Bailiff related comments have been relocated here.
The posts have been left in place because it’s a rather interesting discussion regarding issues that affect a lot of people, even if not directly related to the core issues discussed on this site.
Yes I see your point but, you are making the assumption that a person is going to purchase it at the end of the agreement when in fact they might not for whatever reason, change in circumstances for example. I’ve had several cars under HP but under each of them there was no intention to purchase because the cost of the final payment was more than the actual value of the car. Therefore it makes sense to continue to hire until that point and return it.
What you appear to be describing is a conditional sale agreement and the difference being that there is an obligation for the debtor to pay the final instalment, the only way out for a debtor under conditional sale is to VT the agreement, otherwise he is obliged to make all payments including the final one. Perhaps then your argument that the payments are made towards the car might be a valid point.
Hiring/renting means the same thing in that you will never own the goods/property and will be returned at some point.
End of the day, the EA will clamp the car. He can then establish whether after getting a settlement figure from the lender whether there is enough value in the car to pay towards the debt. An early life HP car will likely have no value – a late life one may have some potential.
The biggest problem is the clamping – it’s been said before that the EA is effectively using the car to blackmail the debtor. There is no need to actually clamp. Sheila misinterprets sch12 to say that the EA must clamp any car – sch12 says no such thing, it just gives options on how to take control.
EA’s should not clamp a car that has little value or ownership is disputed.
I would just add to Potes accurate assessment that when a bailiff agrees to release a clamped/removed car, he does so only under the explicit agreement that no further action will be taken regarding this matter. A bailiff ensures that he is (ahem) ring fenced from proceedings in any case. Only a fool would pursue a claim for damages and risk a costs order against them rather than just getting their car back and moving on.
A I’ve said before I am not expert in bailiff law or the tactics employed by bailiffs but the law is the law. If a bailiff seizes goods without consent of the third party, by law, he is wrongfully interfering with it. Of course if he decides to obtain permission before seizing then he will not fall foul of interfering. The problem I foresee with the finance company granting permission to seize the car is that they are likely to be in breach of obligations, either contractually or under s.90 CCA as peter pointed out. If a debtor satisfies the criteria under s.90 then they will be in breach and a claim can be made against them as they would require a court order to repossess. You could maybe argue they rely on the bailiffs warrant but that can easily be rebutted in that the warrant is on behalf of another creditor and not the finance company, they cannot ride on the back of another creditors order since that order was completely separate.
Mark, yes I suppose a bailiff could do protect himself by disclaiming from any proceedings but i’ll refer to the meaningless, obsolete CPUT regulations (although I have no idea why you say obsolete when it is still in force and remains good law) in that there is potential for the bailiff to be in breach of aggressive practices by way of coercion and/or undue influence. He will have seized the goods and then if a debtor suggests a claim for wrongful interference decides to hand them back on the basis of disclaiming any proceedings against him, will likely fall foul of CPUT. He is exploiting his power of position in that scenario if there is no intention of selling, otherwise he should carry on and sell the car ignoring the claims if he was that confident. The fact that the bailiff is willing to hand back the car on agreement of no proceedings brought just goes to show that he knows he is 100% right in the first place.
You say only a fool would pursue a claim but it only takes one to put the right arguments forward and its game over for the bailiff. You can’t get a costs order in small claims if you have reasonable grounds for a claim but only for unreasonable conduct or claims which are vexatious. As there is clearly a dispute on interpretation of the TCE here, I simply disagree that a person bringing a claim will face costs other than fixed costs.
You really don’t know much do you?
You first need to injunct (as you said right at the start of the debate). After the interim hearing, costs will be reserved dependant on the outcome of a final hearing.
If the debtor continues and fails, he is exposed to costs (as was the case with Ori)
If the debtor doesn’t injunct and declines a conditional offer to release the car, choosing instead to sue and then predictably fails in court, action, the bailiff company will have reserved the right to produce the original offer to the court in order to demonstrate the unreasonableness of the debtors actions in bringing the claim.
Please try to understand, I am not dreaming this up as I go along. Unlike Peterbard, I DO know what I’m talking about and unlike you, I DO have experience in bailiff law and tactics, including the civil litigation process.
You have no legal argument to back up your opinion of beneficial interest. A bailiff will argue that if there is beneficial interest in goods then he is empowered by the courts to take control of these goods in order to recover a lawfully owed debt.
Your opinion, based on the very little contained in this thread is that a good lawyer would win costs for the debtor. My opinion, based on listening to and observing the comments of a couple of good lawyers, as well as viewing numerous documents is that the bailiff company would win the day in court.
And I did not say the CPUTR were obsolete, just that they are not relevant here.
You keep repeating that I do not know much, granted I am no expert in bailiff law but I am well versed in consumer credit and litigation amongst other things.
A bailiff cannot get full costs on the basis that they’ve held a debtor ransom by only agreeing to hand the car back provided no further claims are made against them. That’s not how civil litigation works, if a person has been wronged then they have a right to bring a claim to court. A debtor who is unsuccessful in a small claims court is restricted to fixed costs, the courts cannot depart from that unless there is unreasonable conduct or the claim is vexatious. If a court was shown evidence that thee bailiff is only willing to hand the car back unless the debtor agrees they wont bring a claim is clearly blackmail and that will not count as unreasonable conduct.
You’ve also said I have no legal argument to back up my opinion of beneficial interest, did you somehow miss the House of Lords case I mentioned? You have yet to come up with any real definition of beneficial interest which trumps the court’s definition.
All you have done so far is dismiss superior court decisions, the bible book on torts and the government’s position on what can and cannot be seized under Part 3 of the Act. Yet you have failed to supply any documentary evidence whether that’s case law or any other authorities to the contrary – which shows a clear weakness in your arguments, other than “there is a beneficial interest”.
Anyway, we are back to square one now.
I am currently staring at a letter where a bailiffs solicitor is saying exactly that-He isn’t admitting any liability, however he will release the vehicle on condition that the debtor does not pursue a claim.
Please don’t tell me how civil litigation works-I have forgotten more about civil litigation than you know. It is normal procedure to produce offers made to the other party (in an attempt to avoid proceedings) when it comes to the subject of costs being awarded.
I would say that a debtor who owes a penalty/fine and chooses not to pay it, instead decides to sue the bailiff company for tort because his HP car had been removed, despite being offered the opportunity to walk away with his car returned, would be in very real danger of a costs order against him, wouldn’t you?
You also don’t seem to understand how difficult it is to take these bailiffs on in court. They are seen by the courts as people collecting debts on behalf of the courts. I used to think the same way that you did-I fight bailiffs on a daily basis, however this is one argument that will not be won. All knowledgeable people are of the same opinion. You can re-word John Kruse’s comments as much as you like, the bottom line is that he stated that goods on HP are vulnerable as far as enforcement is concerned.
Sure, but what if the debtor chooses to bring a claim for wrongful interference? Presumably by what you are saying the solicitor is then not going to hand the car back? A person who wrongfully appropriates goods entitles a debtor to the remedy of the return of those goods (if possible) and damages – not just the return of those goods. Just because an offer is made, does not make it reasonable and I would say the return of the car is inevitable anyway but since the car was taken wrongfully, an entitlement to damages is also available. If the solicitor had offered a reasonable sum as compensation for taking the goods and causing loss of use which the debtor refused then yes there could be an element of liability for costs above standard small claims costs.
One of many cases in point about a debtors right to sue the bailiff – Iran v Barakat Galleries Ltd, Court of Appeal 2007
Summary: Where the owner of goods who had an immediate right to possession of them by contract transferred the latter right to
another, so that he no longer had an immediate right to possession but retained ownership, it would seem right in principle that the
transferee should be entitled to sue a third party in conversion.
Doesn’t matter whether bailiffs are seen by courts as collecting debts they are not exempt. If you breach the law, you pay the price of doing so.
Just as an addition here but no doubt you will dismiss anyway, s.189 of the CCA is definitions and the definition of “hirer” means the individual to whom goods are bailed under a regulated agreement. Chitty on Contracts (another bible for lawyers) states that the essence of bailment is the transfer of possession, not ownership.
going back to the argument of beneficial interest/ownership, as we agree here that the debtor is the hirer and in line with Chitty, the debtor cannot be deemed to have a beneficial interest as it is one of possession. Chitty goes on to say further that the only interest a bailee has is a possessory one which is very distinct from any other kind of ownership/interest.
On that basis I would say John Kruse is wrong in that HP goods can be seized unless there is a suitable argument against the above. Pehaps his initial view is that it might be the case but I think further investigation would show that they cannot.
Can you please just quote me one case where it was found that a bailiff cannot seize goods on HP? I don’t even care if it dates to pre April 2014
Without looking into great detail, the previous cases i’ve referred to before Farr v Newman, Fenwick v William Laycock, both state that you can’t take or seize goods of third party.
Legg v Evans is probably more specific to this matter which held a person who siezes or holds goods belonging to a third party, in return for payment by the debtor is unlawful.
Although I can’t find any specific authority on bailiffs seizing goods, it is clearly a matter of interpretation when taking the relevant legislation into consideration and not just the TCE but the CCA. I would go as far as saying a bailiff has a power under the TCE to sell goods, which for names sake you could say included HP goods but he would be strictly liable as there is no right to seize the third party goods in the first place and thats where the tort lies.
It’s clear that a HP is a bailment of goods under the CCA and you can’t have any ownership under a bailment of goods. You might want to look at TRM Copy Centres v Lanwell Services – the House of Lords which gives this explanation “The essence of hire is that the hirer acquires the use and possession of the goods from the provider in return for a rent”
We all accept that goods of a third party cannot be taken.
The issue of HP is not as clear cut. Nobody denies that the debtor is not the owner however the legislation is worded in such a way that there is an argument that HP goods with equity can be seized.
The issue is further compounded by the fact that the 3rd party (the HP company) do not lay claim to the goods. This makes the debtors/hirers options more limited. CPR85 is the correct route to go to challenge wrongful seizures but this then sends us to the TEC which only provides for applications from 3rd party owners.
There is an option to sue under s3 of the Torts Act as this covers for people who are in possession or control of the goods. In the interim period, the debtor will want the car back and this is where we enter the murky world of conditions and clauses.
I don’t see the actual selling as being a problem as by then, notices will have been served cancelling the agreement and transferring rights. The only way of challenge as I see it is the initial seizure. I don’t think your case laws will help in the legal arguments concerning beneficial interest. I do however think the words of a fellow CC judge will be damning if the other side produce a transcript.
I apologise over the confusion regarding Jon. Now that I accept that you are not that idiot, I will be happy to continue this debate on a more civil level.
I will make one last post before I sleep, the starting point as I see it under the act is as you say third party goods can’t be seized. Under a HP, there will be a retention of title clause which explicitly states ownership does not vest in the debtor unless he makes the final payment, or words to that effect. And that is where I see the bailiffs first mistake.
but leavig that to one side, if you are talking about the meaning beneficial interest under the act as being worded in such a way to allow it to be siezed lets take it step by step.
Osborne’s Concise Law Dictionary defines the following words:
Beneficial interst: The interest of a beneficial owner or beneficiary under a trust.
Bailment: The transfer of possession of goods, but not ownership.
A HP is essentially a hire on finance with a clause for the hirer to purchase if he so wishes under no obligation. Using the two definitions above and what the HoL confirms in TRM Copy Centres, I can see no way in which a bailiff can seize goods on HP. Whether you agree or not, the Government paper in 2013 I mentioned a day or two ago specifically makes reference to the fact that bailiffs under TCE cannot seize goods on HP, hire or rent. The court cannot ignore that because that is what parliament intended when the law was brought into force.
I think somewhere in the TCE I saw maybe paragraph 63 or 64 says the power to sell the goods, and I won’t deny that power could include HP goods but as we both seem to agree it is the initial seizure which I would say under paragraph 10 restricts them from doing so.
I can’t see your argument of equity really flying that well, you’ve acknowledged the debtors not the owner which would mean any equity which is attached to the car must belong to the finance company because they are owner of the car. The equity lies in the car and the car is not owned by the debtor, its is simple as that. If you argue the equity belongs to the debtor, you are implying the debtor is committed to buying the car, but that implies a conditional sale agreement and not a HP. You may have an argument where the agreement is a conditional sale (where the bailiff will stil lhave the initial seizure issue) but not a HP
The ultimate fact is that any transcript produced by a CC judge is merely persuasive and thats it. Any (sensible) judge would look to practioner textbooks such as Clerk and Lindsell and Chitty for guidance and coupled with the above arguments from the highest court in the land and what the Government says, the arguments are overwhelmingly in favour of the debtor.
Sure, bailiffs are going to win at CC level unless either someone appeals or provides an extensive defence along the lines of the above, which I think that point the bailiff will have no chance of success.
Not entirely sure what you mean about a third party laying a claim but as for CPR85, I am assuming that you know CPR is only a procedural code and not law and therefore cannot override a claim under statute. So if a debtor wanted to make a claim, then it will the be usual route and not CPR 85, if that only allows third parties.
But here’s another food for thought, if a debtor is successul in tort for wrongful interference, then he will also likely be successful in a tort for inducment to breach contract by the bailiffs actions causing the termination of the HP agreement. A more difficult argument to make but as it is an economic tort, the damages in for inducement may actually be substantially more than any damages for wrongful interference.
I was pointing out that CPR85 may not be available to the or, leaving him with no choice other than to injunct, which as we know from the Ori case, can backfire. It was also made very clear in that case that the judge was not best pleased that Ori chose the route that he did, rather than CPR85. (not a major issue as it can easily be countered with legal representation). Any claim for tort would include in it’s particulars, a claim for causing the termination of the agreement. That would be part of the damages.
We are still stuck with the key issue of convincing a judge that a car with £2,000 equity in it cannot be sold to recover a debt by legal process. I don’t think any of the High Court case laws advance an argument any further. I do however think that the wording of Osborne’s Concise Law Dictionary would help, if not greatly.
If the HP companies were to step in on behalf of their clients, the case would be a lot stronger, unfortunately, they take the easiest and cheapest option and side with the bailiffs after being guaranteed that their interest in the car is covered and will be paid in full if sale occurs.
Can you tell me what Government paper you were referring to in 2013 please? Of course this will have been written before the term “beneficial interest” came into play but I would be interested to read what is written.
As a side issue, I’m not aware of a car on HP ever being sold since the new legislation came into force. I am aware of one currently where sale is being threatened which will be interesting, especially as bailiff sell cars by auction which obviously brings in the lowest amount of proceeds quite substantially.
Regarding the damages for inducement and wrongful interference, the burden of proof are different as for inducement you have to prove intention and the result of which is all direct losses. The debtor could potentially opt to bring a claim against the finance co for breach of contract instead if they wanted to and just claim damages for wrongful interference, but if both are brought together and successful then it could be susbtantial.
The definition in Osborne’s is simply applied in the cases i’ve mentioned or at least most of them. We talk about equity here but in reality that equity simply means the market value of the car, compared to the value under the agreement. It still doesn’t avoid the fact that the car is on hire and the car belongs to the third party.
The first question to ask is who owns the car, and if the answer is not the debtor then it’s game over really. You could argue equity as being relevant but the debtor can’t own the equity because the car is not theirs and without ownership, there is no share to take. Obviously if finance co’s side with bailiffs and get their money back they then couldn’t claim the same outstanding balance from the debtor as that would be double jeopardy, the only difference being is that the bailiff has a car he now owns but the outstanding debt under the warrant would remain.
As for the finance co not siding with the debtor, as I’ve pointed at the beginning they may be liable in other ways and that is up to the debtor to choose if they want to take action.
The Government paper is here -> researchbriefings.files.parliament.uk/documents/SN04103/SN04103.pdf
The relevant points on hire purchase start at the bottom of page 5 and continue into page 6. There is some useful points made about a bailiff being liable at the bottom of page 6 and continues into page 7 and this is where I have made my reference previously about John Kruse’s comments perhaps being taken out of context. A credit sale as acknowledged by the paper is perfectly legal to seize because ownership transfers at the beginning of the agreement and not at the end even though the goods are being paid by instalments over a period of time. So a debtor might think the goods are on HP but in fact they might not and that requires the bailiff to do some initial investigations to confirm.
We can all pour over the question of whether there is a beneficial interest but until a binding decision becomes available, it will be up to the debtor to fully plead their case in persuasively
Many people who say they have a car on Hire Purchase are in fact utilising A PCP agreement(personal contract plan), although covered by the consumer credit act these have a different structure with repayments and deposits being generally much smaller.
If you want to buy the car you have to make a large balloon payment at the end of the contractual repayment period, or f you can just give the car back and owe nothing or you can trade in for another car.
Bailiffs do not take control of these vehicles.
The question is should they be able to take any vehicles under HP.
Equity as said, is the value of the goods minis their costs, and is due to the person who owns title to those goods (the dealer). It is contained within the contract and not available once the contract is made.
The considerations due under the active contract are , use of the vehicle to the hirer, and the repayments to the dealer.
Beneficial interest is what is produced when the contract is terminated and reduced to a liquidated sum(in this case). the amounts raised are divided amongst the “beneficiaries” this would include adjustments for contractual costs or credits.
So in taking the car the EA would have to presume that there would be a sum payable to the hirer after the contract had been so disposed of.
This is by far to much of a decision for a bailiff to make because their are so any unknown factors, these factors exist because of the contract.
If as said the goods where not hindered by a contract, if they were at the debtors premises for his use but the title still rests with the supplier their resale value would generate a profit.
There is a genuine undeniable beneficial interest contained within the goods.
They would be sold the supplier would be paid and the balance would be the debtors and thus the bailiffs, This in my view is the purpose of the definition of “interest” as beneficial , and I must add, not just in my view.
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