Nat West refuse to send statements

[steven4064]

See below

AIf I lose the main case but win my small counter claim (which would bring the judgement below £5000), how would that affect whether costs should be awarded against me? I'm afraid I don't know the answer to that - I'm not sure costs go with the award or the claim.

 

Also, Cobbetts will ask for Standard Directions (I presume you mean standard disclosure - you should ask for it too) which means disclosure could be ordered 14 days before the hearing. However, I thought the banks have a statutory duty under the Consumer Credit Act (this does not apply to business accounts - you are not a consumer) and maybe elsewhere that they were guilty of an offence under the act if they fail to supply things like copies of signed Credit Agreements, Default Notices etc within 28 days of a formal demand.

 

So, how do I argue a case to suggest the Judge allow Special Directions and order disclosure within 14 days? (I have drafted a directions order) but how do I argue the point, rather than allow Cobbetts solicitor to get away with maybe 6 months longer than the CCA (as I said above CCA dosn't apply) provides for disclosure.

 

Also, disclosure of these documents should be virtually free. If they are disclosed as part of the summons, and I lose, I bet Cobbetts will try to claim the costs of disclosing these stautory documents at £100s.(I don't think they can do that. You have a right to information for your defence and counter claim under CPR part 18)

[Its WAR]

Hi Steven,

 

No, the business was not a consumer. But I am being sued as a guarantor of the overdraft. Am I a consumer? What legislation protects a Guarantor?

[steven4064]

But I am being sued as a guarantor of the overdraft. Am I a consumer? What legislation protects a Guarantor?

I still don't think you qualify as a consumer. On the legal aspects, you may find this helpful. THis has some case law which may help too.

[Its WAR]

Thanks for the links, they lead to other links etc. It seems I might have another argument relating to whether the guarantee was issued correctly. The business (ltd co) had ceased trading about two years prior, when the bank phoned me to threaten legal action over the unpaid overdraft of £13,500 unless I opened a new account for the balance and support it by guarantee.

 

After two payments under the new arrangement, I stopped paying when the balance was £4800 and claimed for bank charges for 6 years (couldnt go back further because of the limitation act...which now appears we could try to go back further). The bank settled as explained above (in full and final?).

 

The thing is, it appears the bank might have had the responsibilty to pay the settlement directly into the account to zero the balance and clear the guarantors liability. Instead they simply issued a cheque to the limited company and the amount was swallowed up by the company. Leaving the overdraft unpaid and the guarantors on the hook.

 

There is virtually no threads in CAG to assist in Guarantor problems, but it seems Nat west are trying a few threats now.

 

Is there any guidance anywhere?

 

In court in 5 hours.

[steven4064]

Hi haydn

 

I think this is an unusual situation and to be honest is way out of my league. My only thought is on the following:

The business (ltd co) had ceased trading about two years prior, when the bank phoned me to threaten legal action over the unpaid overdraft of £13,500 unless I opened a new account for the balance and support it by guarantee.

When I had a quick look on the web yesterday, the thing that struck me was the bit about duress or undue influence (4th section of the first link). I think NatWest's actions in getting you to be a guarantor might be construed as duress or undue influence.

 

Secondly, the fact that they paid the bank charges to the company to settle debts rather that to pay off the overdraft maybe within the law but is certainly outwith your understanding of your relationship with them as guarantor. In this case, you might use the "non est factum" defence (same section), as their action indicates that the guarantee alleged is so fundamentally different from the agreement you thought you were making that you would not have made the guarantee had you understood what they intended or how they intended to treat you.

 

Finally, Schedule 2 of the UNFAIR CONTRACT TERMS ACT 1977 may help in relation to whether Nat West's contract with you as guarantor was reasonable and therefore fair:

SCHEDULE 2

 

"GUIDELINES" FOR APPLICATION OF REASONABLENESS TEST"

 

The matters to which regard is to be had in particular for the purposes of sections 6(3), 7(3) and (4), 20 and 21 are any of the following which appear to be relevant-

 

(a) the strength of the bargaining positions of the parties relative to each other, taking into account (among other things) alternative means by which the customer's requirements could have been met;

 

(b) whether the customer received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons, but without having to accept a similar term;

 

© whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

 

(d) where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable;

 

(e) whether the goods were manufactured, processed or adapted to the special order of the customer.

I think that (a) and (b) in particular may apply, and possibly © and (d).

 

That's really the only thing I can think of. As I said, it is way beyond my (current) knowledge.

 

All the best

[midge61]

Hi Haydn

 

I have found the following on the business link website. Maybe you could give your local one a ring and see if they can offer any advice.

 

Just a thought.

 

Providing a guarantee for your loan | Business Link

[steven4064]

Hi Haydn

 

How did you get on in court?

[Its WAR]

Court was really interesting. Cobbetts sent a solicitor (not from their firm). He asked the judge for permission to reply to my defence. It was refused. The judge blasted him for the very poor particulars of claim and no wonder I was unable to write a solid defence. He asked the solicitor where the copy guarantees, default notices and bank statements were, afterall it looked like they plucked the summons amount out of the air. The solicitor complained he only had the notes last night....and didnt work for Cobbetts.

 

Then

 

 

 

SORRY dont know what happened to this post. See post below.

[midge61]

Then.................What!!!!!!!!!!!!!!1

[midge61]

Please say it got thrown out. I do hope so.

[Its WAR]

Court was really interesting. Cobbetts sent a solicitor (not from their firm). He asked the judge for permission to reply to my defence. It was refused. The judge blasted him for the very poor particulars of claim and no wonder I was unable to write a solid defence. He asked the solicitor where the copy guarantees, default notices and bank statements were, afterall it looked like they plucked the summons amount out of the air. The solicitor complained he only had the notes last night....and didnt work for Cobbetts.

 

Then it was my turn and I mentioned that I had been waiting a year for the documents and without them I was unable to prepare a proper defence. If they didnt exist, there was no case to answer, and if they were produced they may not be in order or accurate and any amounts being claimed might be wrong or include unfair penalty charges but for which there may be no debt.

 

The judge agreed and ordered that Cobbetts prepare new particulars of claim, enclose the Guarantees and Default notices and statements within 14 days or the case would be dismissed. I would then have a further 14 days to lodge my defence and counter claim.

 

A few other dates were set and I was unable to pursuade the judge to allocate to the small claim. The case is now a fast track with a hearing set for March.

 

 

What was interesting was that the solicitor when prompted, flicked through his bundle and came across two Gaurantees. One dated 1998, the other 2000. What is relevent here is that if he had them, why had he not sent copies to me. More importantly, the business account was overdrawn £13,500 when we were pursuaded to agree to transfer the balance to a new account for which we had to be guarantors around Feb 2005. The question is, are we still subject to either of the earlier guarantees which supported the limited companies overdrafts 7 to 10 years ago (these being for 50,000 in 1998 and a75,000 in 2000) and which they appear to exist. Or are we subject to the latest guarantee of 2005 which appears not to exist (unless my solicitor took a copy when he was required to witness it). Of course, if it does exist, it was extracted under some undue influence under duress of summons if we didnt accept. The thing is, why would we be required to organise a third guarantee if a pre existing one was already in effect. Of course, the pre existing one had no duress associated with it, therefore it might be valid. The recent guarantee may be flawed.

 

That is before we go into whether even if the guarantee is good, we still have the argument that we had settled in full and final with Cobbetts.

 

The other question is : If I get the statements and they go back to 1992, do I calculate the bank charges and counter claim? (I am being sued as Guarantor) I think I would not be able to counter claim, but instead have the closed limited company of which I was a director, issue a new claim.

 

Eitherway, I get four weeks to research and would appreciate any clues?

 

Just had another thought. They might only send statements for the new account and not the old statements. How do I deal with that and ensure they send all the statements for the whole history of the original account. Oh! maybe the old guarantees relate only to the old account number, in which case they will be no good to secure a debt on the new account number. Crumbs, it gets exciting.

[midge61]

Blimey!

 

Did the judge say anything about costs for it going fast track?

Can you ask the solcitor that witnessed the document for a copy if he has one?

 

All looks very complicated but 1st round to you.

 

Good luck

[steven4064]

Hi Haydn

 

Firstly, you seem to have handled the situation brilliantly. Poor solicitor, only having the papers the night before

 

For a limited company, your personal liability is normally limited to theface value of your shares. However, if you signed a guarantee, that would override the limited liability. In your case though, from what you have said, it would appear that it has all changed anyway. As I understand it, the company account was closed when the company ceased to trade and the overdraft moved to this new account for which you also stood as a guarantor. As the previous account was closed, the guarantees relating to it must now be void.

 

We can research and discuss this over the next 4 weeks (and particularly when you have their new PoC) but my opinion ATM is:

 

1. The previous guarantees are now void because they relate to an account which is now closed.

 

2. You can probably argue that the current guarantee was made under duress or undue influence because of their threat of legal action if you didn't

 

3. Nat West charged unlawful penalty charges which added to the overdraft and they paid some of them back but used them to defray some of the business debts rather than offset the overdraft. Probably (we will need to reasearch this) they had no right to do that.

 

4. This act was completely outwith your understanding of the guarantee and therefore may be able to use the "non est factum" defence

 

5. You accepted the refund of charges as a full and final settlement of that particular claim for charges relating to that particular period of time. That does not prevent you making a different claim for a different period of time.

 

6. Items 2-4 could form the basis of a defence and 5 the basis of a counter claim

[Its WAR]

Thanks Steven, its been a great help in substance and in easing the mind. Cant wait for the disclosure and new poc, but I guess I would be pleased if they failed to send them in time.

[Its WAR]

Steven,

 

Actually I accepted the settlement offer by including the additional term of settlement that it would bring an all to ALL the claims we had against each other. That is why I believe we agreed not to pursue them for further bank charge claims and they would not pursue us for the guarantee oir balance of overdraft. Although the phrase used was ALL matters, it did not specify what those matters may be and therefore it might be too weak to rely on.

 

The main question is do I counter claim their summons with my claim for charges earlier than 2001. They are sueing my wife and I as guarantors, so us it correct for the counter claim being issued by us as guarantors, when the counter claim relates to the ltd co, of which my wife and I were directors? Or should the ltd co issue their own claim.

 

Its important because, if the ltd co has to issue its own claim, then nat west my just settle it as they always seem to do at the last minute, especially if the high court case goes against the banks (although I dont know of any settlements of pre limitatation act successes yet).

 

If I counter claim, the amounts may set each other off, in which case nat west may still decide to withdraw their action, if I withdraw my counter claim (basically we would be back into what I had attempted to negotiate on originally).

 

Or, the hearing goes ahead and I lose the guarantor matter, and I may lose the full and final settlement matter but win the bank charges matter.

 

Or I could win the full and final setllement matter which by winning, I would therefore automatically lose my counter claim (which, if I get the statements, may be worth more than £5000).

 

So its a difficult strategy, but I think I should include the counter claim as a tactic they might cause the bank to take longer to figure out their new particulars and they might miss the 14 day deadline. I dont know the amount of the countwer claim but could send Cobbetts notice that I will be issueing it and insist they send all the statements within the 14 days. I feel certain they will only send the statements for the new account they set up to cover the account to which the gaurantee was for.

 

As I will only have two weeks to reply, I need to examine the various strategies now, so that I can implement them in time. Its going to take hours of research, probably every night, for two or three weeks.

 

Best advices greatfully received, especially case laws on guarantees, and a spreadsheet with interest calculator would be useful.

[steven4064]

I'm going to have to think about this. Hopefully others may have some wisdom too.

 

One question - does the limited company still exist or has it been wound up? If it still exists, is it still trading?

[hedgey06]

Personally, I feel this is a very difficult (perhaps unique) situation. If haydn was a 'general consumer' I'd advise submitting a counterclaim based on the outstanding penalty charges on his account. We've had a few claimants recently (Wally springs to mind) where a straightforward counterclaim has been completely in order and has also 'stayed' proceedings for a certain period of time.

 

However, as this is a business claim, the waters become decidedly 'muddied'. Business claims can be fraught with problems anyway - so to counterclaim on this particular case (given the various intracacies involved) needs careful thought. I really don't want to call this one.

 

I think it's advisable at this stage to request further help - I'll flag the thread up to see if anybody has any additional ideas.

[steven4064]

The real proble as I see it is that the limited company and haydn are seperate 'entities' even though haydn is (was) a director. The Guarantor issue just muddies the issue. The bank's actions have muddied it further. The way forward depends to some extent on the status of the limited company now.

[Bigmac versus]

Very difficult situation here but regarding the full and final settlement i hope this helps and dosent make it any worse.

 

re. contracts - for a contract to be binding there must be consideration. The case law for this is Foakes v Beer (1884) and Pinnels Case (1602). Part payment of a debt is not acceptable as consideration for a settlement. This means that for you to give up your right to the full amount they owe you, they would have to give you valuable consideration. In effect they are asking you to write off their debt to you for nothing.

[Its WAR]

OK, Natwest sent me a cheque for my my first claim (it was short by by £100). At the same time, they offered me a settlement figure for my second claim. I told them I would accept that lower amount and that I would accept £400 less in acceptance of the second claim, (total amount of £500) as my payment of consideration, if the settlements were a full and final settlement and put an end to ALL matters between us, and if they agreed it was full and final, they had to write a notice of discontinuance to the court, which they did.

 

I wasnt accepting part payment of a debt I owed to them, rather I was taking less money from them as a negotiated deal for the bank charges if in return for me accepting £500 less (therefore my consideration) that they would not pursue me for any other matter and I would not pursue them any more. I also agreed to accept their confidentiality agreement as part of the deal. They broke the deal by issuing this action.

 

Now they are pursuing me for the balance of the overdraft and I feel obliged therefore to pusue them for bank charges from 1992 to 2001. I had preferred not too, which was the whole point of the negotiation. So is is a counter claim or a new claim?

 

As far as the ltd company was concerned, It voluntarily ceased trading about 5 years ago when I closed the shop. (which is why they wanted to get me to guarantee the balance still oweing and by threatening legal recovery action unless I agreed, to enter intro a new guaranteed agreement to settle the balnce which was previously an unsecured overdraft and as the shop had ceased trading and completely wound up, the bank knew they would only see more repayments if they successfully persuaded me).

 

I subsequently opened another shop under a different company and used a different bank, I sold the shop earlier this year and retired.

[tomterm8]

haydn, you PM'd me.

 

I'm not entirely sure exactly what you wanted my help with, because it seems at the moment you are basically unable to do very much until they submit a new claim / disclose information.

 

Maybe you would like to clarify exactly what you want help with, since it seems a lot of issues have been brought up in a short thread:confused:

 

However, in general, I will respond to a few of the points made so far in this thread.

 

undue influence

 

At one stage, the idea of "undue influence" was raised. I have to say that there have been several successful cases on these grounds, but it is important to understand what undue influence is not. It is not entering into a business agreement, where you have access (if you chose) to legal help and extensive business experience / intelligence etc. Undue influence implies at the very least, some inequality in experience and/or resources AND some element of undue pressure.

 

There seems to be confusion as to what the phrase "undue" means. For example, threatening to do something entirely legal - such as to take you to court, or foreclose etc, isn't normally considered "undue".

 

However, taking advantage of someone without experience, or (in some cases) pressure from husband / wife, may be undue.

 

I am not aware of any case where, a business person (e.g. director) entering into a guarantor relationship with a bank in order to secure a loan, or even to secure the survival of his/her company, has been considered undue influence. On the face of it this would contradict everything I've read about the subject.

 

Frankly, you seem to be a smart man / woman who knew what you were doing when you signed the guarantee, and that would tend to preclude undue influence as a defence.

 

 

Dislosure

 

Civil action completly reverses the normal rules of business, since a series of legal requirements exist. these are in essence, to act fair and reasonably, to act in proportion to the value of the claim, and to act in such a way as to expidite the equitable resolution of the court action.

 

it is completly true that the Data Protection Act 1998 doesn't normally cover limited companies. however, at the stage that some company takes legal action against you, or sends you a letter before action, you are entitled to see information that is relevant to the case, except for certain limited exceptions such as national security or commercial confidentiality.

 

If they refuse to provide this information, after a reasonable request, the normal procedure would be to make an application notice for disclosure under the civil procedure rules. the relevant sections are PART 18 - FURTHER INFORMATION and

PART 31 - DISCLOSURE AND INSPECTION OF DOCUMENTS

 

You would need to fill an application notice form out, The requested resource (/HMCSCourtFinder/tiles/Her Majesty's Courts Service -Forms and Guidance) is not available in accordance with the guidance, and with the appropriate fee. Some people in receipt of benefits may be entitled to either a reduced fee, or no fee at all.

 

Alternatively, you can explain your problems in your defence and / or allocation questionaire, or by writing to the court.

 

 

Very difficult situation here but regarding the full and final settlement i hope this helps and dosent make it any worse.

 

re. contracts - for a contract to be binding there must be consideration. The case law for this is Foakes v Beer (1884) and Pinnels Case (1602). Part payment of a debt is not acceptable as consideration for a settlement. This means that for you to give up your right to the full amount they owe you, they would have to give you valuable consideration. In effect they are asking you to write off their debt to you for nothing.

 

Bigmac, this is an astute and helpful post, however I would like to add some further information absout what the doctrine of consideration does, and does not do. The doctrine of consideration, which may also be called the doctrine of condition in noncontractual settings, establishes that in a normal contract their needs to be some consideration in order for an enforceable bargain at law to take place. Such a bargain may not be based on past performance, or doing something that you are already obliged to do. This doctrine does not cover deeds.

 

to get away from this doctrine, courts have derived a number of loopholes. One of which is what I would call the "peppercorn" loophole, which is where one party agrees to pay say half the debt amount and something material but of little value like a peppercorn which was not an obligation under the original agreement.

 

A general shift in the law has occured since the cases you mentioned in two fields. the first is the field of public policy, and the second is the field of equity. While the doctrine of consideration is still well established at common law, there are many exceptions at equity.

 

a particular exception is estoppel ( also known as reliance), that is that if someone says they will do or not do something, and you have acted to your detriment based upon this promise, even if not enforceable at common law, equity would generally prevent the other party failing to act in accordance to it's statement.

 

Another is in the field of public policy. It is considered as a matter of public policy that the settlement of legal issues is to the benefit of the general population. Consequently, it is considered generally unfair to revive settled issues. And so, as a general rule, and with the obvious exception of fraud, an offer that is accepted is binding on both parties - lots of general waffle has been written on this (inventing consideration, such as reduced risks and cost), but I believe the basic principal is the court should prevent people setting aside agreements made in good faith to settle legal disputes.

 

In particular, this is the case even if the payment of the offer is made to a third party... The cashing of a cheque offered in settlement of a dispute ...

 

In my opinion, courts would consider filing a new claim, based on issues already decided between both parties, to be an abuse of process.

 

I would need to see the actual documents relating to the settlement, in order to see whether the terms you believe you agreed to were actually the terms you agreed to, but if this is the case, then i do not believe there is a case to answer.

[Its WAR]

That was a really useful post. Thanks so much. Lets just see if the bank comply in 11 days left.

[Its WAR]

Letter today from Natwest. They will not supply the data requested under the Data Protection Act as it only applies to living individuals and not to Ltd Companies. However, they will supply the statements for me in my capacity as a director of the company, via Cobbetts.

 

So I will be able to calculate a counter claim or issue a seperate new action. Still dont know which yet.

[Its WAR]

Times up. The bank was ordered to file a new particulars of claim and supporting docs by 4pm today to the court and copies to me (giving them 14 days). The Judge ordering that in default the claim to stand dismissed.

 

They have failed to file them to both me and the Court. So I guess the claim is dismissed automatically???? I did visit the Court at 4pm today to hand in my request that the Court dismiss the claim, so I hope thats it and I just wait for formal notification. Unless of course, Cobbetts fancy trying to re start the claim or issue a fresh one.

[tomterm8]

sounds promising... wouldn't get my hopes up until I see the order for dismissal, however. DCA's have a tendency to get away with filing stuff late.