Business Account -chasing Me For Guarantee

[slick132]

Zootscoot has also suggested amendments to the Defence as follows:-

 

Quote:

THE XXXXXXX COUNTY COURT CLAIM No: XXXXXX,

 

BETWEEN

 

BARCLAYS BANK PLC CLAIMANT

 

AND

 

 

DHOOM DEFENDANT

 

 

 

 

BARCLAYS BANK PLC

 

DEFENCE AND COUNTERCLAIM

 

DHOOM

 

 

Background

 

1. [Iam the Claimant and Litigant in Person in this case. The guarantee referred to in this case is normally provided for by the Director which I am/was not, not sure how relevant this is] The initial negiotation that were made between Limited (company) and the claimant was to provide overdraft facilities (OD) for a period of 3 months to around end March 2006 I agreed to act as guarantor in the amount of £xxxxx in respect of the OD.

2. During the period in which the Account [what account]was operating the Claimant debited numerous charges to the Account in respect of [Delete purported] breaches of contract on the part of Company and also charged interest on the charges once applied. I understand that the Claimant contends that the charges were debited in accordance with the terms of the contract between itself and the Company.

 

3. A list of the charges ("the Charges") applied is attached to this defence and SET OFF. The total being £xxxxxincluding interest is believed to be£ xxxxx. The Defendant contends that this is like to increase once all the information has been obtained from the Claimant

.

4. Due to the amounts the Claimant debited in unlawful charges the Company had used up its entire OD to service this and had to seek extra facilities from the bank. (Does he have evidence to back this up if so need to state were the evidence is)In the interim around the late 2006/early 2007 (surely this would be a precise date?)the Claimant called upon the OD facilities which left the Company no option but to cease trading.

 

5. In early 2007, the Claimant called in the guarantee from myself.

 

 

6. On xx FEB 2008 I made a request to the Claimant’s solicitors under Civil Procedure Rules Part 18 (did he?)to provide all relevant information in respect of the account and this claim. To date the claimant has ignored my request under the CPR and I have not received any such documentation requested. As a result it has proven difficult to compose this defence without disclosure of the information requested, especially given that I am Litigant in Person.

 

7. I respectfully request that the Claimant be ordered to disclose the requested documents and that following sight of them I will seek the permission of the court to amend this defence and present a more fully particularised defence.

Defence

 

The Guarantee

 

8. This guarantee imposes a secondary obligation on me:-

 

“in a contract of guarantee the surety assumes a secondary liability to answer for the debtor who remains primary liable;” (Chitty on Contracts (29th Ed) Vol 2 para 44.013)

 

As a result, I have all the defences available to the debtor and I am discharged automatically (under the rule in Holme v Brunskill (1878 ) 3 QBD 495) if there is any variation of the arrangements with the principal debtor without my consent which might prejudice my interests. (Marubeni Hong Kong v Government of Mongolia [2005] EWCA Civ 395 per Carnworth LJ).

 

9. It was confirmed in Triodos Bank NV v Dobbs [2005] EWCA Civ 630 that, despite any language incorporated into the guarantee designed to displace the rule in Holme v Brunskill, the express consent of the guarantor must be obtained unless the changes are minor or expressly provided for in the original agreement.

 

10. To the best of my knowledge this guarantee was for the purpose of securing the overdraft facility for a period of 3 months which would have expired around end March 2006. [it seems that there were some changes to this which I was not notified - A little vague would need to be more specific and and refer to any actual changes] .I submit that these variations and were not expressly provided for in the original agreement and therefore the rule in Holme v Brunskill applies and I should be automatically discharged.

 

11 Further, or alternatively, it was represented to me by the Claimant that the facility I was to guarantee would last for 3 months. (was this written or verbal) I submit that this was a misrepresentation of the true facts and it did induce me to sign the contract of guarantee. I submit that this was a negligent misrepresentation under s2(1) Misrepresentation Act 1967 and I claim damages (how much and for what - rescission?) pursuant to this, the amount being at the [discretion of the court - damages for misrep are not discretionary they must be pleaded and proved. I refer also to the authority of [Millett v Stanley Works Ltd [1997] EWCA Civ 2469. - why]

12. I also contend that as a direct result of the Claimant the Company, had no choice but to stop trading resulting in defaulting over the OD facilities. [what point is this trying to make?]

Set-Off

 

13. The Claimant is claiming for money owed by Company. which operated an account [account number]with the Claimant which was opened around Nov'2005 and I don't know whether this is still open or closed. Neither has the Claimant provided a statement detailing the exact amount owed.

 

14. During the period in which the Account was operating the Claimant debited numerous charges to the Account in respect of purported breaches of contract on the part of the Company. and also charged interest on the charges once applied. I understand that the Claimant contends that the charges were debited in accordance with the terms of the contract between the Company and itself. - Is this not repeating para 2 - would need to refer to the terms which were breached

15. A list of the charges applied is attached to these particulars of claim.

 

16. The Defendant contends that:

 

a) The charges debited to the Account are punitive in nature; are not a genuine pre-estimate of cost incurred by the Claimant; exceeds any alleged actual loss to the Claimant in respect of any breaches of contract on the part of the Company and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Claimant which exercises the contractual term in respect of such charges with a view to profit. - isn't this from the old POC?

b) The contractual provision that permits the Claimant to levy such charges is a disproportionate penalty and as such is unenforceable by virtue of the common law. The precedent for the law relating to contractual penalties was set in the case of Dunlop Pneumatic Tyre Co Ltd v New Garage Motor Co Ltd (1915) AC 79. Additionally, in the case of Murray v Leisureplay (2005) EWCA Civ 963 it was held that a contractual party may only recover damages in respect of its actual loss or liquidated losses.

 

c) The claimant has been unduly enriched by having this money

 

 

d) There is a right of set-off with regard to these charges and the interest paid on them.

 

17. Accordingly I claim the following amounts should be set-off against any claim the claimant might have against me:

 

a) The amounts debited in respect of charges in the sum of £xxxxx and any interest charged thereon.

b) Any interest charged by the Claimant to the Account as a result of the charges being applied, the exact amount to be detailed when the Claimant complies with my CPR 18 request;

 

c) I also claim compound interest at the claimant’s standard rate for overdrafts for the restitution of the time value of the charges and interest thereon on the basis that the Claimant has been unduly enriched by having the use of this money. The authority for this is Sempra Metals v Inland Revenue Anor. [2007] UKHL 34. Lord Nicholls in the leading statement said:-

“There can only be one answer on this important question of law. Nobody has suggested a good reason why, in a case like the present, an award of compound interest should be denied to a claimant. An award of compound interest is necessary to achieve full restitution and, hence, a just result. I would hold that, in the exercise of its common law restitutionary jurisdiction, the court has power to make such an award.”

 

d) In the alternative to © above, if the court should find that I am not entitled to compound interest, then I claim interest pursuant to s69 County Courts Act.

 

Indemnity Clause

18. The contract of guarantee contains a separate indemnity clause. I submit that this clause is unreasonable within the meaning of the Unfair Contract Terms Act 1977 and, as such, is unenforceable. I note that under s11(5) of this Act that it is for those claiming that a term satisfies the requirement of reasonableness to show that it does. - Have the bank used the indemnity clause?

 

 

Costs

19. I claim all court and other costs associated with defending this claim.

[dhoom]

Hi Dhoom,

 

Zootscoot, a Site Moderator well versed in such matters, has commented as follows:-

 

" I'd be very cautious of advising defending in multi-track. The costs can rise quite considerably particularly as he was willig to pay and just wanted more time. Do we know if the charges are likely to bring the overall debt below the 40K? YES THEY ARE If not there is little to be gained from defending. Is there another guarantor? NO I would be most surprised if the director of the company was not also a guarantor. Does any one have a copy of the Barclays business T & Cs as if he is going to defend he will need to plead the contract terms breached. "

 

THE PROBLEM IS THEY HAVE SUPPLIED NOTHING APART FROM SOME STATEMENTS AND A COPY GUARANTEE.

 

The other thing is that they are claiming for the entire guarantee and not just for the authorised OD which was less than the amount they are claiming. I vividly remember that the facility letter detailed how the guarantee was to be apportioned i.e. so much for OD so much for credit cards and so much for indemnities

[dhoom]

in reply to comments made in p.4 yes the company did make request for more advance.

 

p.6. yes i did make a request under CPR 18

 

p.10 & 11 - I was not privy to all the company documents and thus I need them to supply me all the information requested.

[slick132]

I think, at this late stage, you should enter the Defence using Zootscoot's amendments.

 

It is wholly reasonable that you should ask for and receive a detailed breakdown of the bank's claim against you which shows how their figures are arrived at.

 

It's also reasonable that you should question whether the bank is acting properly in demanding rep't of the full guarantee, as opposed to the authorised OD.

 

I believe Zoot's reservations concern your exposure to costs in defending the claim at court, as you accept you owe the bank in principle.

 

You are acting reasonably in attemping quantify what you properly owe, by requesting further info or documents, but defending the claim in court could prove costly.

 

Perhaps further letters to the Bank or Optima, requesting sight of the original facility letter and the nec'y calculations of their figures, would show the court you are acting reasonably to resolve the dispute.

[slick132]

Re your answers in post #78, adapt the Defence to reflect your case as best you can.

[nicklea]

dhoom, just a few comments from me that I hope might be helpful

 

BETWEEN

 

BARCLAYS BANK PLC CLAIMANT

 

AND

 

 

DHOOM DEFENDANT

 

 

 

 

BARCLAYS BANK PLC

 

DEFENCE AND COUNTERCLAIM

 

DHOOM

 

Background

 

1. [Iam the Claimant and Litigant in Person in this case. The guarantee referred to in this case is normally provided for by the Director which I am/was not, not sure how relevant this is] The initial negiotation that were made between Limited (company) and the claimant was to provide overdraft facilities (OD) for a period of 3 months to around end March 2006 I agreed to act as guarantor in the amount of £xxxxx in respect of the OD.

2. During the period in which the Account [what account]was operating the Claimant debited numerous charges to the Account in respect of [Delete purported] breaches of contract on the part of Company and also charged interest on the charges once applied. I understand that the Claimant contends that the charges were debited in accordance with the terms of the contract between itself and the Company.

 

3. A list of the charges ("the Charges") applied is attached to this defence and SET OFF. The total [ maybe delete this being £xxxxxincluding interest is] believed to be£ xxxxx. The Defendant contends that this is like to increase once all the information has been obtained from the Claimant

.

4. Due to the amounts the Claimant debited in unlawful charges the Company had used up its entire OD to service this and had to seek extra facilities from the bank. (Does he have evidence to back this up if so need to state were the evidence is) [if there’s no evidence to hand then maybe say something like. Evidence of this is contained in the documents that I requested be disclosed by the Claimant] In the interim around the late 2006/early 2007 (surely this would be a precise date?)the Claimant called upon the OD facilities which left the Company no option but to cease trading.

 

5. In early 2007, the Claimant called in the guarantee from myself.

 

 

6. On xx FEB 2008 I made a request to the Claimant’s solicitors under Civil Procedure Rules Part 18 (did he?)to provide all relevant information in respect of the account and this claim. To date the claimant has ignored my request under the CPR and I have not received any such documentation requested. As a result it has proven difficult to compose this defence without disclosure of the information requested, especially given that I am Litigant in Person.

 

7. I respectfully request that the Claimant be ordered to disclose the requested documents and that following sight of them I will seek the permission of the court to amend this defence and present a more fully particularised defence.

Defence

 

The Guarantee

 

8. This guarantee imposes a secondary obligation on me:-

 

“in a contract of guarantee the surety assumes a secondary liability to answer for the debtor who remains primary liable;” (Chitty on Contracts (29th Ed) Vol 2 para 44.013)

 

As a result, I have all the defences available to the debtor and I am discharged automatically (under the rule in Holme v Brunskill (1878 ) 3 QBD 495) if there is any variation of the arrangements with the principal debtor without my consent which might prejudice my interests. (Marubeni Hong Kong v Government of Mongolia [2005] EWCA Civ 395 per Carnworth LJ).

 

9. It was confirmed in Triodos Bank NV v Dobbs [2005] EWCA Civ 630 that, despite any language incorporated into the guarantee designed to displace the rule in Holme v Brunskill, the express consent of the guarantor must be obtained unless the changes are minor or expressly provided for in the original agreement.

 

10. To the best of my knowledge this guarantee was for the purpose of securing the overdraft facility for a period of 3 months which would have expired around end March 2006. [it seems that there were some changes to this which I was not notified - A little vague would need to be more specific and and refer to any actual changes] .I submit that these variations were not minor and were not expressly provided for in the original agreement and therefore the rule in Holme v Brunskill applies and I should be automatically discharged.

 

11 Further, or alternatively, it was represented to me by the Claimant that the facility I was to guarantee would last for 3 months. (was this written or verbal) I submit that this was a misrepresentation of the true facts and it did induce me to sign the contract of guarantee. I submit that this was a negligent misrepresentation under s2(1) Misrepresentation Act 1967 and I claim damages (how much and for what - rescission?) pursuant to this, the amount being at the [discretion of the court - damages for misrep are not discretionary they must be pleaded and proved. I refer also to the authority of [Millett v Stanley Works Ltd [1997] EWCA Civ 2469. - why] that misrepresentation to a guarantor of the true facts leads to the guarantee being unenforceable

12. I also contend that as a direct result of the Claimant the Company, had no choice but to stop trading resulting in defaulting over the OD facilities. [what point is this trying to make?]

Set-Off

 

13. The Claimant is claiming for money owed by Company. which operated an account [account number]with the Claimant which was opened around Nov'2005 and I don't know whether this is still open or closed. Neither has the Claimant provided a statement detailing the exact amount owed.

 

14. During the period in which the Account was operating the Claimant debited numerous charges to the Account in respect of purported breaches of contract on the part of the Company. and also charged interest on the charges once applied. I understand that the Claimant contends that the charges were debited in accordance with the terms of the contract between the Company and itself. - Is this not repeating para 2 - would need to refer to the terms which were breached

 

15. A list of the charges applied is attached to these particulars of claim.

 

16. The Defendant contends that:

 

a) The charges debited to the Account are punitive in nature; are not a genuine pre-estimate of cost incurred by the Claimant; exceeds any alleged actual loss to the Claimant in respect of any breaches of contract on the part of the Company and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Claimant which exercises the contractual term in respect of such charges with a view to profit. - isn't this from the old POC?

b) The contractual provision that permits the Claimant to levy such charges is a disproportionate penalty and as such is unenforceable by virtue of the common law. The precedent for the law relating to contractual penalties was set in the case of Dunlop Pneumatic Tyre Co Ltd v New Garage Motor Co Ltd (1915) AC 79. Additionally, in the case of Murray v Leisureplay (2005) EWCA Civ 963 it was held that a contractual party may only recover damages in respect of its actual loss or liquidated losses.

 

c) The claimant has been unduly enriched by having this money

 

d) There is a right of set-off with regard to these charges and the interest paid on them.

 

17. Accordingly I claim the following amounts should be set-off against any claim the claimant might have against me:

 

a) The amounts debited in respect of charges in the sum of £xxxxx and any interest charged thereon.[ you’re claiming the interest in b below] also what about all charges you don’t know about – unless of course you’ve got all the statements. You said in point 3 above that this figure is likely to increase so you need to take account of this as well. Maybe say something like amounts debited in respect of charges the total amount of which will be detailed following disclosure by the Claimant but is in excess of £x

b) Any interest charged by the Claimant to the Account as a result of the charges being applied, the exact amount to be detailed when the Claimant complies with my CPR 18 request;

 

c) I also claim compound interest at the claimant’s standard rate for overdrafts for the restitution of the time value of the charges and interest thereon on the basis that the Claimant has been unduly enriched by having the use of this money. The authority for this is Sempra Metals v Inland Revenue Anor. [2007] UKHL 34. Lord Nicholls of Birkenhead [sorry I left of his full title] in the leading statement said:-

 

“There can only be one answer on this important question of law. Nobody has suggested a good reason why, in a case like the present, an award of compound interest should be denied to a claimant. An award of compound interest is necessary to achieve full restitution and, hence, a just result. I would hold that, in the exercise of its common law restitutionary jurisdiction, the court has power to make such an award.”

 

d) In the alternative to © above, if the court should find that I am not entitled to compound interest, then I claim interest pursuant to s69 County Courts Act.

 

Indemnity Clause

18. The contract of guarantee contains a separate indemnity clause. I submit that this clause is unreasonable within the meaning of the Unfair Contract Terms Act 1977 and, as such, is unenforceable. I note that under s11(5) of this Act that it is for those claiming that a term satisfies the requirement of reasonableness to show that it does. - Have the bank used the indemnity clause?

I see what you mean – if the bank haven’t raised this issue in the POC then maybe leave out the bit about the Indemnity Clause – but keep it handy just in case they come back later or in the court case with it.

Basically what the indemnity clause says is that if they can’t get all the money from you through the guarantee (ie you successfully manage to defend against them) then they are entitled to get the money from you anyway as a result of this indemnity clause

 

Costs

19. I claim all court and other costs associated with defending this claim.

[dhoom]

Thanks Slick and nicklea, I'll will incorporate the amendments, also forgot one very important factor that the bank wanted me to sell my house and cover this OD.

[BeleagueredSinner]

Any progress on this one?

 

I noted it with interest, but am worried that the situation relating to reclaiming 'unfair charges' from business accounts was now all but impossible.

 

See link:

 

My business bank charges reclaim hell | This is Money

[dhoom]

NEED a bit of clarification

 

If a judge has ordered

 

That the claimant by 4.00 pm on a certain date send to court and the defendant a reply to the defence.

 

and the claimant doesn't, what do I do next

[elsinore]

If the order states what will happen if the Claimant fails to submit the response (an unless order) then the court will act accordingly.

 

If not, then you can apply to the court for an order that the claim is struck out.

 

Either way it's worth a call to the court to check if there is anything in the pipeline.

 

How much time has elapsed since the sumission date passed?

 

Els

[dhoom]

not elapsed yet

[elsinore]

Ah! I see - planning ahead!

 

Els

[dhoom]

Ah! I see - planning ahead!

 

Els

 

Indeed

[humbleman]

If the order states what will happen if the Claimant fails to submit the response (an unless order) then the court will act accordingly.

 

If not, then you can apply to the court for an order that the claim is struck out.

 

Els

 

I might need to do this with one of my cases, is there a from that I need to fill in to have the claim struck out. What practically happens once I fill the form in.

[elsinore]

I might need to do this with one of my cases, is there a from that I need to fill in to have the claim struck out. What practically happens once I fill the form in.

 

You can make an application to the Court using form N244. If it’s a High Court case it will be an N244 (CC).

 

You can state whether or not you want a hearing to consider your application. (The judge won’t necessarily agree with your request).

 

Courts don’t like awarding judgment by default if they can ‘persuade’ a defaulting party to comply and have the case heard. So they might give the Claimant another chance to comply by a certain date, failing which the claim will be struck out.

 

Whatever the judge decides to order after considering your application, will be advised to both parties in a Notice.

 

I thought the fee was £40, but I read in HMCS Fees document that if you are requesting judgment by default, it’s free. So you might want to check that out with the Court.

 

Els

[guzzleguts]

dhoom, any up date

 

About to be going through same situation soon.

 

Hope it went well.

 

GG

[dhoom]

there is a hearing in the next 10 days-Summary Judgement.

 

They have refrained form supplying me any information under CPR

[guzzleguts]

I wish you the best of luck.

 

They have just put it in the solicitors hands, waiting for their first letter.

 

GG

[guzzleguts]

dhoom

 

hope everything is going well.

 

Could you tell me when you have a min if they didnt comply to your cpr and wouldnt give you a breakdown of charges how did you proceed.

 

They have started legal action now and the charges route you are taking may well be what i need, some of the charges on the loan set up and the business account are extortionate

 

I know you must have your hands full ewith this but i would appreciate the info.

 

Thanks GG

[dhoom]

dhoom

 

hope everything is going well.

 

Could you tell me when you have a min if they didnt comply to your cpr and wouldnt give you a breakdown of charges how did you proceed.

 

 

They didn't comply with the CPR and all they gave me way a copy guarantee and printed ledger sheets purporting to be bank statements. I have no way of verifing the statements since I do not hold the company records.

[dhoom]

I have a summary judgement in the next 2 days, is there any way I can have this postponed.

 

Especially since they have not complied with the CPR and also in their statement of truth they they have attached a letter which they say they have sent me, but i actually have the original with a different date and amount.

[Goldlady]

What do you mean by a summary judgement? Can you post up what the court document actually says? If they have no paperwork to back up their claim I can't see what the claim is based on.

[dhoom]

What do you mean by a summary judgement? Can you post up what the court document actually says? If they have no paperwork to back up their claim I can't see what the claim is based on.

 

Sorry I should have said hearing for a summary judgement. Which is basically an application by a claimant to say that i have no defence in the matter and there is no need to go to trial.

[Tarka2]

Hi dhoom,

this is where we are at the mo,our last court appearence,was for barclays to strike out our defence(N244)on the basis they say we havent got a defence.

 

on the day we informed the judge that we had not had a response from barclays,for our request for documents,proof of debt etc etc and their inaccuracies throughout their claim.

 

The judge ordered we must have total disclosure and request any paperwork we require,if they do not comply then they will be ordered to comply by him or the case be struck out.The application to be struck out was not heard.

 

he told us he had read the limited gaurentee and also our defence in great detail,and told us if he had to make a descision now based on our defence,then he would have no option but to grant a possession order,but suggested we gain specialist legal advice now,case management hearing now set,to see if we go to trial.

 

we are now seeking specialist advice,if anyone knows of any good lawyers specialist in this area,we would appreciate any advice.

[dhoom]

Tarka 2

 

What sort of limited gurantee did you give was it the same as mine. Have you got your defence posted anywhere.