SB100 v HFC - is this default compliant? Court/Restons ***WON***

[SB100]

Done it- its on its way. Thanks again.

[SB100]

Ok, they've replied. The default looks similar to the one I received - but its not identical. Some bits are missed out. Also, they've photocopied the 'CCA' so that 'application form' doesn't appear across the top. They've also included what appear to be archive copies of t&c's from when they allege I took the card out. I'll scan them tomorrow and put them on as I need help with my defense.

 

Thanks :0

[SB100]

Ok, here we go. I've made some notes, not sure if they're of any relevance or help.

 

I could do with help with the defense as I suspect I need to do it pretty quickly? They've not mentioned extra time to file amended defense as requested, and the timing of the CPR response wouldn't have allowed me to submit a correct defense. Deliberate or just innefficient?

 

Cover page. Note that they say the termination notice is not applicable, but they state on the DN that 'HFC will terminate the account on the date shown'.

 

 

This, they say, is the agreement. They've conveniently cut the heading off that says 'Priority Application Form' which may be considered slightly misleading... Also, can't see a sgnature from HFC, and they've dated it 23/2/94 although the DN says the agreement was dated 17/2/94? No prescribed terms as far as I can see, and no reference to a 'PTO' or similar.

 

 

Terms and conditions- they've written 'Jan 94' on the top. Never seen these before.

 

 

These appear to be both sides of the leaflet for t&c 2008 - note '2008' handwritten and cut marks usually associated with a digital file.

 

 

 

Default notice. Dated 15th April and sent by UK Mail (sorry, I managed to obliterate the date when clearing off the personal info). Notice the discrepancy between the figures in 2(b) and 4. This isn't the same as the DN they originally issued, where the amount is the same. Seems to have problems with 14 clear days remedy date and prescribed wording (NOT etc)

 

Edited June 25, 2009 by SB100

[GamekeeperToPoacher]

Hi SB,

 

I am sorry but I cannot see the date that the DN was sent on there?

Am I having a senior moment?

 

GK

[SB100]

Sorry- I managed to obliterate it. Its dated 15th April and sent by UKMail.

[andyr666]

Are they insinuating that they have not terminated the agreement?

[SB100]

Your guess is as good as mine- although the DN clearly states that they'll terminate on the remedy date if not remedied. maybe they don't issue a separate termination.

[SB100]

Guys / Girls, I need some help with my amended defense asap please

Edited June 26, 2009 by SB100

[citizenB]

If the DN was sent by UK Mail (2nd) then it would only allow you 11 days I think.

 

They say the TN isnt applicable, but they do state in the DN that they WILL do it. Therefore you.. as any reasonable person would.. believe it to have been so.

 

Therefore they have terminated on the back of a Dodgy DN.

 

What was the date of your signature on the application form?

 

I wonder from what date the agreement actually takes place.. from when you signed the application (which doesnt at that time mean that you have been accepted as a customer) or when they have signed it. Which kind of makes the date the agreement started according to the DN incorrect as well. What date is on the POC. ?

[SB100]

Yep, that seems to be about the long and short of it. I need to put the proper defense together now- not sure how long I have but suspect I ought to do it pdq.

 

Thanks

[SB100]

Equifax are reporting my account was closed on 31st March:confused:

[citizenB]

Ok heres a very rough embarrassed defence (think it came from Pt2537 originally?), others can add to it.

 

 

1. I, ********** of ************** make this statement as my defence to the claim brought by **************

 

2. The claimants particulars of claim are vague and fail to disclose any cause of action, they appear to be an abuse of the process in that they fail to deal with the basic rules of pleading in accordance with the CPR even allowing for the constraints of the bulk issue system

 

3. No documents supporting the claims in the particulars have been offered and despite a request to the claimant for further information via CPR 31.14 dated xx/xx/xxxx sent by recorded delivery none has been forthcoming and as a result I cannot plead in defence to the claim

 

4. Without clarification of the claimants claim, the defendant is extremely disadvantaged and the claimants claim appears without merit, the defendant asks to be allowed to submit a fully particularised defence should the claimant provide copies of the original documents he will rely upon.

 

5. Further to that above 4 paragraphs, the defendant is unable to plead effectively or at all. The defendant is embarrassed.

 

 

Statement of truth bit here

 

 

 

 

 

S.

 

 

 

Okey dokey, so you submitted the above embarrassed defence on Wednesday, 24th June. Which by my reckoning was the final day allowed for submission.

 

You have now been supplied with the documents you require in order to put in a fully particularlised defence.

 

We now need to know the procedure for putting in a proper defence.

 

TBH, I shouldnt worry too much at the present. You have submitted a defence on time which is important.

[42man]

Just adding this in to the mix....

 

strike out under CPR 3.4(2)(a)

 

The reasoning is simple:

 

Section 87(1) of the CCA 1974 says:

 

87.--(1) Service of a notice on the debtor or hirer in accordance with section 88 (a default notice) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,--

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum....

 

Section 88 says that the DN must be in the prescribed form and the associated regulation say what that form is.

 

Thus, if the DN is not in the prescribed form, it is invalid and, under s87, the lender has no right of action.

 

CPR3.4(2)(a) says that the court may strike out a statement of case if it appears to the court –

 

(a) that the statement of case discloses no reasonable grounds for bringing ... the claim

 

The requirement for a valid Default Notice to lawfully Terminate an Account whilst in default

 

1. Notwithstanding the matters pleaded above, the Claimant must under Section 87(1) of the Consumer Credit Act 1974 serve a valid Default Notice before they can demand early payment of sums not yet due under a Regulated Credit Agreement.

 

2. Under the Interpretation Act 1978 Section 7, it states:

 

Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expressions "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have effected at the time at which the letter would be delivered in the ordinary course of post."

 

2. Practice Direction

Service of Documents - First and Second Class Mail.

 

With effect from 16 April 1985 the Practice Direction issued on 30 July 1968 is hereby revoked and the following is substituted therefore.

1). Under S7 of the Interpretation Act 1978 service by post is deemed to have been effected, unless the contrary has been proved, at the time when the letter would be delivered in the ordinary course of post.

2). To avoid uncertainty as to the date of service it will be taken (subject to proof to the contrary) that delivery in the ordinary course of post was effected:-

(a) in the case of first class mail, on the second working day after posting;

(b) in the case of second class mail, on the fourth working day after posting.

"Working days" are Monday to Friday, excluding any bank holiday.

3). Affidavits of service shall state whether the document was dispatched by first or second class mail. If this information is omitted it will be assumed that second class mail was used.

4). This direction is subject to the special provisions of RSC Order 10, rule 1(3) relating to the service of originating process.

 

8th March 1985

J R BICKFORD SMITH Senior Master

Queen's Bench Division

 

3. Further to point 2 above, CPR rules on service also state the required timescales to be given for serving of documents :-

 

Under CPR 6.26 First class post (or other service which provides for delivery on the next business day) is deemed to be “served” The second day after it was posted, left with, delivered to or collected by the relevant service provider provided that day is a business day.

 

4. The Default notice supplied by the Claimant is dated Friday 3rd August, to allow service in line with the statutory requirements mentioned in points 2 & 3 above, 2 working days were required to allow for 1st Class postage. Thus the Rectify date should be 14 calendar days from Wednesday 8th August, namely Wednesday 22nd August 2007, not the 14 calendar days from the date of the letter as stated in the Default notice which would have been 17th August.

 

5. I therefore put the Claimant to strict proof that any Default Notice sent to me was valid and allowed the statutory 14 clear days to rectify the breach. I also note that to be valid, a Default Notice needs to be accurate in terms of both the scope and nature of breach and include an accurate figure required to remedy any such breach. The prescribed format for such document is laid down in Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) and Amendment regulations the Consumer Credit (Enforcement, Default and Termination Notices) (Amendment) Regulations 2004 (SI 2004/3237).

 

6. The failure of a Default Notice to be accurate not only invalidates the Default Notice (Woodchester Lease Management Services Ltd v Swain and Co - [2001] GCCR 2255) but is an unlawful rescission of contract which would not only prevent the Court enforcing any alleged debt, but give me a counter claim for damages Kpohraror v Woolwich Building Society [1996] 4 All ER 119.

 

7. It is submitted that the above Default Notice served s87(1) Consumer Credit Act 1974 failed to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561).

 

8. For a Creditor to be entitled to terminate a regulated Credit Agreement where there is a breach, demand repayment in full or take any legal action to recover any monies due under the Agreement, a creditor must serve a Default Notice under section 87(1) of the Consumer Credit Act 1974 which states:

 

Section 87. Need for Default Notice

 

(1) Service of a notice on the Debtor or hirer in accordance with section 88 (a "Default Notice ") is necessary before the creditor or owner can become entitled, by reason of any breach by the Debtor or hirer of a regulated Agreement -

 

(a) to terminate the Agreement, or

 

(b) to demand earlier payment of any sum, or

 

© to recover possession of any goods or land, or

 

(d) to treat any right conferred on the Debtor or hirer by the Agreement as terminated, restricted or deferred, or

 

(e) to enforce any security.

 

9. The Act also sets out via Section 88(1), that the Default Notice must be in the prescribed form, as below:

 

Section 88. Contents and effect of Default Notice

 

(1) The Default Notice must be in the prescribed form…

 

10. The wording must make it clear that no variation is acceptable. Therefore it cannot be dispensed with as a De Minimus issue.

 

11. I note that the regulations do not allow any variation in the form of these statements and therefore it is suggested that where the statements are not as laid down in the regulations the Default Notice is rendered invalid as a consequence.

 

12. In the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 in the Court of Appeal, the Court addressed in some detail the issue of the contents of a Default Notice and should the notice fail to comply with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) it would render the Default Notice invalid I quote the comment of KENNEDY LJ: "This statute was plainly enacted to protect consumers, most of whom are likely to be individuals" the judgment appears to confirm the consumer credit legislation made under the Consumer Credit Act 1974 as plainly enacted and set out to offer protection to the consumer. Therefore it is suggested that the failure of the Claimant to set out the Default Notice in accordance with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) could unduly prejudice me as it failed to allow the required time to remedy the alleged default.

 

13. The Claimant’s failure to issue a valid Default Notice must surely prevent a right of action and would make any termination of the Agreement unlawful, as statute provides the procedure that must be followed. Since the Claimant has failed to adhere to statutory procedure it is averred that the Claimant does not have a right of action, and can never now have a right of action having terminated the Agreement unlawfully.

 

14. Furthermore, the Arrears Total outlined cannot be accurate, as the Balance on the Account was at least partly comprised of Unlawful Charges plus additional Charges and Interest added unlawfully whilst the Account was in Dispute. Therefore, the Arrears claimed cannot be accurate, as they are themselves calculated using a Total that was itself inaccurate.

 

15. This is at all times an Agreement Regulated by the Consumer Credit Act 1974. There is no provision in the Act that allows a large financial institution to terminate an Agreement that is in alleged default or breach simply by giving notice to the Consumer. Section 98(6) makes that quite clear. The Creditor must follow the steps outlined in Section 87 and Section 88 if they are to lawfully Default and Terminate, and enjoy the benefits of Section 87.

 

16. Finally, an invalid Default Notice cannot be remedied by simply issuing a new Default Notice. The Claimant may not serve a second effective default notice in prescribed form post-termination of the agreement. Any such second default notice will necessarily state a date by when I would be required to comply after which in default the agreement would terminate. The second default notice would therefore contain the fiction that the agreement endured when that cannot be the case, as it was terminated on XX/XX/XX. Terminating an Agreement on the back of a defective Default Notice, simply confirms the undeniable truth that Termination of the agreement by the Claimant was carried out in circumstances which then prohibited them from enjoying the benefits of Section 87, namely the opportunity to seek early Payment of a sum that was, prior to Termination, only payable in the future.

[42man]

CCA RULES FOR PRESCRIBED TERMS

CONSUMER CREDIT ACT

8.2 What if prescribed terms are missing or incorrect?

 

s127(3) provides that the court may not make an enforcement order unless a document containing all the prescribed terms of the agreement was signed by the debtor – see Q1.21.

 

If therefore any of the prescribed terms is missing, or incorrect, the agreement is not enforceable against the debtor, and the court is precluded from making an enforcement order.

 

 

8.3 What are the prescribed terms?

 

The prescribed terms specified in Sch 6 are as follows:

 

* amount of credit – see Q8.

 

* credit limit – see Q8.5

* repayments – see Q8.9.

* rate of interest – see Q8.6

 

Sch 6 was not amended by the 2004 Regulations.

IS MY AGREEMENT ENFORCEABLE( Via section 127(3) CCA1974)

PRESCRIBED TERMS FOR THE PURPOSES OF SECTIONS 61(1)(0) AND 127(3) OF THE

CONSUMER CREDIT ACT 1974 Taken from sced.6(1983/1553) regulations

(If you just want to find out, skip the bits in between the stars it’s just some extra information)

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

 

How does unenforceable differ from enforceable with a court order only?

When an agreement is unenforceable it means that the court or the judge cannot make a ruling on it. The court cannot make it enforceable.

When an agreement is enforceable only by ruling of the court it means that the agreement can be stopped by the debtor but the court has the power to re-instate it and allow the credit to continue to enforce.**

 

The Prescribed Terms are these

 

A Amount of credit

A term stating the amount of credit

 

B Repayments

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following-

(a) Number of repayments;

(b) Amount of repayments;

© Frequency and timing of repayments;

(d) Dates of repayments;

(e) The manner in which any of the above may be determined; or in any other way, and any power of the creditor to vary what is payable.

 

C Rate of interest

A term stating the rate of interest to be applied to the credit issued under the agreement

D Credit limit

This may be a term or the manner in which it will be determined or that there is no credit limit.

--------------------------

 

Which of these applies to you depends on the type of agreement you have?

 

For a Running Account (credit card) agreement

 

BC and D Apply

 

For a Restricted Use Debtor Creditor Supplier

• Where the dealer is the supplier and the creditor is the one providing the finance.
  
• The money can only be used for the purpose it is given.
  
• There is no interest on the purchase (the cash price is the same as the total price)
  
• And there is no advance payment
  

A is applicable

 

For a fixed Sum Credit Agreement

A conventional credit agreement with none of the above restrictions

 

A and B apply

 

For a Hire Agreement

 

B is Applicable

 

This paper only covers section 127(3) of the Act agreements can also be unenforceable by contravention of sections 1 and4 this will be the subject of the next paper.

Please note that these Prescribed terms where not changed in any way by the 2004/1482 Ammendments although the form in which they appear on the agreement was. Subsection127(3) was repealed on the 6th of April 2007 so that unenforceability due to 127(3) will only apply to agreements executed before that date.

A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

 

Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

 

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

[SB100]

Application dates 2nd Feb, POC states 'on or about 17th Feb', application marked (by them, I assume) 23rd Feb.

 

 

What was the date of your signature on the application form?

 

I wonder from what date the agreement actually takes place.. from when you signed the application (which doesnt at that time mean that you have been accepted as a customer) or when they have signed it. Which kind of makes the date the agreement started according to the DN incorrect as well. What date is on the POC. ?

[SB100]

I'd like to get the defense done today if possible- can someone help me put it together please with all the salient points.

 

I have no idea how to put this in the correct format so if someone could help I'd be very grateful.

 

Thanks

[r&b]

hi SB100,

have a look here at the set out of a defence and skeleton argument by IGNM (if required) the defence should be direct and to the point and skeleton includes all the statutes and case law if needed...the underlining is just for the amendments so donthttp:

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/191754-arrow-global-ignm-1st.html

[the_shadow]

SB100,

 

Have you received everything you asked for in the CPR 31.14 letter?

 

S.

[SB100]

Ah, I think I see where you're coming from.

 

1) The agreement. You will appreciate that in an ordinary case and by reason of the provisions of CPR PD 16 para 7.3, where a claim is based upon a written agreement, a copy of the contract or documents constituting the agreement should be attached to or served with the particulars of claim and the originals should be available at the hearing. Further, that any general conditions incorporated in the contract should also be attached. Received an application form, not an agreement.

 

2) The assignment, if any. Nope, 'not applicable'.

 

3) The default notice. Yes, but not compliant.

 

4) The termination notice. 'Not applicable', apparently

And... maybe, most importantly(?), I didn't get this..

 

In addition your statement must be accompanied with a statement that you agree to an extension of the time for me to file my defence. Your extension of time must be not less than 14 days from the date when you say you will have complied with my request and you must state the new date for filing my defence.

 

[the_shadow]

Good , as far as I can see then a trio of options...

 

a) Sit tight as you've posted a defence, court might get involved early and send out directions for claimant to comply or you'll both be sent AQ's to fill out. Would suspect claimant will note they will ask for strikeout of your defence on the AQ.

 

b) Go for strikeout yourself as the default does not comply with CCA1974 regs and therefore they have no cause of action having not terminated the agreement properly.

 

c) Amend the defence, send to other side for agreement on changing defence, if they dont give it apply to court, otherwise just send it in as an "amended defence".

 

42Man has listed the details for the strikeout which will need to be an application (form N244) to court. The link r&b posted holds a defence.

 

S.

Edited June 30, 2009 by the_shadow
cant tell the difference between couple and trio

[SB100]

Thanks Shadow.

 

What would you think is the best course of action- just in your opinion, of course.

[r&b]

hi Shadow,

would non submission of amendment to defence not leave SB100 open to a SJ, due to the holding defence? i only say this as its just happened to me !!!

[the_shadow]

hi Shadow,

would non submission of amendment to defence not leave SB100 open to a SJ, due to the holding defence? i only say this as its just happened to me !!!

 

Yep, sorry thats what I meant by "strikeout" mentioned in a)

 

There is a risk in a) and b) I've posted as far as I can see:-

 

a) SJ application, doing it prior to AQ means its a costs risk as not allocated to a track limiting costs at present

b) Claimants strikeout failing as judge doesnt agree with reasoning or arguments put forward, proceeds to court although defendant should request entitlement to put in an amended defence

 

I think I've listed the right procedure in c) for amendeding a defence but it needs to be confirmed.

 

S.

[SB100]

Ok, sounds like safest plan is to file amended defence then?

[SB100]

Ok, here's what I managed to butcher together so far, which is largely from the IGNM / Arrow Global thread (thanks for that, and for the link to it.

 

COUNTY COURT CLAIM NO: XXXXXXXX

In The

NORTHAMPTON COUNTY COURT

 

BETWEEN

 

 

HFC Bank Ltd

 

CLAIMANT

 

And

 

 

 

ME

 

DEFENDANT

 

 

 

 

 

Amended DEFENCE

 

 

 

 

1. The Defendant admits that he signed a document provided by HFC Bank Limited. It is Not admitted that the Defendant signed an agreement with HFC Bank Limited. The Precise terms and date of any such alleged agreement are not admitted. The Claimant is put to strict proof as to the date and terms of such agreement.

 

2. It is averred that if any agreement existed that the aforesaid agreement was a regulated agreement within the terms of the Consumer Credit Act 1974. It is denied that the Agreement is enforceable within the terms of the Act in that the Defendant avers that the aforesaid alleged agreement does not contain the Statutory Particulars as to payment, rate of interest and calculation of credit limit. It is further averred that the alleged agreement is defective in that it is not executed by or upon behalf of HFC Bank Limited.

 

3. Further and in the alternative if, which is not admitted, an enforceable agreement is in existence it is not admitted that any or all of the monies claimed are lawfully owing. The Claimant is put to strict proof as to how the sums claimed have been calculated and as to how those sums are lawfully owing.

 

 

4. Further it is denied that both the alleged contractual interest and the alleged contractual account charges which have been claimed are lawfully owing in that it is averred that not only is there no contractual basis for the sums claimed but also that the sums claimed are in any event unfair and in breach of the general law.

 

8. In view of the foregoing it is denied that the Defendant is indebted to the Claimant as alleged or at all.

 

Counterclaim

 

1. The Defendant repeats the defence herein

 

2The Defendant seeks a declaration from the Court that the aforesaid agreement is unenforceable in that it does not contain the statutory particulars and is not properly executed.

 

 

Statement of Truth

I believe that the facts stated in this amended defence are true.

I am the Defendant.

I'm not sure how to mention the defective default, or how to put in legal terms about the collection charge and interest still accruing. I also need to mention why I'm amending, but once again don't know how to use the proper legal jargon.

Could one of you kind people help me out please?