Dissecting the Manchester Test Case....

[PriorityOne]

In a bid to diffuse the panic and stop mini-threads popping up all over the place, I've started a new thread to try and dissect the above.

 

The link to the Judgement is here...

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/239693-why-no-news-coverage-7.html#post2672599

 

My own findings are as follows.... comments in red or bold are either my own or part of the Judgement that I've highlighted as important for CAG. This has all been put together quite quickly.... so I hope it's reasonably easy to follow my train of thought on it....

 

 

2. The purpose of this judgment is to give general guidance, in the context of the cases before me, in the hope that this will narrow or eliminate the issues arising in the hundreds of other similar claims issued in County Courts around the country, many of which have been stayed pending the outcome here.

From the outset, this para appears biased and indicates that there wasn’t a hope in Hell of the Claimants winning this…

the Claimants’ approach is driven to a large extent by the Proof Purpose. As I’ve been saying all along…

Page 14 (47) indicates that a stalemate was reached between Claimant & Defendant

Mrs Thompson laid great stress on the fact that the thing to be copied ie the executed agreement, is, by definition, the document signed by the debtor. I agree So he does…. But then refers to the provisions of the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 to explain why a signed copy is not needed to honour a CCA request (but not how it cann be re-enforced under Sec 127(3))... yet!but that 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 of what it is to consist. A continued focus upon the requirements of a CCA request ONLY

Page 15 (53) refers again to the proof that the debtor is after as claimant

Page 16 focuses entirely upon the requirements to fulfill a CCA request (not re-enforcement)

Page 18 refers to the Claimant going after the Proof Purpose and the language of a S78 request…. But the Proof Purpose is not necessary for complying with a CCA request, as the Judge says.

Page 19 (56) suggests an error on the part of the Claimant in trying to go for unenforceability, while going after PPI on the same Agreement….

Page 19 (57) Nice to see that the creditor now has to admit to not having a true copy J. Thanks Judge!

Page 22 (Issue 1(B)…. Explains what this is about once again…

Read this very carefully… especially the end part:

If McGuffick is rightly decided, the effect of the unenforceability provision is as follows: the contractual liability of the debtor to pay any sums due or falling due by reason of his use of his credit card remains. It is not the case that the creditor’s rights to payment were never acquired or that they were extinguished. The result is that if the debtor stops paying during the s78 breach period, interest will accrue. And if and when the s78 breach is cured, the creditor may sue him and recover all outstanding amounts. Moreover, during the breach period the creditor can still report the debtor to credit reference agencies (“CRAs”) without the need to tell them that the agreement is currently unenforceable.

And if and when the s78 breach is cured, the creditor may sue him and recover all outstanding amounts. Moreover, during the breach period the creditor can still report the debtor to credit reference agencies (“CRAs”) without the need to tell them that the agreement is currently unenforceable. It can demand payment from the debtor or instruct a third party to do so and can issue a default notice. None of that constitutes “enforcement”. The only restriction on the creditor is that he cannot, after starting proceedings, obtain a judgment which enforces the agreement. So he cannot obtain a judgment sum, a charging order to enforce that judgment or make the debtor bankrupt.

A further element of the dilemma prayed in aid by Mr Gun Cuninghame is that without a s78 copy the debtor will also not know whether the agreement is irredeemably unenforceable under s127 (3) ... which it might be. He mentions it, but doesn’t go into it due to this bias he has towards the banks, in my opinion… but it’s still law which needs to be satisfied before an Agreement can be re-enforced But that is entirely speculative and the point is undermined by (a) the fact that it is not the purpose of s78 to provide proof of a properly executed agreement, (b) the fact that regardless of any s78 breach, if the debtor wants to allege an IEA it behoves him to make some kind of positive allegation about it (see below) and © it is conceded by the Claimants represented by Mr Gun Cuninghame that a finding that there is an IEA does not, of itself, lead to an unfair relationship (see Issue 6 below).

Page 36 (133) The claimant was trying to get debts written off because of a Sec78 breach. I agree with him; it’s hopeless (and a stupid move)….

His conclusion was that there were statements of their Lordships in Wilson which supported the position of RBS, namely that unenforceability under s127(3) did not mean that the parties

no longer had any rights or liabilities thereunder. But in any event the context of Wilson was different from the context before him (and me) Yes it absolutely was….

the rights of the creditor and the obligations of the debtor did exist but were unenforceable. The creditor’s “rights continue but cannot be enforced”. Thank you… J

the words of Lord Hobhouse in saying that “The consequence of the failure to comply with the statutory requirements is clearly spelt out in the statute. The contract cannot be legally enforced by the creditor against the debtor: sections 65 and 127. It may be thought that this may sometimes produce a harsh result and an unmerited windfall for the debtor. But this is what Parliament has provided no doubt in accordance with a broader policy. Again I agree with your Lordships that there is no basis for implying an obligation of the hirer to pay contrary to the statute.”

MBNA has contended that neither the County Court nor the High Court has any jurisdiction to grant a declaration as to a breach or otherwise of s78.

Page 50 (191)

No evidence in reply was served. At the end of his submissions Mr Gun Cuninghame said that there was a WS from Mr Adris saying that he could not remember whether he signed the agreement or not but that was not before me and no application was made to put it in (Day 4/162-163). Thus RBS’s evidence is unchallenged… which it would be because They were only DEFENDING. They were not the CLAIMANT.

Page 51 (196) The first point made by RBS is that what paragraph 9 effectively does is to shift the burden of proof on to it to prove that there was not an IEA. There is no basis for any such reversal of the usual burden which would be on Mr Adris, since it is his claim and his allegation that there was an IEA. It is not suggested that there is any special rule in the Act reversing the burden of proof in the case of an alleged IEA as there is in other instances

 

(197) It was then said that while the evidential burden may shift in the course of the trial, the legal or persuasive burden remains on the party making the allegation (here Mr Adris)and that in any event there has been no evidence adduced to raise even a case to be answered because no facts have been alleged or put in evidence at all, other than reliance on s78.

(199) Mr Gun Cuninghame accepted that the burden of proof was on his client

Thirdly, and critically, it behoves the Claimant to put forward some kind of case as to what he alleges was the position.

The absence of any positive case or evidence is in my judgment fatal to Mr Adris’s case.

(200) For those reasons, I hold that there is no real prospect of Mr Adris succeeding in his allegation that there was an IEA and this head of his claim should be dismissed. It would also be appropriate to strike it out as disclosing no reasonable grounds for bringing the claim.

(201) Gives the reason why it all fell apart….

Ok.... discuss!!

Edited January 1, 2010 by PriorityOne

[yourbank]

To be a pedant, and to help this discussion he is the link direct to the case from Bailii:

Carey v HSBC Bank Plc [2009] EWHC 3417 (QB) (23 December 2009)

 

The judgement was posted up Christmas Eve after 10am.

[Docman]

P1,

 

Great idea to start a new thread but in view of the importance of these cases and the confusion that their use (or misuse by DCAs) can cause, would it not be an idea for the mods to make this a sticky with a summary of what the cases where about and the main conclusions?

[PriorityOne]

P1,

 

Great idea to start a new thread but in view of the importance of these cases and the confusion that their use (or misuse by DCAs) can cause, would it not be an idea for the mods to make this a sticky with a summary of what the cases where about and the main conclusions?

 

It probably would, yes.... as people were beginning to panic and it saves us going over the same ground repeatedly on different threads.

 

It's up to the Mods though...

 

[babybear39]

Subscribing...

[B3rty]

P1,

 

Great idea to start a new thread but in view of the importance of these cases and the confusion that their use (or misuse by DCAs) can cause, would it not be an idea for the mods to make this a sticky with a summary of what the cases where about and the main conclusions?

 

Also I feel it would a good idea to rewrite the CCA request letter quoting from this judgement i.e

 

" If the copy you provide is reconstituted you must inform me whether you hold the original on file or if this is from your records as per Carey V HSBC Bank Plc 2009 [EWHC] 3417" ect ect

 

This should put the DCA's on their toes as you can bet they will be quoting their version's to us as soon as their paralegals have updated their theatomatic machine

[gyos]

Also I feel it would a good idea to rewrite the CCA request letter quoting from this judgement i.e

 

" If the copy you provide is reconstituted you must inform me whether you hold the original on file or if this is from your records as per Carey V HSBC Bank Plc 2009 [EWHC] 3417" ect ect

 

This should put the DCA's on their toes as you can bet they will be quoting their version's to us as soon as their paralegals have updated their theatomatic machine

 

Excellent idea.

 

Mustn't give them an inch.

[PriorityOne]

Doesn't take us long to start fighting back, eh Guys?

 

[lookinforinfo]

Where to start PriorityOne.

The first feeling I had after reading the judgement was that the Judge had ridden a coach and horses through the Act and overturned some of the foundations laid down by several Law Lords in earlier appeals.

I have read quite a few cases relating to the consumer Credit Act 1974 mainly the ones that have gone to appeal and almost without exception the Law Lords point out how difficult the Act is to interpret in parts. Now it may be that the Wilson cases are not the best examples to use in this

thread since it involves a pawn.

 

Another observation is that it is a pity that the claimants were pretty naive and seemed to have very little knowledge of the Consumer Credit Act to challenge some of the Judge's observations. And having the OFT involved-apparently on our side-may not have been to our advantage.

Had there been some Caggers there for example to point out to the Judge more pertinent reasons why the Act should not be weakened the final reasoning may have been different.

[PriorityOne]

Where to start PriorityOne.

The first feeling I had after reading the judgement was that the Judge had ridden a coach and horses through the Act and overturned some of the foundations laid down by several Law Lords in earlier appeals. Agreed...

I have read quite a few cases relating to the consumer Credit Act 1974 mainly the ones that have gone to appeal and almost without exception the Law Lords point out how difficult the Act is to interpret in parts. Now it may be that the Wilson cases are not the best examples to use in this

thread since it involves a pawn. No so sure...

"No evidence in reply was served. At the end of his submissions Mr Gun Cuninghame said that there was a Witness Statement from Mr Adris saying that he could not remember whether he signed the agreement or not but that was not before me and no application was made to put it in (Day 4/162-163). Thus RBS’s evidence is unchallenged…"

These were claimants who had to prove their case, not the other way around. Therefore, if we are taken to court as Defendants, Wilson should still hold up.... but I see where you're coming from re. pawns.

Another observation is that it is a pity that the claimants were pretty naive and seemed to have very little knowledge of the Consumer Credit Act to challenge some of the Judge's observations. Unfortunately, thats what happens when you allow greed to enter into the equation... people get cocky and over-confident...And having the OFT involved-apparently on our side-may not have been to our advantage.

Had there been some Caggers there for example to point out to the Judge more pertinent reasons why the Act should not be weakened the final reasoning may have been different.

 

Yes, I agree with you here as well.... but CAG helps people for nothing. These people seemed to be in it for themselves and were bl**dy stupid to think they'd pull it off on the back of a s78 request, in my opinion.

[babybear39]

Stinks of the Rankines

[gyos]

Stinks of the Rankines

 

At the very least you would think these other claims companies would have taken the hint after the Rankine judgement.

 

But, no. They steamed onwards resulting in this.

 

However, as said, it's not so bad for us really.

 

Most caggers are just interested in defending themselves against unfair and heavy-handed action from creditors/DCAs. Hopefully the impact on that will be minimal or can be worked around.

[the_shadow]

I note the judge states the reasoning in the McGuff case (CCA1974 & s78/enforcement et all)can be used in cases which are disimilar because the judge has reasoned in the bigger picture and not just that distinct case... not too sure on that reasoning tbh, it stinks of the sort of thing a normal bank/dca employed solicitor would claim.

 

...and no doubt will now these test cases have been handed down.

 

S.

[Basil Fawlty]

First of all thankyou very much PriorityOne for your work on this.

 

I think overall this judgment just show us its a waste of time being a claimant on the back of a s78 request, but I think its still game on doing it the sensible way, as a defendant. They still have to have a link to the original agreement to enforce, and we know it will be difficult for them.

 

I like the idea of re-wording the s78 so that they have to state if what they are sending out to us is a recontruction and whether or not they hold the original..... that should put the cat among the pigeons

 

What happens now with the CMC's? Surely they'll give up on their idea of being a claimant on the back of a s78 request? Will they turn to defend us?

 

BF

[Gaznkaz08]

Yes, I agree with you here as well.... but CAG helps people for nothing. These people seemed to be in it for themselves and were bl**dy stupid to think they'd pull it off on the back of a s78 request, in my opinion.

 

 

so if they'd have also gone for default notices and letters of assignment etc they would have stood more of a chance?

[Axiom99]

para 177 of the judgement refers to assumed facts-how can such a thing exist?if it is a fact it must be able to be proven.Surely if something is assumed it can only be because it can't be proven and is therfore not a fact

[Axiom99]

How could the solicitors acting for the debtors have accepted what the judge wrote in para 177 it is just a whole series of assumptions-why did he not challenge the creditors to produce some physical evidence to back up the assumptions- I find this really strange

[Axiom99]

First of all thankyou very much PriorityOne for your work on this.

 

I think overall this judgment just show us its a waste of time being a claimant on the back of a s78 request, but I think its still game on doing it the sensible way, as a defendant. They still have to have a link to the original agreement to enforce, and we know it will be difficult for them.

 

I like the idea of re-wording the s78 so that they have to state if what they are sending out to us is a recontruction and whether or not they hold the original..... that should put the cat among the pigeons

 

What happens now with the CMC's? Surely they'll give up on their idea of being a claimant on the back of a s78 request? Will they turn to defend us?

 

BF

 

You can write wahtever you want in a s78 request the lender will just ignore it and send you what it wants

[Axiom99]

para 178 then concludes that the document DID contain all the prescribed terms on no other evidence than what was the supposed proceedure of the bank at that time as described by the bank -I find this pretty unbelievable

[Axiom99]

para 206

 

The letter also said that the bank was obliged to keep a copy of the signed agreement not only to comply with its statutory obligations but also to ensure that it could take enforcement action in the event of default. The latter does not follow. It is open to a credit card provider to commence enforcement action without a copy of the signed executed agreement. All it needs to do is persuade the Court that this the agreement would have been signed for example by reference to its records of this particular customer and his credit card and its standard procedures and terms at the time. In the absence of some positive evidence from the customer to challenge the execution of the agreement, such evidence is likely to be sufficient. The letter from Ascots contained no allegation of any kind from their client as to what he understood he had signed or when.

 

This looks very bad to me its opening the door for the banks to come up with any old crap they like I thought that they did have to have the original executed agreement not just say well we must have had it one time or we wouldn't have given you the card

[angry cat]

No, the Banks cannot just come up with any old Carp!

[spartathisis]

Would I be correct that this judgement is from a lower court than some of the case law on the subject eg Wilson, Dimond etc? If so, why would this set a precedent and make a difference?

 

As I said on the previous thread, would it make a difference not requesting the info via a s78 but just a SAR request?

[PriorityOne]

para 206

 

The letter also said that the bank was obliged to keep a copy of the signed agreement not only to comply with its statutory obligations but also to ensure that it could take enforcement action in the event of default. The latter does not follow. It is open to a credit card provider to commence enforcement action without a copy of the signed executed agreement. All it needs to do is persuade the Court that this the agreement would have been signed for example by reference to its records of this particular customer and his credit card and its standard procedures and terms at the time. In the absence of some positive evidence from the customer to challenge the execution of the agreement, such evidence is likely to be sufficient. The letter from Ascots contained no allegation of any kind from their client as to what he understood he had signed or when.

 

This looks very bad to me its opening the door for the banks to come up with any old crap they like I thought that they did have to have the original executed agreement not just say well we must have had it one time or we wouldn't have given you the card

 

No.... please stop.

 

There are two very important factors to remember in all of this.

 

1. The debtors were the CLAIMANTS and the creditors were the DEFENDANTS. This puts the onus of proof onto the claimant (consumer) in this case. People on here are being taken to court as DEFENDANTS... which means that the burden of proof falls on the creditor as CLAIMANT.

 

It's very important that the differences in procedure are made very clear.

 

2. The Agreements fell under CCA 1974 and not CCA 2006... which means that they have the protection of s127 (3), which the Judge does refer to but it's not relevant in the CLAIMANTS' case since they were not going down the route of s127 (3) in their POC.

 

[SteveH2508]

This judgement could make things very difficult for the CC companies who bought other accounts without the necessary paperwork (e.g MBNA).

 

They would not have the information required to 'reconstruct' as per the judgement (Original address etc..)

[bornrich]

SteveH2508,

 

I think you've definitely got something there.

 

Here's an extract from a recent letter from MBNA

 

We note that your account was acquired from another lender some time ago. As such, we need to obtain documentation from that lender. As soon as we receive that documentation we will forward it to you in response to your request.

 

The next paragraph in the letter mentions the McGuffick ruling and states that payments should continue to be made.

 

So, it would seem MBNA are stuffed as they won't be able to reconstitute agreements.

 

 

Bornrich.