Default judgment against first defendant (second defendant filed defence)

[typonaut]

I have filed a claim against two defendants, both limited companies, for the supply of faulty/misdescribed goods.

The time has expired for the defendants to file a defence or acknowledge service.

The second defendant has filed a defence, and implies that the first defendant is responsible.

The first defendant has not filed a defence or an acknowledgement of service.

Can I get a default judgment against the first defendant, and start persuing recovery action? If so, is it possible to get an order for a bank to put a charge-back against the original debit card transaction? If this is not possible, how can I discover the card processing company that processed the card payment, and seek to seize any other money that they might pay (from other, unrelated transactions) to the first defendant in the future?

Thanks

[R0b]

Can I get a default judgment against the first defendant, and start persuing recovery action?

Yes, you can.

if so, is it possible to get an order for a bank to put a charge-back against the original debit card transaction?

That's not a remedy the court would be able to order since the bank is not party to the proceedings for starters but also if I recall the charge back procedure is a protection in the Visa/Mastercard rules.

Your enforcement options would the list available in Practice Direction 70 (link here).

[typonaut]

Would the card payment processor be a third party debtor? Would a bank be a third party debtor, or would that need a sequestration order?

I expect I can find out who the card processor is, possibly through my bank, but how do I discover where the funds went (so that I can get an order to seize money from their bank account)?

I exect the firm is VAT registered, so is there a way to ask HMRC for the bank account details (usually required for VAT payment)?

The claim is still at the CCBC/moneyclaim.gov.uk, what is the process for getting a default judgment - there doesn't seem to be any way to do this from the claim online.

Thanks

[R0b]

Unless I am missing something, I can't see how the card payment processor will be a third party debtor - they would simply be a conduit in the process.

If you want to find out where those funds ended up then you would need to summon the defendant to court and answer certain questions. If you have an invoice or something else that shows their bank account details you could try and dip into their account that way, albeit there is some risk since you cant guarantee there being funds in that account.

I doubt HMRC are going to divulge that information unless by a court order. This will be at your expense.

Is there any reason why you arent considering High Court bailiffs? If this is a business debt then I believe HC bailiffs can force entry to premises.

Third party debt orders are risky and rarely achieve success unless you can retain the surprise element.*


As for obtaining judgment, check out the MCOL User Guide.

https://www.google.com/url?sa=t&sour...QXcwXAEb7W4k70

[typonaut]

You could argue that anyone paying the defendant/holding money for them is a conduit. The payment processor is holding their money for a short period, I want to intercept that - I don't really see that being any different to the bank holding the money.

I think the total sum is marginally under the HC bailiff limit. But also it's a problem seizing goods because I'm pretty sure the address I have is just an accomodation address - ie just receiving post, etc.

Sure the court order is at my expense, but that may be the only way to get the information.

[R0b]

You could argue that anyone paying the defendant/holding money for them is a conduit. The payment processor is holding their money for a short period, I want to intercept that - I don't really see that being any different to the bank holding the money.

But there is a difference. The payment processor is processing a payment on behalf of the debtor, it is has no contractual or tortious relationship with you at all, so it can't be a debtor. Third party debt orders have a two-stage process whereby the first stage is an interim order freezing the debtor's money pending a final determination - I'm not sure how you can freeze a payment that is being processed if the transaction has already occurred nor can I see how you would be able to intercept any other transaction . In any event, the payment processor and/or the debtor is likely to argue that the card processor is an agent of those funds and case law has established that a third party debt order cannot be attached to an agent holding monies on behalf of the debtor.*

Of course you are welcome to try, but I think you might be better off exploring other ways and means of ascertaining the Defendant's bank details.

[typonaut]

The bank doesn't have a contractual or tortious relationship with me either - that's essentially why it's called a "third party" debt order isn't it?

Anyway, I have another idea on getting the bank details… that I'll leave for another time.

The interface for moneyclaim.gov.uk would not allow me to ask for judgment, so I ended-up sending off the paper form. I don't know the reason for this, but guessing that it is because there are two defendants and one filed a defence - I understand that's not what should happen, but that could be just a bug in the web site (or something completely different).

[R0b]

Yes that's true but your choice of words in the beginning confused me because you referred to the payment processor as a being a debtor when they are not. The third party debt order doesnt elicit funds other than funds belonging* the defendant to the claim.*

The MCOL system is ages old but you are probably right in that part of the functionality wasnt factored in. Still, you should be able to seek judgment just make sure to follow up if you've not heard back or it might get lost in the system.