jshtr3 v Lloyds TSB **WON** (no, really!)

[GuidoT]

Just to be a bit pedantic - Yes I have been told that it is illegal to write out a Business cheque which you know will bounce. However, they may have cancelled the cheque their end because they believed it hadn't been delivered.

LTSB are now that busy that they are paying staff overtime to make sure that payments are going out after court orders. I have found out today that even with o/t it is still taking them 4 - 6 weeks to make a payment.

So how many claims are they settling to take this long?

 

It is fraud to deliberately write any cheque knowing full well that you have insufficient funds to cover it.

 

Once I had judgement and said I was going to apply for a warrant they paid in 6 days. The banks take 4 - 6 weeks as it suits them, nothing to do with them being busy, it takes seconds for them to process a payment; think of how many cheques they process each day.

[jshtr3]

GuidoT, Is it fraud to tell someone to cash a cheque if you know or suspect that it may have been cancelled? I have been banging my head against a wall with [problem] since thursday. They say they cancelled it as it took so long to arrive from date of posting but I rang them to confirm it was ok to bank and they said YES. No one seems to want to know when I ring them now (there's a surprise then!) and I'm at a loss as to who to complain to next. I've compained to the law society and written to [problem] twice as well as phoning twice daily. Any thoughts on going to the police to complain of fraudulant activity?

[GuidoT]

I have read over your thread, is it your cheque for the charges or the warrant or both?

 

I am no expert on this, but it is not fraud to cancel a cheque, otherwise the banks would not allow this facility, you can cancel a cheque for a variety of legitimate reasons. The police will not be interested unless you can show a crime has taken place, they will just say it is a civil matter.

 

Maybe obvious, but have you phoned the bank to find out why it was cancelled? This answer may help with deciding what do to next. I have not come across a claimant who has instructed bailiffs, received a cheque and then had it cancelled?

 

Additionally maybe phone the Bailiff and explain the situation, they may have come across this before and be able to offer some advice.

[jshtr3]

The cheque that was returned was the cheque for the judgement on 4th may. £2120. I have recieved another cheque for the warrant but haven't cashed it yet. Was waiting to see if I could convince [problem] to pay it all by bank transfer.

 

The bank said the cheque was cancelled on the instructions of [problem] due to delay from posting (23rd May(allegedly)) to me recieving it (18th June). They thought it was lost. I think they never posted it as the other cheque only took 5 days from the date on their letter. I enquired about cashing the cheque on 18th as I had a conversation with [problem] on the 15th where they told me they would issue a new cheque. On 18th june they said this hadn't been done.

 

My fear is now it will take another 6 to 8 weeks to get another cheque out of them. There really aren't enough expletives!!!!!

 

Bailifs office were informed the day the cheque bounced. On the original return from bailif Lloyds stated they had paid. Apparently it could be another 4 weeks before the bailif in question submits another return. Whilst the receptionist was pleasant enough she had little/no knowledge of my case and seemed unable/unwilling to point me in the direction of anyone who may be able to help.

 

I'm just (edit) sick to the back teeth of all this now. They really are very lucky I dont live in Brighton.

[nicsussex]

They really are very lucky I dont live in Brighton.

 

Would happily put you up for the night if you want to pay them a visist!

[GuidoT]

It seems like you have it under control as you can. Not sure exactly how this works but ensure that bailiffs are booked to go back in the 4 weeks in case you do not receive the cheque by then.

 

I do not see what else you can do.

 

However clearly hagenuk has plenty of ideas (post 82).

[hagenuk]

Do not wait for the bailiffs to act - there is plenty you can do right now.

 

You can now sue the bank again for the full amount of the cheque, plus interest and costs under the Bills of Exchange Act 1882 and there is virtually no defence that they can use.

 

Under the Bills of Exchange Act 1882, cheques are contracts in themselves. As such, they are a promise by the drawer of the cheque that the person to whom it is addressed will be paid the money as stated on the cheque. This is the case irrespective of the purpose for which the cheque is paid and there are only very limited exceptions. If there are insufficient funds in the account to meet that promise or if the drawer of the cheque stops payment, the cheque has been dishonoured and the contract broken. You need only give notice to the bank that the cheque has been dishonoured and then you are entitled to sue them on the dishonoured cheque, get judgment and enforce it.

 

The only exceptions to this situation are a failure of consideration, duress or if the transaction was illegal.

 

A cheque is like a bill of exchange and is as good as cash in the hand. In your case the bank are not entitled to argue that there is no consideration for the payment, nor can they use a counterclaim to avoid payment. The bank is therefore is required to make payment of the sum of the cheque without delay.

 

Under law, when you write a cheque to someone (or as in this case, the bank writes one to you) you effectively promise that the cheque will be honoured and if, for whatever reason, the cheque is not honoured you imply that you will compensate that person in full. So as this cheque has not been honoured you can immediately sue the bank and there is virtually no defence that the bank can raise to that claim.

 

In this case, you may claim not only the amount of the cheque, but also interest on that money and payment towards the costs you incur in chasing up payment.

 

If you wanted to go further still, you could have some fun with this one. As the bank are a company, you can write to them demanding immediate payment and if they do not then pay up, you can start winding up proceedings against them at once.

 

There is no need for you to serve a separate and formal statutory demand on them which is the normal pre-requisite to commencing winding up proceedings.

 

Let's see how they like them apples.

[Rooster-UK]

Nice!

[jshtr3]

Wow, Lots going on then, Firstly, Nick, May need to take you up on the offer of accomadation if you have room for me and my maliscious weapons. Thanks for the offer:)

 

Now to the apples Hagen. Do I need to sue the bank before I start winding up proceedings? As I have demanded payment twice already do I have to tell them I'm going to sue them? Won't doing this take longer than waiting for the bailif? I really would like to start winding up proceedings against them so.... Is there a name for winding up proceedings (other than the obvious) that I need to use in the letter and should I send copies to [problem]. IS there anything else I need to include in any letters (law references etc.)?

Thanks in advance

Also, whoever had to edit my post last night, very sorry. but I was that angry;)

[hagenuk]

I would be inclined to serve them with a Statutory Demand as the cheque was not returned with “refer to drawer” (which means that there are insufficient funds in the account) and the fact that issuing a winding-up petition is complex and expensive. The threat of being wound-up is a serious one and this should prompt them to react quite spectacularly.

 

It would be very difficult for them to dispute this debt because they have already issued a cheque for the full amount and then countermanded it. A statutory Demand will usually make them realise that, as the debt is due, the best course of action for them is simply to pay. Winding-Up Petitions are normally treated with great caution by those receiving one, but should also be treated thus by those issuing due to the serious consequences of a wrongly issued petition which may result in an injunction against you, the issuer and a sizeable order for costs.

 

Lloyds are onto a loser here on so many levels and they would find this difficult, if not impossible to defend. It is a well settled principle of law that a petition founded on a disputed debt should be dismissed by the Court. The test often applied is whether the debt is disputed in good faith and on substantial grounds. If this is the case, the petition will be dismissed as of right because the petitioner will not be a creditor with the standing to present a petition. However, it is also a well settled principle of law that a cheque is to be treated as cash (Nova (Jersey) Knit Ltd v Kammgarn Spinnerei G.m.b.H [1977). Once issued the party who issued the cheque is not entitled to argue that there is a failure of consideration for the payment, nor can a counterclaim be used to avoid payment. (Isovel Contracts Ltd (in Administration) -v- ABB Technologies Ltd [2002])

 

Send them a Statutory Demand and I am sure you will not have to wait very long for payment after that.

[jshtr3]

Drafted this letter. Thoughts anyone?

 

Dear Sir or Madam

Re: Account Number 77-76-18 xxxxxxxx

 

Claim Number 7WF00914

 

As the cheque you sent me dated 23rd May 2007, which I received on 18th June 2007, was cancelled and therefore returned to me unpaid. I am writing to inform you that you have committed an offence under the Bills of Exchange Act 1882.

Unless the money owed to me in the amount of £2120.34 is paid into my bank account (details below) by (1week) I will begin court proceeding under the Bills of Exchange act for the amount owed, interest since the date of judgement and renumeration of expenses I have incurred in pursuing payment, without further notice.

I trust you will treat this matter with the utmost urgency in order to avoid further court action. I will begin court action if you fail to make payment by (date)

My current account details are:

Sort Code 20-89-68

Account Number xxxxxxxx

Yours sincerely

[hagenuk]

You have a judgment already and they issued a cheque which they subsequently countermanded - this is sufficient for you to issue a Statutory Demand - do this instead of writing any more letters.

[jshtr3]

Thanks for the advice, How do I do that?

[jshtr3]

Ok, found the form so scrap that last question but here are some more specific ones

1. Do I leave in the bit on the form about " being a minister of the crown or a government department", I'm obviously neither of those things so I think I delete it.

2. In the particulars of debt I have writen" The debt was incurred by way of a County Court Judgement in claim number 7wf00914 on 4th May 2007

The amount due as of the date of this demand is £2120.34"

Is this correct and do I need to add anything else

3. In Part A which court do I say they should apply to have the demand set aside, is it my local county court or do I have to use a High Court?

4. Do i send it to Lloyds? [problem]? the court? or all 3? Couldn't find any info about this on the insolvancy site.

Here's a link to the form I found http://www.insolvency.gov.uk/pdfs/forms/6-1.pdf

Thanks for any help

[hagenuk]

Ok, you are on the right track, but use the form 4.1 on that site, you are not intending to make an individual bankrupt, you are issuing a Statutory Demand prior to issuing a winding-up petition against a company.

 

To answer your questions;

 

1. Yes.

2. Yes, that should be sufficient, but I would be tempted to elaborate, if only for effect.

3. n/a Use form 4.1

4. It must be served on the Registered office of the company, see below.

 

You may use a Process Server or you may of course serve it yourself and it must be served on Lloyds at their registered office. Correct service of the Statutory Demand is critical. In your case the statutory demand is served by leaving it at or posting too the registered office of Lloyds Bank. In Re: A Company (No 008790 of 1990) [1991] BCLC 561 Morritt J held that a statutory demand sent through the post to a company’s registered office had been properly served. In this case the demand had been sent by registered post and was acknowledged by the company. Morritt J. stated that it made no difference whether the act of leaving the demand at the registered office was carried out by the creditor personally or by the postman. All that was required to be proved was that the demand was left at the registered office. It would appear that proof of posting alone would not have been sufficient, so do make sure that you send it via at least recorded delivery - although, if this were me, I'd be sorely tempted to make the trip to 25 Gresham Street personally....

 

If Lloyds dispute the debt and wish to prevent a petition being presented, they should obtain your agreement to set aside service of the demand. Alternatively they may apply to a court to obtain an order to restrain you from issuing a petition, however Lloyds will have difficulty persuading a court that the debt can be disputed and the demand ought to be set aside. After all, you have already obtained a judgment and they have already issued a cheque.

 

Any application by Lloyds is only likely to be granted if they establish that the debt is disputed in good faith or on substantial grounds - the problem here for Lloyds is that not only is the claim almost impossible to defend against under the Bills of Exchange Act 1882 due to their stopping of the cheque, you also already have a judgment against them.

 

If no application is made for a restraining order, or an application is made but is unsuccessful, you can proceed to issue a petition at court to obtain a winding up order to force Lloyds bank into insolvency.

 

In your case you are absolutely certain that they owe you the money and the debt is crystallised, not only that, Lloyds certainly do have the money and it is pretty clear that they will pay rather than risk your issuing a petition.

 

I almost wish they owed me the money now, instead of you!

[jshtr3]

Thanks Hagen, you really are a star and if ever you're in my neck of the woods (wakefield) there's a beer or 4 on me.

I WAS actually intending to make someone bankrupt but suppose that's just wishfull thinking. Think I may fax a copy to [problem] too. May gee them up a bit!!!

I'll get on with the form now and post special delivery tomorow as Londons just too far to walk;)

[jshtr3]

Statutory demand posted special delivery this morning. Guarenteed to arrive and be signed for (therefore served) on 2nd July. If they haven't paid me before 23rd July I get to petition to have them wound up. Seems only fair as they've been winding me up for weeks!

[hagenuk]

Excellent! I shall be watching this with great interest.

[McIavelli]

Just subscribing...& rubbing my hands together with glee. Sterling work hagen & good on ya jshtr3.

[bobcatman]

just subscribing , this is better than a tv show,chek my claim out

[checkoutdolly]

well done trev just wish it had been easier for you

[broke dave]

Can you let me get mw winnings out before you wind them up?

[jshtr3]

Don't worry dave, if you wait till "I OWN THE COMPANY:D" I'll pay you in cash and give you....... hmmmmm £40k for your trouble. I also intend to defend all cases just to set a precedent. Think I'll use [problem] as my legal team as they seem to be capable of cocking up the most basic of processes! I will also purchase Leeds United (for about a tenner as thats all they're worth) and invest the rest in premium bonds

[broke dave]

I look forward to the 40k

[McIavelli]

Is there a template for "begging letter to jshtr3" in the templates library?