Lloyds TSB....do I defend or leave it? Advice urgently needed!

[Giddy Kipper]

In a nutshell, we received a County Court claim for a Lloyds CC debt. We defended, stating that we had requested and never received a copy of the credit agreement or default notice. The judge ordered the claimant to provide copies. We received a copy of the credit agreeement via the post but no default notice. We now have the following:

 

Deputy District Judge xxxxxxxx sitting at xxxxxxx considered the papers in the case and upon the claimant advising the court that the defendant has been sent the copy of the executed credit agreement and default notice referred to in the Defendant's Defence

 

ordered that:

 

1) Unless the Defendant do within 14 days of service of this order upon him file and serve an amended defence to the claim the defence be struck out and the claimant at liberty to enter judgement against the defendent by default

 

2) Because this order has been made by the court without considering representations from the parties, the parties have the right to apply to have the order set aside, varied or stayed. A party wishing to make an application must send or deliver the application to the court (together with an appropriate fee) to arrive withing seven days of the service of this order

 

We were going to just let them enter judgement because I've been advised that Lloyds don't keep copies of DN's therefore it was a weak argument. However......we have until tomorrow to defend if we're going to and I wonder if we should? The sticky point is that the debt is in my partners name and he is scared stiff at having to go to court.

 

What would you advise? Should we just let them enter judgement or enter a defence that contrary to what the judge has been advised, we have had the CA but not the DN? If that latter, does anyone have something in draft I could utilise?

 

Thanks in advance for reading!!

[Giddy Kipper]

Please Please Please, Can Someone Help???????

[palomino]

If they are required to issue a DN and haven't done so, or unable to prove that they have done so, then you case is in fact strengthened.

Now that you have defended the case you must stay on the merry-go-round until it finishes if you want to maintain any credibility at all.

[Giddy Kipper]

Thank you for your response, I thought I was invisible

 

Do you know if there is a standard way in which I can defend this? Is there a letter or form? The court didn't send anything to complete. I need to get this to them by the close of play tomorrow if I'm going to do so.

[cat100]

what defence did you use.Embarrsed one?

[BlurredFX]

Is the agreement legible and properly executed, as per the Consumer Credit Act 1974 (s78/79 if I recall)?

 

If the agreement is illegible, then it is unenforceable by the Courts.

 

Look at TomTerms sticky at the top of this forum - Basic Intro to Consumer Litigation - and you will see the format you should use for your ammended defence. Basically, you are ammending your defence - so you should type it up in the same manner that you submitted your original defence.

 

The key here, I think, is if the agreement is legible. If they have sent a copy of the agreement, get it scanned an on photobucket or similar, and post the links here.

 

You rally have left it late though... At least if you get something in you can ammend it later i think.

[BlurredFX]

The sticky point is that the debt is in my partners name and he is scared stiff at having to go to court.

 

He can bottle out right up the the last minute - simpky don't attend the Court - though a Judge would rightly frown on such behaviour.

 

Even if the Judge rules against you in your absence, it's only going to increase what you owe, with the extra costs. However, if the agreement is illegible, it is a different story, and you could be thousands of pounds up!

 

If you win, you are thousands (I presume) up, and if you lose, a couple of hundred quid down - the risk/reward ratio tells me to defend - at this point.

[Giddy Kipper]

Ok, the original defense was simply that without the adequate paperwork ie: the CCA and the DN, I could submit no defense. I assume the Judge then told them to send the relevant info because we received a copy of the CCA (but nothing from the court).

 

We have since received the order as written at the beginning of the post. So in essence, we haven't yet defended anything and I am still I guess, saying that in light of not having received ALL the relevant paperwork, then there is no case to defend?

 

I believe the CCA is legal and enforcable so I'm not arguing that aspect.

 

Do you know roughly what the difference in court costs is between leaving it now and continuing the defence? The debt is almost £7k.

 

Thanks

[BlurredFX]

I got took for £700, but that is a very long story, which involved me kicking myself in the shin every day since.

 

The lesson I leared is: Never try to correct a Judge, especially when he is about to rule in your favour, but you don't understand things properly!!!

 

Sorry, that bit is irrelevant, it just irks me on a daily basis, as it cost me £5,500! Including the £700 costs.

 

But £700 is what I got awarded against me in costs, having attended a couple of Court hearings.

[BlurredFX]

If they are required to issue a DN and haven't done so, or unable to prove that they have done so, then you case is in fact strengthened.

 

Maybe.

 

Deputy District Judge xxxxxxxx sitting at xxxxxxx considered the papers in the case and upon the claimant advising the court that the defendant has been sent the copy of the executed credit agreement and default notice referred to in the Defendant's Defence

 

The claimant has advised the Court have they? Interesting. Have they supplied the Court with evidence of the DN? Have they supplied you with evidence of such?

 

If not, then I think there might be something in it.

[Giddy Kipper]

They categorically have NOT provided us with a DN. I'm basing my facts on that the

 

'judge considered the papers in the case and upon the claimant advising the court that the defendant has been sent the copy of the executed credit agreement and default notice referred to in the defendants defence'

 

I am assuming they will rely on the fact that Lloyds apparently don't keep copies of DN's but that's not my problem is it?

 

We do have the Credit agreement (received just before xmas).....

 

p.s. Sorry about your costs

[welshperson3]

This is from one of 42man replies to someone in a situation close to yours.

 

In my opinion it might help you,

you will need to edit it to suit your position.

BUT MOST IMPORTANTLY YOU WILL NEED TO UNDERSTAND IT if your going to try and use it.

 

 

 

 

I would like to suggest that, as a matter of course, we advise the user to go for a strike out under CPR 3.4(2)(a) in these cases.

 

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 user should submit a defence based on the same argument but then ask for a strike out with the aq. That way, there is no need to make an appliaction and shell out £40.

 

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.

 

Here is a request for strike out based on the above Quote:

The Claimant respectfully requests that an order may be made as follows:

 

1. That the Claimant's statement of case is struck out pursuant to rule 3.4(2)(a) of the Civil Procedure Rules

as the Calimant's statement of case discloses no reasonable grounds for bringing the claim.

 

The claim is for the early repayment (ie before the full term of the allleged agreement between the Claimant and the Defendant) of a sum of money consequent on a breach of the alleged agreement by the Defendant. The Claimant is only entitled to file such a claim after first having served a defeult noitice under section 87(1) of the Consumer Credit Act 1974 and in accordance with s88 of the Act.

 

Inter alia, the regulations made by the Sectratary of State related to s88 concerning default notices require that a period of 14 clear days be given to the Defendant to remedy the default before enforcement action (including filing a claim) may be started.

The default notice supplied by the Claimant in response to the order of the Court dated date is dated Friday 3 August 2008 and says "To remedy this breach, payment due on your account of £xxx must be received within fourteen calendar days from the date of this default notice", ie by Wendesday 17 August. Under CPR Part 6.2, a letter is deemed served on the second day after it was posted, provided that day is a business day. That means that a default notice posted on Friday 3 August would be deemed served on Tuesday 7 August and 14 clear days from then is Tuesday 21 August. Therefore the default notice does not comply with the regulations in respect of giving the Defendant the statutory length of time to remedy the default.

The failure of the default notice to comply with the regulations made by the Secretary of State invalidates the default notice (Woodchester Lease management Services Ltd v Swain and Co - [2001] GCCR 2255), is an unlawful rescission of contract and prevents the Court from enforcing any alleged debt (Kpohraror v Woolwich Building Society [1996] 4 All ER 119).

The invalidity of the default notice means that the Claimant has no right of action in this case. On this basis, I respectfully ask the Court to strike out the Claimant's statement of case.

obviously, dates need to be changed to suit.

[lilly white]

where is the CCA

[Giddy Kipper]

Wow, Welsh, thank you so much for that. I do understand it (in principle) although some of the technical jargon is a little out of my league!

 

In what format do I send it? Like a letter with the case number etc at the top?

 

Thanks

 

Lilly.....I have that here but I'm not contesting the validity of it

[lilly white]

Wow, Welsh, thank you so much for that. I do understand it (in principle) although some of the technical jargon is a little out of my league!

 

In what format do I send it? Like a letter with the case number etc at the top?

 

Thanks

 

Lilly.....I have that here but I'm not contesting the validity of it

 

May i ask why not how old is it

[Giddy Kipper]

It's Jan 2007

[lilly white]

ok they would have had their act together by then

 

However are you sure that all terms are correct as per your statments etc

 

just check this

[Giddy Kipper]

I'm just looking at the CCA again and the only thing of note is that it isn't signed by one of their representatives.....it's left blank. Do you think this matters?

[BlurredFX]

Just had my Sunday meal, and a few glasses of wine, and some good company, so a little woosy! Bearing that in mind, here goes...

 

Welsh, can you post a link to that thread? Looks interesting.

 

I am thinking that if they say they did, and you say they didn't, then the Judge has to look at the evidence.

 

In the case where I got hit for costs, the Judge elected to go along the lines of "everything else seems to be in order, I am not going to go into a forensic examination of this trivial matter, you owe the money, now get it paid". To be fair to the Judge, I was bang out of line, and he hammered me for it - twenty seconds after he was about to rule in my favour! **kicks shin again**

 

If you are going to go for this, I would suggest that you make sure you have a good case, check references on google, and spend the next 18 hours getting very clever. Use the search facility of this site. The library can sometimes be useful.

 

OR MAYBE, you can ask for more time to compile your defence. I am not sure how to do this formally, but i guess if you do, then at least you have to wait for the Judge to respond to your request, and in the mean time be working on your defence. He might come back and say, give me some basics or more information, which by that point you should have some?!?!?!?

 

I think what you need is a Time Order, to give you more time.

 

Blurred:rolleyes: there is no emoticon for half cut is there? lol

[BlurredFX]

I'm just looking at the CCA again and the only thing of note is that it isn't signed by one of their representatives.....it's left blank. Do you think this matters?

 

Research taht, I am off to bed.

[cymruambyth]

Just be careful, the DJ may say 'on the balance of probabilities' LTSB will have sent out a correct DN for the right amount using the correct postal service, in the correct time scale etc etc etc

[welshperson3]

put in your defense that you put the claimant to strict proof that a valid DN was sent containing all the prescribed term's.

Also remind the court that the claimant has no right to bring proceedings without first issuing a valid DN.

 

then if they fail to produce DN you go for the strikeout as in the following paragraph.

 

I would like to suggest that, as a matter of course, we advise the user to go for a strike out under CPR 3.4(2)(a) in these cases.

 

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

 

wp3