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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

26 AUG 2013

Evans v Finance-U-Ltd [2013] EWCA Civ 869

(Court of Appeal, Mummery, Patten and Black LJJ, 18 July 2013)

The defendant was entitled to delivery up of a car on which it had been given a bill of sale as security for a loan to the claimants. Although the claimants had no personal liability because each of them had been made bankrupt and been discharged from bankruptcy, the Insolvency Act 1986 preserved the defendant's right to enforce its security. That right had not been lost by the defendant proving in the first claimant's bankruptcy for the full sum owed under the loan agreement because the defendant had disclosed its security in its proof even though it had not attributed any value to it. The loan had been regulated by the Consumer Credit Act 1974 but it was doubtful that service of a default notice under s 87 was appropriate once the claimants had ceased to have any personal liability. Until the term of the loan expired, service of a termination notice under s 76 and/or enforcement notice under s 98 would have been necessary. But once the term had expired no such notice was necessary to entitle the defendant to delivery up.

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