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December 14, 2018
What is a Winding up petition?

What is a Winding up petition?

A winding up petition is a request to the court to close down a company [“wind it up”] because it can’t pay its debts. You [“a creditor”] must prove that you are owed at least £750 and the company can’t pay you. The process starts by filling in the correct forms and sending them to the right court with a petition deposit, presently £1,600. What the company does will depend on the state of its finances and whether or not it agrees that it owes you. If your application [“winding up petition”] succeeds the assets of the company are sold, any legal disputes are settled, the company collects the money it is owed and the remaining funds are paid to the creditors. You are one of those creditors. You might get all or some or none of the money you are owed. If your petition fails you will probably be ordered to pay the company’s legal costs.

Paul Ashwell offers expertise across the full range of commercial and property law. If you require his services, please get in touch with our clerks who will be able to put you in contact with him.

By Paul Ashwell | Contracts and Debt Recovery

October 15, 2018
How to serve or challenge a Statutory demand

How to serve or challenge a Statutory demand

What is a Statutory Demand?

A statutory demand is a demand for payment by someone who is owed money [called “the creditor”] by an individual or a company. A special form must be used. The form depends on when the debt is payable and whether it is owed by an individual or a company. The usual time limit is 6 years and the demand has to be made or “served” in a special way. When the individual or company that owes you money [the ‘debtor’] receives a statutory demand, they have 21 days to either pay the debt or reach an agreement with you to pay. If they don’t respond, if the debt is large enough, you can apply to the court to bankrupt your debtor [if they are an individual] or wind them up [if they are a company]. The court fees are at present £280 for an individual and £1,600 deposit for a company.

If a demand is made on you and you don’t agree with it you can challenge it and get it “set aside” if you are an individual. A company challenges a statutory demand in a different way by applying to stop the winding up. If you make a demand which is unjustified you can be ordered to pay the debtor’s legal costs.

Paul Ashwell offers expertise across the full range of commercial and property law. If you require his services, please get in touch with our clerks who will be able to put you in contact with him.

By Paul Ashwell | Contracts and Debt Recovery

September 14, 2018
What can Commercial Dispute Mediation be used for?

What can Commercial Dispute Mediation be used for?

Commercial dispute mediation [“CDM”] is a way of resolving commercial disputes as an alternative to taking a claim to court for a judge to decide. It is one of the means of alternative dispute resolution [“ADR”]. Other means of ADR are negotiation and a settlement meeting, which is similar to CDM but without an independent mediator. CDM can take place before any court claim is made but often takes place soon after a court claim is made because then each side will understand what the other’s position is about the dispute. Often a business will not sit down and mediate unless a court claim is actually started or at least about to start. The procedure is that the two sides choose and pay for an independent mediator whose job it is to help them reach agreement, not to decide the dispute. Both sides and their lawyers and the mediator meet for ½ a day or a day and try to reach a written agreement. CDM is far less expensive than going to trial, quicker, less stressful, avoids publicity that can damage reputation and can allow a commercial relationship to continue. It is private and confidential so that if it is not successful a judge cannot be told about what happened at the CDM. About 80% of CDMs result in agreement, either on the day or shortly afterwards.

Paul Ashwell offers expertise across the full range of commercial and property law. If you require his services, please get in touch with our clerks who will be able to put you in contact with him.

By Paul Ashwell | Contracts and Debt Recovery

April 6, 2018
How do I restore a dissolved company to the register of companies?

How do I restore a dissolved company to the register of companies?

If your company has been struck off the register of companies, there are various options available to you: 

There are 2 ways of re-instating a company. The easy way is by administrative restoration. You will find the procedure, forms and cost here and a fee, currently £100, is payable to Companies House. 

If you are not eligible for the administrative method (for example because the company was struck off more than 6 years ago) you will need to get a court order to restore the company. The process is short but technical, and at the time of writing, the court fee is £308. You can find further details of the procedure here. 

A Part 8 claim form is issued with a witness statement which must include certain pieces of required information. Evidence of service of the application, any undertakings and the agreed consent order are also filed. The court procedure involves the Registrar of Companies who is represented by the Treasury Solicitor – (whose attendance might require you to pay costs of around £250 or more) – and can involve some negotiation. Information about the company can often be found free of charge at  Companies House. Whilst you may feel confident in tackling the administrative method yourself, our team of experienced commercial lawyers are able to help when an application has to be made to the court – both in drafting papers and representing you in court. 

To get in touch with a member of our Direct Access legal team, first read our simple step-by-step guide, then fill in the online form for our clerks to advise you on your next steps. 

By Paul Ashwell | Contracts and Debt Recovery

 

March 23, 2018

Litigant in Person’s status is clarified by the Supreme Court

Legal professionals and litigants-in-person alike will be interested in the recent Supreme Court decision in Barton v Wright Hassall LLP [2018] UKSC 12 which is likely to affect how litigants-in-person are treated by the court when considering compliance with CPR rules and practice directions.


Background

 The case was brought after Mr Barton, acting in person, purported to serve a claim form and particulars of claim by email on the defendant’s solicitors, Berrymans Lace Mawer, the day before expiry of the four month period allowed in CPR rule 7.5.

Mr Barton had failed to obtain permission prior to service on Berrymans who refused to acknowledge service. The claim form expired unserved and the action became statute-barred.

Mr Barton then applied for an order for retrospective validation of service under CPR rule 6.15(2). In order to succeed he needed to demonstrate a good reason to grant the application.


Decision

 The Supreme Court dismissed the appeal by a majority of three to two. Lord Sumption gave the lead judgment and agreed with the decision of the Court of Appeal below. Lady Hale and Lord Briggs provided a dissenting judgment.


Reasoning

At paragraphs 9 and 10 of his judgment, Lord Sumption set out the main factors to consider when granting retrospective validation of service:

  • Whether the claimant took reasonable steps to serve in accordance with the rules;
  • Whether the defendant or his solicitor knew of the contents of the claim form when it expired;
  • What, if any, prejudice the defendant would suffer from validation of the non-compliant service.

Paragraph 18 of the judgment is particularly useful for those who appear against litigants-in-person where there is purported non-compliance with CPR rules or practice directions.

Paragraph 18 reads:

Dissenting Judgment

The dissenting judgments of Lady Hale and Lord Briggs allowed the appeal considering that Mr Barton’s service fulfilled the purposes of ensuring that the contents of the claim form were brought to the attention of the person to be served and notifying the recipient that the claim has been commenced against the defendant on a particular day.

Lady Hale and Lord Briggs decided that Mr Barton’s circumstances would provide good reason for validation unless there were specific circumstances which swung in the balance against validation (paragraph 38).

However, Lord Briggs stated:

 

Discussion

Lord Sumption’s judgment seems to allow for some leniency towards litigants-in-person when it comes to case management decisions and how hearings are conducted, for example, giving unrepresented parties longer time limits for compliance with case management directions or assisting unrepresented parties to present their evidence during trial. However, when it comes to compliance with CPR rules and practice directions, the clear message is that litigants-in-person should be treated the same as represented parties.

Nevertheless, the message is tempered slightly by the last sentence of paragraph 18 referring to ‘inaccessible or obscure’ CPR rules and practice directions. It is not clear what parts of the CPR are to be considered ‘inaccessible or obscure’ for the purposes of litigants-in-person complying with rules and practice directions but it is assumed that the relevant parts will be identified on a fact-specific, case-by-case basis.

Indeed, both leading and dissenting judgments made tacit admissions that CPR provisions relating to service by email might need to be reconsidered and, to that end, the judgment was referred to the Civil Procedure Rules Committee. Although it could be said that the reference to the Rules Committee is a result of the prevalence of email communication since the rules on service were last considered.

In any event, it is suggested that the starting point for the courts would be to consider any parties’ failure to comply with CPR rules and practice directions without reference to whether a party is represented or not.

Similarly, in the dissenting judgment, Lord Briggs accepts that Mr Barton’s status as a litigant-in-person itself did not provide him with a good reason for the court to grant his application. Accordingly, this would support Lord Sumption’s analysis that CPR rules and practice directions’ failures should not be validated with any reference to parties’ represented or unrepresented status.

Interestingly, the courts may already be taking a tougher approach to compliance given the recent judgment in Reynard v Fox [2018] EWHC 443 (Ch) (08 March 2018) where HHJ Matthews (from paragraph 44) applies the principles in Barton referring to the “unanimous” decision of the Supreme court on the position of litigants-in-person.

Mr Reynard’s claim against the defendant, his former trustee in bankruptcy, for damages for breach of contract and negligence in relation to the conduct of the defendant as such trustee in bankruptcy was struck out under CPR r 3.4(2)(a) for re-litigating issues which were decided in a previous application under section 303 of the Insolvency Act 1986. HHJ Matthews commented, at paragraph 46:

“You cannot successfully claim that an apple is an orange, on the grounds that you do not know the difference because you are a litigant in person.”

March 9, 2018
Shareholder disputes – FAQs

Shareholder disputes – FAQs

I’m a minority shareholder in a company. It is being run in a way that is unfair to me. Perhaps I’ve been excluded from management. Maybe business has been diverted to another company. Or my co-director is receiving an excessive salary. What are my shareholder’s rights?  

These are the kind of problems that often arise within “quasi-partnership companies”. These are small, unlisted companies that are like partnerships, with few members and few directors. Our team of commercial barristers have a wealth of experience in dealing with these kinds of issues and can help if you feel you have been a victim of unfair dealings.   

What is the process and who can apply 

Unfair prejudice is assessed using an objective test. A staring point is whether the Articles of Association and any shareholder agreement have been complied with. The procedure is that the member files a petition to the court under section 996 of the Companies Act 2006 and a detailed witness statement which includes all the necessary formal information about the company as well as full evidence about the unfairly prejudicial acts. The Companies (Unfair Prejudice Applications) Proceedings Rules 2009 can be found here and the form the petition takes is shown in the Schedule. Formal information about the company can often be found free of charge at Companies House.   

When it comes to dealing with a claim of unfair prejudice, Section 994 of the Companies Act 2006 gives a special remedy to: 

[1] a “member”, that is, a shareholder who has been usually, not always, registered, 

[2] of a company  being run, or will be run, in a way that is “unfairly prejudicial 

[3] to the interests of himself or herself [and perhaps other members too]. 

So to be clear, this procedure cannot be used by a director who is not a shareholder.  

What resolutions are available?  

This process is time consuming. A court fee, currently £280, is payable in the High Court. At this point, before or after the first hearing, the legal proceedings are often adjourned to give the parties an opportunity to resolve their differences. This is usually achieved by mediation or another method of ADR [Alternative Dispute Resolution]. Everyone has an incentive to sort out the dispute by consent because an actual trial of a petition involves a great deal of preparatory legal work including service of points of claim and points of defence. It is time consuming and expensive. If a trial cannot be avoided, the judge has the widest discretion to impose a suitable solution, which is often (if the prejudice is substantial and there is deadlock) achieved by the compulsory buy-out of the minority shareholding according to a prescribed valuation process. If the company is profitable it is in no-one’s interest to wind it up. 

I would like to begin the process – how do I start?  

The best place to start is usually to have a conference with one of our barristers in which we can discuss what has gone wrong and what the solutions might be. That might be followed up with a letter drafted by the barrister to the majority shareholder explaining what they need to do if a petition is to be avoided. If court proceedings are unavoidable we can draft all the documents and represent you in court. 

To instruct a member of our experienced legal team, first read our simple step-by-step guide, then get in touch with the clerks in our central Brighton office who will be able to advise you on what to do next. 

By Paul Ashwell | Contracts and Debt Recovery

February 9, 2018
Freezing orders and seize and search injunctions – what you need to know

Freezing orders and seize and search injunctions – what you need to know

Contract law is complex and multifaceted. Our team of barristers has considerable experience of commercial disputes at all levels and will be able to help you understand and take relevant action on any challenges you might be facing.  

Our overview of freezing orders and search and seize orders reveals some of the complexities.

What are freezing orders and search and seize orders 

Freezing orders and search and seize orders are aggressive and expensive steps in litigation. Some important points to note: 

  • Both orders are injunctions, that is, an order of a judge telling someone to do or not do something.  
  • Refusing to obey an injunction is contempt of court.  

freezing order freezes a person’s assets to prevent them being disposed of, so that they will be available to pay a court judgment. If an injunction is granted, the defendant will be ordered to make a statement disclosing his assets. After the first “without notice” hearing a second, “with notice” hearing will take place within 14 days. The defendant will be present and can say to the judge that the order ought not to have been made at all, or is too wide and should be limited in amount. You can see a specimen order here.  

search and seize order is a very serious and even more aggressive injunction which can only be made in the High Court. These are often carried out early in the morning and commonly known as “dawn raids”. The aim is to preserve evidence or property relevant to court proceedings. The defendant is ordered to let the applicant’s solicitors enter premises, search them for anything named in the order and to take photos and samples. An expert will search computers. Often the defendant will also be ordered to disclose where things are. To obtain a search and seize order you need an extremely strong case at first sight, very serious damage for you, clear evidence of possession of something incriminating, a real possibility of destruction of that thing, and likelihood that the harm caused by the order will be proportionate to the object of the order.  It is extremely time consuming and expensive to prepare to apply for the order and to carry it out. You can find a specimen order here.  

What does the procedure involve?  

The procedure for both is that an application notice with draft order is issued, a fee paid, and an affidavit supporting it is made for the court to consider. This happens at a hearing which takes place without notice to the defendant.  

Full and frank disclosure of all relevant facts is required – and if it is not given, any injunction may not stand. An applicant must give the court an undertaking – or solemn promise – to pay the defendant for any damage caused by the order. If there is not already a legal claim underway the applicant will have to start one immediately and pay a fee depending on the amount claimed. 

What legal expertise is necessary? 

All the drafting of court papers in either of these cases demands specific legal expertise and this is where our team can help. Our barristers, with their considerable experience in these matters, will also be able to represent you in court. And in carrying out these orders you will need experienced solicitors with specialist knowledge whom we can help you to find. 

Our barristers are able to tackle the most challenging commercial cases. To instruct one of our legal team, first read our simple step-by-step guide, then get in touch with the clerks in our central Brighton office who will be able to advise you on what to do next. 

By Paul Ashwell | Contracts and Debt Recovery

May 2, 2017

“Freemen-of-the-land” – Go Directly to Jail (Do Not Pass Go)!

Desperate times can sometimes call for desperate measures. It is therefore not difficult to see why the suggestion that you are not bound by legislation or commercial law may be attractive to someone who has mounting debt problems or is facing eviction from their home. This is essentially what is promised by various groups of people whose theories are all based around the ‘freemen of the land’ movement in North America.

The general claim is that there is a big state conspiracy – between the government, judges, civil servants, lawyers etc – to take away citizens ‘common law rights’. This all starts from the moment your parents registered your birth. Freemen see the birth certificate as a contractual document with the state signing over the legal title of the baby. The suggestion is that there is a distinction between you as a man or woman – John, of the Family Smith – and Mr John Smith who is the legal entity owned by the state.

The suggestion is that if you do not consent to being bound by the law then you will not be bound. This way official demands for payment of fines, to appear in court etc can simply be declined. By following various freeman rituals – e.g. asking the Judge if he or she is on their “oath” / refusing to enter the Court room unless the Judge agrees that your god given rights are intact / producing a birth certificate to be the respondent rather than the man/woman themselves – then the Court will have no jurisdiction over you and the Claim will be dismissed. It sounds like a wonderfully simple way to make all of your problems go away.

The problem is that it is, put simply, nonsense.

In the 2012 case of Meads v. Meads, a Canadian Judge forensically deconstructed and dismissed freemen-style arguments in a detailed 192 page judgment. This is a long read, but essential if you have any doubt that what the Freemen are peddling is anything other than nonsense.

The real problem is that not only will the Freemen arguments not magically make everything better – they may in fact land you in contempt of court – facing imprisonment or at the very least a substantial fine.

For example, in 2015 at Sandwell Magistrates’ Court, an uninsured driver was sentenced to 14 days imprisonment for contempt of court after claiming to be a Freeman-of-the-Land and therefore outside of the jurisdiction of the Court.

Unfortunately, there are no magic cures or silver bullets when it comes to legal problems. There is no substitute for taking early legal advice from a trained professional and being represented by someone who can fight your corner in accordance with the legitimate laws of this land.

Further reading:

Meads v Meads 2012 ABQB 571 (CanLII) https://www.canlii.org/en/ab/abqb/doc/2012/2012abqb571/2012abqb571.html

https://ukhumanrightsblog.com/2012/09/30/freemen-of-the-land-are-parasites-peddling-pseudolegal-nonsense-canadian-judge-fights-back/

https://ukhumanrightsblog.com/2011/11/15/freemen-of-the-dangerous-nonsense/

http://www.birminghammail.co.uk/news/midlands-news/freeman-land-driver-jailed-contempt-10253089

http://www.bbc.co.uk/news/uk-england-merseyside-12668444

http://www.bbc.co.uk/news/magazine-36499750

http://www.eveningnews24.co.uk/news/crime/norfolk-tax-dodger-arrested-after-writing-to-queen-1-745681

July 8, 2016
£11 million Ferrari dispute resolved

£11 million Ferrari dispute resolved

Simon Sinnatt and David Lewis-Hall represented a car collector in dispute over £11million 1954 classic Ferrari.

Simon and David were instructed to represent renowned car collector Mr Christopher Gardner at the 3 week trial in the Commercial Court set to start on the 18th April 2016.  The case concerned the purchase of a 1954 Ferrari 375 Plus by American billionaire Mr Les Wexner at an auction held by Bonhams at the June 2014 Goodwood Festival of Speed. The car is one of only four of its type which remain in existence.

The car was previously owned by Mr Karl Kleve, an Ohio car collector, but the chassis was stolen from him in 1989 and found its way to Belgium. Mr Jacques Swaters bought the chassis in 1990 and restored the car to its former glory.  A title dispute arose between Mr Kleve and Mr Swaters, which was continued by their respective heirs.  Mr Gardner subsequently became involved in the dispute.

The car found its way to the Bonhams auction as a result of a purported settlement agreement between the parties fighting over ownership of the car.  Mr Wexner sought to rescind his contracts with Bonhams and the sellers, alleging that he had been misled.

A number of different claims were issued and joined together, resulting in proceedings involving 8 parties and a trial bundle running to over 60 lever arch files, to determine the fate of the car and destination of the proceeds of sale.

Simon and David were instructed as Public Access Barristers representing Mr Gardner in the negotiations between the parties who were represented by leading firms of solicitors Jones Day and Mischon de Reya and magic circle Chambers Brick Court and Blackstone.  Settlement of all claims was achieved.

Read news article here.

 

May 14, 2015

Paul Ashwell advises in Company dispute

An entrepreneur sold his shares in a media company with instalments of the seven figure purchase price being paid over a number of years. There was a dispute about the tax treatment by the company of payment of instalments, the calculation of the balance in his director’s loan account and the conduct of the company pending the final payment. Both company law and tax expertise were needed. The way forward was resolved in a round table meeting with the barrister, a forensic account whom chambers had recommended and the entrepreneur’s legal advisor from abroad.

Paul Ashwell | Contracts and Debt Recovery