Credit Act 1984

A credit provider shall not—

institute proceedings against a debtor or guarantor in respect of a matter arising under a regulated contract by reason of—

a default by the debtor;

a failure by the debtor to observe provisions of the contract, being a failure that does not constitute a breach of the contract; or

the exercise of an option by the credit provider; or

exercise, or purport to exercise, a right under a regulated contract arising by reason of—

a default by the debtor;

a failure by the debtor to observe provisions of the contract, being a failure that does not constitute a breach of the contract;

the exercise of an option by the credit provider; or

any other fact, act or thing—

the debtor is in default under the contract;

the credit provider has served on the debtor and, where there is a guarantor in respect of the contract, on the guarantor, a notice in accordance with subsection (3); and

the notice referred to in paragraph (d) has not been complied with in accordance with subsection (4).

A mortgagee shall not institute proceedings in respect of a matter arising under a regulated mortgage or exercise, or purport to exercise, a right under a regulated mortgage unless—

the debtor under the regulated contract to which the mortgage relates is in default under the contract;

the mortgagee has served on the mortgagor and, where there is a guarantor in respect of the mortgage, on the guarantor, a notice in accordance with subsection (3); and

the notice referred to in paragraph (b) has not been complied with in accordance with subsection (4).

A notice referred to in paragraph (d) of subsection (1) or paragraph (b) of subsection (2) is a notice—

specifying the default, as the case may be—

of the debtor under the regulated contract; or

of the debtor under the regulated contract to which the regulated mortgage relates;

stating the intention of the credit provider or mortgagee to exercise rights and remedies under the regulated contract or regulated mortgage unless, within a period of one month after service of the notice (or where a longer period is specified in the notice, that longer period)—

the default is remedied (except insofar as the default relates to a requirement to do a thing at or before a certain time, or within a certain period, or is a default in payment of an amount that became payable earlier than would have been the case if there had been no other default);

the amounts that would be due to the credit provider under the contract if the default, failure, exercise, fact, act or thing had not occurred or been done, are paid; and

the enforcement expenses (if any) in relation to the exercise by the credit provider or mortgagee of any rights arising from the default of the debtor are paid;

stating, if the notice refers to payment of amounts due under the contract that increase until paid, that the amounts so increase; and

containing the prescribed information.

The notice referred to in paragraph (d) of subsection (1) or paragraph (b) of subsection (2) is complied with if within the period of one month after service of the notice (or where a longer period is specified in the notice, that longer period) the default is remedied (except as referred to in subparagraph (i) of paragraph (b) of subsection (3)), the amounts referred to in subparagraph (ii) of paragraph (b) of subsection (3) have been paid or tendered and the enforcement expenses referred to in subparagraph (iii) of paragraph (b) of subsection (3) (if any) have been paid.

Where a mortgage secures payment of a debt or other pecuniary obligation or the performance of any other obligation under a regulated contract and secures payment of other moneys or the performance of any other obligation, subsection (2) does not apply to or in respect of the institution of proceedings, or the exercise, or purported exercise, of a right under the mortgage arising otherwise than by reason of a default of the debtor under the regulated contract.

Subsections (1) and (2) do not apply where—

in relation to a regulated contract, the credit provider believes on reasonable grounds that he was induced by fraudulent misrepresentation on the part of the debtor to enter into the contract;

in relation to a regulated mortgage, the mortgagee believes on reasonable grounds—

that he was induced by fraudulent misrepresentation on the part of the mortgagor to enter into the mortgage;

in the case of the exercise of a right to take possession of goods, that the goods will be or have been removed, concealed damaged or disposed of by the mortgagor in breach of the mortgage; or

in the case of the exercise of a right under the mortgage in respect of property other than goods, that the property has been or will be damaged or prejudiced by the mortgagor in breach of the mortgage; or

the credit provider or mortgagee has, after making reasonable efforts to locate the debtor or mortgagor, been unable to do so.

The onus of proving that, by reason of subsection (6), subsection (1) or (2) does not apply, is on the credit provider or mortgagee.

Where a credit provider or mortgagee fails to comply with subsection (1) or (2), as the case may be, a court may, on the application of the debtor or mortgagor, order the credit provider or mortgagee, as the case may be, to compensate the debtor or mortgagor for any loss suffered by him as a result of that failure.