Beneficial interest on goods under a HP Agreement.

[unclebulgaria67]

Hello uncle, I am not saying anything as such, it is dodgeball that is saying there is a beneficial interest in the goods under HP. If that were the case then it is a creation of trust, a contingent trust to be more specific, that is to say that until all payments are made, ownership does not transfer.

 

My position is that there is no beneficial interest and I agree with you, ownership of the car remains with the creditor at all times and that includes beneficial interest. Despite dodgeball also disagreeing with Stack v Dowden which confirms this position (and that equity law never arises which is somewhat strange) then I can only conclude that he seems to think the HP agreement is the creation of a trust. Agreements do not have to specifically have the word "trust" in them to create a trust. It can come about from statute, operation of law, or by intention/express.

 

The fact is that a beneficial interest is an equitable interest which falls under equity law and no one so far has proven me wrong on this point and I am happy to be corrected.

 

Depends on how far they are into the Finance agreement. I thought that after a certain number of payments made, that the debtor could have interest in the financed vehicle.

 

All an Enforcement company wants to know from a finance company is whether at a particular point, the debtor holds any interest in the vehicle and if it were seized to be sold, how much money is likely to be released. The HP company might lodge an application with a court stating their ownership of a vehicle, refusing to allow it to be sold. I am not sure whether a Judge would allow a vehicle to be sold against the will of an HP company who owned most interest in a vehicle.

 

I don't think a trust is relevant, whether it is stated in a contract or not. The HP company owns the vehicle and then it depends on how far the contacts advances as to whether the debtor gains any interest in a vehicle.

 

I would be surprised if there are many enforcement cases where HP vehicles are subject to disputes, where the enforcement company/creditor is trying to take ownership to sell. I can't see it would be worth the hassle.

[JustAnotherPerson]

You haven't explained anything, you have created the most vague statement ever, like most politicians do. What laws of property do they come under - references? That statement simply cannot hold up in court as there is no evidence. You did mention the LPA 1925 so I'm intrigued as to what section you are referring to that HP agreements would come under.

 

Do you not think HP agreements come under the CCA since it already defines what a HP agreement is?

 

Again, equity in the goods is just the value of the goods, it does not indicate who owns the goods or who has a interest in it. Your whole argument rests on the fact that a hirer contributes towards the total amount of the vehicle which gives rise to a beneficial interest. Stack v Dowden confirmed that contributions made towards the purchase price gives rise to a beneficial interest, that is an equitable interest. Jones v Kernott, another Supreme Court case in 2011 also confirmed the understanding of beneficial interest by way of contributions towards a house.

 

There is no new definition of beneficial interest as meaning equity in the goods, you cannot determine a beneficial interest by the value of the goods, you determine the beneficial interest by the contributions made towards the goods.

[Peterbard]

Depends on how far they are into the Finance agreement. I thought that after a certain number of payments made, that the debtor could have interest in the financed vehicle.

 

All an Enforcement company wants to know from a finance company is whether at a particular point, the debtor holds any interest in the vehicle and if it were seized to be sold, how much money is likely to be released. The HP company might lodge an application with a court stating their ownership of a vehicle, refusing to allow it to be sold. I am not sure whether a Judge would allow a vehicle to be sold against the will of an HP company who owned most interest in a vehicle.

 

I don't think a trust is relevant, whether it is stated in a contract or not. The HP company owns the vehicle and then it depends on how far the contacts advances as to whether the debtor gains any interest in a vehicle.

 

I would be surprised if there are many enforcement cases where HP vehicles are subject to disputes, where the enforcement company/creditor is trying to take ownership to sell. I can't see it would be worth the hassle.

 

No however as we know bailiffs do not always remove goods with the intension of selling. I agree with the rest.

[Peterbard]

You haven't explained anything, you have created the most vague statement ever, like most politicians do. What laws of property do they come under - references? That statement simply cannot hold up in court as there is no evidence. You did mention the LPA 1925 so I'm intrigued as to what section you are referring to that HP agreements would come under.

 

Do you not think HP agreements come under the CCA since it already defines what a HP agreement is?

 

Again, equity in the goods is just the value of the goods, it does not indicate who owns the goods or who has a interest in it. Your whole argument rests on the fact that a hirer contributes towards the total amount of the vehicle which gives rise to a beneficial interest. Stack v Dowden confirmed that contributions made towards the purchase price gives rise to a beneficial interest, that is an equitable interest. Jones v Kernott, another Supreme Court case in 2011 also confirmed the understanding of beneficial interest by way of contributions towards a house.

 

There is no new definition of beneficial interest as meaning equity in the goods, you cannot determine a beneficial interest by the value of the goods, you determine the beneficial interest by the contributions made towards the goods.

-D again you are mixing articles you have googled. The case you mentioned was about property rights in a break up, no goods were equitable in any sense and absolutely not in the sense we are talking about here.

 

Decisions were made in an equitable manner and perhaps under equitable law, but this has nothing to do with equity in goods.

 

If you have a house which has appreciated in value that appreciation is the equity in the property, this has nothing to do with equity law. This is something most know.

[Peterbard]

One last time a hire agreement is different to aHP agreement, see under the act, but read the full description ns this time.

 

When payments are made by the debtor an amount goes towards the value of the car,not so in hire. On termination of agreement the car is sold and the agreement paid off the balance is paid to the debtor.

 

Now what do you call this particular interest which so benefits the debtor. Oh I know

[Peterbard]

You haven't explained anything, you have created the most vague statement ever, like most politicians do. What laws of property do they come under - references? That statement simply cannot hold up in court as there is no evidence. You did mention the LPA 1925 so I'm intrigued as to what section you are referring to that HP agreements would come under.

 

From your post earlier.

 

We were discussing property law of course.

[JustAnotherPerson]

You are missing the point, I am not disagreeing with you on your interpretation of the meaning of 'equity in goods/property' - yes we all know that means the value of something at the time. What I am trying to understand is how you jump from the value of the goods (which the starting point under the HP agreement is owned by the creditor right?), to the hirer obtaining a beneficial interest in that value of the goods (which by contract says the hirer does not own). My understanding is this is because of the contributions towards to price of the car - is that correct?

 

If that is the case, there is no difference between what you are arguing now and the cases I referred to. Both cases made contributions towards the property and so both have a beneficial interest under equity law - the fact that you refer to the word equity says it all. Google 'equity' and you get the same result. Just because the cases referred to are not of the same facts do not mean they are irrelevant. I'll repeat what I said previous, there is only one beneficial interest meaning and that is an equitable interest, which is different to the equity(value) of goods. You can't have an interest in the value of the goods without making some kind of contributions, as soon as you do, a beneficial interest arises if you are not the legal owner and then equity law comes into play on the basis of fairness.

 

Just because the hirer is a party to the agreement does not automatically mean that he has an interest in the goods, it's not a condtional sale agreement it is one of hire for a fixed period with the option to pay for the car at the end of the hire period. You cannot have a beneficial interest under a hire agreement. You cannot own the equity value of the car without having some ownership in the first place. That will be a legal ownership (again the creditor has legal ownership) or it will be equitable ownership.

 

P.s, I have no need to google, it is first hand knowledge and I think it is you that is mixing things up and have got yourself in a bit of a pickle.

 

We were discussing property law of course.

 

Property law covers a wide range of things, land, chattels, etc. which is predominantly governed by the law of property act 1925. So if this is what we are discussing please point as I ask again to the relevant sections that cover HP agreements. The LPA 1925 actually discusses legal interests and equitable interests but equity law doesnt apply.. funny

[Peterbard]

The benificial interest is in equity because the creditor has ownership, legal title cannot be given whilst car is under the agreement. That is all there is to that point. Interest in goods can of course arise when payment is made off their value. Even if the title is bound under a contract.

[Peterbard]

You are missing the point, I am not disagreeing with you on your interpretation of the meaning of 'equity in goods/property' - yes we all know that means the value of something at the time. What I am trying to understand is how you jump from the value of the goods (which the starting point under the HP agreement is owned by the creditor right?), to the hirer obtaining a beneficial interest in that value of the goods (which by contract says the hirer does not own). My understanding is this is because of the contributions towards to price of the car - is that correct?

 

If that is the case, there is no difference between what you are arguing now and the cases I referred to. Both cases made contributions towards the property and so both have a beneficial interest under equity law - the fact that you refer to the word equity says it all. Google 'equity' and you get the same result. Just because the cases referred to are not of the same facts do not mean they are irrelevant. I'll repeat what I said previous, there is only one beneficial interest meaning and that is an equitable interest, which is different to the equity(value) of goods. You can't have an interest in the value of the goods without making some kind of contributions, as soon as you do, a beneficial interest arises if you are not the legal owner and then equity law comes into play on the basis of fairness.

 

Just because the hirer is a party to the agreement does not automatically mean that he has an interest in the goods, it's not a condtional sale agreement it is one of hire for a fixed period with the option to pay for the car at the end of the hire period. You cannot have a beneficial interest under a hire agreement. You cannot own the equity value of the car without having some ownership in the first place. That will be a legal ownership (again the creditor has legal ownership) or it will be equitable ownership.

 

P.s, I have no need to google, it is first hand knowledge and I think it is you that is mixing things up and have got yourself in a bit of a pickle.

 

 

 

Property law covers a wide range of things, land, chattels, etc. which is predominantly governed by the law of property act 1925. So if this is what we are discussing please point as I ask again to the relevant sections that cover HP agreements. The LPA 1925 actually discusses legal interests and equitable interests but equity law doesnt apply.. funny

If

Again you are getting mixed up, an interest will be in equity,but that dies not mean that the person receiving it has an equity in the property. He has an interest in the owners equity.

[JustAnotherPerson]

If

Again you are getting mixed up, an interest will be in equity,but that dies not mean that the person receiving it has an equity in the property. He has an interest in the owners equity.

 

An interest in equity is the same as equity interest or equitable interest i.e full or partial ownership of something.

 

But let's play along with your scenario, if the HP agreement says ownership remains solely with the creditor until the last payment then how can the hirer have an interest in the owners equity if the contract expressly prohibits this? Isnt the whole purpose of contract law is to follow what was agreed?

[Bailiff Advice]

County Court judges I presume with no binding authority or if there is already a superior court decision could you link me to it?

 

It all comes down to the fact that these decisions were more likely based on something in which the claimant was out of their depth and lack of understanding. But if the right arguments are put forward on previous superior court decisions then I have no doubt that the courts would be bound to follow it. Dodgeball's definition of beneficial interest is one that is not actually recognised in law apart from the 3 separate judgments you mention, and I will presume they agreed by applying the rules of equity.

 

May I make a suggestion....

 

Before posting on this forum (and by the way...thank you for doing, so as your contribution has been very worthwhile) you had been posting elsewhere and had been in discussions with the individual who had instigated these 3 court cases. He had also been in attendance at the hearings.

 

It would be most helpful to this forum and of course, any visitors viewing the thread to know precisely WHY each case had failed. Perhaps you could ask the question. This would greatly assist with furthering the discussion on here.

[JustAnotherPerson]

I could do sure, but to fully understand what the judges meant a transcript of those judgments would be necessary

[Bailiff Advice]

I could do sure, but to fully understand what the judges meant a transcript of those judgments would be necessary

 

A transcript would greatly assist but that is not an option at present. Therefore, the second best option must surely be to rely upon the detailed notes that would have been taken by the person present in court.

[Peterbard]

An interest in equity is the same as equity interest or equitable interest i.e full or partial ownership of something.

 

But let's play along with your scenario, if the HP agreement says ownership remains solely with the creditor until the last payment then how can the hirer have an interest in the owners equity if the contract expressly prohibits this? Isnt the whole purpose of contract law is to follow what was agreed?

No.not about ownership at all. It is an interest.

Interest in property can be taken when the property title rests with the owner ?

In fact it is the only way it can be taken. The agreement says nothing on the ! matter

[Peterbard]

As I said the benificial interest does sit uncomfortably with the CCA but there is no doubt a benificial interest does exist.

[JustAnotherPerson]

Interest in property can be taken when the property title rests with the owner ?

Yes it can, and that derives from the principles of equity law. There was at one point only ever a legal right but the courts of chancery corrected defects in the law at the time and created an equitable right which was separate from the strict legal right - there's no such thing as beneficial interest being a separate right, it falls under the equitable umbrella. So whilst you continue deny that beneficial interest under the TCE is completely separate to a legal and equitable interest I guess we should leave it at that because no matter how many case authorities I throw at you, you will continue to state that there is two separate meanings as to a beneficial interest, which is ludicrous. Unfortunately, as there is no transcript of these cases floating around, it would have been helpful to prove this point.

 

To summarise, beneficial interest can only take place if there is no express declaration as to the intentions of ownership. HP agreements expressly define ownership solely in favour of the creditor and as per Lady Hale in Stack v Dowden, there is the presumption that where sole legal ownership exists, there is also sole beneficial ownership.

 

Until you come up with some concrete evidence that the judges in the cases agreed the meaning of beneficial interest as equity in the goods, or any other evidence that it means something other than the hundreds of years worth of case law, I will assume they applied beneficial interest under principle under equity law as that is the only logical and recognised meaning.

[Peterbard]

Could you link to these""Principles of equity law" please.

 

It is well written but nonsens,hp agreements do point to other owners,that is why there is the purchase bit?

 

The rest is similar codswallop I won't be wasting my time with you anymore.

[Peterbard]

Just one last re ark,allthis case law you are throwing around does not say what you want it to. You miss quote and misinterpret everything it seems.even the legislation.Take you favourite case here,this is about a martial split and the allocation of assets, I know they use the word benificial interest but it refers to joint owners of title. do you see the difference . Course you don't.

[JustAnotherPerson]

The principles of equity I refer to are the equitable maxims, a quick google of it and you will find them.

 

That's your problem here, HP agreements do not point to other owners and you are focusing heavily on the option to purchase. The hirer has the freedom but no obligation to purchase the car, instead he could simply return it after the hire period. Your confusing HP with conditional sale and with the latter, the is an obligation to pay. I've already pointed to case law which has stated that HP is not an intention to buy in any way nor does it create any interest or right other than the use of it for the duration of the hire period.

 

This is not the only issue that bailiffs have with HP agreements, there is the issue of buying out the remainder of the contract because of the doctrine of privity and the Contracts Rights of Third Parties Act but thats a whole other discussion.

 

Anyway I do agree let's leave it there as I can only spin my words in so many ways.

[JustAnotherPerson]

Just to add as edit time expired ...

 

Yes the case consisted of joint beneficial ownership but they also commented on the effect of sole ownership too. This is the most common problem people say which is entirely misleading that the facts of the case are not relevant so the whole case is not relevant - that is incorrect. Every case turns on its facts but within those judgments there will be comments which can be applied generally. There is hardly ever any case that fits directly into another, and the sooner you come around and realise that the easier this all gets. In fact, if you actually read the whole of the case you will come to realise they refer to previous case law that mentions disputes where there is also sole legal ownership (Oxley v Hiscock for one), I suppose you didn't have time to look at them though and have jumped the gun.

 

But since I seem to be completely misunderstanding and cherry picking quotes here's another one for you that explains it in more detail

 

4 The cases can be broken down into those where there is a single legal ownership and those where there is joint legal ownership. There must be consistency of approach between these two cases, a point to which my noble and learned friend, Lord Neuberger of Abbotsbury, has drawn our attention. I think that consistency is to be found by deciding where the onus lies if a party wishes to show that the beneficial ownership is different from the legal ownership. I agree with Baroness Hale that this is achieved by taking sole beneficial ownership as the starting point in the first case and by taking joint beneficial ownership as the starting point in the other. In this context joint beneficial ownership means property is assumed to be held by the beneficial owners equally. So in a case of sole legal ownership the onus is on the party who wishes to show that he has any beneficial interest at all, and if so what that interest is. In a case of joint legal ownership it is on the party who wishes to show that the beneficial interests are divided other than equally.

 

5 The advantage of this approach is that everyone will know where they stand with regard to the property when they enter into their relationship. Parties are, of course, free to enter into whatever bargain they wish and, so long as it is clearly expressed and can be proved, the court will give effect to it. But for the rest the state of the legal title will determine the right starting point. The onus is then on the party who contends that the beneficial interests are divided between them otherwise than as the title shows to demonstrate this on the facts.

[brassnecked]

Isn't there a final payment in a HP agreement of a nominal sum as acceptance of the vehicle? Before said payment it is still tecnically on hire.

[unclebulgaria67]

Isn't there a final payment in a HP agreement of a nominal sum as acceptance of the vehicle? Before said payment it is still tecnically on hire.

 

I think HP terms vary so much.

 

This discussion just proves that an Enforcement Agent taking a vehicle under a HP agreement is getting them into hot deep water. They should only ever take control of property that can be sold, if the debtor does not fulfill any payment agreement. As a vehicle on HP will mostly be property that cannot be sold to release money to the creditor, then i would suggest that it cannot be a lawful action, if the Enforcement agent does not hold evidence it can be sold if necessary to obtain monies due. The Enforcement Agent should not do anything with a vehicle shown to be on HP, until they have written documents from the HP company confirming that the debtor holds interest and they would consent to it being sold subject to conditions A, B, C .......

[Bailiff Advice]

 

This discussion just proves that an Enforcement Agent taking a vehicle under a HP agreement is getting them into hot deep water.

 

 

In fact UB, bailiffs are not getting into deep water at all. In fact far from it.

 

In reality, only a small proportion of vehicles are subject to hire purchase. Most are found to be subject to a Personal Contract Plan (PCP) agreement. If a PCP is in place, the vehicle is entirley exempt and there is no question about this at all.

 

In any event, there should be no need at all for a debtor to take such an incredibly complex case to court....and almost certainly, should not do so without first paying the government's debt.

 

The correct procedure (and I have said this many times before) is that if a debtor considers that his vehicle should be exempt, (subject to hire purchase for example) then he should submit a simple Part 85 Claim under the Civil Procedure Rules. This route does not involve court proceedings. What can be simpler.

[Peterbard]

Yes r regarding this. Unfunately when the creditor terminates a CCA agreement, they can sell the car, ownership reverts back to them.

 

The sum raised by the sale goes to pay the outstanding sum on the contract and the Ballance if any is returned to the debtor, this represents his interest in the vehicle, if the car is under control the bailiff, he will be due this amount.

 

The breach of the agreement which permits the creditor to terminate is the failure to keep control of the vehicle by the hirer.

 

All the debtor has to do is show that there is no interferest in the car, most HP doesn't even the traditional kind. The ones to be wary if are those which have had a large deposit paid on them.

[Peterbard]

Personally I do not thinkhe benificial interest term was designed to cover HP. The term in my view and many others who far better qualified to comment, say that othis was to facilitate the taking control of goods in rellation to commercial debts. There will be many occasions where bailiffs turn up at shop premisses and are unable to take anything because goods present are on sale or return or consignment. The benificial interest term solves this as goods will represent an interest to the trader even if they are owned by a wholesaler.

 

However,it was unfortunate that a person who was trying to dupe the court came in front of a judge with some knowledge in the area,i suspect that in this first instance she was more than a little miffed with the debtor and was more than happy to chance her arm with this decision.

 

Then to most people's surprise it turned out that this was supported by common law also. And here we are.