Loans as Fraud

Has Your debt been sold to a SPV who is trying to unlawfuly enforce the debt? This case was successfully won using the following ……..

In the County Court at Merthyr Tydfil


Hoist Portfolio Holding 2 Limited Claimant


Miss Tina S………… Defendant

Defendant replies to the “Reply to Defence” as follows;

Para 2. The defendant submits that the burden of proof is not satisfied with hearsay by a legal representative per swift (attached) – the fraud act 2006 and the “Ghosh Test” (below)

Para 7. The defendant is severely sight-impaired and cannot read documents. John Hurst is her common law husband and assisted her in preparing her defence. The documents were not written by her , but accurately reflect her views.

The defendant’s seperate and independent defences are as follows;

1. The defendant accepts that from 2003 she held a Barclays Credit Card. She submits that the document she signed to obtain it was a security issued by her, a promissory note (PN), and that the transaction that took place was purchase of the security by Barclays Bank which they deposited in their bank. There was no “Consideration” (real money) put forward by Barclays and a bank “Deposit” is a record of its unsecured debt from the bank to the depositor in the amount specified as the “Credit Limit”. This was confirmed in the Bank of England’s Quarterly review, here which was submitted previously.

2. The defendant submits that the function of a properly directed court is to adjudicate on evidence that is placed before it. In the event of a contested claim, which this is, natural justice requires production of the PN to prove its existence and the nature of the transaction in question. (Times Newspaper 1974…..) Neither a “Khanna Subpoena” nor the applications of section 7 and 8 of the Bankers Book of Evidence Act 1879 should be necessary for the court to exercise its powers to secure the production of evidence and manage the case. This is the effect of the “Fundemental Principle” of the Civil Procedure Rules. This is a new measure (I.e post 2003) but is applicable to all parties.

3. The Defendant submits that without production of the PN, claims based upon it are unenforcable because the burden of proof is not satisfied.

4. The Defendant submits that if the agreement signed by her does not accurately reflect the nature of the transaction that took place, the contract is void from its start because of lack of disclosure by the bank.

5. The Defendant submits as is argued below, that a new statute (Fraud Act 2006) and a recent judgement (“The Ghosh Test”) have made attempts to make claims which are calculated to suspend their effects unlawful.

6. This is the “Commentary on fraud by false representation” in the explanatory notes to the Fraud Act 2006: 10 Section 2 makes it an offence to commit fraud by false representation. Subsection (1) (a) makes clear that the representation must be made dishonestly. This test applies also to sections 3 and 4. The current definition of dishonesty was established in R v Ghosh (1982) Q.B.1053. That judgement sets a two-stage test. The first question is whether a defendants behavior would be regarded as dishonest by the ordinary standards of reasonable and honest people. If answered positively, the second question is whether the defendant was aware that his conduct was dishonest and would be regarded as dishonest by reasonable and honest people….”.

7. The Defendant submits that applying the ratio of Swift, the Fraud Act 2006, and the “Ghosh Test” to the facts of this claim as it is at the present time (i.e. without full disclosure) produces the following conclusions:

a: No reasonable person would expect to be forced to part with money to an unsworn claim made by a junior official of a firm of solicitors on behalf of an offshore company without production of original signed documents to substantiate the claim. They would regard an attempt to do so as dishonest and expect a Court to protect them from it.

b: Ignorance of the law is no excuse and the claimants solicitor should have taken the professional precautions that the Swift judgement requires. It is accepted that Swift originated in a different jurisdiction but the points of law that constitute the ratio decedendi are of universal application in the common law world. If either the claimant or their legal advisors persist in the claim in its present form their criminal culpability is not going to be in doubt.

c: Breach of those principles would be regarded as dishonest by reasonable and honest people. Note that in Swift, both the solicitor and the company official are “warned of the consequences” of non-compliance.

d: These concepts are reinforced by the criminal liability of company officers for offences committed by the company per section 12 of the Fraud Act 2006.

8. For the reasons given, the defendant submits that:

a: If the PN has not been transferred from Barclays to another party, the wrong entity is making this claim and it should be struck out per CPR 3.4.2 because it is contrary to section 1 (2) of the Fraud Act 2006, fraud by false representation as to fact.

b: If the PN is not produced at all the claim should be struck out per CPR 3.4.2 because it is contrary to section 1 (2) of the Fraud Act 2006, fraud by false representation as to fact.

c: If the PN is in the claimant’s possession it is prima facie evidence that the debt has been expunged by payment, and the claim should be struck out per CPR 3.4.2 because it is contrary to section 1. (2) of the Fraud Act 2006,fraud by false representation as to fact and law. If this is denied by the claimant, the contract concerning the transfer should be disclosed as evidence. The defendant will give evidence that she had no prior knowledge of such transfers and this is corroborated by the letters that were sent to her afterwards informing her of them. If she took no part in the contract she is not bound by it. If some form of “power of attorney” was used it would fail the “Wednesbury reasonableness test because she did not know about it and again it cannot be binding upon her.

9. The defendant seperately submits that the original contract that she had with Barclaycard has become frustrated if the following alternative circumstances are proved to the civil standard.

a: If the PN has been “lost” “destroyed” or otherwise cannot be produced without blame attributable to either party, the contact between the defendant and Barclaycard was frustrated from the date of the event.

b: If the law, custom and practices concerning PN’s have been repealed as described above, the contract between the defendant and the claimant was frustrated from the date of the Fraud Act 2006, 8th November 2006.

10. In either situation, the defendant submits that section 1 of the Law Reform (Frustrated Contracts) Act 1943 is applicable.

Adjustments of rights and liabilities of parties to frustrated contracts.

(1) Where a contract governed by English law has become impossible of performance or been otherwise frustrated, and the parties thereto have for that reason been discharged from the further performance of the contract, the following provisions of this section shall, subject to the provisions of section 2 of this Act, have effect in relation thereto.

(2) All sums paid or payable to any party in pursuance of the contract before the time when the parties were so discharged (in this Act referred to as “the time of discharge”) shall, in the case of sums so paid, be recoverable from him as money received by him for the use of the party by whom the sums were paid, and, in the case of sums so payable, cease to be so payable:

Provided that, if the party to whom the sums were paid or payable incurred expenses before the time of discharging, or for the purpose of, the performance of the contract, the court may, if it considers it just to do so having regrad to all circumstances of the case, allow him to retain or, as the case may be, recover the whole or any part of the sums so paid or payable, not being an amount in excess of the expenses so incurred…”

11. This is the counterclaim that the Defendant makes which was not addressed in the Claimant’s response. The £1,000 referred to is for the expenses incurred prepaing her defence.

12. The Defendant also seperately submits that the sum claimed as owed by Barclaycard is in doubt because of the LIBOR Judgemenbt aginst Barclays Bank and the application of the “Ghosh Test”. The consequences of this are either;

a. The sum claimed as owing has not been proved to a sufficient standard. A remedy would be, per the Swift Judgement, a reasoned calculation by a qualified member of Barclays Bank staff corroborated by records and presented in the form of a sworn statement by that official and subject to review by expert witnesses.

b. The sum claimed was the result of Criminal Fraud by individuals and because Fraud vitiates all, any claim based upon it cannot be enforced. An attempt to make a claim in these circumstances would be caught by section 3 of the Fraud Act 2006, Fraud by failing to disclose information.

c. The sum claimed was the result of Criminal fraud by officials of Barclays Bank either wilfully or negligently. An attempt to make a claim in these circumstances would be caught by section 4 of the Fraud Act 2006 – Fraud by abuse of position because bank officials have fiduciary responsibilities.

13. The Defendant submits, for the reasons given above, the Claimant should be making a claim against Barclays Bank, not her, because they were sold a pig in a poke (mochyn yn ‘y’ bag) Diolch yn fawr.