LLoyds Business OD - Unaware of Personal Guarantee ***Case Struck Out and awarded Costs !!***

[peebeeh]

I have to defend a claim by Lloyds TSB for a limited company's overdraft. The company has ceased trading and I was a director. The sum is approx £9,000

 

I am not aware of any personal guarantee being in existence although I remember signing a document that was put in front of me for the arrangement of the overdraft, in June 2000, but am sure that no discussions took place about guarantees.

 

Can anyone advise on the points of law in this instance and is there a bank code of practice?

 

I have asked the bank to copy anything relevant to me.

[kurvaface]

What paperwork do you have?

[peebeeh]

The only paperwork that I have from the bank are Overdraft renewal letters dated June'07 and June'08, and these contain no references to guarantees.

[kurvaface]

This is difficult because the lloyds doesn't follow the usual rules for access to paperwork for a business account. Have you asked them yet or any paperwork? Do you or did you have a personal account with lloyds? If so, was your business manager responsible for the running of the business and personal accounts?

[peebeeh]

I did and still do have a personal a/c run by the same business manager.

 

I have not yet asked for any paperwork, but I was on the point of doing so. Should I not do so at present?

 

I was given 14 days to file my defence today in court, when I managed to get a judgment in default set aside. The court know that I have no paperwork from Lloyds.

Lloyds solicitor was present, so they also know the position.

[toddle2u]

Yes you need all the paperwork from Lloyds asap so that you can ascertain if there is a PG or not and prepare a defence. You need to move quickly on this as you only have 14 days to file a defence.

 

Who is the claim against you personally or the Ltd Company. From what you have said I guess you personally but please clarify.

[peebeeh]

Yes, it is against me personally

[kurvaface]

I did and still do have a personal a/c run by the same business manager.

 

I have not yet asked for any paperwork, but I was on the point of doing so. Should I not do so at present?

 

 

In that case you can get everything in relation to your accounts under a SAR because your business manager was in effect your personal manager too. One of the problems lloyds has is that they made business lending decisions based on personal circumsatances rather than on the merits of the business in my experience.

 

It means coming at the problem from a different angle but it you should be able to put lloyds on the back foot by doing a SAR, which they will not comply with in full for the business side of things, allowing you to create a stink using the argument that your business and personal matters are linked in their entirety. Combine this with a probable lack of paperwork nailing you down with regard to guaranteeing your business affairs, you should be able to muddy the waters enough to spoil Lloyds' action.

 

The problem here with a sar is that it takes upto 40 days and always takes LLoyds longer to comply fully so you will time out with the court so I think your only route to getting full disclosure of relevant documents is to request disclosure under cpr 31.14. This should show you Lloyds' hand interms of paperwork. Get the SAR going in the background for later.

[peebeeh]

Thank you so much for your helpful input - because of the urgency it seems I should start with a request under CPR 31.14

I have found a template in Consumer Wiki which seems fit for purpose

 

It is difficult to construct my defence until after the documents have been received?

Do you have any advice on how to handle this dilemma?

[kurvaface]

You need to do an "Embarrased defence" I think. Press the triangle on your post to flag it up and someone who knows the technicalities should come to help.

[peebeeh]

do you mean the symbol which says 'report post' when you hover over it?

 

kurvaface - sorry - I am not sure which you mean by 'press the triangle'

[kurvaface]

underneath where your avatar would go on thwe left hand side of each post you have "Promote to article", "add to users reputation" and "Report post". Press report post...it's the triangular one:-)

 

do you mean the symbol which says 'report post' when you hover over it?

 

That's the one:roll:

[peebeeh]

Done it - thank you

Have also sent CPR 31.14 request for documents to Lloyds' solicitors (address on their claim form)

 

Shall I send SAR to Lloyds, Gresham Street, London - or to my local branch?

[kurvaface]

Yes. Get the SAR done.

 

Tip for LLoyds: ask for transcripts of all phone calls including all calls to your business manager (business matters do not fall under SAR rules but because business manager also discusses personal matters this royally pees them off). Quote the phone numbers you have called that you want data from. Also, to be a nuiscanse, it can be fun to ask for all video footage of you in branch - ask them to refer to your bank statements to see when you made deposits/withdrawals for times of required footage. They will probably say they don't have anything over 3 months old. Ask for statements and all screen shots. Try your luck asking for agreements although you may have to do a CCA request seperately for this.

 

I suggest you serve the SAR to your local branch in person and get a receipt for this. Saves you paying recorded delivery and you can also request the cctv footage:smile: and also ask them to arrrange for your documents when produced to be available for collection at the local Branch. You can be sure that LLoyds will obfuscate and delay with regard to complying.

[peebeeh]

I have served the SAR to my local branch today and obtained a receipt, both for it and the £10 fee.

 

I clicked the triangle and asked if anyone could give further assisatnce at this point - after your suggestion that an embarrassed defence might be appropriate.

No-one has made contact yet - am I being impatient? I am just aware of the time limit to enter the defence

[kurvaface]

I've flagged it too.

 

Good stuff with SAR. Let's see what comes back.

[ukaviator]

When your business is struggling it is sometimes common to use your personal credit to fund your business operation costs. This means that if the business struggles to trade you could be left with debts that you must deal with personally. It's not uncommon for banks and credit providers to offer loans on a personally guaranteed basis. This is a safeguard for the banks making the loan. Any shortfall on the loan from the company will then fall onto you personally. This type of loan would then be dealt with in the same way as you would deal with any personal debt.

 

If you signed as a guarantor for the loan, or your name is on the loan, then yes, you are responsible for the debt and if the company does not pay the debt, the bank can chase you for payment. If they were to get a CCJ and look to enforce it, they could get a charging order against any property you may own. Did the company go bust?. . .

[peebeeh]

Hello Ukaviator,

The background here is that the business required some working capital, it was not in trouble but wanted to fund increased trade.

The company did not get wound up but it did fail and lies dormant with no assets, I am the sole director of the limited company.

In 2009 my eldest grandson fell in Afghanistan to a roadside IED. He was just 18yrs old and in the absence of his father since 1yr old I brought him up. By the time I paid any attention to business it was irretrievable.

 

The company overdraft was agreed in 2000 and was unsecured, the company had a good trading history and net current assets.

I am sure that no personal guarantee was asked for or given.

I have requested with CPR 31.14 the agreement referred to in the POC, this is the exact POC on the claim form:

 

"The Claimants claim is in respect of a credit agreement between the Claimant and the defendant, full particulars whereof having been given."

 

I have no letter before action or notice of default - just the claim form - and no knowledge of any agreement.

 

I have to file my defence by 6th December, so I am hoping for advice on how I should proceed.

Edited November 24, 2011 by peebeeh
security

[ukaviator]

If they don't respond to your request by say next Thursday then we need to file an N244 with the court. You can make an application to the court for an order that the proceedings be struck out or stayed for non-compliance of the CPR 31.14...

 

Sorry to hear about your Grandson, it makes my blood boil when I hear what goes on out there.

[peebeeh]

Thank you KV for your PM - tried to reply but am notified that your inbox is full.

 

I have edited the post I made - thanks for your thoughts re security.

[BRIGADIER2JCS]

Kurvaface has asked me to look in on your thread.

A couple of questions , do you have a copy of any

guarantor contract if not you must ask them to provide

strict proof that you have any liabiity.

In any event and I am no expert in this area, if the

company is listed as a limited liabilty company with

companies house then the directors have no case to answer.

I am going to bump this thread to see if we have anyone more into

company law.

 

BUMP PLEASE.

[Gaston Grimsdyke]

Erm...the claim pleads a credit agreement between you and LTSB, not a credit agreement between them and the company and a personal guarantee executed by you. Which means you have a complete defence, unless and until they amend their claim. Rather than do their job for them and point them in the right direction, I would simply enter a defence denying that you have never entered into a credit agreement with them.

[peebeeh]

Thank you all for your input.

 

Brigadier2js - there is no copy of any guarantee and I do not recall being asked to do any guarantee - I have requested copies of any documents upon which they are relying, using CPR 31.14 - I have also sent a SAR letter

 

Gaston Grimsdyke - you make a good point - but legally, would a guarantee agreement constitute a 'credit agreement'? I think this must be clear before considering a complete defence using this.

[Gaston Grimsdyke]

No a guarantee is certainly not a credit agreement; you personally were not advanced any credit. All you did was gratuitously agree to honour someone else's debts. You have to plead to the case which has actually been made against you, not the one you think should have been made against you so I think it is not only tactically correct, but also procedurally correct, to deny the claim as it stands on those grounds.

[kurvaface]

No a guarantee is certainly not a credit agreement; you personally were not advanced any credit. All you did was gratuitously agree to honour someone else's debts. You have to plead to the case which has actually been made against you, not the one you think should have been made against you so I think it is not only tactically correct, but also procedurally correct, to deny the claim as it stands on those grounds.

 

Interesting point, and in the absence of any paperwork...