Problem with Will/Trustee - ** judge found in our favour **

[hyperjase]

Thanks, I have another query on this, hopefully someone will be able to answer this. It'll be my step-son making the Small Claim Court application but he's at college and only has £20 per week coming in -- will this class for a fee remission? I've completed that form (EX160) and have completed a Court Form N1 describing the details. Not sure if I've done this right or wrong but it appears to be a little more complex than I imagined. I will be his representative so have entered that where they ask for Claimant's Solicitors details.

 

Many thanks.

[steampowered]

Have a read of the detailed leaflet here: http://hmctscourtfinder.justice.gov.uk/courtfinder/forms/ex160a-eng.pdf. Looks like he should qualify for a remission but you will need to provide evidence of his income (3 months' bank statements?).

 

You can represent your son as a lay representative but only if he is physically present in court - see http://www.legislation.gov.uk/uksi/1999/1225/article/3/made. Your son must attend all hearings even if he does not say anything.

[hyperjase]

Well, here we are 3 months after my last post. I managed to get it to the Small Claims Court and without fee because my step-son isn't working.

 

I have a Notice of Part Admission from her, claiming she can only pay £100 per month (which would take over 4 years to pay this in full!). Now, first point, there is no interest attached to this (I had to put in a second claim which then ended up requiring proof what what income he had, basically, money his mother gave him from time to time - we're taking £10 now and then, not every day and his money from his college - like educational maintenance allowance). So I hit a stumbling block there.

 

My question now is what to do with Part Admission. As far as I'm aware, when I made the last post she claimed that "it would take 90 days to withdraw the money". 90 days has come and gone, and now she's offering a stupid amount. Does my step-son have a legal right to ask for the full amount? What if she's spent it and doesn't have it? That's a major possibility at this point.

 

Any help or guidance would be appreciated.

 

Many thanks,

 

Jason

[steampowered]

Has Defendant admitted liability for the amount, so it is just the rate of repayment that is in issue? If so there should be a box for accepting the total amount but disputing the payment proposal on the form, and space for you to explain the reasons for objecting.

 

Regarding interest ... did you claim this on the Particulars of Claim?

 

Why did you put in a second claim?

 

It is worrying that she is trying to pay 100 a month after saying the investment could be withdrawn in 90 days. It sounds like you were probably right to think she has spent the money. I would write a short letter along the following lines:

Dear X

I refer to your Notice of Part Admission dated [date], in which you admit liability for [amount] and seek to pay it off at the rate of £100 a month.

 

As you were aware, this amount should have been paid to [name] in August last year. More recently you assured me that it would take 90 days to withdraw the money. If the money is available in 90 days I do not understand why you are making an offer which would mean it will take more than 4 years for the money to be paid. We cannot move forward until this issue has been resolved. Please explain why the money has not been provided and when [name] can expect to be paid, and provide a copy of the relevant documentation.

 

If your earlier statement that it would take 90 days to withdraw the money was untrue, then please inform me of this and provide evidence of what happened to the money. Your honesty about any problems with making repayment will be much appreciated and would allow us both to avoid the time, effort and expense of further court proceedings by agreeing a sensible payment proposal based on the facts.

 

If you do not provide further information about what has happened to the money, our only option will be to assume that the money is available in accordance with the terms of the will and reject your payment proposal. We cannot be expected to accept a proposal unless you provide a proper explanation of why that proposal is necessary, together with the relevant documents.

 

Unless you clarify the situation we will ask the court to order that the money is immediately due, and in support of that will draw the court's attention to the lack of information we have about what has happened to the money. If money is due under a court order but not paid, we will have the right to ask the court for an order that you attend court for questioning about the whereabouts of the money and/or pursue a bankruptcy application, and will seek to recover all court costs from you. You should also be aware that an unpaid County Court Judgment would be registered as a CCJ which would damage your credit rating. We hope that this will all be unnecessary, and can be completely avoided if you will simply confirm what has happened to the money and provide the supporting documentation so that we can negotiate a sensible repayment proposal.

 

 

Please respond within 7 days.

 

 

Yours sincerely

hyperjase

 

By the way, great job on pushing this forward ... your son is very lucky to have you helping with this.

Edited July 8, 2013 by steampowered

[hyperjase]

The Defendant has admitted £5000 (which is the amount minus any interest -- this has never been disclosed and we have never been provided any evidence of any interest - which is why I made the second claim - £5000 plus standard 8% interest since the monies were put into trust, up until the end of May (when I submitted the second claim).

 

She has given no financial details whatsoever on this form, just how much she's prepared to pay but cleverly has filled in the section where she says she has 2 children. It still doesn't alter the fact this money was in trust. I've been enquiring about the possibility of this being classed as fraud and actually having her prosecuted, but I need to get the details of the Solicitors that were dealing with it, which I should obtain this week.

 

What if I tick the "I DO NOT accept the defendant's part admission"? Does that mean I can request the interest on top? I made a claim for £5000 + interest on the original claim stating we were never informed of how much interest it had attracted. But the Small Claims Court limits are up to £5000, then from £5001 upwards, hence why I'm not sure I can add interest to this claim.

 

The reason why I am fighting this is because the Defendant is a spoilt little arse who spends other people's money behind their back (I have no evidence but have been told by other people that this has happened to them). I'm not prepared to let someone screw over an 18 year old lad who was left money in good will only for someone to crap on them from a great height. I'm fighting this to the bitter end and I hope she does get prosecuted for this, she deserves to.

 

Many thanks for your help.

 

Jason

[hyperjase]

Some very important information has come to light

 

it appears the money was removed from trust and the defendant has placed it in an account in her name only, not in trust as far as we are aware -- solely in her name.

 

Surely this is now fraud?

[steampowered]

OK, you submitted a second claim for the interest? One claim for 5k and one claim for 5k+interest? Technically what you should have done is amended the first claim. If there are two separate claims going through the court system for the same amount I think one of them should be withdrawn or there should be a court order consolidating them.

 

I assume the admission relates to the first claim only. If so, I think you need to reject the part admission. To avoid any confusion, I would get a short letter on the court file (copied to the Defendant) explaining what you are doing.

 

The small claims limit increased to 10k for claims filed after 1 April 2013. I assume this applies to you, hence there should be no concerns about adding interest.

 

Technically I do not think taking money from the account would be fraud, since fraud would usually require a dishonest misrepresentation to get the money put in trust in the first place. However, I think it would be theft ... not to mention a civil law breach of fiduciary duty and breach of the Trustee Act 2000. If you threaten to report her to the police for theft, that may encourage cooperation but on the other hand police contact could also encourage her to play her cards close to the chest, so there are pros and cons. Ultimately a theft conviction would not help you get the money if it has been spent but the possibility adds pressure.

[hyperjase]

It turns out she HAS spent it -- it has been admitted to the court (via a telephone call) and she spoke to my partner today (it's her sister). So where do we go from here? She's stolen the money that was in trust. I want to have the police involved as it's theft. She can only agree to £100 per month which takes just over 4 years to pay back, which to me is an utter joke.

[steampowered]

Yes, I agree with you. The next stage is to get a formal court order. You can then enforce that in the usual ways and it will automatically go on her credit rating for 6years if not paid in 28 days. The main enforcement mechanisms are issuing a bankruptcy application, bailiffs, attachment of earnings order if you can identify an income stream, third party debt order if you can identify a bank account with money in, or an order that she attends court for questioning about her assets.

 

She may apply to the court to set monthly payments. She would at the very least need to provide a proper income and expenditure statement. I can't imagine the court would be too sympathetic, but ultimately if she doesn't have any assets she can't pay what she doesn't have.

 

Whether to involve the police is up to you.

[hyperjase]

A further update:

 

We received a notification that she was required to pay the whole £5000 giving them around two/three weeks to pay, but this hasn't been the case, I received last week a letter with an "offer" ....

 

Basically, there is just under £300 per month that they can afford (using their own calculations), but the offer is for £110. Should I accept this or send a reply showing the calculations of what the actual left each month is and request a higher amount? Say £200? Any thoughts?

 

Many thanks.

[steampowered]

Yes, if their own calculations indicate that £110 a month is not adequate then try to negotiate more. Of course you do need to be realistic as well ... some headroom may be sensible.

 

You will also need to think about how you formalise this. It is not a good idea just to withdraw the claim. One option is for both parties should sign a consent order providing that the proceedings are put on hold as long as payments are current and can be brought back to life in the event of default. Another option is to push this forward to a CCJ which would badly damage her credit rating and let the court set monthly payments if she requests ... but always better to solve things amicably if possible.

[hyperjase]

Well, a further update. I have tried to argue that there is more money going into the house than just what she has as income, but it appears she has rejected it as we have just received notification that there will be a hearing next Friday. What should I prepare for this? Can I go down the route of "her husband earns £2000 a month easily" and therefore there is more money being put into the household? Can I go for that reason or will it be dismissed? Failing that I could point towards their failings of the Trustee Act (but I don't know enough about that to quote from it, any pointers there?) - if this is a civil matter?

 

Many thanks.

[steampowered]

Although the husband is not liable for the debt so you cannot get at his income, his income will meet part of her household expenses and therefore will affect the payments she is able to afford.

 

I don't think there is a lot to prepare to be honest. Make sure you know the income and expenditure statement inside out, with attention to detail. I would also think about the level of monthly payment you will ask the judge to set and be prepared to explain why you think this is affordable.

 

I don't think you need to worry about technicalities here as the Defendant has admitted liability. The basic nature of your case should be clear from the Particulars of Claim.

[citizenB]

This thread is now in "General Legal Issues"

 

It is purely an administrative move.

[hyperjase]

After many months of back and forward to the Court, we got an interim judgement of the £5000, we have to go back Wednesday for the interest and any expenses. Sadly the interest looks like very little, but a good result for the interim judgement.

 

Which now leaves us with trying to get what my step son is owed. I've got quite a few leaflets from the court but it's quite confusing. What methods can we use to reclaim this money? I read of one where they're called to court to show what they have, income, assets etc - but I'm not sure about if that's worth going down.

 

Any other suggestions?

 

Many thanks for all the support over the past year on this thread.

[BazzaS]

Put aside thoughts of prosecution for theft : when the trust was created the legal ownership of the money went to the trustee. She is, however, clearly in breach of her fiduciary duty to your sons, the holders of the beneficial ("equitable") interest in the money, and it is on this basis that the court has already and likely will again find in your favour, and may make her liable for the interest that would have been accrued by the actions of a reasonable trustee.

 

The issue now is of securing the monies from the judgement. Getting the judgement doesn't help you much if she won't pay (or worse, can't pay)

 

You have alluded to an order for examination by the court of her financial status.

 

Does she own a property? Has the relationship broken down sufficiently that you wouldn't mind seeking bankruptcy proceedings if she won't pay (rather than "Can't pay").

 

Does she own an expensive car (and not hold it under a finance agreement)? where transferring the debt up to the High Court and instructing HCEO's may be an option.

[steampowered]

The main methods of enforcement are (1) bailiffs, (2) bankruptcy, (3) third party debt order (if you can identify e.g. a savings account), (4) attachment of earnings order (order that employer pays part of their salary towards the judgment), (5) charging order (if they own a house a good way of ensuring payment but not until the house is sold) and (6) order to attend court for questioning about assets.

 

 

6 is worth doing, but if you already have an idea about what assets they might have you can proceed with the other appropriate option.

[BazzaS]

Not all bailiffs are equal!

In general, HCEO's (who may be paid by results) may be more driven than County Court bailiffs (who are salaried, and not "paid by results").

I'm not a HCEO expert, but two points from reading about them on CAG stick in my mind:

1) in case their efforts are fruitless, ensure you know in advance how much their maximum fee would be if they can't recover goods or the sum owed, and (following on from this)

2) whilst CAG won't advise on any particular firm I've seen the comment "biggest isn't always best" in one form or another a number of times.

 

By claiming the sum of the Trust (and interest) you have gone after the trustee on a "personal" basis, which is a better approach if she has "frittered away" the money rather than buying something tangible with it (where you might have "gone after" that asset : the "proprietary" approach).

 

The downside of the "personal" rather than "proprietary" approach is if the aberrant trustee has no assets : you can't "get blood from a stone"

 

Do you know if the money was "frittered away" on day to day expenses / gambled / spent on something like a holiday that leaves no resultant asset? Or used to buy something?

 

Do you have any idea of if the trustee has assets where the money might be recoverable?

If you don't have this info then an order to attend for examination / questioning of her financial situation might help.

[hyperjase]

Do you know if the money was "frittered away" on day to day expenses / gambled / spent on something like a holiday that leaves no resultant asset? Or used to buy something?

 

Do you have any idea of if the trustee has assets where the money might be recoverable?

If you don't have this info then an order to attend for examination / questioning of her financial situation might help.

 

Yes the money was frittered away, I have a copy of the book that money was kept in, showing withdrawals down to the value of zero.

 

Asset wise, this is where I'm not sure, she has a house with her husband and as far as I know a good wage, but she disclosed that she could only afford £110 per month. I don't think she owns a car but I'm not 100% on that.

 

I was looking at the route of the attend re finances, not sure how much it costs but I think it'll be worth it as they've failed attend court on numerous occasions and I know that she can't get out of this.

 

On a side note, my other step son turned 18 a few days ago and guess what ..... yep no money! So looks like I'll be doing this all over again with the same trustee! One question though - there are three trustees but the bank book shows only one name, can I hold all three accountable for this? I know I have a better chance of recovery with three versus one.

 

Many thanks.

[BazzaS]

Yes the money was frittered away, I have a copy of the book that money was kept in, showing withdrawals down to the value of zero.

 

......

 

On a side note, my other step son turned 18 a few days ago and guess what ..... yep no money! So looks like I'll be doing this all over again with the same trustee! One question though - there are three trustees but the bank book shows only one name, can I hold all three accountable for this? I know I have a better chance of recovery with three versus one.

 

Many thanks.

 

As ever, "it depends".

 

Are the other 2 trustees "amateurs" or professional trustees? A court will hold professionals to a higher standard.

 

Usually trust assets are not held in the name of a single trustee, to prevent one person doing just this on their own.

 

What, if anything, did the other trustees do, so as to administer the trust?. If they did nothing at all, just leaving the one trustee to siphon off the money, they may be jointly and severally liable. Did they ever seek professional advice?

 

Are there any exclusion clauses in the will / details of their appointment(s)?

[hyperjase]

Are the other 2 trustees "amateurs" or professional trustees? A court will hold professionals to a higher standard.

They are amateurs, three people named on the Last Will and Testament, all three being appointed as Executors and Trustees.

 

Usually trust assets are not held in the name of a single trustee, to prevent one person doing just this on their own.

The bank book the monies were paid into are in one Trustee's name trustee of my step son.

 

What, if anything, did the other trustees do, so as to administer the trust?. If they did nothing at all, just leaving the one trustee to siphon off the money, they may be jointly and severally liable. Did they ever seek professional advice

Well one of the other Trustees is the husband of the trustee who is named in the bank book. The third Trustee is related to one of the other Trustees by family relations.

 

Are there any exclusion clauses in the will / details of their appointment(s)?

Nothing out of the ordinary I would expect and could you ever exclude a trustee taking monies out of a trustee account? That's a breach of the Trustee Act.

[BazzaS]

They are amateurs, three people named on the Last Will and Testament, all three being appointed as Executors and Trustees.

 

 

The bank book the monies were paid into are in one Trustee's name trustee of my step son.

 

 

Well one of the other Trustees is the husband of the trustee who is named in the bank book. The third Trustee is related to one of the other Trustees by family relations.

 

 

Nothing out of the ordinary I would expect and could you ever exclude a trustee taking monies out of a trustee account? That's a breach of the Trustee Act.

 

I'm not sure how the existing CCJ against one of the trustees affects the ability to go after the other 2 for the same debt / cause of action.

 

It appears likely that the younger beneficiary could take action against all 3 trustees, which might be a better option if pursuing the miscreant singly doesn't work : get their money back from whichever of the 3 has it, and let them then sort it out amongst themselves?

[steampowered]

Asset wise, this is where I'm not sure, she has a house with her husband and as far as I know a good wage, but she disclosed that she could only afford £110 per month. I don't think she owns a car but I'm not 100% on that.

 

I was looking at the route of the attend re finances, not sure how much it costs but I think it'll be worth it as they've failed attend court on numerous occasions and I know that she can't get out of this.

I think the appropriate enforcement mechanism would be going straight to HCEO bailiffs. Alternatively if you know who her employer is you could try for an attachment of earnings order. She had a chance to offer monthly payments through the court process, if she hasn't respected the process I would just proceed to enforce.

 

 

On a side note, my other step son turned 18 a few days ago and guess what ..... yep no money! So looks like I'll be doing this all over again with the same trustee! One question though - there are three trustees but the bank book shows only one name, can I hold all three accountable for this? I know I have a better chance of recovery with three versus one.

 

Many thanks.

I think the answer is yes. Trustees have a common law obligation to collect in the trust property and to exercise a duty of care. While the other trustees are not obviously as guilty of wrongdoing as the trustee who nicked the money, if they let her have an account in sole names which they never checked then I think they would be jointly liable for the full whack.

[hyperjase]

I think the appropriate enforcement mechanism would be going straight to HCEO bailiffs. Alternatively if you know who her employer is you could try for an attachment of earnings order. She had a chance to offer monthly payments through the court process, if she hasn't respected the process I would just proceed to enforce.

 

I was kinda hoping I could follow this route, I have no idea who their employer is - but an offer was made of £110 per month to pay this off, and I argued back it was an unfair amount of time to pay this back, nothing more was said so I can assume the court accepted this. The last time that they attended court the Judge actually told them she should make some form of payment ... which she never has.

 

Is it easy to go down the HCEO Bailiff route? I've never done this before.

 

Back at Court on Wednesday for the interest and expenses so the final amount will be found out then.

 

 

I think the answer is yes. Trustees have a common law obligation to collect in the trust property and to exercise a duty of care. While the other trustees are not obviously as guilty of wrongdoing as the trustee who nicked the money, if they let her have an account in sole names which they never checked then I think they would be jointly liable for the full whack.

 

Great - I will get on to the Court and get paperwork started. I know I'll get the funds back off three of them versus one. That'll be another thread though!

[BazzaS]

Put aside thoughts of prosecution for theft : when the trust was created the legal ownership of the money went to the trustee. She is, however, clearly in breach of her fiduciary duty to your sons, the holders of the beneficial ("equitable") interest in the money, and it is on this basis that the court has already and likely will again find in your favour, and may make her liable for the interest that would have been accrued by the actions of a reasonable trustee.

 

I've discussed the question of theft with someone with more expertise than me : they felt (on my brief presentation of the scenario so it wasn't formal legal advice!) that it would be possible to steal someone else's beneficial interest, so this might be theft after all, meaning that this might not be purely a civil matter : would you report it to the police?