Unenforceability & Template Letters III

dibs69

BigCraigJohn wrote: »

I was blonde till I got in debt, its more of a silver now.

Hi, i was blond and silver and now white,hope you dont go the same way the stress.

handyman123_2

Found wandering on page 2 Jock Mctavish of the 23rd Ayrshire (dont worry its an in Joke but it gets the thread back to page 1).

never-in-doubt

The purpose of this post is to explain, in Laymans, exactly what happened at court regards to the following case; heard on 23rd & 24th September 2009 at the Royal Courts of Justice (London).

McGuffick v RBS - Case & Judgment Breakdown

The Claimant is Phillip McGuffick, the defendant is RBS. This matter was brought to the attention of the courts by way of a Claims Management Company (CMC), called MJP. The object of the whole argument was not to create a test case but instead to bring to rights the shortcomings of RBS in the way they dealt with the claimants s.77 request, in particular the claimant was seeking an injuction against the bank to cease processing data with the CRA's.

Brief Summary of Argument:
The claimant requested s.77 which the bank failed to comply with, ergo the account became unenforceable, until such time the bank did comply; by the time the bank realised that they'd omitted a signed statement of account, the claimant had already (via their CMC) started legal proceedings. So as not to confuse matters, the bank allowed MJP to take the matter to court to get a judge to rule, as accordingly.

The claimant was seeking 4 primary injuctions against the bank, these were:

a) An injunction restraining the bank from reporting account conduct to the CRA's;
b) An injunction requiring the bank to report additional information based around the banks failure to comply with s.77, i.e that the claimant has no enforceable liability to make repayments;
c) An injunction requiring the bank to notify the CRA's that the claimant defaulted on the agreement in circumstances where he had no liability to pay due to the banks failure to comply with s.77
d) An injunction ordering the bank to provide the missing information, i.e a signed statement of account.

Originally, prior to court, the claimant was looking for a declaration of relief (i.e a statement of unenforceability from the court) however at the hearing, this changed as he no longer sought a declaratory relief statement (probably because he knew the bank would fulfil their s.77 request rendering the account enforceable again).

So, to make this crystal clear, at no point was the claimant arguing the actual enforceability due to faults within the agreement, such as it being improperly executed (i.e lack of prescribed terms or signatures) meaning that s.61; s.65 & s.127 of the Act were excluded from this argument in their entirety. The claimant was attempting to stop the bank from reporting to the CRA's, as the default notice as issued under s.87(1) of the Act was indeed improperly executed.

Parameters of the Case:
The judge made a couple of points at the start of the hearing, mainly relating to what he would and would not be dealing with. The main points are as follows:

a) This was not to be a test case because the claimant accepts that the agreement was valid and enforceable, furthermore once the bank provided the missing signed statement of account as requested under s.77 this would render enforceability again;
b) This was to be a case of temporary or redeemable unenforceability concerned only with s.77 of the Act, in that it differs from other factual arguments where unenforceability can be said to be permanent or irredeemable (where the agreement is improperly executed only a court can make an order for enforceability - i.e. s.65(1) of the Act).

The claimants QC asked the court to make rulings based on those other factual arguments, although they were not applicable to that particular case, the judge declined this request and specified he would stick to the actual relevant parameters.

The Actual Issues:
There were 9 issues, known as an agreed list of issues, that had to be prepared for court, these included:

1) Whether the claimant had to repay the loan
2) Clarity on what is classed as "enforcement" of the agreement in line with s.77(4)(a) of the Act
3) Whether the claimant had a right to obtain an injunction
4) Whether the claimant had a right to obtain an injunction for the signed statement of account
5) Whether the bank could report to the CRA's
6) What impact (if any) the CPUTR 2008 had on the enforcement of regulated agreements
7) Whether the processing of personal data by the bank was a breach of the first principle of the DPA by reporting account activity

Of the above agreed list of issues, the judge found in favour of the bank in each one. The reason for this was because he linked back to reference notes and other test cases to prove that the bank was not acting unlawfully by reporting to the CRA's, nor was an injunction warranted due to the fact the agreement was not contended for unenforceability.

Conclusion:
So, in a nutshell, this judgment went to decide that the lender can report accurate data to the CRA's. Meaning that if you cease repayments, you are free to add a notice of correction if you so wish, within this NOC you can mention you believe the account to be unenforceable but the lender can still report the default as appropriate. It also went on to decide that the lender can write to you and demand payment because although unenforceable, it does not void the agreement, it only allows the lender to ask for repayment not enforce it. Finally, it went on to decide that that there was no breach to the DPA in that the lender is only reporting a factual state of account conduct thus allowing other lenders the opportunity to see the factual account standing.

Basically, all that this judgment proved was that the lender can and will report account conduct to the CRA's and they can and will use reasonable enforcement tactics to get you to pay without being able to obtain a judgment as per s.127 & s.65 of the Act. It had absolutely no bearing on the enforceability or unenforceability of the actual loan in question, this was not even up for discussion.

never-in-doubt

The purpose of this post is to explain, in Laymans, exactly what happened at court regards to the following case; heard on 30th November to 4th December 2009 at the Manchester Mercantile Court.

Carey v HSBC - Case & Judgment Breakdown

This is unique in that ir originated as a test case for 8 applications, these are named as follows: Carey v HSBC, Yunis v Barclays Bank, Conniff v Barclays Bank, Adris v RBS, Backwell v RBS, Mandal v RBS, Light v MBNA & Atkinson v HBOS however for arguments sake, the main basis for explanation will be based around the whole case, with a breakdown of the subject matter (Carey v HSBC) at the end.

Brief Summary of the Argument:
This test case was brought about as a result of the amount of cases entering the county courts over the last few months, in the NW of England over 100 cases were lodged in October 2009 alone. This brought about a stay on all other claims, pending the outcome of this combined test case. The whole purpose of the judgment was to provide general guidance, in the context of the cases brought before the judge, with the hope that the outcome would narrow or eliminate the issues surrounding hundreds of similar cases, all pending this outcome.

The judgment deals with 2 primary matters concerning the request for copies of agreements and the consequence of non-compliance with the provision. The first is the determination of 6 preliminary issues of law, arising in a number of similar cases whilst the second matter is the application by two of the banks to strike out (or obtain under CPR24 the summary dismissal) on the basis of no reasonable grounds and/or abuse of process and/or no real prospect of success ("the applications").

The first matter:
The 6 Preliminary Issues have been framed as the following questions:

1) When providing a copy of an executed agreement in response to a s.78 request;

(a) Must a creditor;

i) Provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or a complete copy thereof, or
ii) Can a creditor provide a document which is a reconstitution of the original agreement which in itself may be from sources other than the actual signed agreement?

(b) Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit Regulations 1983 as to form, as at the date the agreement was made in order to comply with s.78?

(c) Must the copy provided under s.78 include the debtors name and address as at the date when the agreement was made, and if so in what form?

2) If an agreement has been varied by the creditor, is a copy of the executed agreement, as varied, a sufficient copy for the purpose of s.78(1) or must the creditor provide a copy of the original agreement as well?

3) Does a creditors breach of s.78(1) of itself give rise to an unfair relationship within the meaning of s.140A?

4) If there is a breach of s.78(1), is that sufficient without more to make a declaration to that effect (pursuant to CPR40.20) appropriate, in particular;

i) Where the creditor admits the breach but did not admit it before the issue of proceedings?
ii) Where the creditor denies or does not admit the breach?

5) Does the document signed by the debtor contain the prescribed terms for the purposes of s.61 and/or s.127(3) if;

i) They are on a sheet which is referred to on the piece of paper signed by the debtor; or
ii) Where that sheet is attached to the piece of paper signed by the debtor; or
iii) Where that sheet is separate from but was supplied with the piece of paper signed by the debtor?

6) If it were not established, at trial, that there was a document signed by the debtor containing the prescribed terms, would that of itself entail an unfair relationship?

* The term "executed agreement" is defined under s.189(1) as being "a document, signed by or on behalf of the parties, embodying the terms of the regulated agreement, or such of them as have been reduced to writing". An "unexecuted agreement" is defined under s.189(1) as being "a document embodying the terms of a prospective regulated agreement, or such of them as it intended to reduce to writing". By s.189(4) "A document embodies a provision if the provision is set out either in the document itself or in another document referred to in it".

Comment from Judge Waksman QC:
"....all of that said, the extent to which it is necessary to have resort to such over-arching considerations depends on the language of the particular provision being construed and its immediate context and purpose. In relation to the matters before me, I was not greatly assisted by these general considerations."

The above comment is quite important, basically he is making judgment based on his found knowledge and not from experts or otherwise ergo his actual judgment can be appealed.

The Judgment:
Judge Waksman stated that for the purpose of Issue 1(a) it is necessary to assume that the agreement has not been varied under s.82(1) - as it may not have been if the s.78 request was made not long after the agreement was made.

He went on to say that the claimant and the defendant had varying idea's about what s.78 is, in that the claimant felt that it should include details of how the agreement was formed (at outset) and how it is, currently; to determine whether the claimant did actually enter into an agreement by signing an executed agreement (the "Proof Purpose") at the time the agreement was taken out. He also stated that it is common ground that the s.78 request copy need not be a photocopy or other form of literal copy of the executed agreement. The claimant agreed that the creditor can recreate a copy of what it says was the executed agreement but only if this is done by looking at the executed agreement itself, i.e the document containing the signature of the debtor, as both accepted, in practice entails the retention by the creditor, of the original document (or a literal copy of it, for instance a photocopy or scanned copy if the original has gone); The defendants argued that the creditor may "reconstitute" the copy from sources other than the original (for instance its separate records as to the details of the debtor, the type of card provided and what terms would have applied at the time the debtor signed the agreement); all that is needed is that the copy be "honest and accurate".

As both the claimant and defendant agreed that so long as the reconstitution was accurate and made bona fide, thus on Issue 1(a) there is no real difference between their (claimant and defendant) position. There was also a large mention about the meaning of the term "True Copy", this was argued with links to previous cases and it was agreed that this means "a true copy need not be an exact copy but it shall be so true that nobody reading it can by any possibility misunderstand it", i.e simple errors such as clerical errors would be disregarded. The claimant laid great stress on the fact the executed agreement, is, by definition, the document signed by the debtor. Judge Waksman agreed with this but also stated that it does not take one very far when it is clear from the provisions of the Act and the Copies Regulations - and is accepted by the claimants - that a photocopy is not required, and that the signature need not be reproduced. The effect of this is that in one vital respect the copy need not match the original, this emphasises that the key question is not what is to be copied - which is uncontroversial - but how that copy may be made and what is it to consist. The one thing that could give the debtor real proof (absent forgery on the part of the lender) that he did indeed enter into an executed agreement, does not have to be provided - i.e a copy of the signature page. Nonetheless the claimant contended that the creditor must prove execution of the agreement by reference to the document itself, as opposed to using its secondary records, however reliable they may be. Judge Waksman disgreed with this.

He also disregarded another argument inthat the original agreement would show whether a debtor did indeed request PPi, ergo meaning a new set of terms would need to be provided within a s.78 request, but as this was not part of the skeleton argument, the invitation to argue this with the judge was declined by both the creditor and the defendant thus it was disregarded. The claimants also go on to contend that the copy must contain the name and address of the debtor as at the date of the executed agreement, the defendants deny that this is required. Judge Waksman then went on to say that in his view it is clear that the name and address must be provided within any copy agreement, however unlike the claimant wanted - he did make it clear that the name and address could be any that the lender has on record, not just those from account incepetion. On this note, he also judged that the lender must, whereby variable terms include, send a copy of the original form as well as a statement of the terms as they are at the time of the request. The claimants went on to argue that part of s.78 should be inclusion of the actual application form, which would surely be required in order to make a reconstitution - again, this was rejected by Judge Waksman.

Judge_Waksman_Para_173 wrote:

It seems to me that the following information needs to be included in the reconstituted copy agreement, assuming of course that it was present in the original:

1) Heading: Credit Agreement Regulated by the Consumer Credit Act 1974.
2) Name and Address of Debtor.
3) Name and Address of Creditor.
4) Cancellation Clause applicable to the executed agreement.

The above, therefore should always be present within the Prescribed Terms, in order to comply with the basic provision of s.78 compliance. All of the above ,ay be provided on a sheet which is separate to the full statement of terms and conditions which also forms part of the reconstituted agreement. The lender may well decide to reconstitute the agreement in a different way so that, for example, the information above is is populated electronically onto the same sheet as the terms, or some of them. He then went on to say that he is not here to prescribe the precise form of a reconstituted agreement, moreso the key point is what information it should contain subject of course that its format should not be such as to mislead the debtor to what they agreed to.

Judge_Waksman_Para_177 wrote:

The assumed facts of the HSBC reconstituted agreement are as follows;

1) Ms Carey signed a form which contained, among other things, the entries at page 197 (of the claim pack) including the specific reference to being bound by the terms and conditions attached; that form did not have the prescribed terms stated on the front or the reverse;
2) The form (referred to as the signature page) would have been produced with Ms Careys details already on, for her to sign once her application, already made, had been approved;
3) At the same time as the form was produced electronically, the relevant terms and conditions (including the prescribed terms and information) would have been printed off and physically attached to the form by a staple;
4) Ms Carey would then have been invited to read the agreement. consisting of the signature page and attached terms and would then have signed and dated the signature page, it would then have been countersigned by the bank;
5) The relevant terms and conditions would not have been precisely in the form of pages 198-201 (of the claim) simply because that is a s.63 copy with the different cancellation clause but they would have been the full terms with the prescribed terms included in either landscape or portait form.

Conclusion:
So, in a nutshell the above test cases proved the following points:

1. A creditor can satisfy its duty under s.78 by providing a reconstituted copy of the executed agreement which may be from sources other than the actual signed agreement itself;

2. The s.78 copy must contain the name and address of the debtor, as it was at the time of the execution of the agreement, but the creditor can provide the name and address from whatever source it has of those details, it does not have to take them from the executed agreement itself;

3. The creditor need not, in complying with s.78, provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made;

4. If an agreement has been varied by the creditor under a unilateral power of variation, the creditor must still supply a copy of the original agreement, as well as the varied terms;

5. If a creditor is in breach of s.78 this does not in itself give rise to an unfair relationship within the meaning of s.140(A);

6. The court has jurisdiction to declare whether in a particular case, there has been a breach of s.78. Therefore whether it will be appropriate to grant such a declaration depends on the circumstances of that case;

7. In assessing whether Prescribed Terms are "contained" in an executed agreement the principles set out at para 173 above are relevant, on the assumed facts set out at para 177 above, the Prescribed Terms were so contained;

8. The claim that there was an unfair relationship should be struck out. The lack of plea by the debtor concerned was fatal in losing this argument.

So, what does all the above mean, in laymans? Ok, quite simply the lender must provide you with a copy of the agreement whether it be the original or a recon, the details can be used from other records to create the recon so long as it does not try and mislead you in any way, or add/omit details that were not present on the original. Part of this means yours and the lenders name and address must be present. The name and address must be those at the time the agreement was taken out, it can obtain such details from other sources other than the original (i.e. other accounts held with the bank etc). If an agreement has been varied, the lender must supply a copy agreement for the original account and as currently stands, since the variation. If a creditor has breached s.78, it does not give rise to claim an unfair relationship however the court has jurisdiction (i.e the final say) on whether an account will be deemed unenforceable and whether such a declaration will be forthcoming based solely on that particular case.

It should also be noted that this "test case" was paramount for a pre-determined set of rules, which is highlighted in the relevant sections above, entitled Para 173 & Para 177 - basically, if your circumstances do not match those mentioned then this judgment does not matter, being it was judged soley on those pre-determined rules.

Each specific case can be taken to court allowing a judge the opportunity to hear your case, albeit the above judgment may well be used in certain areas of your claim. However this should not put you off, if your case is different to the material facts mentioned above.

Remember at the top of this post I quoted that the Judge was basing his findings on his own knowledge and was not trying to find solution or clarity for the whole unenforceability spectrum. This means he only made judgment on the facts given to him and these can be argued, repealed and appealed as cases and time goes by.

never-in-doubt

swanfan02 wrote: »

Hi Niddy, hope you are enjoying your w/e away. I have got a chaser letter from BLS Collections aka LTSB.:mad: Do i just ignore this as well? Cheers mate!:beer::beer:

Hi matey

Send this: Account sold - whilst in Default of CCA Request

never-in-doubt

AndyLGR wrote: »

Back in January I requested my CCA from the DCA that have my Capital One account.

Cap One responded directly and sent me a copy of my original application form and also a reconstituted print of terms and conditions.

in_to_deep wrote: »

hi nid & gang
i also had same response from cap 1 as andylgr post 3931 after sending debtors final response & refusal by lender to accept unenforceablity. they also mention Teasdale v HSBC 2010 EWHC612

Hiya

I'm just explaining the actual judgements in detail so we can strip each part and see why the lenders quoting such, is pointless. Bear with me and i'll deal with Crappy1 in due course.

I'll sort you a reply soon.

never-in-doubt

Hannah_10 wrote: »

I've just heard on another thread that unenforcibility doesn't apply to overdrafts, is that right?

Thread is called "I've got £1000, I owe £6,000, which ones to pay?" and is on this board, it says I can't post the link though sorry.

The overdraft is with a high street bank and was started in Jun 2001 and defaulted in May 2006, since then nothing has been paid, the account was closed in about 2006 too. Is there any possibility at all it is unenforcible?

Hiya

Overdrafts are CCA Exempt meaning you cannot do a s.78 request - you have to negotiate repayment, sorry.

never-in-doubt

dibs69 wrote: »

Hi niddy and all , got a letter from LTSB, i dont think thay will be sending me a copy of a signed original agreement, thay say the have complied with the requiements of a reconstituted copy and thay are not obliged to provide any further documentation, nor will we do so:eek:.:):rotfl: i have emailed you the letter niddy if you would check it out please, many many thanks:):) would i be ok to send this Refusal by Lender/DCA - to accept Unenforceability

Hiya

Ive got your email and i'll soon have a response ready for LTSB - just bear with me and keep clicking this, the template for Lloyds will be here when it is done: Template to Lloyds TSB - Upon their claim they have satisfied s.78 or in your case, it may well be this reply you need to send: Template to Lloyds TSB - Upon their final response

I'll get it sorted by tomorrow at the latest - just got a lot of templates to sort out tonight as things seem to be getting out of hand and the lenders are definitely watching this board (hello [STRIKE]w@nkers[/STRIKE] bankers :hello:)

Just bear with me and all templates will be updated asap!


Edit - templates are all done - you need to see this: Template to Lloyds TSB - Upon their final response

never-in-doubt

*Pollypocket* wrote: »

Hey Niddy, hope you're enjoying your weekend!

I received a Final Response letter from LTSB today, very patronising it was too. Anyway, basically they are satisfied that they have provided me with a valid CCA, etc.

As I have already sent my final response I'm assuming that I just sit tight to see if they order a CCJ now? Here is a link to a post I made in March: #837

Thank you soooo much again Niddy! If unenforcability fails then I will be content with a repayment plan, hopefully the interest will stop and I will stand a chance of paying this damn card off eventually. They've already had their money back several times in interest over the years anyway

Hiya

No - do not sit and wait for them to issue a CCJ - LOL, that's not what we do.... can you email me the letter they sent you? I've PM'd my email address - then i'll add a response for you, on here.

Thanks

jen_br

Hi Nids I got a reply to your letter(s) to LSTB. we can talk when your back around