Who to list on court action?

Hi,

I have done work for a builder as a sub contractor and he has decided not to pay me my last 5 invoices totaling about £4000 the oldest of which is 3 months and youngest 8 weeks.

I have been sending him fresh invoices weekly with interest added.

Once the newest was over 30 days old (I have payment on receipt but gave him 2 weeks) I sent harsher worder emails/invoices asking for payment within a week or I will reclaim my supplied goods(since found out that as they are in installed I would have problems doing that), so when these also were ignored I finally got him on the phone where he claimed to have an issue with the last works done on the last 2 invoices (that were over a month old by this time). when I ask if there were problems with the other 3 he said no and claimed cash flow prevented him paying them. At that point I sent my 'letter before action' to him, 2 weeks tomorrow.

I named him as owner of the company in my letter but since found that it is his wife who is listed as company director.

Do I have to resend my letter before action to her or can I proceed with court action. If proceed do I list her as director or him as owner in the action? Or both?

many thanks, Antony

Courts usually like to see you make a reasonable attempt to chase the debt before bring the matter to their attention. Therefore, I recommend the following:

i) establish with which party a contract was made i.e. the 'owner' in his own right as a sole trader or the limited company he may be hiding behind (fronted by his wife). This is not meant to be a perjorative remark but one of the founding tenets of good credit management is 'Know your Customer'. The legal identity of your customer should have been established before you started work and a credit report effected on that legal identity. A good credit account application form linked to your trading terms and conditions works a treat in this regard and is one of the reasons we include one in our new Get Paid terms and conditions package here: payontime.co.uk/terms-and-conditions/get-paid-terms-and-conditions-for-your-business

ii) if the other party is the company then run a check via Companies House to establish the registered address and the names and addresses of each of the directors.

iii) send your LBA to the registered address of the company and all the directors at their home addresses (assuming the other party to the contract is the limited company). Give the 7 days notice before issuing your court claim.

iv) Quickly get your claim in and push for an early judgement against the company

v) Whilst waiting for the courts to respond (can be around 6 months on average for claims of this size to be heard according to the Ministry of Justice figures), prepare the ground for how you will enforce the judgement. For a debt of £4000 I will seriously consider upgrading the Warrant of Execution (if awarded) to a High Court Writ which would permit the involvement of High Court Enforcement Officers (HCEOs). HCEOs have far greater powers than bailiffs and can enter trading premises at will. It's surprising how often cash can suddenly be made available when the HCEOs start unplugging the business' printers, computers and start carting away equipment, tools & materials.

vi) pick up the phone to a good HCEO (I know a couple of good ones if you need an introduction).

Finally, keep us posted on progress if you have the time of-course.

Best Regards

John Hackwood
TermsandConditions.co.uk Ltd
www.termsandconditions.co.uk

Hi John,

Many thanks for that, I have always been asked to do the work by Mr M* C* directly, I invoice Mr M* C* with the address of 'M* C*, MC* LTD at the single home/company address'. He had been paying by bank transfer with a reference 'M* C* Co Ltd' referring to 'M* C* Construction ltd'. On site I was directed by Mr M* C* or one of his staff on the jobs.

Only recently did I find out he wasn't the director listed.

Still have no idea if I should be dealing with him or his wife.

She is aware of the outstanding debt as I spoke to her last night to make sure she knew (being the director).

Regards, Antony.

Hi Antony,

We've edited your post to remove the names of the individuals involved. Best not to name names publicly in these types of situations.

Regarding this case, it would appear you have dealt with the limited company as such its the company that holds the liability. Not the directors or shareholders.

If you have sent the LBA to the company then we don't think you need to send a further letter. Once it has expired pursue the company as planned. In situations like this speed can make all the difference.

When it comes to issuing proceedings this link from Judiciary.gov.uk is excellent and covers pretty much everything you need to know in plain English.

When you get judgment you might also consider having the wife questioned by the court using an Order to Obtain Information. This will involve her attending court to answer questions under oath. We have found this to be particularly effective in situations like you describe.

We would always recommend you upgrade the CCJ to High Court action as HCEO we are legally required to full and diligent searches for goods and assets belonging to the debtor. That includes documents and in some cases we will even force entry under new powers given under the tribunal courts and enforcements act 2007 sch 12.