Ltd Building Co-Fraudulent activity-walked off job & Director put funds into own bank account

[ZBanfield]

HI everyone,

 

New here and need help.

 

Whilst at work in June 2014 another member of staff approached me stating they ran a building firm. He is the Director, lets call him Mr. X of the Limited company and his brother is the secretary.

 

They managed their own team of builders to do the work.

The work was not completed, items were stolen and damaged and they walked off the job having taken £3K in cash and bank payments combined between July and August 2014

 

Mr. X provided one invoice on letter head paper with a false address on which is a derelict building site. I have obtained the correct registered address from Company's House.

 

I have followed legal procedure writing recorded delivery letters to the correct address provided by Company's House which is also his home address asking for resolution but all have been ignored.

 

In March 2015 Mr. X filed a DS01 form to strike off the company to obstruct me commencing legal proceedings.

 

I objected to Companies House regarding the DS01 form and my objection was upheld and striking off and dissolution of the company has been suspended until 30th July 2015.

 

I have also logged all this information with Insolvency Services at Companies House, Action Fraud and Serious Fraud Office but nothing has happened.

 

In addition to being Director of the company Mr. X is employed full time where I work and a second job too.

 

I approached my Manager at work in June and explained everything.

 

On Saturday 11th July 2015 my Manager requesting a meeting with Mr. X (The Director of the building firm and employee) and myself.

 

At the meeting, he admitted he took all the money from me but gave the money to his brother Secretary of their Company.

 

He stated that he no longer lived at his home address which is also the company registered address and would not be returning any of the money taken as his brother now had this.

 

Mr. X personally provided me with the bank details via email and in person to which to make the payments and requested specific cash amounts in advance. Originally, he stated that these were payments to his Limited Company to pay for building works which I contracted with him and now stated the monies I had paid in cash and bank payments had been taken under false pretences.

 

He stated that these cash and bank payments he had requested I pay had in fact been made directly into his own personal bank account which he had then transferred to his brother's private bank account along with cash

 

He stated that the payments received were not related to the Limited company at all.

 

Despite being the sole Director of the company, he took no responsibility and blamed his brother for everything now stating that it is his brother who runs the company.

 

He stated that he would not be returning any of the money taken as his brother now had this.

 

I have reason to believe he is still registered as living at this address as is his vehicle and driving licence and continuing to engage in fraudulent activities.

 

All the evidence suggests that he intentionally intended to defraud me from the outset and he is confident that by now stating his brother only is responsible for the fraudulent activity he cannot be held responsible for the activities of his company which he is the sole Director of. Having now discovered that I was asked to make payments to a personal account unrelated to the company's activities, I also suspect they intend to deceive HMRC by avoiding payment of the relevant taxes on the income taken.

 

I originally had been corresponding him under the Ltd Company as Director and was going to the small claims court. Now he has admitted to taking the money into his own personal bank account and then passing to his brother do I need to start fresh correspondence with him personally?

 

Do I take him to the small claims court of the company? What exactly do I need to do? I telephoned Consumer Gov but they said they are unable to advise me as this is too complicated and that I need to speak to CAB and I cannot get through to my local office.

 

I have seen sections on line such as:

 

Fraudulent Trading

 

6.3 Section 213 of the Insolvency Act 1986 (the “IA”)

provides:

 

“213(1) If in the course of the winding-up of

the company it appears that any business of

the company has been carried on with intent

to defraud creditors of the company or

creditors of any other person, or for any

fraudulent purpose the following has effect.

 

213(2) The Court, on the application of the

Liquidator may declare that any persons who

were knowingly parties to the carrying on of

the business in the manner above mentioned

are to be liable to make such contributions (if

any) to the company’s assets as the Court

thinks proper”.

 

Really stressed and confused.

 

I have been doing all this on my own as can’t afford a solicitor and am exhausted and depressed. I would really appreciate it if anyone on this forum help?

[SabreSheep]

This is outside my expertise but

 

I would be sending a letter before action giving him 7 days to refund

 

then lodge a N1 claim form against him/the company

 

once that is lodged I would be asking company house to delay the dissolution again showing proof of a served N1 claim form.

 

For a small claims you will not require a solicitor.

 

 

See what others say

[ZBanfield]

This is outside my expertise but

 

I would be sending a letter before action giving him 7 days to refund

 

then lodge a N1 claim form against him/the company

 

once that is lodged I would be asking company house to delay the dissolution again showing proof of a served N1 claim form.

 

For a small claims you will not require a solicitor.

 

 

See what others say

 

 

Many Thanks. I have done the letter before action. I am delaying filing the court papers as unsure who to take action against. What is frustrating is he keeps changing his story, so I am unsure to pursue the company or him personally for the funds taken.

 

Will wait and see what others say. Thanks again.

[steampowered]

I think you should proceed to sue him personally. Suing the company is pointless because it I doubt t the company has assets.

 

Fraud is a justification for 'piercing the company veil' and suing directors personally for their misconduct. If you can convince the judge of the facts you have described in your post, then that certainly sounds like fraud to me.

 

The legislation you have posted is not relevant. Fraudulent trading is something that can only be applied for by a liquidator of a company and not by creditors like you. The concept of 'piercing the veil' to sue directors personally is very well known but it comes from common law, so you don't have a nice piece of legislation to read. You can however also rely on this part of the Insolvency Act: http://www.legislation.gov.uk/ukpga/1986/45/section/423.

 

I would kick it off with a formal letter before action addressed to him personally giving him 14 days to confirm that he will pay up, otherwise you will sue him personally on the basis of fraud. 14 days is the timeline specified in the court rules on pre-action conduct. If you don't get a good response, proceed to issue a claim.

 

The claim itself can be quite simple. There is a requirement to clearly specify what you are alleging when fraud is claimed - a general allegation of fraud is not enough, you do need to clearly state what statements were made by the defendant which were fraudulent and induced you to part with your money.

[ZBanfield]

I think you should proceed to sue him personally. Suing the company is pointless because it I doubt t the company has assets.

 

Fraud is a justification for 'piercing the company veil' and suing directors personally for their misconduct. If you can convince the judge of the facts you have described in your post, then that certainly sounds like fraud to me.

 

The legislation you have posted is not relevant. Fraudulent trading is something that can only be applied for by a liquidator of a company and not by creditors like you. The concept of 'piercing the veil' to sue directors personally is very well known but it comes from common law, so you don't have a nice piece of legislation to read. You can however also rely on this part of the Insolvency Act: http://www.legislation.gov.uk/ukpga/1986/45/section/423.

 

I would kick it off with a formal letter before action addressed to him personally giving him 14 days to confirm that he will pay up, otherwise you will sue him personally on the basis of fraud. 14 days is the timeline specified in the court rules on pre-action conduct. If you don't get a good response, proceed to issue a claim.

 

The claim itself can be quite simple. There is a requirement to clearly specify what you are alleging when fraud is claimed - a general allegation of fraud is not enough, you do need to clearly state what statements were made by the defendant which were fraudulent and induced you to part with your money.

 

 

Hi there,

 

Thank you very much for your advice and information. I haven't been able to get a lot of clear legal advice or support before this and am struggling to get my head round everything and what to do.

 

I have a few more questions and would really appreciate your time:

First thing due to time factor is

 

 

1. 2. Do I need to contact Companies House again and object further to the dissolution of company at this is planned for 30th July and explain I am pursuing the Director personally - Does the Company need to be active for me to pursue him personally - is it relevant as the previous paperwork was addressed to them and him as Director?

 

 

2. Legally, is it correct to just write one letter titled "Letter Before Action". Do I need to state any reference to fraud in the letter title? Do I reference the Insolvency Act? Cut and paste into letter?

 

I assume I simply address to him personally at last known address, (which is also the company trading address). Would it be correct to reference and attach all the previous correspondence to Black Velvet Corporation as this form part of the evidence?

 

When I did the correspondence to the company I was told to send three letters before Letter Before Action., as I have to be shown to give him fair time to respond or judge may frown on being so quick to file for court?

 

 

3. Is there any positive efforts to escalating matters with our employer and whistle blowing there for fraud?

Edited July 21, 2015 by ZBanfield
Missing detail

[steampowered]

1. Legally, is it correct to just write one letter titled Letter Before Action, attach and reference all the previous correspondence to Black Velvet Corporation? When I did the correspondence to the company I was told to send three letters before Letter Before Action., as I have to be shown to give him fair time to respond or judge may frown on being so quick to file for court?

I'm not sure where you heard about three letters but that's nonsense. If you are worried about it have a read of the rules themselves at https://www.justice.gov.uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct. The standard practice is a single letter with concise details of the claim giving 14 days for a response.

 

There is no need to attach the previous correspondence as they should have this already. The letter of claim should be clear, self-standing and capable of being clearly understood by an independent person without reading the separate correspondence. That said, you can attach the previous correspondence if you want.

 

2. Do I need to contact Companies House again and object further to the dissolution of company at this is planned for 30th July and explain I am pursuing the Director personally - Does the Company need to be active for me to pursue him?

I think you should maintain the objection. The company is still liable and should not be struck off with debt outstanding. You could, in fact, sue the company and the director personally together in the same claim.

 

3.Is there any positive efforts to escalating matters with our employer and whistle blowing there for fraud?

I doubt it. It doesn't sound like this has anything to do with his employment. I doubt your employer would appreciate being dragged into a private dispute.

[ZBanfield]

Thank you,

 

I have maintained the objection for the company as you advised.

 

Our Employer held the meeting where he admitted taking the money into his own account. Am I entitled to a copy of the minutes and can my employer refuse to give these and/or making a statement as a witness?

 

Can Moneyclaim advise how to complete the form to sue the company and the director personally together in the same claim?

 

Do I need to mention that I am suing both him and the company in my letter to him personally or is the fact that the previous correspondence states I am pursuing the company adequate?

 

Do I need to reference Insolvency Act in my letter or just state I am pursuing him personally for fraud?

Edited July 21, 2015 by ZBanfield
Missing details

[steampowered]

Our Employer held the meeting where he admitted taking the money into his own account. Am I entitled to a copy of the minutes and can my employer refuse to give these and/or making a statement as a witness?

I don't think you are legally entitled to the minutes. But you can certainly ask for them.

 

In theory I guess you could ask the individual person who attended the meeting to act as a witness. Although this would be hearsay evidence and therefore have limited weight. Personally I don't think it is wise to drag an employer into a private dispute, the employer is unlikely to be pleased, but that is really a judgment call for you to make.

 

Can Moneyclaim advise how to complete the form to sue the company and the director personally together in the same claim?

Just enter both the name of the company and the name of the director as defendants.

 

Do I need to mention that I am suing both him and the company in my letter to him personally or is the fact that the previous correspondence states I am pursuing the company adequate?

If you want to sue him personally I think that should be very clear from your letter. This could either be one letter to the company, with a separate letter to him personally, or it could be a single letter but addressed to both him and the company.

 

Do I need to reference Insolvency Act in my letter or just state I am pursuing him personally for fraud?

This is not necessary. If you do mention the Insolvency Act you should be specific about what section you are relying on - quoting the entirety of a statute which is hundreds of pages long is pointless. I would suggest the section mentioned in my earlier post, which you should read.

 

If you are alleging fraud, you should be very specific about what exactly this person did which was fraudulent. I think the letter would need to say that you intend to pursue him personally on the basis that his fraudulent conduct caused your loss, and you should also clearly identify the basis of the allegation of fraud - i.e. you should mention the specific dishonest statement which was made in order to get you to enter into the contract if any, or mention that transfer of money out of the company account was a fraudulent action intended to deprive you of funds as a creditor of the company.

[ZBanfield]

Thank you. Have been reading through the Insolvency Section you sent.

 

Just checking - in Feb 2015 as the Director of the Limited company I have sent a letter titled "Letter Before Court Action" where I stated:

 

"I am claiming £x consisting of the balance required to complete the building work . In addition I will be pursuing you for a claim for damages for additional sums for consequential losses incurred for the sum valued at £X"

(along with breakdown of cost calculation and relevant paperwork).

 

Does this cover me for suing the company element - i.e. I don't need to write to the company again?

 

Also can I just copy that again into the personal letter?

[steampowered]

I think that is fine for the company letter. But the personal letter needs to state the basis on which you are trying to pursue him personally. A copy/paste of the sentence you pasted above does not do that.

[ZBanfield]

I think that is fine for the company letter. But the personal letter needs to state the basis on which you are trying to pursue him personally. A copy/paste of the sentence you pasted above does not do that.

 

 

Thank you very much. Will let you know how it goes.

[ZBanfield]

I think that is fine for the company letter. But the personal letter needs to state the basis on which you are trying to pursue him personally. A copy/paste of the sentence you pasted above does not do that.

 

Hi steampowered,

 

I have drafted a letter to the Director personally as advised. Admittedly, it is rather long as I have detailed the initial contact the agreed contract and what the problems were with a list of the incomplete work and referenced The Supply of Goods and Services Act 1982 (as amended) relating to the contract.

 

I have then gone onto cover the areas you advised, but I think I am getting a little waffly with the key points and my summary. Would you be willing to review just these sections of my letter (I wouldn't expect to drag you through the whole thing of course). I can post in the thread or PM you if this would be acceptable? Each section is about a page long? I would really appreciate your help.

 

 

Many Thanks,

 

Zoe

[ZBanfield]

Hi Forum members,

 

Can anyone help with reviewing my letter please in relation to the above problem? I have spent hours detailing out the events but am unsure of the wording I need to use to clearly state what I pursuing the Director for and the correct references to the Law. I think it falls under breach of contract, negligence, dishonesty, misconduct and fraud. I believe the relevant sections are Common Law, Companies Act 1986, the veil of incorporation to avoid personal liability for dishonesty (piercing the veil) and The Insolvency Act 1986 c.45, Part XVI, Section 423, subsections 2 and 3.

 

I would be most grateful as I do not have legal expertise and have hit a wall in my research and seeking legal help without employing a solicitor

 

 

Also, I found another thread on the forum that maybe relevant and am unsure whether to put this in my letter too?

 

"A DS01 is a voluntary striking off application. This is supposed to be used for solvent dissolutions with no insolvency practitioner appointed. If there are creditors to be dealt with a liquidation should have been used which is a different process. The Directors were required to notify all creditors (which would include you) in order to give them a chance to object to the application. It was a criminal offence not to do so as you will see from s1006 CA 2006 - http://www.legislation.gov.uk/ukpga/2006/46/section/1006"

 

 

Many thanks in advance,

 

Zoe

Edited July 27, 2015 by ZBanfield
Additional Question

[steampowered]

You can PM me the letter if you are not happy to post an anonymised version on here, although I would respond on forum (minus any personally identifiable information).

 

I think the key points are as follows:

- Mr X entered into a contract with you in his capacity as a director of X Ltd.

- X Ltd has breached its contract with you, resulting in a debt being owed.

- Mr X is attempting to avoid this debt by attempting to arrange for a voluntary dissolution of X Ltd. In doing so he has failed to notify the claimant as a known creditor of X Ltd and has thereby committed a criminal offence under s1006 of the Companies Act 2006.

- Mr X is personally liable to pay the debt to you for the following reasons:

(a) the corporate veil may be pierced as he fraudulent induced you to contract with X Ltd (you need to specify what untrue statements were made);

(b) Mr X has committed the tort of deceit (you must specify what untrue statements were made);

© Mr X provided his personal bank account details rather than company account details, from which fraudulent intent is to be inferred;

(d) Mr X has entered into a transaction defrauding creditors contrary to s423 of the Insolvency Act 1986 on the basis that Mr X transferred the money to his brother, thereby depriving you of access to this money as a creditor of X Ltd. Mr X was acting fraudulently because he knew that he was acting in breach of his statutory duties to X Ltd as a director of X Ltd under the Companies Act 2006 and knew that the payment was an unlawful dividend contrary to s830 of the Companies Act 2006, as the company did not have any profits available for distribution to its shareholders.

 

It all looks very complicated. But in actual fact it is not. It all encapsulate a very simple principle that people are personally liable for fraud, which is brought to life in a number of different pieces of legislation which all need to be pieced together. I would suggest reading the sections of the legislation I have referred to. If this gets to court you will need at least a basic understanding of what the law actually says.

[ZBanfield]

Hi Steampowered,

 

Many, many thanks. I will go through your points and revamp my letter. I have and will also look at all the sections of the law which are relevant in increase my understanding. I am happy to post anonymised version on forum. Hopefully it may help someone else too. I will forewarn you, I have put lots of details about the building work faults as I thought this would be relevant to demonstrate just how much I had been misled by him as to the building work. I would appreciate knowing whether the detail there is relevant or not as I remember you saying this should be a stand alone letter which does not rely on referring to my previous correspondence to him.

Edited July 28, 2015 by ZBanfield
Detail missing

[ZBanfield]

Many, many thanks in advance for your time reading this. I appreciate I may have repeated a few legal points, but hopefully not too much.

 

Dear Mr. “ X “,

 

Re: Letter Before Court Action

 

I am writing to you personally regarding problems with work carried out at the above property (my home) during July and August 2014.

 

in June 2014 at our current place of employment “X” you overheard a conversation I was having with another staff member regarding building works I needed carried out at my home. You (Mr. “ X “ employed as a Security Guard) approached me and stated you ran a company managing building renovation and redecoration works employing a team of professional builders and offered your services.

 

I was hesitant and reluctant at first, as I had a traumatic experience with cowboy builders previously. I explained to you that they ruined my home and caused a serious gas leak I nearly died from. In addition, they stole various items, ransacked my belongings and helped themselves to food and expensive alcohol from my home whilst working. I stressed these points to you especially and the fact that I desperately needed to sell the house urgently because of the financial difficulty I had been put in by the previous builders.

 

• You assured me that you operated a reputable, established, reliable and trustworthy building company.

• You assured me your building company carried out high quality work done to a high standard.

• You were entirely responsible for managing the entire job including employment and management of builders.

• You assured me your builders were qualified, experienced, competent, reliable and honest, who you personally knew and worked with for over two years on various jobs.

 

I was further assured by the fact that we had worked together as colleagues since June 2012 and felt secure and confident that you would carry out the work as promised.

 

After this conversation, you visited my home to review and agree the work to be completed. There was a further visit where you introduced me to your brother Mr “ Y ”who you stated you run the company with.

 

On 2nd July 2014, you Mr. “ X “ acting as Director of “Co. X” Limited (your building company) entered into a contract with me to carry out internal and external building works/decorations at my home (Address).

 

The original quote for the work and agreed sum was £4,390 for labour only including VAT commencing 25th July 2014.

The work agreed consisted of the following:

• Damp course and related rendering and re-plastering work in association with the damp course treatment.

• Fitting fence posts, fencing and gate to front of the property. Cost of fencing, gate and fixtures at expense to myself excluded from price quoted.

• Concrete path and front of property inside fenced area. Cost of materials at expense to myself excluded from price quoted.

• Front of House - Painting front wall, remove and reattach guttering to lower extension area allowing for correct falls to rainwater down pipe. Cost of paint and materials at expense to myself excluded from price quoted.

• Fitting new skirting and laminate to sitting room and hallway. Cost of flooring step edge, T-bar and reducer and laminate flooring at expense to myself excluded from price quoted.

• Re-tiling bathroom shower cubicle. Cost of tiles at additional expense to myself excluded from price quoted.

• Bathroom – Internal crack repair work, plastering and painting external wall, make good around window and realigning the guttering on the rear bathroom extension to allow rainwater to drain correctly. Cost of materials at expense to myself excluded from price quoted.

• Painting hallway, sitting room, kitchen, two bedrooms, bathroom, wooden skirting and doors. Cost of materials at expense to myself excluded from price quoted.

• Adjusting pipework to sitting room and hallway radiators.

As per your email to me dated 4th July 2014, you stated:

“All payments will be made through “Co. X” with the surveyors and companies and then billed to you.”

During the work, I became aware that the builders were negligent, dishonest and work/working practices substandard. I communicated all these concerns to you. You were present in my home with myself and the builders during one particular incident of theft. You attributed this to one of the builders and you said would not be allowed back on site.

You assured me you would remedy/resolve everything and all work completed by 8th August 2014 but the negligence, dishonesty and unsatisfactory work/working practices continued.

 

The problems are:

• The work has not been completed.

• The work has not been carried out with reasonable care and skill, in a reasonable time, for a reasonable charge.

• You have taken a total of £ 2,730 in cash and bank payments from me but submitted only one invoice for the Damp Course report, including a management fee from your company, “Co. X” Limited including VAT for £102.00.

• Once work had commenced, you increased the original quote by an additional £360.00 to £ 4,750.00. You advised the £360.00 was the charge for additional tiling work due to further damp on two additional walls in the bathroom which was completely necessary. The two walls were to be stripped completely of all existing tiles and re-tiled; the additional tiles supplied at my own expense. You have never provided a copy of the damp report despite my requests.

• My neighbours' property at X has also been damaged directly as a result of your builders’ negligence and an absence of reasonable care and skill. You have not rectified, repaired or resolved the damage.

• Numerous aspects of the work / working practices are unsatisfactory. The work is negligent, unprofessional, sub-standard and remains unfinished.

• Work contains poor quality materials you instructed your builders to purchase at my expense.

• The rendering and re-plastering work in association with the damp course treatment is substandard, uneven and unfinished.

• Front Of The House:

• Fence posts, fencing and gate to front of the property are not parallel, uneven, substandard and unfinished.

• Concrete area path and front of property inside fenced area are substandard, uneven and unfinished.

• Wall painting is unfinished, uneven and substandard

• Guttering to the lower extension area has been removed and not reattached, causing problems with falls to rainwater down pipe.

• The letter plate on the external mailbox has been removed and is missing from the property.

• Laminate fitted in sitting room is unsatisfactory – buckled, inconsistent and not flush with skirting.

• Internal socket fixtures in sitting room and external aerial cable feed have been removed and disconnected and wall access completely blocked with plastering.

• Laminate fitted in hallway is unsatisfactory – the ‘step edge’ I purchased as you advised was compulsory for the work has not been fitted by front door. Flooring is uneven and dangerous and gives way underfoot by front door due to original floorboard area underneath laminate having been removed by your builders.

• Hall and sitting room radiator pipe work and fitting is unsatisfactory and unfinished. Hall pipework exposed and wedged behind skirting.

• Laminate flooring T-bar & Reducer I purchased as you advised was compulsory for the work was not used within the work and I found damaged by your builders and left within large rubbish piles in my back garden.

• Your builders did not use reasonable care and skill disconnecting and moving my bath and toilet and left these unfitted, bath pipework and waste disconnected and the bathroom unusable. Your builders’ negligence resulted in a flood, forcing me to call a registered plumber to repair the leak damage to the toilet, refit and reconnect the toilet and bath pipework and waste at my own expense.

• Your builders dismantled the shower cubicle to re-tile the walls, have been negligent in reassembling the shower cubicle and tray and the work is substandard and unsatisfactory. The shower tray is damaged, shower unit fixtures are missing and the sliding door does not close flush and has fallen off. Through an absence of reasonable care and skill the shower unit is unsafe, damaged and unfit for purpose.

• Tiling of shower cubicle and two walls is substandard, incomplete, surfaces uneven with numerous faults and gaps. Wall tiling is inconsistent with the existing brick pattern, not in straight lines and unevenly spaced. Grout lines and tile patterns from one wall to the next are inconsistent.

• Your builders were negligent and through an absence of reasonable care and skill, a substantial number of bathroom tiles I purchased for the work were broken, damaged beyond repair and unusable.

• Bathroom internal crack repair work has not been carried out. Bathroom external guttering repair work has not been carried out. Plastering and painting of the external wall of bathroom is unfinished and unsatisfactory.

• All internal paint work throughout the property carried out by your builders is uneven, unprofessional, sub-standard and unfinished.

• My black suit trousers have been covered in paint and stuck to the wall behind a wardrobe by your builders. We discussed this matter and you have not reimbursed or replaced the trousers to date.

• Your builders have been dishonest during work at my home. Items belonging to me are damaged and/or missing Despite my numerous discussions with you regarding these issues, this remains unresolved to date. The missing items have been reported as theft to the police.

• You advised me that all the work would be complete in full on Monday 4th August 2014 which you then extended to Tuesday 5th August 2014 and further to Wednesday 6th August 2014.

• On Wednesday 6th August 2014 the work was still not completed. I telephoned you and you insisted the work could only be completed on Thursday 7th August 2014and I must be at the property. I booked a day’s holiday for Thursday 7th August 2014 and I expressly stated the holiday and the financial loss to me but you insisted I cancel my holiday arrangements.

• On Thursday 7th August 2014 neither you, nor your builders arrived. I telephoned and sent text messages to your mobile, (the only contact number you provided). You did not answer your phone, return my calls or respond to text messages. At 2.05pm I received a text form your phone advising builders would arrive shortly to complete the work. At approximately 3pm you telephoned to advise that the builders had walked off the job and would not be returning at all. You apologised for the dishonesty, unreliability and incomplete work and conceded this was unacceptable. I asked for resolution and you offered none.

• I asked you rectify the situation by either: A) Providing “honest” builders to complete the work or B) I appoint independent reputable builders to rectify and complete the work and any additional costs for labour in excess of your original quote and replacement of materials and items missing from my home be financed by yourself.

• You were obstructive, stating that you did not want to provide your own builders to avoid further disappointment to me as you could not guarantee I would be satisfied with the quality and reliability of your building services.

• You rejected my proposal to appoint independent builders.

• You refused to contribute any additional money should this be required for alternate contractors to rectify and complete the work, should their cost exceed your quote to complete the job.

• You refused to reimburse me for damaged materials and material losses caused by your builder’s negligence and/or dishonesty.

• You offered only £500, advising I make arrangements with alternate contractors to rectify and complete all building works myself. I made it very clear in no uncertain terms your numerous rejections of my various proposals and the offer of only £500 was unacceptable. You ended the phone call saying “I feel bad”, but with no resolution.

• Later on Thursday 7th August 2014, we had another telephone conversation. Your only proposal was that the same builders (who had walked off the job) would return to complete the work. I expressed my concerns as you were now contradicting your earlier statements; dishonesty, unreliability and poor workmanship of the builders and now wanted them to continue working at my home. I reiterated that you rectify the situation by either: A) Providing “honest” builders to complete the work or B) I appoint independent reputable builders to complete the work and any additional costs for labour in excess of your original quote and replacement of materials and items missing from my home be financed by yourself.

• You refused to accept either proposal again and arranged to attend my property to review the work and discuss the extensive list of concerns and incomplete work. We agreed the appointment to be on Friday 8th August 2014 at 8am.

• On 8th August 2014 at 7.15am you and your brother “ Y “ arrived at my property. I had arranged a witness to be present at the meeting at 8am but as you had arrived earlier than agreed unannounced, they were unavailable to attend. All my complaints and concerns were dismissed and you ignored and / or made excuses for the substandard work. You were not interested in close inspection of the work and the numerous faults and flaws which I pointed out during your visit. The only proposal offered was the same builders could return to continue the work. I declined and referred yet again to the previous conversations with yourself on Thursday 8th August 2014, whereby you conceded the dishonesty, unreliability and poor workmanship of the builders.

• On inspection of the bathroom, a major area of concern, you ignored all the substandard, incomplete work, negligence and lack of reasonable care and skill by your builders. I also discussed and showed you all the substandard work carried out by your builders, details previously mentioned earlier in this letter.

• You stated you did not know the builders whereabouts and would need to get in touch with them to discuss all the issues and “see what they had to say” and you would “let me know”. I asked for confirmation of when I would have a response as to you resolving the circumstances and unfinished work. You said either Friday 8th or Monday 11th August 2014. You also stated that the builders had left items at the property and would be returning to collect these. I expressed that in no uncertain terms were the builders to return or enter the property and I was concerned that you had not returned my house keys. Regarding items “ Y “ stated had been left at my property by your builders, I showed you both the garden where the builders had left only rubbish and debris from the job.

• You promised to submit a proposal to complete the works by 15th August 2014 in writing by email to myself from “Co. X” Limited. However, I have not received a proposal via any method of correspondence to date.

• I previously asked for my house keys to be returned on 7th and 8th August 2014 and neither you nor your builders were to enter the premises. The house keys were not returned. On Saturday 16th August 2014 I happened to be visiting colleagues at Emirates Airline, Greenwich Peninsula. You approached me without conversation and merely extended your arm out dangling my house keys in front of me with other staff members present in the staff room on site. You gave no explanation for the extended delay in returning my house keys.

• Other than myself only you had a set of house keys to my property. The builders were authorised to enter my property to carry out building works only during contracted days, leaving the same day and my property secure. I was forced to stay elsewhere for the majority of the work up until 13th August 2014. I returned to my property on 14th August 2014 and my neighbours' advised me that they observed my property was occupied on several occasions overnight whilst I was away from the premises. My neighbours have confirmed dates to include before 7th August 2014 and between 9th and 13th August 2014. At no stage did I agree with you or your builders that they were allowed to be in the property overnight.

 

 

The Supply of Goods and Services Act 1982 (as amended) states that the contract I have with you contains implied terms that;

• The work should be carried out with reasonable care and skill, in a reasonable time and for a reasonable charge.

• Any goods supplied, or materials used must be of satisfactory quality, fit for their purpose and as described.

 

For the reasons detailed above, “Co. X” Limited has breached its contract with me, resulting in a debt being owed; I am a creditor of the company.

 

It is clear that the work carried out is substandard and as a direct result, I have incurred greater potential costs to have the work put right. It is evident that your builders are clearly not capable of rectifying the problems / faults because the work they’ve done is defective. Allowing them to try and fix the problem is liable to cause more damage or place me in even more danger.

 

• The accumulation of breaches is indicative of the inability of yourself and your builders to deliver the contract to a reasonable standard. You and your builders manifest inability to comply with carrying out the work with reasonable care and skill and the completion date requirements. The nature and number of complaints from myself and defects have not been remedied. By your own admission the quality of work was substandard, incomplete and your builders are unreliable and dishonest. This points to the truth of my view that you knowingly made dishonest statements and claims regarding the building work your company were to carry out at my home which I relied upon and induced me to enter into the contract.

 

Following these events, I have sought an amicable resolution with you to the situation but to no avail. I then took legal advice and was told that I needed to write to you (Mr. “ X “) as Director of “Co. X” Ltd via recorded delivery letter(s).

I first wrote to you, (Mr. “ X “) as Director of “Co. X” Ltd. on 1st September 2014. I wrote to the details given on your invoice as follows:

 

Invoice Ref No: X, dated 11th July 2014

 

“ADDRESS”

 

This is the only address you have ever provided.

 

My letter dated 1st September 2014 was returned undeliverable which raised concerns as you had completely stopped communicating with me and avoided all resolution.

 

I investigated the address given; “ADDRESS” which is a derelict building site as confirmed by trading standards.

 

I obtained the correct registered address from Company's House which is also your (Mr. “ X “) registered home address. Company’s House stated that “ADDRESS” is not associated in any way with “Co. X” Ltd. Company’s House stated that they rely on people to be honest and provide the correct address for their records.

 

The company details I obtained from Companies House are:

 

Company Name: “Co. X” Limited

Company Number: X

Registered Address: X

 

Director: Mr. “ X “

Secretary: Mr. “ Y “

 

Despite numerous written/verbal requests between August 2014 and 17th February 2015 to remedy/resolve the situation amicably you has been obstructive, evasive and ignored all my requests and correspondence.

 

Summary of previous correspondence sent to you (Mr. “ X “ as Director of “Co. X” Limited) to which I have received no response to date.

 

1st Letter Dated: 01/09/2014 No response from you

Returned undeliverable as false address provided by yourself personally on your Company Invoice:

 

2nd Letter Dated: 16/10/2014 No response from you

Delivered & signed for 18th Oct 2014

Stated the facts, legal aspects and gave 14 days to respond

Supply of Goods and Services Act 1982 (as amended)

"I have no confidence in you to complete work satisfactorily and subsequently will be obtaining three quotes and pursuing you for the additional funds required to complete the work and a claim for damages for additional sums for consequential losses incurred.

 

3rd Letter Dated: 05/02/2015 No response from you

Delivered and signed for 6th February 2015 - reiterating 2nd letter and 7 days to respond

I requested that you contact me within 7 days of the date of this letter in writing to make arrangements to reimburse me in the sum of £4,009.52.

This consists of the balance of £3,290.00 required to complete the building work. In addition I will be pursuing a claim for damages for additional sums for consequential losses incurred for the sum valued at £719.52.

 

4th Letter Dated: 17/02/2015 No response from you

Delivered and signed for 18th February 2015 - Titled “Letter Before Action”

Restating the same as previous letters and to resolve the matter amicable to avoid court action.

I requested “you contact me within 28 days of the date of this letter in writing to make arrangements to reimburse me in the sum of £4,009.52. This consists of the balance of £3,290.00 required to complete the building work. In addition I will be pursuing a claim for damages for additional sums for consequential losses incurred for the sum valued at £719.52”or I would be starting legal proceedings against “Co. X” Limited.

 

Following receipt of my letter dated 17th February 2015, on 5th March 2015, you, in your capacity as Director filed a DS01 form to strike off your company; “Co. X” Limited (Company No: X).

 

As the Director, there are strict obligations on you personally when filing a DS01. You are legally required to notify all creditors of “Co. X” Limited. I am a creditor of your company effective August 2014 to date.

 

Legally you are required to provide me with a copy of the striking off application in accordance with S1006 (1) CA2006.

 

“A person who makes an application under section 1003 (application for voluntary striking off) on behalf of a company must secure that, within seven days from the day on which the application is made, a copy of it is given to every person who at any time on that day is –

 

c) a creditor of the company”

 

Your actions imply you have intentionally concealed the making of your application to me. You are attempting to avoid the debt to me by attempting to arrange for a voluntary dissolution of “Co. X” Limited and knowingly obstructing me pursuing “Co. X” Ltd legally as a creditor. Thereby triggering S1006 (4)

 

“A Person who fails to perform the duty imposed on him by this section commits an offence.

 

If he does so with the intention of concealing the making of the application from the person concerned, he commits an aggravated offence”

 

You have failed to provide me with a copy of the striking off application DS01 and have thereby committed a criminal offence under the Companies Act 2006, c. 46 Part 31 Chapter 1 - Voluntary striking off Section 1006, 1 ©

The offences attract a fine of up to a maximum of £5,000 on summary conviction (before a magistrates' court or Sherriff Court) or an unlimited fine on indictment (before a jury). As a Director, breaching the requirements to give a copy of the application to relevant parties and do so with the intention of concealing the application, you are also potentially liable to not only a fine but also up to seven years imprisonment. Anyone convicted of these offences may also be disqualified from being a director for 15 years

 

You have also changed the nature of the registered business activity of “Co. X” Ltd. from being a building works company since I began correspondence regarding our dispute in September 2014.

 

Your company is now registered trading as follows:

Industry Classification

SIC 59112 - Video production activities

Activities

Motion picture, video and television programme production, sound recording and music publishing activities.

 

I believe you intentionally altered the business activity to conceal the nature of your true business activity and further obstruct me pursuing you should I commence legal proceedings against “Co. X” Ltd.

 

Between April 2015 – 11th July 2015, I sought further resolution by approaching a fellow colleague, Mr. Simon Green at Emirates Cable Car Terminal, Edmund Halley Way, London SE10 0FR. This was in an attempt to resolve the situation amicably between ourselves. You and Simon Green had a separate discussion and you requested a meeting with myself and Simon Green. Mr. Simon Green attended as an impartial chair and not in his capacity as Commercial Manager but as an individual to mediate at the meeting.

My last contact with you was at a meeting held on Saturday 11th July 2015 at 5pm.

The meeting took place in the offices at: “X”

 

Present were:

Mr. “CHAIRMAN/WITNESSS”

Mr. “ X “ (Director of “Co. X” Ltd and Manager at employers)

Ms. X (myself)

 

At the meeting you admitted that we entered into a building contract for works at my home for £4,390. You admitted taking the monies I had paid totalling £2,730 in cash and bank payments.

 

You stated that these cash and bank payments totalling £2,730 (which you had requested I pay) had been made directly to a private personal bank account. Initially you stated these funds were paid directly into your brother’s private bank account (Mr. “ Y “ Secretary of “Co. X”) but then amended your statement and stated that the funds had been paid your own personal bank account. You also stated you had then transferred the funds (cash and bank payments totalling £2,730) on into your brother’s (Mr. “ Y “) private bank account from your own.

 

I asked for clarification on where the payments had been made to. You stated that both the cash and bank payments I had made had been paid to private bank accounts not related to “Co. X” Limited.

 

You took no responsibility for any of your actions which were all made consciously acting as Director of your company. You stated that you would not be returning any of the money.

 

All the evidence suggests that you intentionally intended to defraud me.

 

You are personally liable to pay the debt to me for the following reasons:

 

• You are attempting to hide behind the veil of incorporation as Director of Co. X Ltd in order to avoid personal liability for your dishonest actions. I refer you to common law and the concept of 'piercing the veil' to sue you personally. I also reference the points of law contained within The Insolvency Act 1986 c.45, Part XVI, Section 423, subsections 2 and 3.

 

• You consciously represented yourself acting as Director of “Co. X” Ltd when you initially approached me offering your building services and in inducing me to enter the contract.

 

• You knowingly made dishonest statements in order to induce me to enter into the building contract with your company to carry out building work at my home:

o You made dishonest statements regarding your builders’ qualifications, experience, competency and honesty

o You made the dishonest statement that “All payments will be made through “Co. X” with the surveyors and companies and then billed to you.”

o You made dishonest statements that the work would be carried out to a high quality and high standard.

o You made dishonest statements that the work would be completed and within in a reasonable time

 

 

You have committed the tort of deceit:

• The work has not been completed.

• The work has not been carried out with reasonable care and skill, in a reasonable time, for a reasonable charge.

• Your builders do not possess the relevant and/or necessary qualifications, experience, competency, ability and honesty to complete the building work agreed.

• You have not taken personally responsible for the actions and/or managed the work and misconduct your builders.

• The evidence compounds the fact that your builders have neither the ability, competence nor the will to complete the work in the manner required by the contract.

 

You have entered into a transaction defrauding creditors contrary to s423 of the Insolvency Act 1986 on the basis that you transferred the money to your brother, thereby depriving me of access to this money as a creditor of “Co. X” Ltd..

 

You were acting fraudulently because you knowingly acted in breach of your statutory duties to Co. X Ltd. as a Director of X Ltd under the Companies Act 2006 and knew that the payment was an unlawful dividend contrary to s830 of the Companies Act 2006, as the company did not have any profits available for distribution to its shareholders.

 

Under the Companies Act 2006, you have not exercised reasonable care skill and diligence in your duties as Director of your company. You have been negligent and breached your duties as Director and benefitted directly from the financial loss you caused to me as a creditor of your company.

 

I am pursuing you personally for the loss and liability I have incurred as a direct result of your dishonesty, misconduct and breach of duty.

 

• You personally and solely were responsible for providing me with the bank details via email and in person to make bank payments to and requested specific cash amounts in advance.

• You personally stated that these payments were to “Co. X” Limited to pay for building works which I contracted with you under your company to carry out.

 

• All payments have not been made through “Co. X” and billed me as you advised

 

• You have not provided relevant invoices / paperwork despite numerous requests relating to the building work.

 

• You deliberately deceived me in providing your own personal bank account details but advising I was paying funds to “Co. X” Limited, from which fraudulent intent is to be inferred

 

• On 11th July 2015 you admitted that you took all cash and bank payments totaling £2,730 into your own personal bank account (details provided in writing and verbally by yourself), thereby intentionally depriving me of the funds as a creditor of your company.

 

• You have intentionally ignored and not responded to any previous correspondence sent to you as Director of “Co. X” Ltd. (regarding the building as detailed in this letter) despite evidence of delivery and your receipt sent to your home address which is also the company’s registered address.

 

• You have denied receiving all previous correspondence sent to you as Director of “Co. X” Ltd. (regarding the building as detailed in this letter) despite evidence of delivery and your receipt sent to your home address which is also the company’s registered address.

 

• You are refusing to return any of the funds and rectify/remedy the situation.

 

• You have filed a DS01 with the intention of concealing the making of the application from myself with the objective to

shut down the company and obstruct me pursuing “Co. X” Limited legally

 

• You intentionally changed of your company’s business activity following my dispute with you to conceal the true nature of your business activity being building works to further obstruct me pursuing you legally regarding my building related contract with “Co. X” Ltd.

 

Despite my endeavours and concerted efforts to resolve the issues with you since August 2014, you have been evasive, dishonest, obstructive and refused to return the funds and/or reimburse stolen and damaged property.

It is evident from the amount of time, patience and effort on my part; I have endeavoured to give you ample opportunity and time to remedy/resolve the situation without the need for court action.

 

You have left me with no alternative but to appoint an alternative contractor to carry out the necessary remedial work.

 

Attached is a copy of the quote to rectify the incomplete and sub-standard work you have carried out at my property.

I request that you contact me within 14 days of the date of this letter in writing to make arrangements to reimburse me in the sum of £4,009.52.

 

This consists of the balance of £3,290.00 required to complete the building work. In addition I will be pursuing a claim for damages for additional sums for consequential losses incurred for the sum valued at £719.52. Attached are copies of relevant invoices and receipts relating to this claim. Please note that some of these costs are subject to estimates; detailed to be confirmed.

 

(BREAKDOWN OF COSTS/COPY OF ALTERNATE BUILDERS QUOTE AND RECEIPTS HERE)

 

N.B. – I am unsure if the next paragraph on Practice Direction is relevant?

 

In accordance with the Practice Direction on Pre-Action Conduct I request you provide me with copies of the following documents:

Copies of all invoices relating to payments I have made to you, totaling £2,730 in cash and bank payments

Copy of the Damp Course Report

Copy of the invoice for the Damp Course Report, which includes a Management Fee and VAT from your company, “Co. X” Limited

Documentation and invoice relating to the additional £360 you advised was a necessary charge for additional tiling work due to damp on two further walls in the bathroom at my home

I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute resolution (ADR) in order to avoid the need for this matter to be resolved by the courts.

I would invite you to put forward any proposals in this regard.

I draw your attention to the Practice Direction on pre-action conduct under the Civil Procedures Rules and in particular to section II, paragraph 4 which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim.”

 

End of Practice Direction query section

 

 

 

 

For the reasons detailed in this letter, I am suing you personally for fraud. I relied on the statements you made to enter into the contract to carry out the building works at my home. You made fraudulent statements and this induced me to part with my money.

 

If I do not hear from you within 14 days from receipt of this letter:

 

• I will be pursuing you personally for the additional funds required to complete the work in the sum of £3,290.00.

• I will be pursuing you personally in a claim for damages; additional sums for consequential losses incurred for £719.52

 

a) Damage to my neighbours’ property X

b) Cost of registered plumber to repair leak, refit and reconnect toilet and bath pipework and waste.

c) Loss and damage to items at my property

d) Financial loss for a day’s holiday sacrificed.

 

Please respond to my complaint in writing within 14 days from receipt of this letter. Should I not receive a response to my letter within this time frame then I intend to sue you personally on the basis of misconduct, dishonesty, fraud and breach of your duties as Director of “Co. X” Limited. I will ask the court to make an order that you, Mr. “ X “, Director of “Co. X” Limited are held personally liable for your actions.

 

I intend to issue proceedings against you personally in the county court with no further reference to you. This may increase your liability for costs.

 

Yours sincerely

[steampowered]

That is a very admirable effort and must have taken you hours. But a letter before claim would normally be only one or two pages. The key points are (i) You did something wrong, (ii) I have suffered £xxx loss as a result of your actions, (iii) if you don't pay up I am going to take you to court. Not much more is required.

 

The detailed synopsis and factual background should go into your witness statement, which comes much later in the court process. It doesn't go into the letter before claim (or even into the claim form). These are supposed to be short documents. The rules do say that a letter before claim must be concise.

 

You must focus on the core of your case. It is really important that you understand the company and the individual have separate legal personalities. To claim against a director personally you need to prove fraud. You really must focus on that and avoid the temptation to bang on about the fact that the services were not performed with reasonable care and skill - that sort of thing is not anywhere near adequate to sue the director of a company personally. The judge will need a precise legal basis for reaching a decision - pages and pages of waffle are not helpful at all.

 

I note reading your letter that this gentlemen is holding onto your house keys. I therefore think you should add a claim for what is known as the 'tort of conversion' - which is essentially a claim against someone who is wrongfully holding onto your property.

 

I think you should go with something more like this, which is more in line with the specific focus on the fraud issue and length expected.

Dear Sir

 

I refer to my letters to X Ltd dated xxx and xxx, setting out problems encountered in relation to my property at xxx.

 

The purpose of this letter is to put you on notice that I intend to pursue you personally, for the following reasons:

 

1) Your conduct has been fraudulent. X Ltd has been used as a sham to mask the use of my money. I am therefore entitled to 'pierce the corporate veil' under common law. The particulars of that fraud are as follows:

- You fraudulently induced me to enter into a contract with X Ltd by making dishonest statements regarding your builders’ qualifications, experience, competency and honesty [ZBANFIELD YOU NEED TO PARTICULARISE WHAT HE ACTUALLY TOLD YOU - PARTICULARISING WHAT THE FRAUDULENT STATEMENTS WERE IS ABSOLUTELY FUNDAMENTAL]

- You accepted payment into your personal bank account rather than a bank account belonging to X Ltd. -You made the dishonest statement that “All payments will be made through “Co. X” with the surveyors and companies and then billed to you.”

 

2) You have committed the tort of deceit, in that you made the following untrue statements, knowing that they were false. You intended for me to rely on those statements and I did so in entering into a contract with X Ltd.

- [ZBANFIELD YOU NEED TO PARTICULARISE WHAT YOU WERE TOLD MUCH MORE CLEARLY - THIS MAY BE A BIT OF A REPEAT OF POINT 1.]

 

3) You transferred the money I paid to X Ltd to your brother, thereby depriving me of proper recourse against X Ltd. This was a transaction defrauding creditors contrary to s423 of the Insolvency Act 1986. I have reached this conclusion for the following reasons:

- You knew that this money belonged to X Ltd and that paying this money to your brother was a clear breach of your statutory duties to X Ltd as a director of X Ltd.

- You also knew that the payment was an unlawful distribution contrary to s830 of the Companies Act 2006, as the company did not have any profits available for distribution to its shareholders. This can be inferred from the fact that you have taken steps to wind up X Ltd by filing form DS01 with Companies House, and in doing so have failed to notify me as a creditor of X Ltd. I would point out that failure to notify creditors is a criminal offence pursuant to s1003 of the Companies Act 2006 for which the maximum possible sanctions are an unlimited fine, 7 years imprisonment and 15 years disqualification from acting as director of a company.

 

4) You have committed the tort of conversion by holding onto, and refusing to return, my house keys.

 

[iNCLUDE HERE THE LAST FEW PARAGRAPHS FROM THE END OF YOUR LETTER ABOUT THE AMOUNT HE NEEDS TO PAY AND THE 14 DAY DEADLINE].

[ZBanfield]

Thank you so much steampowered for your time and effort to help me. I really, really appreciate it. I do apologies for the detail. I will hang onto all this if it has to go to court. Thank you for explaining everything. I will go away again and follow the guidelines you have advised for my letter format. Would you be willing to review the final document before I send it please? I promise it will be concise.

[steampowered]

Yes, that's fine.

[ZBanfield]

Yes, that's fine.

 

 

Thank you very much

[ZBanfield]

Hi Steampowered,

 

I have taken on board all the points you made and looked at the aspects of law. I would really appreciate your review of my letter. I have left point 4 about the keys in. He did return the keys eventually so shall I take this out?

 

Many Thanks.

 

 

 

Dear Mr. X,

 

Re: Letter Before Court Action

 

I refer to my letters to X Limited dated:

 

1st September 2014 Returned undeliverable as false address provided by you

16th October 2014 Sent Recorded Delivery Ref: KF060675190GB

5th February 2015 Sent Recorded Delivery Ref: BZ521726389GB

17th February 2015 Sent Recorded Delivery Ref: BZ690797105GB

 

setting out the problems encountered in relation to my property, as above (44, Red Lion Lane, Shooters Hill, London SE18 4LE) in July and August 2014.

The purpose of this letter is to put you on notice that I intend to pursue you personally, for the following reasons:

 

1) Your conduct has been fraudulent. X Limited has been used as a sham to mask the use of my money. I am therefore entitled to 'pierce the corporate veil' under common law. The particulars of that fraud are as follows:

 

You fraudulently induced me to enter into a contract with X Limited by making dishonest statements regarding your builders’ qualifications, experience, competency and honesty

 

• You stated you were the owner and Director of your own bulding company which you had run successfully for a number of years.

• You assured me I could trust you implicitly in executing the building work as we were long standing work colleagues since June 2012.

• You stated you ran a reputable, established, reliable and trustworthy building company.

• You stated you employed a team of qualified, experienced, competent and honest builders to carry out building works under your company X Ltd.

• You stated you had experience and competency in managing and completing building projects/works.

• You stated that all your building projects are consistently completed to a high standard and quality in terms of the workmanship and materials used.

• You stated you personally oversee all aspects of building works/projects carried out by your company through to completion.

• You stated confidently your company could carry out all aspects of the building work required as per the details of the agreed contract.

• You stated you would provide relevant paperwork and receipts for funds paid to your company.

• You stated you would provide interim as well a final invoice on completion of the work.

• You made the dishonest statement that “All payments will be made through X with the surveyors and companies and then billed to you.”

• You stated the contract would be completed on time at the agreed cost.

You accepted payment into your personal bank account rather than a bank account belonging to X Limited. You made the dishonest statement that “All payments will be made through X Limited with the surveyors and companies and then billed to you.”

 

 

2) You have committed the tort of deceit, in that you made the following untrue statements, knowing that they were false. You intended for me to rely on those statements and I did so in entering into a contract with X Limited .

• You stated you ran a reputable, established, reliable and trustworthy building company.

• You assured me I could trust you implicitly in executing the building work as we were long standing work colleagues since June 2012.

• You stated your builders possessed the necessary industry recognised qualifications, experience and competency to complete the agreed building works under your company X Ltd.

• You stated your builders were completely reliable, trustworthy and honest.

• You stated I could rely on you to deliver the contract due to your experience and competency in managing and completing building projects/works.

• You stated you would personally take full responsibility for overseeing all aspects of the contract from inception through to completion.

• You stated your company could carry out all aspects of the building work required as per the details of the agreed contract.

• You stated the contract would be completed to a high standard and quality in terms of the workmanship and materials used.

• You stated you would provide relevant paperwork and receipts for funds paid to your company.

• You stated you would provide interim as well a final invoice on completion of the work.

• You made the dishonest statement that “All payments will be made through X with the surveyors and companies and then billed to you.”

• You stated the contract would be completed on time at the agreed cost.

 

 

3) You transferred the money I paid to X Limited to your brother, thereby depriving me of proper recourse against X Limited. This was a transaction defrauding creditors contrary to s423 of the Insolvency Act 1986. I have reached this conclusion for the following reasons:

• You knew that this money belonged to X Limited and that paying this money to your brother was a clear breach of your statutory duties to X Limited as sole Director of X Limited .

• You also knew that the payment was an unlawful distribution contrary to s830 of the Companies Act 2006, as the company did not have any profits available for distribution to its shareholders. This can be inferred from the fact that you have taken steps to wind up X Limited by filing form DS01 with Companies House, and in doing so have failed to notify me as a creditor of X Limited . I would point out that failure to notify creditors is a criminal offence pursuant to s1003 of the Companies Act 2006 for which the maximum possible sanctions are an unlimited fine, 7 years imprisonment and 15 years disqualification from acting as director of a company.

 

 

4) You have committed the tort of conversion by holding onto, and refusing to return my house keys when asked.

 

 

I request that you contact me within 14 days of receipt of this letter in writing to make arrangements to reimburse me in the sum of £4,009.52. This consists of the balance of £3,290.00 required to complete the building work. In addition I will be pursuing a claim for damages for additional sums for consequential losses incurred for the sum valued at £719.52. Please note that some of these costs are subject to estimates; detailed to be confirmed.

 

If I do not hear from you within 14 days from receipt of this letter:

 

• I will be pursuing you personally for the additional funds required to complete the work in the sum of £3,290.00.

• I will be pursuing you personally in a claim for damages; additional sums for consequential losses incurred for £719.52

 

a) Damage to my neighbours’ property X

b) Cost of registered plumber to repair leak, refit and reconnect toilet and bath pipework and waste.

c) Loss and damage to items at my property

d) Financial loss for a day’s holiday sacrificed.

 

Should I not receive a response to my letter within this time frame then I intend to sue you personally on the basis of misconduct, dishonesty, fraud and breach of your duties as Director of X Limited. I will ask the court to make an order that you, Mr. X, Director of X Limited are held personally liable for your actions. I intend to issue proceedings against you personally in the county court with no further reference to you. This may increase your liability for costs.

 

 

Yours sincerely

[steampowered]

That looks pretty good.

 

The only thing I would say is that I am not sure all the statements you have listed were actually dishonest at the time they were made, which is the test we need to apply here. For example, a statement that 'the work will be done to a good standard' would only be dishonest if the person making that statement knew, at the time the statement was made, that the statement was untrue. The fact that the work was subsequently found to be rubbish would not be enough to demonstrate dishonesty.

 

If you do not feel comfortable trying to convince a judge that any particular statement you have listed was dishonest, meaning Mr X knew it was not true at the time Mr X made the statement, then take it out.

 

Remove the reference to suing Mr X for breach of his directors duties in the last paragraph. You do not have standing to sue him for breaching his directors duties; only X Ltd can do that. The point is that knowing breach of his duty to act in the best interest of the company he was representing as director, in that he paid company money into his brother's account, is fraudulent.

[ZBanfield]

That looks pretty good.

 

The only thing I would say is that I am not sure all the statements you have listed were actually dishonest at the time they were made, which is the test we need to apply here. For example, a statement that 'the work will be done to a good standard' would only be dishonest if the person making that statement knew, at the time the statement was made, that the statement was untrue. The fact that the work was subsequently found to be rubbish would not be enough to demonstrate dishonesty.

 

If you do not feel comfortable trying to convince a judge that any particular statement you have listed was dishonest, meaning Mr X knew it was not true at the time Mr X made the statement, then take it out.

 

Remove the reference to suing Mr X for breach of his directors duties in the last paragraph. You do not have standing to sue him for breaching his directors duties; only X Ltd can do that. The point is that knowing breach of his duty to act in the best interest of the company he was representing as director, in that he paid company money into his brother's account, is fraudulent.

 

Thank you for your time and comments and advice. I will go away and amend the letter and review it for the statement elements. The question really is, do I have enough to be successful in court. The fact that he has ignored all previous correspondence makes me think he has done this so often and been successful. However, I am not going to give up. What is your honest opinion?

[steampowered]

Thank you for your time and comments and advice. I will go away and amend the letter and review it for the statement elements. The question really is, do I have enough to be successful in court. The fact that he has ignored all previous correspondence makes me think he has done this so often and been successful. However, I am not going to give up. What is your honest opinion?

My honest opinion is that you do have enough to be successful in court and should go for it, naming both the company and the individual as defendants.

 

He may well have done this to others in the past and gotten away with it. Most people simply do not know how to enforce their legal rights and are scared of taking things to court because they do not understand the process. In reality, taking someone to court for a small claim (less than 10k) is not that difficult and is worth doing if you have a decent case.

 

The key point about this case for me is that this person simply paid company money into his brother's bank account. That is fraudulent. If a company is genuinely insolvent and gets wound up that is one thing, and in that situation you would be stuck. But directors cannot simply empty a company bank account and then wind up the company - if a company goes bust, its assets are supposed to go to the company's creditors.

 

You might not have documentary proof that he transferred this money at the moment, but you can ask for company bank statements during the disclosure process. If he refuses to provide those you can ask the judge to draw his own conclusions. I also very much doubt that this person would stand up to cross-examination in front of a judge.

 

For now what you should be doing is making sure you have documentary evidence of what went wrong with the building work and how much it will cost to fix it. You need to be ready if he claims that the work was done properly or that the problems were only minor.

 

I cannot guarantee success and obviously this case is not as straightforward as many other small claims. You always get unexpected results with litigation and sometimes the judge sees things in a completely different light. But to be honest, as long as you are below the 10k limit for the small claims track, the risk of going ahead is quite small. Legal costs are very rarely awarded in small claims track and so the main thing you would stand to lose if unsuccessful would be a couple of hundred quid in court fees and a day off work for the hearing. I think that is a risk well worth taking.

[ZBanfield]

My honest opinion is that you do have enough to be successful in court and should go for it, naming both the company and the individual as defendants.

 

He may well have done this to others in the past and gotten away with it. Most people simply do not know how to enforce their legal rights and are scared of taking things to court because they do not understand the process. In reality, taking someone to court for a small claim (less than 10k) is not that difficult and is worth doing if you have a decent case.

 

The key point about this case for me is that this person simply paid company money into his brother's bank account. That is fraudulent. If a company is genuinely insolvent and gets wound up that is one thing, and in that situation you would be stuck. But directors cannot simply empty a company bank account and then wind up the company - if a company goes bust, its assets are supposed to go to the company's creditors.

 

You might not have documentary proof that he transferred this money at the moment, but you can ask for company bank statements during the disclosure process. If he refuses to provide those you can ask the judge to draw his own conclusions. I also very much doubt that this person would stand up to cross-examination in front of a judge.

 

For now what you should be doing is making sure you have documentary evidence of what went wrong with the building work and how much it will cost to fix it. You need to be ready if he claims that the work was done properly or that the problems were only minor.

 

I cannot guarantee success and obviously this case is not as straightforward as many other small claims. You always get unexpected results with litigation and sometimes the judge sees things in a completely different light. But to be honest, as long as you are below the 10k limit for the small claims track, the risk of going ahead is quite small. Legal costs are very rarely awarded in small claims track and so the main thing you would stand to lose if unsuccessful would be a couple of hundred quid in court fees and a day off work for the hearing. I think that is a risk well worth taking.

 

 

HI,

 

Thank you very much. It's just I have been through a lot over the past year, am still living in the mess he left behind and finding it a struggle but not prepared to give up. I want to assure you that you have not wasted your time in helping me. I agree with your comments – he has done this to people before and I don’t want him to be able to continue to do this. It’s the principle of not allowing him to get away with this. Up until speaking with you I was getting confused with which legal points to reference / what was relevant.

I will spend the next few days reviewing the letter again and thinking whether there were any statements I can add which would be useful.

 

Thank you so much again.