Bailiff persuing defunct company and excessive fee - help

[meekle]

Hi all

 

I started a limited company in an office unit back in November last year. Things didnt go well, so as of June this year i put the company on ice, and started a new company.

 

I transferred the old companies computers and equipments etc to the new company through my books so the only thing that the old company had was the original tenancy agreement. The new company took over paying the rent, but in my stupidity i did not change over the name on the rent account.

 

Anyways, teh old company had an outstanding business rates bill, and it was one of those things that i was going to get around to. At the beginning of this month a bailiff turned up at the office (it was locked at the time) and demanded monies for outstanding business rates.

 

I got hold of the council and explained that as the property was now on ice, and that the new company was in residence, i would be more than happy to start a new business rates account un the new company name and make terms to clear the old company debt. They were having none of it, and told me to open up the office to let the bailiff do his duty.

 

I denied his request to open up, and then he told me that he had the landlord with him with a set of keys to open up.

 

I met him there at the property - i had kept him waiting nearly 4 hours by this time, and sure enough the landlord was there, lurking in the background. I made arrangements with the council to pay £500 of the outstanding 1800 the next day and the rest by the middle of september

 

in order to do this, the bailiff insisted on a walking possession and if i did not let him in, the landlord would and all arrangements would be nul and void.

 

So i let him in, and he did an inventory of the goods. However, i reminded him that the goods belonged to the new company - he wasnt interested and listed them all the same.

 

He then served me the possession and i noticed that not only had he charged me the £20 attendance, and £24.50 van fee, he charged me "£400 miscellaneous bailiff costs" which he said was due to him waiting for me to turn up.

 

This meant that the 600 that i paid over the next two days, just about covered his fees, and didnt even touch the outstanding amount.

 

I now have two weeks left to pay this off, and i am concerned that if i cant pay them, he will return and empty my office, even though the equipment, tools etc are belonging to the new company on paper and not the one in debt.

 

Any advice on how to either delay them whilst i make payment or stop them would be grateful

 

Many thanks

 

Mike

[tomtubby]

It is amazing how many bailiff companies charge £200, £300 or £400 to BUSINSSES when enforcing NNDR.

 

They simple CANNOT do this.

 

Before advising further, could you give a brief description of the goods listed and whether you are you the only person working in the company? This is important as the goods can be exempt if they are for "your use personally in the business".

[meekle]

Reading further on the subject, it would appear that by threatening to take all the goods in the property - regardless of alledged ownership is incorrect.

 

According to the HMCS guidelines on collections by "Contractors" - the first should have written to the company to inform them of the intended collection. this was never received.

 

Secondly, when they turned up they told me they had the power of forced entrance, via the landlord. This apparently is also not true, they can not force entrance into the property without the occupiers permission

 

also, it would appear that they can not levy on goods taht do not belong to the debtor, they can not levy on goods at all if the debtor appears or can prove that they are suffering from a long term illness as per section 6.31 ( i suffer a chronic condition that i have received chemotherapy for and can not be cured) and also goods can not be levied upon if their removal woudl cause considerable harm to the business, possibly resulting in loss of employment.

 

Well, considering they never contacted me prior to their visit, i am ill (but will let that lie for now) and if they seize my goods i will need to wind up the company can i get this overturned and back to the council for a payment plan?

[surfaceagentx20]

Got the picture, but first, a few questions:

 

By placing it 'on ice', I assume you mean the company simply ceased to trade?

 

What did the new company pay the old company for the purchase of its computers and equipment?

 

What became of the money new co paid to old co? If nothing was paid, why not?

 

So you let the bailiff in? Not the landlord?

 

Did the bailiff mention anything about 'interpleader proceedings' do you recall?

 

Has the landlord served any 'nasty notices' following the bailiff's attendance? Are you up to date with the rental? Is the landlord likely to be willing to substitute new co for old co as the tenant do you know?

 

The bailiff's charges appear irregular. I'll let you know what I would expect them to be on a non-domestic rating charge of £1800.00

 

Get back to me with your answers and I'll let you know what my opinion on your position is to include an assessment of what I would expect the bailiff's charges to be in the next couple of days say.

 

x20

[meekle]

The company did just ceae trading. i was advised by companies house that if it ceaed trading for three months it could be vluntarily shut down. SHould i have liquidated it?

 

The office furniture such as desks etc were purchased by the old company from a second hand store and so totalled no more than 150 quid.

 

The PC's etc were all loaned to the company by me, beig either second hand or redundant kit i had lying around, and teh old company was due to pay me back once in a financial position to do so.

 

The whole office contents are probably not worth more than £400, so that is what the company paid the old company for them, although to be fair i just transferred the debt owe by the old company to the neew company so that the new company has had a loan from the director now to the tune of £400.

 

The landlord has not even contacted me since the event. Nothing was mentioned about interpleader proceedings at all. what are they?

 

The rent is fully up to date. The landlord probably would substitue a new company as the little row of shops he owns are now down three offices due to the recession so he probably could do with the money

 

Is there anyway to stop the bailiff coming around?

[surfaceagentx20]

The goods

As I understand the situation, the goods now seized comprise goods as follows:

[1] office furniture, purchased by and once owned by old co, value £150.00 or less, and

[2] computer equipment, being your personal property, provided to old co on loan with an option for old co to purchase, which purchase evidently occurred to enable old co on ceasing to trade to

sell [1] and [2] above to new co for the price of £400.00 which purchase was funded by a loan you made to new co.

In those circumstances, the property seized is the property of new co and you are a creditor of new co. to the tune of £400.00

Alternatively, if old co did not pay for the computer equipment, ownership of the computer equipment arguably did not pass to old co and therefore old co was not able to sell the computer equipment to new co.

That said getting into a fancy analysis of who owns what is probably unprofitable. T the value of all the stuff seized is nominal and would not, if sold, make much of a dent in the business rates liability. In truth, a sale would probably not cover the expense of a sale. I imagine the real value is personal to you / to new co in reference to the data on computer and the ability to use it to run new co.

Interpleader Proceedings

Where a bailiff seizes goods in the possession of A in order to satisfy a liability owed to B, but the goods are claimed as in the ownership of C, the bailiff is entitled to apply to the court to adjudicate on the question whether the goods may be used to satisfy the liability or not.

In practice, C will notify the bailiff that he is the owner of the goods. The bailiff will then notify B. In notifying B, the bailiff will usually require B to acknowledge or dispute the claim of C within 7 days of receipt of the notice. If B acknowledges the goods belong to C, the bailiff withdraws. If B disputes that the goods belong to C, the bailiff, as interpleader, will begin the proceedings for the adjudication.

Rarely does B dispute C’s ownership for the simple reason that B has no idea who they belong to. The knowledge is A and Bs. Were B to dispute C’s ownership and the court decided the goods did belong to C, B would face liability for the costs of the bailiff, of A and of C.

In those circumstances, if new co wrote to the bailiff claiming that the goods seized were goods which it owned, the likelihood would be that the council would not contest new co’s ownership and the bailiff would thereupon withdraw from walking possession.

Alternatively, new co might complain to a magistrates pursuant to The Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 reg. 15.

Bailiff Powers

The bailiff does not have power to force entry until such time as he has seized goods belonging to the debtor and requires entry to the premises in order to remove those goods.

The bailiff would not have the power to compel the landlord to admit him and had the landlord admitted him that act may have been a breach of a covenant contained in the lease. However, I suspect there exists an equal and opposite covenant in the lease and made by you, that you will not permit the premises to suffer distress or some such similar wording. It’s a bit of tit for tat.

Further and since this is a liability owing by a limited company, considerations in regard to the health of an officer or employee of the company would not be relevant on the question whether the warrant to levy was enforceable.

Bailiff Fees

The charges which may be applied for by a LA carrying out a levy are set out in Schedule 3 to the 1989 Regulations. Those charges have been amended frequently since 1989 and are now identical to the Schedule 5 charges which may be recovered for council tax arrears.

On the basis the bailiff attended with a vehicle of adequate proportions to load the goods seized into it and the intention of doing so following a levy, but instead entered into a walking possession agreement, I assess his max charges, where £100.00 is allowed for the vehicle, to be £234.00, made up as follows

Fee Type

A(i)

Visit where no levy made

£24.50

A(ii)

Visit where no levy made

B

Levy

% Rate

First £100

24.5%

£24.50

Next £400

4%

£16.00

Next £1500

2.50%

£32.50

C

Attendance with vehicle / no levy

£100.00

D

Removal and sale

E

Walking possession

£12.00

F

Appraisal

G

Sale

H

Release

£24.50

£234.00

 

Voluntary Strike-Off v Winding Up

A private company may apply to be struck off pursuant to Companies Act 1985 s652 if in the 3 months prior to its application, the company has not traded, changed its name or disposed of property or rights in the course of business.

The application is made in Form 652A.

A copy of the 652A has to be supplied to all creditors and other appropriate persons within 7 days after sending in the Form 652A to Companies House. That would include the council. Creditors may object.

You should carefully check s652 and the regulations before making an application for voluntary strike off. There are far to complex to include here and where I know so little about the company.

What I read about old co suggests that it would not have the means to fund its own winding up and the reality is that if the council is the only creditor, the council would not waste money with compulsory winding up proceedings.

x20

[surfaceagentx20]

Formatting has gone a bit wonky, but hopefully you will be able to follow my charges assessment.

 

I intended to say the bailiff does not have power to charge you 'waiting time' or any fee based upon time spent or wasted or calculated at an hourly rate.

 

x20

[Heathliver]

Under schedule 5 a bailiff may not charge for both an visit and a levy visit, although as we all know from previous posts they nearly always try to do so.

[surfaceagentx20]

Heath,

I understand Schedule 5 to permit charges to be imposed for up to x2 pre-levy visits plus the levy visit (ie 3 in all) provided the visits occur on different occasions.

 

This may be your understanding too.

 

In this case I believe the OP referred to just one pre-levy visit followed by the levy.

 

x20

[Heathliver]

Sorry, badly written on my part, I was just making the point that bailiffs often charge both fees for the same visit. You are quite correct.

 

I understood that bailiffs could not charge a fee for waiting time when collecting for council tax, is this differant in the case of UBR?

[meekle]

Ok guys, i have the email address of the councils revenue guy who set the bailiff in action. I have prepared a response, can someone look over it and comment as necessary

 

Ta

 

Further to our conversations over the previous weeks, i did indeed meet with your bailiff at the property and paid him the following sums:

£100 cash, and £500 the next day via card

 

It would appear that he has used these monies to pay his fee and not the debt to yourselves. Whilst i understand that his fees need to be covered, the fees chargeable by a bailiff are laid down in statute.

Whilst he has charged a van fee of 24:50 and an attendance fee of £20 these are within the statute. However, he has charged £400 for "bailiffs Costs".

 

This is over and above the statute charges and falls outside the scope of a fee and into the realms of penalty in the eyes of a court. As such he has no jurisdiction to charge a penalty, thus the particular bailiff has committed an offense. He has posted a charge of £600 to date, whereas the actual charge when calculated using the HMCS own guidelines should be in the region £230 - 250.

 

Whilst viewing the HMCS guidelines it was also interesting to note that prior to a vist from a bailiff, contact protocols dictate that a letter is posted to the defendants address, no less than 48 hours before the event stating that the named bailiff will be attending. This was never received and therefore the notice was incorrectly served, rendering it invalid.

 

Also, whilst allowing him entry into the property under duress, we carried out a walking possession as agreed with your colleagues. When i provided him with evidence of the new company and evidence of ownership of certain goods - he levied on all goods present, irrespective of ownership.

This is again a breach of law. If the ownership of goods is in dispute, the bailiff must enter into interpleader proceedings notifying you, as creditor, of the dispute within 7 days of the levy. This, it would appear, he has not done. What he should have done is apply for adjudication, which he has not.

He also stated that he would enter the property and seize goods with or without my presence prior to the the WPO being signed. He was going to achieve this by coercing the landlord to assist entry. Yet again this is another breach of the law, where a bailiff can not enter a property without permission of the occupier.

All these above points render the WPO invalid and unenforceable. As your bailiff has acted illegally, it is quite within my rights to apply to the courts to get him struck off the register and sue for damages caused to my business. Please note, that as employer of the bailiff, the Council can be held jointly liable for the conduct of its employees, be they employed or contracted, therefore, any illegal activity on the behalf of the bailiff will also mean that the Council have acted illegally and can equally be held to account in court.

However - I wish to keep this an amicable agreement, therefore, in lieu of the WPO being invalid and unenforceable i offer the council the option to take the debt back into its own hands, remove the bailiff from the case and enter into an agreement with myself to pay off the balance owed to the council at the rate of £100 per week for the next 17 weeks, or until the balance is paid off in full.

Should the bailiff make contact again, with the intent to levy a new WPO or attempt to enforce the invalid one, this option will be removed and a formal complaint issued to court regarding the illegal activity of the Bailiff and their employer - namely the Council.

I look forward to your acceptance of this offer within 24 hours, along with details of the account and reference it needs to be paid into so that i can start making payments on this account.

[meekle]

surfaceagent - there was no pre levy visit. He turned up on one day only and waited until i got there to levy a WPO. thats it. i had no prior warning from the bailiff of a visit, just the letter from the council stating that unless payemnt was received by XXX date, bailiffs would be instructed

 

Does that count as prior notice?

[meekle]

hello!

 

Sent email to Council, urging them to withdraw bailiff due to unlawful WPO and accept my payment plan. They sent me a standard response saying that they are looking into the complaint and will aim to respond by 29th September with a decision as to whether they accept my complaint or not.

 

So, with the fact that the bailiff is due some point in the next 7 days, what is my next course of action? Shall i send in the Form 4 complaint? will that stop him coming over to remove goods? Shall i empty the office of possessions before he comes around or is that illegal?

 

Advice urgently required please? As they seem to be active in this area on a thursday i would expect a visit either tomorrow or next thursday.....

[surfaceagentx20]

At this point in time I take the view that your (ie old co's) legitimate complaint is confined to over-charging. Old co, as debtor has no legitimate interest in the bailiff taking goods which do not belong to it. It is only new co which has an interest in the goods which have been seized and in this regard it is for new co to put a claim of ownership to the bailiff (carbon copied to the council).

 

Your email was to the council only and it is not clear from what you posted that the claim of ownership was a claim made by new co. The proper thing to do is for new co to put the bailiff on notice in writing that new co claims ownership of the goods seized. The notice should be to the point, listing the goods and be unfettered with any other area of dispute.

 

x20

[meekle]

Right. Council took the debt back after i lodged a complaint. I entered into a payment plan directly with ther council whilst they investigated the complaint.

 

I have now received their response, basically disputing everything i have said, and passing it back to the bailiff.

 

Apparently as my statement of events differs from the bailiffs, they are going with the bailiffs statement. The bailiff disputes that he said he would charge me to go to the van to get his court identification. He stated that he produced this on arrival. This is not true. he had his ID card, not his warrant.

 

He states that he advised me of the £50 per half hour waiting and the council have informed me that this is entirely within the set scale of charges

 

the council also state that the bailiff acknowledged that i informed him that some of the goods belonged to others than the debtor, but because i could not prove it there and then he did not need to enter into interpleader proceedings as he was not acting as a high court officer therefore it is irrelevant.

 

The council therefore do not believe that the bailiff acted unlawfully and therefore have passed it back to the bailiff for collection.

 

Any thoughts?

[surfaceagentx20]

The question whether the council prefer your version of events or the bailiff's is an irrelevance. Likewise what they think is said in the 1989 regulations.

 

The point is that the goods which have been seized are good which do not belong to the debtor (ie new co owns them). I still do not know whether new co has written to the bailiff saying the goods belong to it as I advised on 2 September (post no6) and repeated again on 3 September (post no14). If new co has not put a claim in writing to the bailiff it would be a very sensible thing if it did.

 

x20

[meekle]

New company has written to Bailiff to confirm what goods are companies and what belonged to old company. The council also tell me that the Interpleader Proceedings are irellevant. Quote

 

"In your letter to Bailiff and Co dated 4th September 2008, you refer to the initiation of interpleader proceedings. Bailiff and Co have advised us that the information regarding interpleader proceedings is relevant to where a High Court Enforcement Officer is executing a writ of Fi Fa, which also results in the seizure of goods. In that instance a third party claim would be resolved by interpleader proceedings, but Bailiff and Co, advise that they were not acting in that capacity in this case"

 

So, are they right or is the Bailiff trying to gloss things over with the Council?

 

The bailiff has asked if i would please send all evidence and documentation to him within 7 days to irrevocably prove that certain goods that i have listed in the letter issued to them on the 5th September belong to others than the debtor. "IF" they accept this evidence they will amend the WPO accordingly.

 

The council also believe that the charges to date levied by the bailiff are correct. Where can i find the legal document (PDF of similar) so that i can demonstrate to the council that £50 per half hour waiting in a van is not a legitimate charge as currently they believe that the charges are correct and therefore i have no case.

 

Thanks guys

[surfaceagentx20]

The bailiff is not the person to sit as judge and jury on an issue of ownership or demand that a third party produce irrevocable proof of ownership to his satisfaction. It is invariably the case that a creditor pulls out in a situation where ownership to goods seized is claimed by a third party on account of the fact that the Claimant can not produce irrevocable evidence that the third party is not the owner.

 

All the same, evidence of some sort is required though whether to admit evidence or what weight should be attached to what evidence is, as I say, a matter for the court not a bailiff.

 

Perhaps then a brief statement followed by a verification statement might suffice. Something like:

 

IN THE MATTER OF A LEVY MADE (DATE) UNDER WARRANT NUMBER (NUMBER) AT (ADDRESS)

 

I (your name) an Officer of (New Co) Limited of (registerd office) STATE AS FOLLOWS:

 

1 On or about (date) (New Co Limited) (the company) acquired in good faith and for valuable consideration the goods and chattels set out in the schedule below and which are now present at (address of premises) and which have been seized in execution under a warrant issued on the application of (Council) for the collection of non-domestic rates DUE from (Old Co).

 

Schedule

 

Here list the goods

 

2 The goods and chattels are the exclusive and rightful property of the company and the company is entitled to the immediate unencumbered possession of them.

 

I BELIEVE THAT THE CONTENTS OF THIS STATEMENT ARE TRUE

 

Dated

 

Signed

 

In sending the statement to the bailiff, insist that he bring it to the attention of the council with a requirement that they admit or deny the trtuth of your statement within 7 days of their receiving it.

 

Hope this might help.

 

x20

[meekle]

Thanks. I will pen this out ASAP