stat demand from RBS - please help

[preggers]

A bit of background - My husband went into partnership with a 'friend' five years ago - both were directors - this 'friend' was then found out to be raising fake invoices which RBS paid out on.

The first my husband knew of this was when a letter arrived asking for payment of debt.

The 'friend'disappeared, the business was wound down - we engaged a solicitor to try and clear our name from this debt.

Nothing happened for 3 years and our solicitor advised us to 'let sleeping dragons lie' - which we did...........until last friday when a man turned up with a stat demand for £140 grand!!!!

RBS have not served papers on the other guy - who has been heard boasting 'he got away with it'

 

We are distraught - we rent our property because of the fall out from the winding up of the company and we are in debt - this will finish my husband.

 

I know I have to apply to have it set aside but I havent a clue what to put on the witness statement or who I should contact for help

 

Can anyone offer any advice - I would be very grateful

[42man]

I'm desparately sorry to hear this...did you go to the police about the fraud ? How was the stat demand delivered to you ?

[preggers]

the stat demand was delivered to my husband at the front door of our house last friday - and we had started to put together a case against the ex partner when it all went quiet with RBS - and stayed quiet for 3 years - and our solicitor advised to let sleeping dragons lie

Can you help me at all ? thank you

[42man]

Unless it is proven that your husband is an innocent party to what has happened or the police investigate and you have a crime number then I think it might be difficult to defend. If you have no assets then bankruptcy would only really be a last resort. However can you see any way of either getting his 'friend' to cough up or paying off the debt ? If not then BR may be the only answer.

[sequenci]

Hello there.

 

Was the business set up as a partnership, or was it a ltd company?

 

Do you guys have any assets (e.g. a car?)

 

I'm sorry to learn about the situation, it's not nice at all. Having said that bankruptcy would write all of that debt off (and any other debt that there might be) - so it would allow you a fresh start. it's not always a dire option - for some people it's a great way of making a fresh start.

 

We're here to help as much as possible, but also you could consider giving business debtline a call to see what they make of the partnership situation. 0800 197 6026.

 

best wishes,

 

Seq.

[preggers]

Hi there and thank you so very much for replying

 

The business was set up as a limited company

 

My husband has a company car and I have an old car

 

His 'friend' has no intention of paying back anything he stole from the bank - we are willing to go to court to clear my husbands name but are at a loss as what to do with this stat demand initially!

 

Are there any threads on what to actually put on the form? Im afraid I find it rather confusing but we need to have this set aside and I have a time limit as you know.

I want to put my reasons for setting aside as succinctly as possible and apart from stating we strongly dispute the debt is his I have no 'legal speak' to speak of!!!

 

Can you lovely people help atall?

[buzby]

A limited company is just that.... limited. Your husband is not directly responsible for the debt unless he personally guaranteed it - in which case, the other director must have done so as well. If there has been fraud, did he report it to the police? If not, he may well be seen as complicit and be made liable as a result. Are you aware of any action being taken by the bank against the other director, and if not, why not?

[Johno100]

A limited company is just that.... limited. Your husband is not directly responsible for the debt unless he personally guaranteed it - in which case, the other director must have done so as well. If there has been fraud, did he report it to the police? If not, he may well be seen as complicit and be made liable as a result. Are you aware of any action being taken by the bank against the other director, and if not, why not?

 

All the indications are that this was a factoring / invoice discounting fraud on the bank. The bank are the 'victims' and it would have been for them to report the matter to the police, however for reputational reasons they alway very reticent to do so. Instead in an effort to recover their losses they rely on guarantees given by the directors when the factoring / invoice discounting agreement was entered into.

 

Assuming both directors signed the agreement (which is not clear) then they would be jointly and severally liable for the debt. The OP should seek urgent advise ideally from an insolvency specialist solicitor or failing that an Insolvency Practitioner.

[preggers]

Johno you are correct - it was a factoring/invoicing fraud that was committed.My husband thinks he did sign the agreement along with the other director - who as Ive explained disappeared and the bank have not tried to contact him in any way ( I know this as he is boasting to mutual friends that he 'got away with it!')

 

I am not disputing the debt exists but I strongly dispute that my husband should be made the fall guy. I am willing to go to court to try to resolve it but firstly I need to set this Stat Demand aside

 

Does anyone know if there is a thread with an actual template of a witness statement which I could peruse?

 

I have searched under Stat Demand but found nothing which helps me to push my case for having it set aside - apart from the fact we strongly dispute it is his debt

 

Thanks once again for all replies

[42man]

You'll need forms 6.4 (set aside) and 6.5 (affadavit), I think you can find them here - http://www.consumeractiongroup.co.uk/forum/showthread.php?86067

 

A witness statement will look like this -

 

Statement: Defendant

Party:

Statement:

Exhibits:

Date:

APPLICATION TO SET ASIDE THE STAUTORY DEMAND

OF MR (name)

_________________________________________________________

statement of MR (name)

_________________________________________________________

I, Mr (name) of ………(address)……………………………… will say as follows:-

(your statement)

I believe that the facts stated in this witness statement are true.

SIGNED ………………………………………..

MR (name)

Dated ………………………………………..

[42man]

When you have completed the documentation, you should take it to your local court (which should also be the court named on the statutory demand). Your documents need to be sworn in either at the court itself (which is normally free - or central London courts normally charge around £12), or you can get them sworn in at a local solicitors office (which usually costs about £5). Just a note that the named court on the stat demand apart from being your closest, should also be a court that handles bankruptcies - so for example Epsom County Court only handle Divorce, Family and Civil cases. (and not all county courts do) It might be worth checking here that the court named does indeed handle 'Insolvency' - http://www.hmcourts-service.gov.uk/HMCSCourtFinder/CourtList.do

[42man]

Make sure there is a name and telephone number on the demand otherwise if not filled in correctly could be an abuse of process (along with the wrong court) - but sometimes this can depend on a judge..

[42man]

And make sure you make copies of everything !!

[42man]

Are RBS aware that there is a dispute ?

 

The key parts of the judgement on abuse of process are:

 

 

Mr. Davies relied on the well-known passage in the judgment of Harman J in Re a Company [1983] BCLC 492 in which he said:

 

"First, it is trite law that the Companies Court is not and should not be used as (despite the methods in fact often adopted) a debt-collecting court. The proper remedy for debt collecting is an execution upon a judgment, a distress, a garnishee order or some such procedure. On a petition in the Companies Court, in contrast with an ordinary action there is not a true lis between the petitioner and the company which they can deal with as they will. The true position is that a creditor petitioning the Companies Court is invoking a class right (see Re Crigglestone v. Coal Co. [1986] 2 Ch 327) and his petition must be governed by whether he is truly invoking that right on behalf of himself and all others of his class rateably, or whether he has some private purpose in view. It has long been an order that a petition presented for the purpose of putting pressure on the company is not properly presented: see Re a Company [1894] 2 Ch. 349 and, in a slightly different context, Re Bellador Silk Ltd. [1965] 1 All ER 667."

It is, of course, right that a bankruptcy petition must not be utilised where the petitioner knows that the debt is the subject of a bona fide dispute, but chooses to proceed with the petition in any event, so as to put illegitimate pressure on the other party to pay the debt. But the authorities cited above cannot be taken as authority for any wider principle or proposition. In my judgment, the correct approach to the facts, in a situation where the petition has failed and it is subsequently suggested that the presentation was malicious, was that applied in Partizan Ltd v OJ Kilkenny & Co Ltd [1998] 1 BCLC 157 by Rimer J, when he concluded at page 173:

 

"It follows that I am not satisfied that, when it presented the petition, Kilkenny was moved by notice or considerations different in any way from those which ordinarily motivate creditors who petition to wind up a company on the grounds that a debt claimed to be due to them (not being one which is regarded by the petitioner as disputed on substantial grounds) is unpaid despite demand; namely, at least an element of hope that, if the company can pay the debt despite its previous failure to do so, it will pay it and, if it cannot do so, a hope and expectation that it will be placed in liquidation so that there can be an orderly realisation of its assets for the benefit of its creditors generally."

What the cases show (and the point I take Rimer J to be addressing by the phrase in brackets in the quotation from his judgment set out above), is that the presentation of a petition is an abuse of process only if the petitioner knows or believes that the debt is in truth the subject of a substantial dispute.

[buzby]

I'm at a loss to see what the set-aside request will do. There is no issue that the parties entered into it knowingly, and the fraid on the factoring company was perpetrated. Whilst it may seem unjust that only one of the parties were pursued by the bank, the point is it doesn't matter (to them). They will pursue whoever is the easiest to call to account, as it will be up to the aggrieved party to seek redress from the defaulting person in a civil action.

 

I cannot see any valid challenge that will move this liability to the 'other' party - as both directors will vave been jointly liable. The fact one of them didn't know what the other was doing has no relevance to the original action. If there have been issues of fraiudulent behavior, I'd strongly suggest formal legal representation to protect your interests, as a a set aside will simply re-run the case, with the same result, unless a solicitor can point to a loophole that removes the liability from your husband. As it stands, if a SA is granted, and you turn up in court and argue it 'wasn't me guv' will result in the same verdict, plust the additional costs of the bank as the claimant added to the bill.

[Johno100]

Fully agree with Buzby. The OP does need urgent and specialist legal advice, this is not a case for DIY.

 

Looking for a loophole in the agreement could be one avenue of attack by a legal representative. For example were the individuals invited to obtain their own legal advice before signing the agreement and was that detailed in the agreement or elsewhere? Of course there is the danger that the 'missing' director is the one who benefits from a loophole not the OP's husband.

 

If the OP had not said that they were struggling financially with other debts prior to the receipt of the Stat Demand I would have suggested negotiating with the bank. The bank are only interested in getting back as much money as they can. Therefore any offer in excess of what would be expected to be realised in a bankruptcy would be looked on favourably. But as there are other debts and few assets then bankruptcy may be the way to go and of course the bank gets to pay for it as well.

[sequenci]

OP: You may wish to get some free advice from Business Debtline on 0800 197 6026

 

Also, you may find that there is a law centre in your local area:

 

http://www.lawcentres.org.uk/lawcentres/

[liquidauctions]

OP what you need to do is check to see if any personal guarantees were taken in the agreement. If non were taken then the debt is not yours to worry about the end and. The case would be about not winding down a company in the correct manner.

[crabbingtime]

I have to agree with Buzby that the demand could be set aside on the basis of the other director. The liability sounds very high indeed, without doubt this will include termination charges which are normally dreamt up in some way or another. The dispute may be an avenue but you run the risk of admitting some of the liability and on that basis the Court may not set the demand aside. It is however improper that a creditor should serve a demand knowing the debt is disputed.

 

Like many other members it may be best to seek legal advice on this......

 

You say the Limited company has been wound down, was it Liquidated or did it merely cease to trade. Did the company have any assets the bank took security over for the discounting agreement? Was a personal guarantee signed by your husband?

[preggers]

Just to update this thread - after long and protracted communication with both the Head of Finance and of Recoveries for RBS - I am delighted to say the case is closed!!!

They have decided my husband is truly a victim in all of this so we are delighted - thanks once again to all that offered advice and help - much appreciated!!

:-D

 

[sequenci]

Great news!