Goods on HP - a Judge says they can be sold

[Peterbard]

I would like to make a number of points clear.

 

Ori's application for an injunction arose from shoddy 'legal' advice.

 

Furthermore, the claim to 'exemption' was not only on the ground that the vehicle had been subject to Hire Purchase. It was on the grounds that the vehicle was ALSO, claimed as being exempt as it was used in the course of business and ALSO that it was used for transporting a disabled person. Lastly, it was claimed that the debtor had not received any of the statutory notices. If the application had just of centred on ONE ground it may well have had a different result (although I doubt it).

 

Secondly...and this is crucial.....the vehicle had merely been clamped (and this was perfectly legal). It has not even been removed. Yes....the vehicle was subject to Hire Purchase but the CREDITOR had not even been shown a copy of the agreement.

 

Thirdly, an injunction is an emergency procedure which has two stages. The first stage is the initial hearing (which takes place on the day that the documentation is presented) and the 2nd stage is when the case is listed for a full hearing.

 

Lastly.....a poster elsewhere has 'hit the nail on the coffin' by stating the following FACT.

 

"The argument was wrong. Bailiffs consider that a car on HP may hold some equity to the debtor. It needs to be shown that there is none, not simply showing the judge the HP agreement"

 

There are points of law to be resolved here. The action was for an injunction against enforcment on property, which was not owned by the debtor.

 

The technical definition of "goods" within the TCE was interpreted to prevent an injunction, as the debtor was said to have an interest in the vehicle and it could therefore be seized.

 

This is important because the action was not regarding the the third party interest in the car, it could not be because the third party was not a party to the proceedings.

 

The lender still has a third party claim on the goods and using the correct procedure they can be reclaimed, this may or may not help the debtor however for various reasons which will doubtlessly become evident.

[brassnecked]

There are points of law to be resolved here. The action was for an injunction against enforcment on property, which was not owned by the debtor.

 

The technical definition of "goods" within the TCE was interpreted to prevent an injunction, as the debtor was said to have an interest in the vehicle and it could therefore be seized.

 

This is important because the action was not regarding the the third party interest in the car, it could not be because the third party was not a party to the proceedings.

 

The lender still has a third party claim on the goods and using the correct procedure they can be reclaimed, this may or may not help the debtor however for various reasons which will doubtlessly become evident.

 

Exactly injunction is no good as there is already a procedure under the Regulations for the owner to claim the goods, the owner was not seeking the injunction, so the application must fail.

[Peterbard]

I should add this also.

As someone who has done some work with HP professionally and in the advice field.

 

It has always been held, since the early days of the HP act 1965 that the debtor has no interest in equity in the goods whatsoever, until the final payment in conditional sales agreements or until the optional purchase fee is paid in the case of HP.

 

Like all law this is open to reinterpretation or repeal. The situation was and is , as i understand it that the debtor has equity in the contract not in the goods.

 

If someone has equity in goods, that equity has value, he can assign it or he can use it for collateral, this is not the case in a HP agreement, because he has no title.

The only time any equity is released is when the contract is terminated and then sums remaining are allocated.

[brassnecked]

I should add this also.

As someone who has done some work with HP professionally and in the advice field.

 

It has always been held, since the early days of the HP act 1965 that the debtor has no interest in equity in the goods whatsoever, until the final payment in conditional sales agreements or until the optional purchase fee is paid in the case of HP.

 

Like all law this is open to reinterpretation or repeal. The situation was and is , as i understand it that the debtor has equity in the contract not in the goods.

 

If someone has equity in goods, that equity has value, he can assign it or he can use it for collateral, this is not the case in a HP agreement, because he has no title.

The only time any equity is released is when the contract is terminated and then sums remaining are allocated.

 

That is exactly as I understand it, the key point is that title and ownership only transfers on that final payment, if it is to be made.

[Peterbard]

I have to say also that I m sick to death with people taking pot shots at knowledgeable member of this forum(and of the forum itself) in the belief that they are immune from reciprocal comment.

 

In that vain, regarding the longstanding allegations made by certain members(of other forums), i would say let us not forget that certain people only advise debtors on courses of action which have a direct financial advantage to themselves, when other free alternatives are available.

 

I may also add for the avoidance of doubt that I have made complaint to every regularity body i know, in an attempt to curb those practices and intend to continue to do so .

 

I would urge others to do the same.

[Bailiff Advice]

 

I may also add for the avoidance of doubt that I have made complaint to every regularity body i know, in an attempt to curb those practices and intend to continue to do so . I would urge others to do the same.

 

You might want to add to your complaint that the same person is trying to encourage yet another debtor to issue an injunction and this time against the creditor....HM Courts and Tribunal Service!!!

 

The brief details are as follows:

 

The debtor has a court fine that has been passed to Marston Group to enforce. Following bailiff enforcement the debtor was advised (by the same person now advising her to file an injunction) to bypass the bailiff and instead, make payment of the amount of the court fine only to the the court. She did as she was told and bailiff enforcement has continued. Police have been involved and a warrant has been granted to the bailiff permitting him to force entry into her property.

 

The debtor has spoken with the court who have confirmed the following to her:

 

That the amount of only the fine (of £145) was paid on 3rd March 2015 (without the legally due bailiff fees).

 

That the court have forwarded the payment to Marston Group

 

That Marston Group have abided by the regulations and have apportioned the payment on a pro rata basis and that Marston's have retained £118.29 and allocated the balance of £26.71 towards the court fine

 

That Marstons do have a Warrant of Control

 

That Marston's has requested and been GRANTED permission to Force Entry

 

That an amount of £118.29 remains due under the court fine.

 

The debtor is being advised that as she has paid the fine direct to the court that the warrant (apparently) ceased to have have any affect and that she can rely upon regulation 58 of Schedule 12 of the Tribunal Courts & Enforcement Act 2007. The problem however is that regulation 58 would have no relevance whatsoever given that this (regulations) states very clearly indeed that it is ONLY applicable in cases where the debtors pays the 'amount outstanding' (which included bailiff fees) AFTER the enforcement agent has taken control of goods !!!!!!

[brassnecked]

Is this the vapour trails in the sky guy?

[Peterbard]

Thats the one BN.

 

I don't know what the problem is with section 58, it states quite clearly what it does, even to the least legally inclined.

 

58(1)This paragraph applies where the debtor pays the amount outstanding in full—

(a)after the enforcement agent has taken control of goods, and

 

(b)before they are sold or abandoned.

 

Regarding the misconception about fees.

 

Unfortunately as much as i would like to say that this is an isolated indecent over there, I am afraid I cannot.

[GrumpyToSayTheLeast]

Its a normal thing. They do with 58 exactly what they did with the delivery of the noe and of many other sections. They just pick PART of the wording and pretend that the rest doesn't exist. Its not there possessions or safety they are putting at risk. I think sometimes that they just WANT to see the debtors fail in these things just to laugh at them. Its an almost pathetic sadistic thing to do when they know it will only make matters worse. Its times like these you feel sorry for what is probably a vulnerable debtor being sucked into silly little schemes like this by individuals that have no legal knowledge, and for all I can see, no morals either. I know you guys don't like me and my profession but I'm sure we agree on this.

[Peterbard]

I should explain. it seems that the relevance of this section is the "amount outstanding" this is defined in section 50(3). i notice that even Mr Proceeds has begun to understand that this includes fees.

 

Been eight months better late than never.

[DragonFly1967]

Its a normal thing. They do with 58 exactly what they did with the delivery of the noe and of many other sections. They just pick PART of the wording and pretend that the rest doesn't exist. Its not there possessions or safety they are putting at risk. I think sometimes that they just WANT to see the debtors fail in these things just to laugh at them. Its an almost pathetic sadistic thing to do when they know it will only make matters worse. Its times like these you feel sorry for what is probably a vulnerable debtor being sucked into silly little schemes like this by individuals that have no legal knowledge, and for all I can see, no morals either. I know you guys don't like me and my profession but I'm sure we agree on this.

 

GTSTL...

 

You're spot on, that's one thing that I'm certain that we can all agree on.

 

Also, it's not that we don't like you, or bailiffs (EA's) in general, it's that like football "hooligans", the few bad apples tarnish the whole crowd. You actually seem like one of the better (and more honest) ones.

 

I have to go now, there appears to be something stuck in my throat

[E Munch]

What is needed is a definition of beneficial interest which all parties will respect. I looked when the legislation came out in 2007 but oddly none was easily available to we who can only use Google for "research." It clearly is not the same as legal ownership or they could simply say goods belonging tot he debtor. It may be to do with creating a mechanism to allow in modern terms the taking of goods jointly owned by someone else but it may also allow the taking of goods in which the debtor could benefit from a theoretical rise in value of the item/vehicle whether or not there was an actual rise in value.

 

 

John Kruse seemed to just ignore the issue in his book that followed the TCE Act's introduction which was odd though of course his comments are only one lay person's opinion. Maybe BA could get a Counsel's opinion from a pro bono Barrister such as Alan Murdie, although ultimately it needs a court to interpret the phrase in this context. You would think an HP company would fund such a case when a sufficiently valuable asset is taken though they may not get the answer they want.

You may not be aware but for over 400 years before 6th April 2014 HP companies ran the risk of losing their assets including cars if they were caught on premises where rent was in arrears and the landlord was able to use the common law right of distrait for rent (either in person or using a certificated bailiff.) That allowed any goods found on the land or premises for which the rent was owed, regardless of ownership to be seized and sold and the debtor did not even need a beneficial interest if they could be sold before the owner found out. Even if they did find out and made a claim under the Law of Distress Amendment Act 1908 the claims of an HP company would not override the landlord's right to the proceeds of sale. Expensive cars were sold notwithstanding claims from HP companies and all they might get would be any overplus (i.e. surplus proceeds of sale) which had to be left in the hands of the sheriff, under-sheriff or constable for the owner's use in accordance with section 1 of the Distress for Rent Act 1689. The HP company, being the owner, presumably could get the overplus from the Sheriff. The Sheriff in this case is the ceremonial Sheriff covering the area in which the rent was owed and not the causal term for what is now a High Court Enforcement Officer. There is no point saying the judge must be wrong because the car is not owned by the debtor. He has to interpret the law ant the law may not say what you or the third party wants to hear.

PS No-one seems to have pointed out that oris problem would be solved if he paid the debt.

[Peterbard]

I remember a number of cases which occurred around about the time the CCA "took over" in the main part from the HP act 1965, around 83 ish.

 

Hirers who here approaching the end of the contractual term and found themselves though an unexpected increase of the value of there goods wished to terminate immediately and sell themselves rather than voluntarily surrender and have the lender sell the gods, for obvious reasons.

 

It was held that there was no interest in the value of the goods by the debtor, the only interest was contained within the contract, only when this was terminated would any sums, either still due be invoiced, or if goods were found to exceed the contractual debt, then they would be remitted to the debtor.

[Bailiff Advice]

I have been discussing this subject a lot today given because , in just 48hours, I have received six separate enquiries from debtors whose vehicles (that are all subject to hire purchase) had been seized.

 

An update. Sadly (but somewhat not surprisingly) one of the 6 enquiries was a bogus one.

 

Of the other 5 enquiries, three of the vehicles have now been unclamped and payment agreements are in place. Worryingly, in the case of one of the cars, the finance company this afternoon gave permission to the enforcement agent to sell the car. It would seem that the gentleman has 3 Liability Orders which he cannot afford to repay and yet, he was paying over £400 per month to the finance company.

 

The agreement only has 6 months remaining but, given that the 'downpayment' consisted of a a sizeable amount realised from a 'trade in' vehicle the car currently has a very healthy amount of equity. The enforcement agent are confident that the eventual sale price will easily clear the debt to the finance company with enough remaining to clear 2 of the 3 Liability Orders.

 

I will write further in the morning on this post.

[Peterbard]

An update. Sadly (but somewhat not surprisingly) one of the 6 enquiries was a bogus one.

 

Of the other 5 enquiries 3 of the vehicles have now been unclamped and payment agreements now in place. Worryingly, in the case of one of the cars, the finance company this afternoon gave permission to the enforcement agent to sell the car. It would seem that the gentleman has 3 Liability Orders which he cannot afford to repay and yet, he was paying over £400 per month to the finance company.

 

The agreement only has 6 months remaining but, given that the 'downpayment' consisted of a a sizeable amount realised from a 'trade in' vehicle the car currently has a very healthy amount of equity. The enforcement agent are confident that the eventual sale price will easily clear the debt to the finance company with enough remaining to clear 2 of the 3 Liability Orders.

 

I will write further in the morning on this post.

 

If the agreement has gone past the one third mark the car would become protected goods under the CCA 1974, this means that the creditor would have to issue a default notice and get an order of the court before the agreement could be terminated and the vehicle sold, unless they had the debtors consent.

[Bailiff Advice]

If the agreement has gone past the one third mark the car would become protected goods under the CCA 1974, this means that the creditor would have to issue a default notice and get an order of the court before the agreement could be terminated and the vehicle sold, unless they had the debtors consent.

 

The agreement had passed the one third period and it would seem from my discussions that the debtors agreement was in default. What is becoming clear from the many comments that I have received since starting this thread is that cars that are subject to hire purchase are indeed being taken and each agreement and each case must be closely looked at as debtors may not be as 'secure' as they think.

 

I am not in the slightest bit concerned about the effect on household goods that are subject to hire purchase as such goods are commonly fridges and washing machines that would be exempt in any case.

[Bailiff Advice]

The agreement had passed the one third period and it would seem from my discussions that the debtors agreement was in default. What is becoming clear from the many comments that I have received since starting this thread is that cars that are subject to hire purchase are indeed being taken and each agreement and each case must be closely looked at as debtors may not be as 'secure' as they think.

 

I am not in the slightest bit concerned about the effect on household goods that are subject to hire purchase as such goods are commonly fridges and washing machines that would be exempt in any case.

 

PS: In relation to the other three vehicles that have been unclamped, in each case the agreements were relatively new and it was a simple case of submitting a properly completed Notice of Claim with supporting evidence.

[Peterbard]

The agreement had passed the one third period and it would seem from my discussions that the debtors agreement was in default. What is becoming clear from the many comments that I have received since starting this thread is that cars that are subject to hire purchase are indeed being taken and each agreement and each case must be closely looked at as debtors may not be as 'secure' as they think.

 

I am not in the slightest bit concerned about the effect on household goods that are subject to hire purchase as such goods are commonly fridges and washing machines that would be exempt in any case.

 

Yes the situation with protected goods is that there must be court order before the agreement can be terminated, this was introduced partially to prevent situations like those mentioned in E Munches post.

 

This is irrespective of any contractual term, in fact there are sanctions available to the debtor for any vehicle which is sold without such an order, in that if no order is obtained he is entitled to reclaim from the lender all sums he has paid under the contract.

 

Retaking of protected hire-purchase etc. goods.

http://www.legislation.gov.uk/ukpga/1974/39/section/90

 

 

(1)At any time when—

(a)the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and

(b)the debtor has paid to the creditor one-third or more of the total price of the goods, and

©the property in the goods remains in the creditor,the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court

 

It is certainly something which needs to be taken into account i think.

[lookinforinfo]

Yes the situation with protected goods is that there must be court order before the agreement can be terminated, this was introduced partially to prevent situations like those mentioned in E Munches post.

 

This is irrespective of any contractual term, in fact there are sanctions available to the debtor for any vehicle which is sold without such an order, in that if no order is obtained he is entitled to reclaim from the lender all sums he has paid under the contract.

 

Retaking of protected hire-purchase etc. goods.

http://www.legislation.gov.uk/ukpga/1974/39/section/90

 

 

(1)At any time when—

(a)the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and

(b)the debtor has paid to the creditor one-third or more of the total price of the goods, and

©the property in the goods remains in the creditor,the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court

 

It is certainly something which needs to be taken into account i think.

 

Dodgeball, I hope you don't mind but I have amended slightly the legislation you printed out to make it clearer that it is not just [c] that a Court Order is required

 

Retaking of protected hire-purchase etc. goods.

(1)At any time when-

(a)the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and

(b)the debtor has paid to the creditor one-third or more of the total price of the goods, and

©the property in the goods remains in the creditor,

 

the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court.

 

Interestingly at the end of that section it states

(7)Goods falling within this section are in this Act referred to as “protected goods"

 

It seems that protection has been somewhat eroded.

[Peterbard]

Dodgeball, I hope you don't mind but I have amended slightly the legislation you printed out to make it clearer that it is not just [c] that a Court Order is required

 

Retaking of protected hire-purchase etc. goods.

(1)At any time when-

(a)the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and

(b)the debtor has paid to the creditor one-third or more of the total price of the goods, and

©the property in the goods remains in the creditor,

 

the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court.

 

Interestingly at the end of that section it states

(7)Goods falling within this section are in this Act referred to as “protected goods"

 

It seems that protection has been somewhat eroded.

 

This is something which will have to be resolved, we have a case of competing legislature.

 

Say we have a case of a car on HP which is seized, after investigation there is found to be collateral or equity due if the car was sold and the agreement was settled.(as an aside how would this be ascertained without the consent of the debtor, there are DPA issues here I would have thought).

 

The ea would claim that the debtor had an interest and they were therefore entitled to claim the vehicle.

However the car is under contract with the lender, there is an agreement and this agreement is regulated by the CCA 1974, what is more section 90 says that if one third of the total agreement price has been passed the car becomes "protected goods" and may not be reclaimed without first a default notice being sent under section 87 and then if the default is not remedied a court order must be obtained to allow the car to be be reclaimed.

 

All this must be done before the agreement may be terminated and the car re- possessed, and of course the car must be repossessed before the EA can take any proceeds of its sale.

 

What is more if this procedure is not followed the lender is liable for this

 

View outstanding changesstatus warnings

91 Consequences of breach of s. 90.

 

If goods are recovered by the creditor in contravention of section 90—

(a)the regulated agreement, if not previous terminated, shall terminate, and

(b)the debtor shall be released from all liability under the agreement, and shall be entitled to recover from the creditor all sums paid by the debtor under the agreement.

 

This is a well used consumer protection device and there is stacks of case law to support it

[lookinforinfo]

One thing that has not been raised yet is the 'intention of Parliament". Certainly since the introduction of the Consumer Credit Act it has been the case that goods

on HP are untouchable withregards to Bailiff action. In deed I remember reading a pamphlet from the MOJ I think when the new Regulations came out that goods

on HP could not be taken by EAs. So whatever interpretation that the current Court case has raised over a "beneficial interest", it is surely contra to the wishes of

Parliament and that must be the over riding factor.

[brassnecked]

This is becoming silly, not only has the judge, put a big hole in Contract Law, he has usurped the CCA as well, this will be very interesting. The law is becoming like Monty Python as far as bailiffs are concerned.

[Bailiff Advice]

This is becoming silly, not only has the judge, put a big hole in Contract Law, he has usurped the CCA as well, this will be very interesting. The law is becoming like Monty Python as far as bailiffs are concerned.

 

There is always a risk when taking a case to court and this was one case that should never have been the subject of an injunction.

[brassnecked]

There is always a risk when taking a case to court and this was one case that should never have been the subject of an injunction.

 

It might make Parliament sit up and notice when the Finance Sector start grumbling about losing property to EAs aka bailiffs for third party debt, because a judge kicking an injunction into touch steamrollered Contract Law, and the CCA, putting all and sundry available to the bailiff.

[Bailiff Advice]

There has been an update on this subject but given that this thread has already run to 10 pages I will be starting a new thread.