Bankruptcy costs more, Sale of goods at House of Lords, Power of attorney enquiries, Family legal aid rates make beaks sexier, CPR pt 8 gets a facelift
LAWBITES
Fees to bankrupt you
Such is the pressure of work on the Insolvency Service these days that some debtors made bankrupt on their own petitions are not even being troubled to speak to an examiner by telephone, let alone take a bus journey to the examiner’s office. This eases the flow of work and, in many cases, the bankrupt is earning an automatic discharge in around seven months. The driest of dampeners is put on this scenario by the Insolvency Proceedings (Fees) (Amendment) Order 2007 (SI 2007/521) which came into force on 1 April 2007.
Insolvency deposits are up—on a debtor’s bankruptcy petition from £325 to £335, on a creditor’s bankruptcy petition from £390 to £400 and on a company winding up petition from £655 to £700.
Trespassers keep out of s 89
A trespasser cannot invoke the Housing Act 1980, s 89 to earn time to vacate. On the contrary, its provisions are concerned with cutting down the period for which a court can postpone possession. See Boyland & Son Ltd v Persons Unknown [2006] EWCA Civ 1860.
Dispossessed but unoppressed
The marketing of a property at an undervalue by a mortgagee in possession could not amount to oppression in the execution of a warrant which would empower the county court to allow the mortgagor back into occupation (pending appeal). See Mortgage Express v Da Rocha-Afodu [2007] EWHC 297 (QB), [2007] All ER (D) 276 (Feb).
Quiz
Q: Who cares?
A: Wrexham cares. Wrexham County Court became a care and adoption centre on 2 April 2007.
A harrowing experience
For the buyer to agree to a repair of goods out of conformity with the contract may not be fatal under the Sale of Goods Act 1979 (as amended). The deeming of acceptance, with the consequential loss of the right to reject, by solitary agreement to repair is prevented by s 35(6). What if the repair is effected but the seller will not disclose the problem that had existed? In J & H Ritchie Ltd v Lloyd Ltd [2007] UKHL 9, [2006] All ER (D) 109 (Mar) involving a harrow, the House of Lords ruled that there had been an implied obligation on the seller to provide the information and failure to satisfy meant that the buyer’s rejection had been justified. However, this had been a complex piece of power operated agricultural machinery which had sold for £14,000. Lord Hope made the point that the obligation could not be assumed to apply in every case.
Stay calm
Reports of the arrival of the Mental Capacity Act 2005 (MCA 2005) have been exaggerated, so relax. The main provisions will not be brought into force until October. The provisions activated on 1 April 2007 by the Mental Capacity Act 2005 (Commencement No 1) (England and Wales) Order 2007 (SI 2007/563), create the new criminal offence of ill-treatment or wilful neglect (England and Wales) and deal with principles, assessing capacity and determining best interests (ss 1 to 4—just England) but only in relation to the operation of the independent mental capacity advocate service. The purpose of this service is to help particularly vulnerable people who have no family or friends and who lack capacity to make important decisions about serious medical treatment and changes of residence, eg moving to a hospital or care home.
And cancel the refuse collector
The Civil Partnership Act 2004 inspired a new form of enduring power of attorney (see 155 NLJ 7203, p 1846) although the old form was to be acceptable up to 31 March 2007. Hold onto your old form stock. The life of the old form has been extended to 1 October 2007 by the Enduring Powers of Attorney (Prescribed Form) (Amendment) Amendment Regulations 2007 (SI 2007/548) when MCA 2005 stands up and shouts.
Slumber
Failing to apply promptly under CPR 39.3 to set aside a judgment order made in the applicant’s absence will be fatal. Four and half months would be too long in the vast majority of cases, said Mr Justice Mann in Harrison v Hockey and another [2007] All ER (D) 336 (Mar), and four weeks has previously been held to be without the alacrity called for.
Claim for another day
Issuing a claim form in time to overcome a limitation defence is one thing but how about serving when the claimant does not know if he has a case? Mr Justice Cooke held in Nomura International plc v Granada Group Ltd and others [2007] EWHC 642 (Comm), [2007] All ER (D) 404 (Mar) that it depends on whether the claimant can properly identify the essence of the tort or breach of contract complained of and, if given appropriate time to marshall what he knows, is in a position to formulate particulars of claim. If he cannot then he has no present intention of prosecuting the claim since he is without a known basis for doing so. A claimant has no business issuing a claim form in the hope that something might turn up. He cannot unilaterally seek to achieve an extension of time allowed by statute for the commencement of a claim even though he is in no position to formulate it. That is an abuse for which strike out is the remedy.
Written reasons for the FPC
Pending the introduction of new legal aid schemes in October 2007—assuming there are not too many marches in the meantime—the Legal Aid in Family Proceedings (Remuneration) (Amendment) Regulations 2007 (SI 2007/742), which came into force on 2 April 2007 harmonise solicitors’ pay for private law cases between the county court and the Family Proceedings Court (FPC), and will also cover domestic violence cases. The idea is to remove the financial disincentive to issue below, but solicitors may have little choice. Where it has jurisdiction, the Legal Services Commission requires proceedings to be commenced in a FPC unless there are particular or sufficient reasons to do otherwise. The funding certificate will contain a condition to this effect (which is appealable). FPC letters in will attract an award and increased rates will be triggered if the fee earner’s office is within the south-east circuit.
EIGHT RULES OK?
A CPR Pt 8 claim, like an elephant or a television reality show, is difficult to describe but you know one when you see one. Practice Directions 8 and A have been revamped and consolidated as part of the CPR 44th update—operative on 6 April 2007—albeit in an unsensational way.
When may Pt 8 be used? We continue to be told by CPR 8.1 that it may be used where the claimant seeks the court’s decision on a question which is unlikely to involve a substantial dispute of fact and PD 8 continues to example an application for approval of a settlement by or against a child or patient or a claim for provisional damages (where have they gone?) which has settled and where the sole purpose of the claim is to obtain a consent judgment. But it is on mandatory use that the revamping comes into its own with a table of various obscure litigation covered including claims under the Mines (Working Facilities and Support) Act 1966 and for a detailed assessment of a returning officer’s account under the Representation of the People Act 1983. In relation to such proceedings, the Pt 8 procedure is either modified by the PD or there is a cross-reference to the CPR schedules which they themselves modify.
The Pt 8 defendant’s acknowledgment of service must always be in practice form N210. The allowance for an informal document such as a letter to be filed in lieu of an acknowledgment has gone.
It is expressly stated that on the hearing date the court may proceed to hear the case and dispose of the claim or give case management directions. The latter may include specific allocation—remember, that Pt 8 claims are otherwise deemed to be allocated to the multi track—and expressly applied in the event of allocation are CPR 26.5(3) to (5) and 26.6 to 26.10.
CREDIT CONSUMPTION
We are moving more seriously into the Consumer Credit Act 2006 (CCA 2006) now. The default notice stuff (see NLJ, 12 January 2007, p 61) was just messing around. We got real on 6 April 2007 when the CCA 2006 (Commencement No 2 and Transitional Provisions and Savings) Order 2007 (SI 2007/123) struck bringing into force ss 1, 15, 19–22, paras 11 and 14–16 of Sch 3 and (partially) s 69(1) and Sch 4.
Individually speaking
The Consumer Credit Act 1974 (CCA 1974) covers an individual. The definition of an individual has changed. It can still include a partnership so long as the partnership comprises no more than two or three people and they are not all bodies corporate.
‘Take your partners (no more than one each) for the 140B’
Under the old regime, the court has been empowered to reopen a consumer credit agreement—despite the amount of credit provided—where the required payments were grossly exorbitant or otherwise contravened the ordinary principles of fair dealing. Factors to be taken into account have included market interest rates; the debtor’s age, experience and business capacity; financial pressure; and the degree of risk accepted by the creditor. A new reopening regime has been introduced with a broader test and will again apply whatever the amount of credit provided. The unfair relationship takes over from the extortionate bargain.
The court can make what could swingingly and lovingly become known as an s 140B (which is a reopening) where there has been unfairness to the debtor because of:
- any of the terms of the agreement or a related agreement;
- the way in which the creditor had exercised or enforced any of his rights; or
- any other thing done (or not done) by the creditor before or after the making of the agreement or related agreement.
The sins of an associate or former associate of the creditor—and that includes an individual’s spouse or civil partner—become the sins of the creditor.
Transitionally challenging
The new reopening regime will apply to all agreements made on or after 6 April 2007. The old regime will continue to apply to agreements that have already been completed, eg no party has any further obligations under the agreement, or were completed by 6 April 2008. But from 6 April 2008 the new regime will apply to agreements already made which are still in existence. This piece of transitional dexterity will allow time to the creditors to ensure that existing agreements that will run beyond the next 12 months are made new regime compliant.
Dodgy agreements
Creditors have needed an enforcement order from the court where they wished to enforce a credit or hire agreement that failed to conform with prescribed requirements and the court has only made one if it were just and equitable to do so. But the creditor has been denied an enforcement order where the debtor did not sign the agreement or certain formalities relating to cancellable agreements were not complied with, eg no or no adequate notice of cancellation rights, CCA 1974, sub-ss 127(3)–(5). This denial is scrapped and the usual just and equitable test will be applicable.
