My boat has been repossessed and I've also been handed the mortgage to pay

[jfm]

Marine law is different from "normal" law, this seems to be the point that passes everyone by.

The boat does NOT need to be registered, it does NOT need to be a "marine mortgage".

If money was loaned for the boat then the debt follows the boat.

Oh, and there's no way of finding out whether a boat has outstanding finance.

And still people are saying that "it'll probably be alright so that's good enough".

Genuinely odd.

Ari we have debated this before and I don't want to go over that same ground. But this case is not one which justifies your proposals imho. The reason OP has the judgment against him is frankly that he didn't turn up to court when served with proceedings. Courts hate that. If he had, there is a quite strong chance he would have resisted the bank's claimed security over the boat. Starting with the bank's failure to tell the world of their security interest, despite there being registers/facilities (HPI, Part 1, ad in MBY, a plate on the boat) to do just that. This lazy omission by lender would form a pretty decent defence, and there may be more once you get into the fine detial of the bank's acts and omissions.

What is to be learned from this case is:
(a) if this happens to you, enter a defence. Don't not show up
(b) even though OP didn't enter a defence, he merely loses his boat. He is not liable for the full £26k debt.

The only thing that would justify your proposals imho would be a significant number of cases where innocent buyers lose their boats even though they enter a defence and turn up to court. Which isn't the case. The rest of us/taxpayers in general should not be made to pay for your proposed HPI-mark2 to protect those folks who don't enter defences when served with legal proceedings

Sorry to be so scathing of the failure to enter a defence but it's a tough world out there and folks doing non trivial finacial transactions need to take responsibility and manage risk personally, and not expect the state to bail them out

 

[timbartlett]

Genuine question -- not trying to be contentious or "clever"...

How can the bank prove that the boat now owned by the OP is the same one that someone completely different offered as security for a loan?

Surely the name painted on the side of an unregistered boat is meaningless: it could be a completely different boat that happens to have the same name but which is nothing to do with the bank at all.

Or have they referred to a HIN or an engine number or anything like that?

 

[jfm]

Genuine question -- not trying to be contentious or "clever"...

How can the bank prove that the boat now owned by the OP is the same one that someone completely different offered as security for a loan?

Surely the name painted on the side of an unregistered boat is meaningless: it could be a completely different boat that happens to have the same name but which is nothing to do with the bank at all.

Or have they referred to a HIN or an engine number or anything like that?

There will likely be a HIN and or serial number. Also the borrower may have toldem "I sold it to Duncan", and Duncan might easily have acknowledged somewhere along the way that he bought it from borrower

The bank no longer has to prove it of course. They have a court judgment in their favour. Had OP entered a defence, he could AT THAT POINT have put the bank to proof (which likely wouldn't have been hard, for reasons above). But it's too late now to put them to proof

 

[toad_oftoadhall]

(b) even though OP didn't enter a defence, he merely loses his boat. He is not liable for the full £26k debt.

I took it that the 26k is not actually 'the original debt + interest' but 'BoS's costs + interest'. I could be mistaken.

 

[PaulGooch]

<snip>

The only thing that would justify your proposals imho would be a significant number of cases where innocent buyers lose their boats even though they enter a defence and turn up to court. Which isn't the case. The rest of us/taxpayers in general should not be made to pay for your proposed HPI-mark2 to protect those folks who don't enter defences when served with legal proceedings

Sorry to be so scathing of the failure to enter a defence but it's a tough world out there and folks doing non trivial finacial transactions need to take responsibility and manage risk personally, and not expect the state to bail them out

There's no need for anyone to pay any big bills here though, to make a simple and safe system for protecting the finance companies interests and safeguarding joe public from having a problem with mortgaged boats.

1) Financial institutions be required to register an interest with HPI, if they don't they have no claim.

2) Buyers should check with HPI, if they don't and the boat is registered with HPI, they lose it.

HPI charge next to nothing to put vehicles in their database. The fee for an individual to make a check is pretty small too. A price i'm sure most people would be happy to pay for the peace of mind, surely ?

 

[jfm]

I took it that the 26k is not actually 'the original debt + interest' but 'BoS's costs + interest'. I could be mistaken.

I haven't seen the judgment but I doubt Duncan is liable to pay BoS court costs in cash, even though he was the loser. He has no contract with BoS and nothing to be in breach of. I expect BoS costs are included in the £26k and are owed to them by the loan borrower, but Duncan's obligations to BoS will I expect consist of nil cash and only handing over the boat

If Duncan appeals, he will then potentially be liable for appeal court costs if he loses, but that's different.

But I'm not sure I get your point ??

 

[jfm]

There's no need for anyone to pay any big bills here though, to make a simple and safe system for protecting the finance companies interests and safeguarding joe public from having a problem with mortgaged boats.

1) Financial institutions be required to register an interest with HPI, if they don't they have no claim.

2) Buyers should check with HPI, if they don't and the boat is registered with HPI, they lose it.

HPI charge next to nothing to put vehicles in their database. The fee for an individual to make a check is pretty small too. A price i'm sure most people would be happy to pay for the peace of mind, surely ?

OK, yep, but what stops the fraudulent seller giving his boat a new identity so that buyer can't find it on the database? This wouldn't be difficult; just borrow another HIN and serial number. There seems to me no point changing the law to a very non-watertight system

Changing HINs is easy btw. My last boat, the Sq58 that I parted company with last week, had a new HIN moulded into the transom after delivery (for a legitimate reason!). It took the GRP guys an hour to do it.

EDIT: actually we may not wish to start a debate on the pros/cons of HPI. We did that to death a few months ago. So I'm haapy if you ignore the above question

 

[toad_oftoadhall]

I haven't seen the judgment but I doubt Duncan is liable to pay BoS court costs in cash, even though he was the loser. He has no contract with BoS and nothing to be in breach of.

My take on it is he had possesion of a boat that "belonged" to BoS and they had to incurr legal costs in going to court to get him to hand it over. I assume if he'd handed the boat over on day one there would have been no costs and his obligation would have ended with the boat alone. (Obviously it is a tradgedy that Duncan was put in that situation and my sympathy should lies with him.)

I expect BoS costs are included in the £26k and are owed to them by the loan borrower, but Duncan's obligations to BoS will I expect consist of nil cash and only handing over the boat

I've no doubt that Duncan's original obligations consisted of nil cash and only handing over the boat. However things have moved on from that and BoS have had to spend cash in taking him to court. Since he lost that case I would imagine he will have to pay the costs.

But I'm not sure I get your point ??

I think the 26k is purely the legal costs of getting him to hand the boat over. None of it is the original loan. Mind you this is completely at odds with what the OP has told us.

I'm asking the question rather than stating a strong opinion - I could be wrong but if that was the case this would all make sense.

 

[jfm]

My take on it is he had possesion of a boat that "belonged" to BoS and they had to incurr legal costs in going to court to get him to hand it over. I assume if he'd handed the boat over on day one there would have been no costs and his obligation would have ended with the boat alone. (Obviously it is a tradgedy that Duncan was put in that situation and my sympathy should lies with him.)



I've no doubt that Duncan's original obligations consisted of nil cash and only handing over the boat. However things have moved on from that and BoS have had to spend cash in taking him to court. Since he lost that case I would imagine he will have to pay the costs.



I think the 26k is purely the legal costs of getting him to hand the boat over. None of it is the original loan. Mind you this is completely at odds with what the OP has told us.

I'm asking the question rather than stating a strong opinion - I could be wrong but if that was the case this would all make sense.

OK, I get/see your point, thanks. You could be right, and if you are, Duncan owes £26k cash AND the boat. I doubt that's the situation though, because the costs of making a HC court applic when the respondent enters no defence and doesn't show up is tiny, not £26k

This point could easily be cleared up by OP but there is much imprecision in what he has said so far and getting a clear understanding of the entire predicament is difficult

 

[toad_oftoadhall]

I doubt that's the situation though, because the costs of making a HC court applic when the respondent enters no defence and doesn't show up is tiny, not £26k

Right, if that's the case then I guess we can rule it out.

 

[PaulGooch]

OK, yep, but what stops the fraudulent seller giving his boat a new identity so that buyer can't find it on the database? This wouldn't be difficult; just borrow another HIN and serial number. There seems to me no point changing the law to a very non-watertight system

Changing HINs is easy btw. My last boat, the Sq58 that I parted company with last week, had a new HIN moulded into the transom after delivery (for a legitimate reason!). It took the GRP guys an hour to do it.

EDIT: actually we may not wish to start a debate on the pros/cons of HPI. We did that to death a few months ago. So I'm haapy if you ignore the above question

Fair comments, but i'll follow your suggestion to ignore this particular discussion for another day John. I'm confused enough by the financial aspects of this one as it is lol

 

[duncan1859]

to jfm

even though I agree with everything that you say, the case of 'Shizelle' where the owners did go all the way with the case and lost in the high court even though the bank had not registered its interest anywhere does show that I probably would have lost as that test case can now be applied to one and all.

the owners in that case bought the boat for £63k and then were told there was a £40k mortgage on it. In the ruling, the judge said that there was absolutely no obligation on the financial institution to register its interest in an unregistered vessel.

i'm sure as you say that these are really rare cases and probably going to become more rare, but I can't help wondering, as a boat owning first timer, why I can buy a £500 car with an HPI check and total confidence but can't buy a £63k yacht with the same security. At least that is what the Judge said in 1993.

Thank you for the advice about talking to the bank too; I kind of realise that to make this go away, it may well come to that.

 

[duncan1859]

to tim

I bought the boat through a boat sales showroom and they subsequently went bust. their records were passed to the receiver who was then contacted by the bank. The non-regulated mortgage application logs the hin number which is the same as my boat. The boat wasn't named.

It is good to hear that this has not happened to anyone else, and this was something I was hoping to find out by posing the question.

 

[duncan1859]

to jfm

OK, I get/see your point, thanks. You could be right, and if you are, Duncan owes £26k cash AND the boat. I doubt that's the situation though, because the costs of making a HC court applic when the respondent enters no defence and doesn't show up is tiny, not £26k

This point could easily be cleared up by OP but there is much imprecision in what he has said so far and getting a clear understanding of the entire predicament is difficult

Again I have to agree with you - I have all the paperwork and a solicitor (now) and I am still struggling to come to terms with it. My problem is that the advice I was originally given was the worst that could happen is that I would lose the boat. This is why I chose not to throw good money into the defence (big mistake we're all agreed).

However, when I look at the 'PARTICULARS OF CLAIM' made by the bank's solicitors, they have used the term 'defendant' in reference to both the defaulting borrower and myself (at separate points in the claim)even though we are not one and the same person. As I wasn't there I am not certain that the judge would have been made aware of this.

It seems that I now need to argue that the defaulting borrower is the defendant who owes them their original loan monies plus interest which they are clearly claiming; I on the other hand am the defendant who wanted to argue that the boat is mine.

All of this becomes academic if the loan being below £25k cannot be attached to the boat in any case.

 

[jfm]

even though I agree with everything that you say, the case of 'Shizelle' where the owners did go all the way with the case and lost in the high court even though the bank had not registered its interest anywhere does show that I probably would have lost as that test case can now be applied to one and all.

the owners in that case bought the boat for £63k and then were told there was a £40k mortgage on it. In the ruling, the judge said that there was absolutely no obligation on the financial institution to register its interest in an unregistered vessel.

i'm sure as you say that these are really rare cases and probably going to become more rare, but I can't help wondering, as a boat owning first timer, why I can buy a £500 car with an HPI check and total confidence but can't buy a £63k yacht with the same security. At least that is what the Judge said in 1993.

Thank you for the advice about talking to the bank too; I kind of realise that to make this go away, it may well come to that.

I may be wrong but I thought in shizelle the bank was found partially in the wrong and the pain was shared. IE the buyer of the boat only had to pay over 1/3rd of the value of his boat to get it back, not the full value. But I may be wrong on this and haven't had time to check

 

[jfm]

OK, I get/see your point, thanks. You could be right, and if you are, Duncan owes £26k cash AND the boat. I doubt that's the situation though, because the costs of making a HC court applic when the respondent enters no defence and doesn't show up is tiny, not £26k

This point could easily be cleared up by OP but there is much imprecision in what he has said so far and getting a clear understanding of the entire predicament is difficult

Again I have to agree with you - I have all the paperwork and a solicitor (now) and I am still struggling to come to terms with it. My problem is that the advice I was originally given was the worst that could happen is that I would lose the boat. This is why I chose not to throw good money into the defence (big mistake we're all agreed).

However, when I look at the 'PARTICULARS OF CLAIM' made by the bank's solicitors, they have used the term 'defendant' in reference to both the defaulting borrower and myself (at separate points in the claim)even though we are not one and the same person. As I wasn't there I am not certain that the judge would have been made aware of this.

It seems that I now need to argue that the defaulting borrower is the defendant who owes them their original loan monies plus interest which they are clearly claiming; I on the other hand am the defendant who wanted to argue that the boat is mine.

All of this becomes academic if the loan being below £25k cannot be attached to the boat in any case.

Aaargh! With such mistakes in the claim you had twice as much reason to enter a defence or go to the court. From what you write above you may well have succeeded if you'd turned up. Courts hate banks making mistakes like this against ordinary innocent Joe Publics. Why on earth didn't you go, and defend? You've kinda shot yourself in the foot on this point

I am not aware of any law that says a <£25k debt can't be secured on a boat. I think that's a red herring. I'm worried your solicitor (if I understand a post you made above) thinks that this argument might have legs. Happy to be proved wrong, but I don't think so

Best of luck negotiating with bank

 

[timbartlett]

Courts hate banks making mistakes like this against ordinary innocent Joe Publics. Why on earth didn't you go, and defend?

If the bank used the OP's naivite to mislead the court into believing that the two "defendants" were one and the same, has it not committed an offence?

 

[petem]

Fascinating stuff. To the OP, when in relation to the other events did you agree to pass the boat to you ex wife? Does she know about the debt, indeed does she still have the boat?

Pete

 

[Tranona]

Why is there more to it than meets the eye ?

I think the subsequent posts illustrate perfectly the point that I was making.

It is too easy to take things on face value based on partial information. Extreme cases like this almost always have complications which are not obvious until you get more detail. That is why they should not be seen as typical - although when there is an unresolved point of law they may well become a precedent based on the court's decision.

My reading here is that it is the "system" that has failed - that is in failing to put up a defence - for whatever reason, rather than the law itself. You can't blame the court - it can only make a decision based on the information it has, and it seems it only had the bank's side.

 

[petem]

Not convinced. It's still not clear whether Maritime law allows a debt to be attached to a vessel (despite this being contra to all other debts). I think that there's been a lot of jumpring to conclusions (unusually even by JFM who is almost always 100% right) that need to be validated by very proper studying of the 'Shizelle' precendent.

JFM, I expect a (properly researched) answer by the end of the day!!!!!

Peter