Being sued by my own company

[worriedwendy]

Hello Everyone,

 

First post after being directer here.

 

Me and a now ex friend started a business X limited. (name removed). My business partner did all the accounts and admin side of the business whilst i done the physical work.

The company was registered in 2010.

We are EQUAL partners of the limited company

 

On 24/04/2012 my now ex friend also registered X (norwich) limited. Norwich being our main location of operation. (her relationship partner and my relationship partner also had Y ltd and on the same date he registered Y (norwich) ltd)

 

After my business partner attempted to withdraw funds from the bank for herself I had the bank changed to counter signature required. This means neither of us can touch the money unless we both sign.

 

My business partner then refused to pay any of the bills and left me unable to do so. As a result and to fulfil my duties to look after the company i started trading as a sole trader under the name of ?'s X (sorry to be vague but the ? is me and the X is the company name)

 

The limited company account now has circa £5k in funds and had outstanding bills to suppliers and service providers. Whilst sole trading i have cleared all these debts.

 

Her relationship partner started to trade on their company and was interviewed last week under caution for fraud and deception after forming his own company and attempting to pass himself of as my partners company (they were both equal directors and her partner resigned). He also invoiced my partners clients for work.

 

Today low and behold a court claim has arrived for the amount of just over £6k.

 

The Claim is from X ltd (of which we are both still joint directors) but the address is NOT our registered address. The claim is against ?'s X.

 

The POC reads :

On 25.5.12 ? (my business partner in X ltd) decided to start a company called ?'s X. She then invoiced from her new company for money due to X ltd. She has fraudulently claimed these monies, telling the companies involved that she would pay them back to the correct company. After many attempts asking for the funds to be returned, and a letter from my solicitor asking the same, she has still failed to do so. This is fraud by a responsible person. I have copies of emails that she has sent to these companies, and proof from them that she has duplicated these invoices from her company. X ltd has proof that all the employees that she now has, worked for our company until 31st May, as P45's can prove.

 

Now my issues, apart from this being a total false account are:

1) Can she issue these papers from the company against me but use an incorrect address?

2) the P.O.C are too brief for me to actually defend myself

3) The amount is not substantiated in any way

4) I have made her fully aware and all companies involved that monies are being paid to my company and not the limited company. these monies have been used to pay off bills accrued in the limited company name.

 

How do i proceed please?

 

Regards

[Andyorch]

And the lesson to be learned never go into business partnership with a friend.But seriously Wendy the P.o.C is a joke and can not be substantiated.I assume you have a working contract that the Directors are responsible to?.

As a LTD company the company is responsible and cant sue its own Directors without the consent of all parties (Ie You).

 

Have you dissolved this Ltd company with your ex friend Partner?

 

Regards

 

Andy

 

PS A warm welcome to CAG

[Andyorch]

Thread moved to Legal Forum

[worriedwendy]

Hi again,

 

The ltd company still exists at current and ideally I'd like to retain it if possible. What should I do about the court case? Either request to strike out or what?

 

Thanks

[Andyorch]

The Claim has been issued now, misfounded has it is and without thought to legal consequences it will entail. Its over 6K so it will be Fast Track.

Are you named as the defendant? Or is it the Ltd Company?

 

Does this ex partner partner realise that if successful she will have placed a CCJ on her own company? Hypothetically!!!

 

You have 33 days (5 deemed served so 28) 14 to Acknowledge Service state your plea and if defending a further 14 days to submit your defence.

 

Do you have the use of a Solicitor..may be worth the cost to nip this nonsense in the bud.

 

Andy

[worriedwendy]

The ltd company is the claimant (but from my business partners home address which isn't the registered or operational address).

 

My new company which is a trading name of me is the defendant so the ccj will go against me not the ltd company.

 

If I dissolve the ltd company there would legally be no claimant? Or can't I just withdraw the claim as I'm equally responsible for the company and it's decisions?

[Andyorch]

As I have stated your are a Party (Director) so yes you can inform the Court that you wish to withdraw the Claim (against yourself:roll:) Ring Northampton and request this you are fully entitled to as Director and Owner.

[worriedwendy]

Will they just let me do this over the phone?

[Andyorch]

If they don't issue a Notice of Discontinuance CPR 38 :- http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part38

 

Procedure for discontinuing

CPR38.3

 

(1) To discontinue a claim or part of a claim, a claimant must –

(a) file a notice of discontinuance; and

(b) serve a copy of it on every other party to the proceedings.

(2) The claimant must state in the notice of discontinuance which he files that he has served notice of discontinuance on every other party to the proceedings.

(3) Where the claimant needs the consent of some other party, a copy of the necessary consent must be attached to the notice of discontinuance.

(4) Where there is more than one defendant, the notice of discontinuance must specify against which defendants the claim is discontinued.

 

Form required N279

[worriedwendy]

Do the courts work Saturday?

 

Whats to prevent her reissuing as a person directly against me? Other than she has no direct entitlement to the monies claimed?

[Andyorch]

She would need permission of the Court ( which they would not allow) which may need your permission as Director which you would not agree to.

She would have to issue the claim in her own name..which she isnt going to do if shes has any common sense.It would be the same claim just a different Claimant.

[worriedwendy]

Ok.

 

So do I send a form of discontinuance to her too or just to myself? The limited company is also registered at my house so I can notify the ltd company too.

 

How would the court be notified in this method?

[worriedwendy]

Ok I get it now. The form is the n279.

 

Also now as a total irrelevance she never sent any lba.

[Andyorch]

Ok I get it now. The form is the n279.

 

Also now as a total irrelevance she never sent any lba.

 

Thats the least of her worries.

[worriedwendy]

Lovely. And after this she can legally be dismissed for negligence and abuse of position?

[worriedwendy]

Another afterthought,

 

She has put the claimants address as her own home address so won't the court notify her?

[Andyorch]

She has issued a claim using your Ltd Company name as Claimant...without your permission...the address (her personal address) is incorrect so I am pretty sure that voids the claim anyway.She is not in a position to sue you under that LTD company name (personally yes in her name)

Speak to Northampton and ask for further guidance Wendy...this is rather unsual and something I have never come across before.

 

Regards

 

Andy

[worriedwendy]

N279 sent lets see what happens now

[worriedwendy]

Ok just spoke to the court and they have advised that we cannot file the N279 as we are using the companys registered address and not the address of the claimant (which should be the company address)

[Andyorch]

I thought that may raise a problem Wendy.

 

Ok make application to strike out the claim CPR 3.4 or even consider making a Counter Claim.

 

Regards

 

Andy

[worriedwendy]

Andy,

 

thanks for the swift reply.

 

Can you advise what i should put exactly please?

[Andyorch]

On an application to strike out.

 

The rules give the court two distinct powers which may be used to achieve this. Rule 3.4 enables the court to strike out the whole or part of a statement of case which discloses no reasonable grounds for bringing or defending a claim (rule 3.4(2)(a)), or which is an abuse of the process of the court or otherwise likely to obstruct the just disposal of the proceedings (rule 3.4(2)(b)) Rule 24.2 enables the court to give summary judgment against a claimant or defendant where that party has no real prospect of succeeding on his claim or defence. Both those powers may be exercised on an application by a party or on the courts own initiative.

 

This practice direction sets out the procedure a party should follow if he wishes to make an application for an order under rule 3.4.

 

The following are examples of cases where the court may conclude that particulars of claim (whether contained in a claim form or filed separately) fall within rule 3.4(2)(a):

 

(1) those which set out no facts indicating what the claim is about, for example money owed,

(2) those which are incoherent and make no sense,

(3) those which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant.

 

A claim may fall within rule 3.4(2)(b) where it is vexatious, scurrilous or obviously ill-founded.

A defence may fall within rule 3.4(2)(a) where:

 

(1) it consists of a bare denial or otherwise sets out no coherent statement of facts, or

(2) the facts it sets out, while coherent, would not even if true amount in law to a defence to the claim.

 

A party may believe he can show without a trial that an opponents case has no real prospect of success on the facts, or that the case is bound to succeed or fail, as the case may be, because of a point of law (including the construction of a document). In such a case the party concerned may make an application under rule 3.4 or Part 24 (or both) as he thinks appropriate.

 

Regards

 

Andy

[Andyorch]

Wendy have to log out now as Im in the middle of something.Consider the above or even a Counter Claim, Ill we be around later this afternoon.

 

Regards

 

Andy