Time Order

TIME ORDERS

A debtor or hirer can apply for a time order:

(a) after he has been served with a notice of default; or

(b) where the creditor owner starts proceedings to enforce a regulated agreement or any security or to recover possession of any goods or land to which a regulated agreement relates.

Notice of default

Where the creditor provides for certain consequences (for example entitlement to terminate the agreement, or demand early payment of any sum, or recover possession) on default by the debtor or hirer then by section 87 such a provision will not be enforceable unless the creditor or owner first serves on the debtor or hirer a notice of default in the prescribed form. The notice must contain the following information:

(i) it must specify the breach;

(ii) if the breach is capable of remedy (e.g. default in payment) the notice must indicate what action has to be taken to remedy it and the date before which it must be done (not earlier than seven days after the service of the notice of default);

(iii) if the breach is incapable of remedy (e.g. causing permanent damage to the goods) what compensation (if any) is required and the date before which is to be paid (not earlier than seven days after the service of the notice of default);

(iv) the consequences of non-compliance; and

(v) in appropriate cases the restrictions on the creditor’s right to repossess “protected goods”.

 

Effect of Notice

If, by the date stated in the notice the debtor or hirer undertakes the steps specified then the default is treated as if never having taken place. As an alternative to complying with the default notice the debtor can apply to court under section 129 for a “time order”. Such an order may contain the following provisions:

(a) that any sums owed by the debtor or hirer or any surety shall be payable at such times as the court, having regard to the means of the debtor or hirer and any surety considers reasonable; and /or

(b) that a breach of the debtor or hirer (other than non-payment of money) shall be remedied within such period as the court may specify.

Protection against repossession without a court order for debtors in breach of hire-purchase and conditional sales agreement and not complying with a default notice
(a) Entry on premises

A creditor cannot enter onto premises to repossess goods without a court order unless it is with the owner’s consent. Any entry in contravention of this actionable by the debtor as a breach of statutory duty under section 92(3).

 

(b) Land

Where the debtor is in breach under a conditional sale agreement relating to land the creditor cannot recover possession of the land from the debtor, or from any person claiming under him, without an order of the court, unless it is with the debtor’s consent. Any entry in contravention of this actionable by the debtor as a breach of statutory duty under section 92(3).

 

(c) Protected Goods

By section 90 where:

(i) the debtor is in breach; and

(ii) he has not terminated the agreement; and

(iii) he has paid to the creditor one-third or more of the total price, and

(iv) the property in the goods remains in the creditor;

then the goods qualify as “protected goods” and as such the creditor cannot recover possession from the debtor without a court order. By section 91 where protected goods are recovered from the debtor by the creditor without a court order or the consent of the debtor the agreement is terminated, if not already terminated, and the debtor is released from all further liability and he can recover from the creditor all sums paid by him under the agreement.

 

Protection against repossession without a court order for hirers in breach of hire agreements and not complying with a default notice
An owner’s best course of action seeking repossession of hired goods is to obtain by a court order or by the hirer’s consent. An owner who enters premises to obtain possession without a court order or consent will be liable to the hirer for breach of statutory duty under section 92. In any case where the owner has obtained possession without the hirer’s consent or a court order then by section 132 the hirer may apply to court for an order:

(a) extinguishing any further liability to make payment in whole or in part; or

(b) requiring the owner to repay sums paid by the hirer in whole or in part (such a provision can also be made on the owner’s application to court for an order seeking possession).

 
Powers of the court when deciding upon time and enforcement orders

Relief against forfeiture
The court has a general power to grant relief against forfeiture of a proprietary or possessory right.

 

Return order

This requires the debtor to return the goods to the creditor. In practice the court will use its powers under s.135 and make a suspended return order on condition that the debtor pays the balance by installments set by the court.

 

Transfer order

This is an order which requires return of some goods to the creditor and transfers title to the remainder from the creditor to the debtor. This type of order is limited by s.133(3) to the extent that the maximum transferable to the debtor is the value of the sum paid less one third of the unpaid balance..