Family Business Loan - Signed Promissory Note - SD Failed - Now a Claimform

[BazzaS]

The OP hasn't really followed the advice (don't pay, deal in writing only) since early 2014, and probably since the thread started in 2009 (advice : don't sign promissory note, debt dealt with by company insolvency) ......

What makes anyone think they'll start now?

 

CAG is a self-help site. The OP is going to have to start helping themself rather than keeping posting without helping themself, if they want to change the status quo.

 

Is there likely any impact on a court's assesment from "why would they have paid for so many years if they didn't intend repayment when they signed the promissory note"?

[BazzaS]

You could ask for a subject access request and see what they say..

 

SAR a solicitor?

 

Strange advice!.

Either you want your own file from your own solicitor : in which case just ask for it, or you want someone else's file from their solicitor (or at least the bits mentioning you), where they will decline based on legal advice (and/or litigation) privilege!

 

The information wouldn't be disclosable even if there was a court case ongoing with disclosure of documents required (being witheld under CPR 3.19(3)), so an SAR on a solicitor acting legitimately will achieve nothing!

[BazzaS]

rippedoff15 said:

We have had a letter from xxx LLP demanding over £20k relating to this long standing issue, We have been asked to contact xxx Practice Manager with a view to repayment of the outstanding amount.

 

How can we sort this issue out once and for all to bring this to a close.

 

My question is if they start legal action after 21 days what happens next ?

Should we file for BR

 

Any help would be great

 

I'd follow the advice you've previously had.

This is pretty much the same as when they were threatening court before : what is actually different this time around? (other than them using a different solicitor?)

 

I also recall noting previously (14th March 2015):

BazzaS said:

The OP hasn't really followed the advice (don't pay, deal in writing only) since early 2014, and probably since the thread started in 2009 (advice : don't sign promissory note, debt dealt with by company insolvency) ......

What makes anyone think they'll start now?

 

CAG is a self-help site. The OP is going to have to start helping themself rather than keeping posting without helping themself, if they want to change the status quo.

 

If there are changed circumstances where new advice might apply you'll need to highlight what has changed, otherwise :

Read back on the thread. Follow the advice you have already had answering this.

[BazzaS]

Many Thanks, we have been given 21 days so the letter will be record to arrive 2 days before the date stated.

 

Why worry about the 21 days?. It would be a blessing if they started court action .... It would put an end to 6+ years of harassment / threats of legal action. Your letter tells them "put up or shut up", so if they do claim : great.

 

If they carry on to form they won't issue a claim. How many times have they sent letters saying "pay up with X days or we sue" already?

[BazzaS]

Well just had the statement any the amount outstanding is £20,198.99 and they have stated we are refusing to deal which this matter and legal action is in progress ?????

 

If legal action has actually started, you will receive a court claim form. Otherwise its just more bluster.

 

I agree with SP, and as a result it is actually a "win-win" for you.

 

If they do take court action, you can defend it, and when the case is found in your favour they can't come after you again for it (or if they tried to: refer them to the court's decision).

 

If they don't issue a court claim,

ignore any future contact up until the point you do receive a claim,

or reply only with the same reply each time of

 

 

"You keep stating the money is owed, despite our denials. You have mentioned legal action.

Whilst we wouldn't wish the court's time wasted,

if it is the only way to bring this matter to a conclusion,

please go ahead and issue the claim if you feel it is warranted,

and we can let the court decide.

 

If you keep making the same statements of an alleged debt without issuing a court claim,

we will just reply with this same reply debying your claim, each time".

[BazzaS]

How does this new letter actually differ from all the last letters?. I can't see how it does, so you are actually asking the same question over and over.......

you've had the answer : ignore (until they issue court papers), as you've already replied.

 

If you really feel 'you have to do something', then you could send a letter saying "you appear not to have received our previous reply, noting that we won't answer further as our positions are now entrenched, please find a copy enclosed" BUT you are then just buying into their game of 'letter tennis'.

 

If you didn't send the previous letter noting this by a method by which you have proof of delivery, then consider sending it recorded or special delivery for a record of delivery. This gives you your 'paper trail' if you want that, and you need only do that the once unless they start sending something that changes the position, which this latest letter doesn't.

 

If they go down the statutory demand route (rather than the CCJ route), then you apply to have the statutory demand set-aside, on the same grounds you'd use to defend a CCJ claim (estoppel, and lack of consideration, from memory ...... but it was raised further back in the thread)

[BazzaS]

How does this new letter actually differ from all the last letters?. I can't see how it does, so you are actually asking the same question over and over.......

you've had the answer : ignore (until they issue court papers), as you've already replied.

 

......

 

 

If they go down the statutory demand route (rather than the CCJ route), then you apply to have the statutory demand set-aside, on the same grounds you'd use to defend a CCJ claim (estoppel, and lack of consideration, from memory ...... but it was raised further back in the thread)

 

Correction, grounds of defence are insolvency of the Ltd company, Op's bankruptcy, and lack of consideration for the promissory note, which also wasn't executed as a deed.

 

Post #69, March 2015.

 

The OP hasn't really followed the advice (don't pay, deal in writing only) since early 2014, and probably since the thread started in 2009 (advice : don't sign promissory note, debt dealt with by company insolvency) ......

What makes anyone think they'll start now?

 

CAG is a self-help site. The OP is going to have to start helping themself rather than keeping posting without helping themself, if they want to change the status quo.

 

I'm not sure that the OP is following the advice given. Perhaps they could confirm what they have actually done?

(Including if they have been making payments, as 'statute barred' may feature in any defence too, by now.

 

Otherwise it is just 7 1/2 years of "we've received this letter" and "that letter"!.

Why is the OP more worried now, rather than at any time in the 7 1/2 years that court action has been threatened and not taken? ..........

[BazzaS]

A SD can be served by first class post, but the claimant may have to show why personal service was not 'reasonably practicable'. Personal service can also be performed by the claimant, they don't have to use a process server (but the advantage of a process server is that they are able to create a certificate of service that the court is unlikely to doubt!).

 

OP, keep the envelope it arrived in, with the postmark.

Regardless of the date written on the SD, what will matter to the court is the date is was posted, and thus the date it would be deemed served : otherwise anyone could create a SD, date it, keep it 14 days and then give the respondent no time to seek a set-aside - the courts won't allow this.

[BazzaS]

Post #33, Jan 2015.

Yes, your wife will probably have to attend to court. She won't have to say very much. The civil courts are not like the criminal courts you see on TV - it will simply be a small room in your local county court with the claimant and the judge. Each side will explain their case to the judge, and the judge will then make a decision.

 

It is not too upsetting. Anyone can handle it. You could even save the monthly payments you would have otherwise made and use them to employ a solicitor or barrister to attend the hearing on your wife's behalf. Even if you self-represent I think a court hearing would be much less stressful than the alternative, which is to let this bullying persist for years and years.

 

A bankruptcy would be equally stressful, since your wife would be required to attend hearings with the official receiver.

 

Post #35, Jan 2015

Hi

As the promissory note does not state it was signed as a deed, in my view it is not legally enforceable.

 

In order to have a legally enforceable contract, there must be what is known as "consideration". This means there must be an "exchange" - in other words, your wife would need to received something of value as part of an exchange in order for her promise to pay money to be legally valid. My understanding is that your wife did not receive anything in exchange for signing the promissory note and hence the promissory note is legally enforceable as a contract. You may read http://en.wikipedia.org/wiki/Consideration_in_English_law to confirm this.

 

The only exception to the above rule is where you have a document which is signed as a deed. A deed does not require consideration. One of the requirements to have a valid deed is that the document must clearly state that it is a deed. If it does not state this then it is not a deed.

 

In a sense, this is a technicality. But it is a fundamental technicality and has been a rule of English law since the 1400s - the courts don't enforce contracts like promissory notes unless both sides have exchanged something. Any first year law student could tell you the same thing. I don't think a judge would have much sympathy for them on this given that they pressured your wife into signing it.

 

post #48, February 2015

Not panicking at all as my wife has a bankruptcy hearing in 2 weeks maybe sooner, and the debt is included. I bet the court papers are hear within the next few days then we have 14 days to file a reply and by then my wife will have had her hearing.

 

Bankruptcy is the best way forward as she also has a mortgage shortfall of £40k. So its needed to clear everything and start a fresh.

 

Post #51

My wife's bankruptcy hearing is due on 2nd March 2015,

 

Post #67. 13th March 2015

Bit more information the loan was paid into the company account before any administrator was appointed about 4 months later. They seem to be replying on the promissory note as proof.

 

I have wrote to the solicitors stating the our point of view, had no reply as yet.

The OP doesn’t make any mention of if his wife’s bankruptcy went ahead.

 

They then also didn’t return to the thread until August 2015 (and again, no mention of the wife’s bankruptcy or if it didn’t proceed ……..)

 

Did your wife declare bankruptcy?. If so, did she include the ‘promissory note’ in her declaration to the OR?.

 

 

URGENT HELP

Well letter today,

 

My wife has had a letter as follows:

 

Issued today Statutory Demand under section 268(1) signed by the claimant on 06/03/2017 yet the demand envelope dated 12/04/2017 ?

 

They forms state we have 18 days to have to bankruptcy set aside or pay a total of £21,000 in full, we cannot repay the amount and my wife will not go to court as she is too upset.

 

With the form it states payable immediately, it also states property and goods can be taken away from you ?

 

If your wife didn’t go for bankruptcy previously, then they MIGHT be doing you a favour…… it depends on if going bankrupt (but ONLY related to the mortgage shortfall!!) is her best option.

If she feels that bankruptcy (paid for by the people who have been hounding you!) will:

a) clear the mortgage shortfall and

b) bring this 7+ year campaign to an end,

she might consider it!.

 

Alternatively, you have plenty of grounds to get the statutory demand set-aside (cancelled), if going bankrupt is not her best option.

 

The could get the SD set-aside on ‘procedural grounds’ that it’s service was defective, but they could then just get it re-issued correctly.

So, you are better also applying for the set-aside on the grounds that there is a genuine dispute as to the debt

(previous postings as to why:

a) Company debt, included in company insolvency

b) OP’s alleged personal responsibility : Debateable it could have been transferred from the company’d debt, but even so, OP declared bankruptcy subsequently ,

c) Wife’s ‘promissory note’ wasn’t executed as a deed, and thus is unenforceable as no contract was formed for want of consideration.

 

I think you have three options:

 

1) Apply for the statutory demand to be set aside. You should be able to find a solicitor who can do this for a competitive fixed fee, and I think you can be pretty confident that the costs incurred would need to be paid by the claimant.

..............

 

 

I personally would go with option 1. I would at least explore the possibility of getting a local solicitor to have the SD set aside on a fixed fee arrangement, it sends a very strong message and gives the claimant a bloody nose when they are ordered to pay that fee.

 

I agree with SP, especially as:

and my wife will not go to court as she is too upset.

 

She is going to potentially face questioning either if she declares bankruptcy (questioning by the OR), or if you apply to have the SD set-aside.

If you have a solicitor acting for you for the set-aside application , the solicitor can make representation, and you wife will only have to speak if the judge asks her a question directly (such as if they want clarification on a point that the solicitor can’t answer for her .

 

OP should also actually update the thread with what happens (they didn't update it regarding their wife's bankruptcy hearing, for example) , rather than again disappearing, only to pop back only when the next demand letter is received.....

[BazzaS]

the last payment was paid to the claimant was in Sept 2014 and nothing since.

 

(Not that you should need it, as you have plenty of other grounds for defence, but : ) So, statute barred not a defence available to you until Sept 2020.

[BazzaS]

My wife did`t file for bankruptcy in 2015 as she was to upset to attend the court and we cancelled the appointment.

 

So, she needs to decide if bankruptcy is her best option (regarding the mortgage shortfall).

She faces questioning at some point : (by the OR if declared bankrupt at her instigation or by the people who have served the stat demand), or (by the court) if she applies to have the SD set-aside, unless she stumps up the £20k+ (which seems to be what the other side are relying on???)

 

Again, getting a solicitor to act for her in applying to have the SD set-aside may be the least stressful option for her....

[BazzaS]

Sit tight then. Call their bluff by doing nothing.

 

Why? Because it still leaves you "in the driving seat".

 

If they don't issue a bankruptcy petition you'll know they were just trying to use it as a threat, and that hasn't worked.

 

If they do issue a petition and it suits your wife to let them pay her bankruptcy fees (and removes her mortgage shortfall) : they still won't get what they are claiming.

(How long has the shortfall existed? Don't forget the mortgage company [following the CML guidelines] won't usually try and enforce it if they haven't started to do so within 12 years)

 

If they do issue a bankruptcy petition and your wife decides to oppose it, whilst it is usual to oppose at the stat demand stage, there is no obligation to do so

(Case law: Barnes v Whitehead [2004] B.P.I.R. 693)

 

See

https://www.lawgazette.co.uk/law/the-ins-and-outs-of-being-in-debt/3817.article and

http://swarb.co.uk/barnes-v-whitehead-chd-2004/

 

If you went down this route your wife may have to explain why she chose to oppose it at the petition stage rather than the Stat Demand stage : your answer to that is that (given all that has gone before) you knew the other side were aware there is a genuine dispute as to the debt, you believed they were 'just trying to use the threat of bankruptcy as a debt collecting tool" and believed they wouldn't actual issue the petition...... you back this up with a witness statement referring to the 7 years of correspondence [which you include as exhibits]

[BazzaS]

That is IF it proceeds to a bankruptcy petition

(which seems unlikely if they'll have to pay and aren't getting what they want!)

and (even then) IF you choose not to oppose it (in other words if you decide it is right for you both).

 

 

You've been through bankruptcy, so can advise her / remind her of how you got through it.

 

Bailiffs from who? / how?.

 

Not from the OR, nor from any creditors, who get referred to the OR!

 

Did you get bailiffs around when you declared bankruptcy?

I bet not.

[BazzaS]

OK: to make things clearer:

The bailiffs can come round, but there is no point for them once they are aware you are bankrupt.

 

If they aren't aware you are bankrupt, you:

a) don't let them in, and

b) show them the bankruptcy papers, referring them to the OR.

Same result: they leave with nothing.

 

More to the point, they would only be acting as bailiffs if there was a CCJ or court fine (from a criminal case).

If your wife hasn't received a fine or CCJ why is she concerned about bailiffs?.

If the visitors were merely acting on behalf of a DCA (regardless of if they belong to a firm of bailiffs!),

they'd have even less authority, and you just tell them to leave!.

 

I can't see how your wife's fears have substance to them if she looks at them logically, for all the reasons previously noted.

[BazzaS]

Who cares?.

 

I don't mean that flippantly, but as a result of looking at the possible outcomes.

A) If they don't file for bankruptcy: who cares.

B) If they file for bankruptcy and it suits your wife to go bankrupt due to her other debts : they are paying the bankruptcy fees, & it suits your wife, so who cares?

C) if they file for bankruptcy at some stage in the future when it no longer suits your wife to go bankrupt: you fight it then on the grounds the alleged debt isn't enforceable : so who cares?.

 

Continue to ignore them until they actually serve the papers (if they do!) at which point you choose between B) and C).

You 'hold the cards', not them.

[BazzaS]

"All communication needs to be in writing, not text or calls, otherwise this will be reported to the police as harassment.

Repeated (and pointless!) letters may also be harassment : you should take legal advice, and may wish to only send letters through your solicitor"

(This has the added bonus of costing them for each pointless letter......)

 

"We continue to believe the alleged debt is not owed and is unenforceable. We have made our position clear and the situation has remained unchanged.

The only communication we are likely to respond to, it having reached this stage, over many years, is a formal legal claim, so that we can get a definitive resolution to this matter"

[BazzaS]

No harm in filing a SB defence, and then adding

“and in the alternate, that as the note was not executed as a deed, the absence of consideration prevents a contract having been formed”

Edited April 4, 2020 by BazzaS

[BazzaS]

You were asked for the particulars of claim, which I can’t yet see.

 

 Posting your defence (without the particulars of claim) isn’t that helpful : the aim is to tailor the defence to the PofC, highlighting which areas aren’t in dispute (so the court doesn’t have to waste time on them, and can focus on the key areas), and which areas you can (as a matter of critical importance) show where the claim fails on matters of law.

 

ideally their PofC would be numbered, and you could go through line by line....

 

<\example>

1a) It is admitted a loan of £x,000 was granted on <date>
1b) It is denied the loan was made to Person X. The Claimant is mistaken, as in fact, the loan was made to Company Y.
2a) It is admitted in part that payments were made. To clarify, payments ceased on <date>.
The claimant’s belief that payments were made after <date> is denied.

2b) Given more than 6 years have elapsed (with no payments nor admission of debt) ... <Staute barred text>
(Points 3-7, more “denied”, “accepted”, “accepted in part, with bits denied”, and also “neither accepted nor denied, but claimant is put to strict proof thereof”)

it might not be point 7, but you get the gist .....

In the alternate: (again, may not be point 8 but numbered sequentially and logically)

8a) It is admitted a note was signed by Person Z on <date>

8b) This note was not executed as a deed, and no consideration was received in exchange for it, thus no enforceable contract can be formed by it.

8c) Thus the claimant’s action in contract is fatally flawed, and bound to fail in the absence of an enforceable contract.

9) The Claimant's claim to be entitled to payment of £[insert figure from their  POC]  or any other sum, or relief of any kind is denied.
<\end example>
 

 

The aim is to make it simple enough for a child to follow.....

a) it impresses the court,

b) it focuses on the key issues at law, and key matters in dispute. (The court can then decide who they believe to formulate what they believe happened, and apply their interpretation of the law to that to reach their decision!)

 

Both of these are adding to your credibility and making it easier for the court to see the legal basis for your defence, and

c) when faced with this the claimant may see sense and withdraw (although, after so long ... I somehow doubt it!)

 

 

 

Edited April 5, 2020 by BazzaS

[BazzaS]

If you don’t want to make any mistakes : when are you going to post the <redacted> PofC ?

[BazzaS]

1 hour ago, Manxman in exile said:

I think they are claiming there was an agreement to lend you (or your wife, or both of you, or your business) £20k and that you would pay it back.
 

.......

 

If the court kicks out the promissory note they'll just try to establish that there was still a loan and an agreement to pay it back.  And that would be quite easy to do if you've already paid back £13K.

 

OP says it was to the (liquidated) business.

 

OP also says it they went bankrupt (irrelevant if the loan was to the business, potentially relevant if they [instead] listed it as a personal liability to their Trustee in Bankruptcy/ the OR)

 

Why pay 13k? “Your Honour, there was no legal obligation to pay, only a moral one, as far as we could. We invite the court to consider the lack of legal obligation”

[BazzaS]

Other than the money

a) was a business loan,

b) if it was to you personally, you went bankrupt, and

c) the promissory note doesn’t create an enforceable contract ....

 

7 pages of people giving you good advice that you have to be dragged into following, if followed at all (like posting the actual PofC!)

 

10+ years, and at the outset, you were advised not to sign the promissory note, then you came back 2 years after to say it had been signed ....

 

Multiple pages of advice, not followed, or only followed begrudgingly, at the 11th hour.

 

Defence (regarding the promissory note) pretty much written for you...... yet you are “up a creek”??!

 

Some people just can’t be helped.

I’m out.