with it.. makes no sense to me but each to their own. What does this mean, I dont understand what you are saying? I've just read para. 66 you mention, whilst the bailiff might not be liable for damages under the Schedule, that does not prevent the debtor from bringing a clause under another cause of action.
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Reference above is Halsbury's Laws (for those that don't know link here), I think that is pretty much what Denning said back in '62, but Halsbury's can't possibly be right though, its an unworkable procedure There is also reference to the word bailment yet again
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Consumer hire agreements do not allow clauses for the hirer to purchase the goods. A hire-purchase however, allows the hirer to purchase the goods at the end of the hire period, simple enough for you? If the agreement was a contract of sale as you keep saying then why is it not called a conditional sale? Surely the definition below fits to your argument does it not? "Conditional Sale means an agreement for the sale of goods or land under which the purchase price or part of it is payable by instalments, and the property in the goods or land is to remain in the seller (notwithstanding that the buyer is to be in possession of the goods or land) until such conditions as to the payment of instalments or otherwise as may be specified in the agreement are fulfilled;" That's because a HP is goods which are bailed for a period of time, as set out in the CCA. Again, two different types of agreements, one a contract of conditional sale, and the other of hire.
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Not sure your logic flows there, regardless of any vested possession you might say, the car is in the hands of the bailiff. If the creditors wants a repossession order to deliver up the car how is the debtor going to do that? And then you are also making the assumption that the debtor has paid 1/3 of the total price. You are also forgetting the general rule that I've explained before, parties cannot benefit from their own breach so why would a court transfer title to the debtor if they are the breaching party? That just wouldn't make sense to me, unless you have another reason why it is just and reasonable to do so? The whole purpose of the section enables the court to transfer title to the debtor and I can only see one reason why that might be the case, if the debtor has a cause of action against the creditor where they are seeking an enforcement order the judge may instead transfer title to the debtor. I can't see how X judge will agree that the debtor is in breach so will transfer title to them anyway and disregard the contractual provisions that says title is to remain with the creditor. The alternative would be if the creditor is asking the court to transfer title to the debtor but there would be no point in that because there is usually a clause which allows for this. They can either terminate and transfer title or they can terminate and ask for the car to be returned.
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Can't remember if I posted this but another useful Denning quote from Bridge v Campbell Discount Co. 1962 on definition of hire purchase agreements: I think that answers your question on whether HP payments count towards the purchase.. and they do not. Rental payments for the period of 36 months for example, after that the debto can return it if they wish. Under your principles, the debtor does not have a choice despite the contract giving them one. Section 9 is titled, Meaning of Credit e.g. the definition of credit under the CCA, not the definition of hire purchase so you need to stop combining the two together. 189 defines HP as bailed goods, yet section 9 as you say calls it a fixed sum loan, everyone has understood what section 9 means since its inception but not for bailiffs.. how convenient. If HP wasn't menitoned under section 9 then it wouldn't be regulated by the CCA, you are just clutching onto the fact it says fixed sum loan.
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As for s.133, who is making the possession order application here? Debtor owes money to TP, TP obtains CCJ for debt owed & uses bailiffs to recover debt, then bailiff seizes the car. I don't see any application for a possession order in that chain of events, do you? Only the finance company can bring a possession order, but can't do that if the car has already been seized. TP can't bring an application because they are not party to the contract. So how does s.133 come into play as I am confused?
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And that's the downfall of your argument. By continuing to claim that the monthly payments are payments towards the cost of the car, is in fact a conditional sale agreement - re-read the conditional sale definition under the CCA, it is entirely distinct from the definition of HP. You are also misguided when you keep referring to section 9 which supports your argument. For an agreement to be regulated by the CCA, it must satisfy the definition set out in section 8: "A consumer credit agreement is an agreement between an individual ( “the debtor ”) and any other person ( “the creditor ”) by which the creditor provides the debtor with credit of any amount." Section 9 defines the meaning of credit for the purposes of an agreement being regulated by the CCA. HP agreements are taken to be a fixed sum loan for credit purposes and thus satisfy the meaning of credit meaning they are regulated by the CCA and companies must comply with the requirements. Section 189 defines what a HP is, section 9 does overrule 189. What you seem to be suggesting is that there is a conflict of definitions between ss 9 and 189 which of course there is not.
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You can't just cherry pick sections of the CCA and then apply what suits you best, you have to read several sections in conjunction with one another to understand how it applies. Can you just confirm by either a yes or no that in your post above, you are confirming that both CS and HP agreements are contacts of absolute sale? If you are saying that, then why does the HP agreement say that the debtor has the option to purchase? If it was for a contract of sale then the debtor is contractually obliged to purchase the car, but it says he can choose to purchase or return. So how does the terms of a HP agreement amount to a sale agreement? What hearing are you referring to by the way? The creditor's hearing who the debtor owes money and instructs bailiffs or the creditor who is the finance company?
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As for the DPA reason, s.35 exemption is discretionary by the finance c ompany to give but as unclebulgaria has confirmed, you need to be satisfied that they are entitled to it. It would also mean that the bailiff's request for information is actually a subject access request and should follow the finance company's policy on that. Most companies will generally ask you for the standard £10 fee but it would seem the finance company is flouting that policy or the only other explanation is the bailiff is obtaining it by deception.
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The act refers to both HP and conditional sale agreements not just HP agreements. CS agreements are for the sale of goods which is paid by instalments, HP agreements are not, they are rental payments with the option to purchase at the end of the rental period - your confusing the two and seem to be joining them together. You initially said they were payments off the sale agreement but are now saying payment off the contract. They are two different interpretations, so which is it? I think I know which part of the section you are referring to but please can you quote me the section that backs up your statement
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I'll give you the benefit of the doubt but your original definition seems awfully close to this one. Not sure why you keep referring to property law as irrelevant, property law doesn't just encompass land it also covers property which is not land and they are called chattels - a car is a chattel for example. However much you wish to deny it, when you bring about an argument on beneficial interest, that argument becomes subject to equity law. I am not entirely sure how you can infer that because the court can transfer title if it appears just to do so, that means that all payments are not considered hire payments. If payments are made off the sale of the car, then that would make it a conditional sale agreement not a HP. @unclebulgaria, the real question then is if they do seize with no intention then that must be something a debtor could bring a claim on?
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And just to add about your posrt #301, I'm not sure how that is relevant, you've said the court can transfer the title to the goods but the claim would have to be brought by the creditor not the bailiff. A third party is not a party to the contract so s.133 won't apply to them as they are not the creditor and have no rights under the CCA
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Dodgeball, Interestingly I came across what I believe to be your source on this definition of "beneficial interest" so I thought it would merit a further post. Your definition appears to stem from a book authored by John Kruse, the Law of Seizure of Goods: Debtors Rights and Remedies, 2009. Below is John's thoughts on HP goods being seized. As you see, he seems to indicate that a debtors interest is the equity value of the goods being the difference between the cars worth and what the debtor owes. This confirms several things: (1) this beneficial interest argument is actually based on the principles of the laws of equity and (2) neither you nor Mr Kruse have any idea how beneficial interest works, arises or how it is quantified. Mr Kruse has suggested that if there is a term in the contract which terminates the agreement on seizure (something we can agree on) then the bailiff could be liable for wrongful interference. He also explains that where there is a retention of title clause in an agreement then again, goods cannot be seized (see below). So we all know that ROT clauses are always inserted into HP agreements, what are your thoughts on that? My other question is even if the car can be seized for whatever reasons, the bailiff is not an expert in valuing cars so how can he determine whether or not that car is going to sell for a price more than what is owed under the HP agreement. Surely if the car undersells then the bailiff is liable because he has caused the debtor to breach the contract and left him to pay the outstanding balance? Does this also raise any liability issues that bailiffs should only be seizing goods that they know can pay off the full amount of the debt owed if the proceeds from the car doesn't cover it? I now realise why you couldn't fully explain this definition of beneficial interest, because it (most likely) came from this book, and parts of this book are so vague and badly explained it doesn't actually help at all. As is clear though, you don't seem to fully understand what beneficial interest actually means. That is to say that the English Legal System only recognises two types of ownership and that is a legal ownership or a equitable (beneficial) ownership, with the latter being governed by equity law.
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My pro bailiff comment was not because I was losing this argument but merely that we are never going to be in agreement until a higher court specifically addresses the beneficial interest point. We are at a point where I don't accept your 3 CC positions and you don't accept my 3 House of Lords Decisions and a number of various other authorities that i've not mentioned which discuss HP agreements and come to the same conclusion as the HoL cases. Then you have the changing positions of the meaning of beneficial interest. So as it stands we are in a bit of a stalemate. and I do agree with unclebulgaria that we have gone round the houses a number of times which is why its spanned 14 pages, probably because sometimes I can't help myself but hey ho. All of these arguments both for and against should really be condensed so one can see each side on one page than over 14 and the remaining posts can focus on further developments. Though I am not sure what failed case you are referring to that is up for discussion?
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Well the only other reason I could think of would be that you don't know the answer I do agree though that maybe it should be closed until new evidence is brought to light or someone has a copy of the transcript which is in favour of the bailiffs that we can digest and comment on. Or at least tidied up, perhaps with a couple of posts where one side of arguments is in favour of BI and the other side being the opposite. Might be a bit too much for dodgeball to read though? Also saves anyone who is interested the trouble of going through 14 pages of regurgitated stuff
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My mind is already made up on BI, it is you that seems to chop and change your interpretation of it. If you understand what BI is, then you will know it is based on the law of equity and the law of equity is about fairness and not enforcing one's strict legal rights. You also said in your first post on this thread there are numerous interests and you separated equitable interest from beneficial, that was your first mistake because they are used interchangeably but are actually one and the same. then you qualified the meaning of BI as: determined by the value of the goods minus any costs and any charges due under the agrement before termination. Now that is also incorrect, because a beneficial interest can only be gained from the contributions made in % terms. So if only 3 months out of 36 months have been paid, then that is a small % of interest and that is all they are entitled to and not anything more than that as the rest of the interest would lay with the Finance Co. Now you have stated the correct approach which is the contributions made from the purchase price of the property. Unless you what to swap back to your original definition? As for the cases, what does it matter? If all of the pro-bailiff supporters wish to rely on their CC decisions with no transcript go ahead, but any logical minded lawyer would understand that those cases are in fact useful and have an impact on the arguments being made, particularly because they are authoritative and relevant.
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