Claim to now defunct company worried about personal liability

[KatherineR]

My husband was director of a limited company which has not traded since 2020. The company put on charity art events so was never hugely profitable. Long story short he worked with an agency who initially agreed to work pro-bono to promote his work but who sent him an invoice a year in saying he owed them £15k for work done. This was back in 2020. He has been trying to resolve this but we have just received a County Court Claim Form and need to respond within 14 days.

There is no money in the company. We have just filed accounts for year to Nov 2021 for £0 and are in the process of voluntarily winding up the company. So we are not worried about having to pay the invoice from company money.

However, the claim was addressed to both the company AND my husband directly (no address, it just says "Company (1) & Husbands Name (2)". We are concerned that they could come after us personally for the money, even though the initial contract was between the two companies with no personal guarantee clause. Does anyone know if this is possible?

We also received no notice that the CCCF was on it's way.

Can anyone advise how best to frame the response? Do we focus on why we don't believe any monies are owed, the fact that the company has no money or the fact that there was no notification? Or all three. I can't find anything on here specific enough to use as a template.

thanks in advance
Confused!

[efpom]

I think from your writing that your husband is named as the 2nd Defendant. Was the invoice for £15k addressed to the company or to your husband?

[echat11]

Hi Kath

Something you need to do straight away is Acknowledge of Service, that can be done online, that gives you extra time to research and file your Defence. It will give you 14 days + 14 days (5 days postal).

https://legalbeagles.info/library/gu...ledge-a-claim/

[atticus]

After acknowledging service, your husband will need to prepare his Defence. What you say suggests that he can dispute the claim on the basis that the claimant contracted with the company and not with him. There may also be arguments as to whether the claimant was entitled to charge.

[islandgirl]

Do you have any written proof (emails texts etc) saying they were happy to work for no charge? Was the invoice disputed when received? It sounds as if you could dispute the invoice but written proof is the key

[echat11]

Also Courts / Judges take a dim view, where Pre Action Protocols hasn't been followed.
The Claimant should of sent a Letter Before Action seeking resolution, before instigating
legal action (if that is the case).

So the Claimant has 'messed up' there.

'We also received no notice that the CCCF was on it's way.'

Posted for information only -

https://www.civillitigationbrief.com...ur-healthcare/

[dslippy]

The big question is what, if anything, your husband may have done to add his personal liability. If he got that right, the court should not find him personally liable.

[atticus]

Indeed.

[KatherineR]

I think from your writing that your husband is named as the 2nd Defendant. Was the invoice for £15k addressed to the company or to your husband?

Thank you for your reply.

It's got his name, then the company made on the following line - no address. I take this to mean he was the contact at the company, rather than a separate entity. Is this a reasonable assumption? Surely if it was to him as an individual it wouldn't have the company name, and if it was to both it would say "Name & Company"? Is this wishful thinking!?

[KatherineR]

Do you have any written proof (emails texts etc) saying they were happy to work for no charge? Was the invoice disputed when received? It sounds as if you could dispute the invoice but written proof is the key

Thank you for your reply.

Unfortunately not really, it was all verbal. But we do have emails disputing the invoice from when it first arrived. I'll dig these out.

[KatherineR]

The big question is what, if anything, your husband may have done to add his personal liability. If he got that right, the court should not find him personally liable.

Thank you for your message. Can you please give me any examples of ways he could have added his personal liability?

[efpom]

I think you need to post up the claim form you received from the court - suitably redacted, That will establish who the defendant or defendants, if more than one, are. There are a few technical issues on a claim form, which a claimant must comply with.

[KatherineR]

I have drafted the following defence. I would appreciate any feedback. Is it too much detail? Not enough? I include a few colloquisims, is this acceptable in this kind of correspondence? I also worry it sounds like we didn't pay them because they weren't very good at their jobs, not because we thought they were working for free which was the case.

I have included his personal circumstances even though in the first paragraph I assert that the agreement was between the two companies. Do I need to be more explicit about why I've done this? In case they're trying to pursue my husband personally?

Thanks again for everyone's help.
Katherine



The agreement signed by me on XXX is between XXX and XXX with no personal liability clause. I am a named contact on the agreement. XXX has not traded since May 2020. The company made films and art projects and did not survive the pandemic. Accounts have just been submitted for the year ending November 2021 showing income of £0. My accountant is in the process of asking Companies House to strike off the company.

The invoice sent on XXXX was immediately disputed for the following reasons:

- The working arrangement between XXX and XXX was that XXX would provide PR and marketing support on a pro-rata basis. The projects we worked on together were not for profit with all proceeds going to charity. There was an understanding that if the projects became profitable in the future then we would discuss XXX being recompensed.
- The contract which I signed on XXX was sent late in the evening the night before a big exhibition launch which I had been working for months to prepare for. I did not get in writing the verbal assurances I received that this did not change the pro-rata nature of our relationship because I was so 'up against it'. I would never have agreed to pay up front marketing costs for a non-profit making project.
- At the press event organised by XXX the following day not a single member of the press turned up. As a result I met with the team at XXX and told them I no longer needed their services.
- XXX did not deliver on any of the services outlined on their invoices except for creating an Instagram account and creating posts which I found off-brand and had to ask XXX to stop as it was damaging to my reputation.
- Despite several meetings, phonecalls and email exchanges, fees were never discussed. I never received any invoices or statements until the total bill which arrived on XXX that I immediately disputed. Please see attached email correspondence for evidence.

The County Court Claim Form is the first correspondence I have received relating to the claim. I did not receive a Letter Before Action.

My personal situation is that I am the sole provider for my family including two pre-school age children. I have minimal savings and settling this amount personally would be cripalling for my family.

[pt2537]

It seems to me from what i have read so far that there may well be merit in a part 24 application for summary judgment. This claim appears to be brought against your husband incorrectly, and as such the Court can dispose of this at a summary judgment hearing, thus removing the need for your husband to have to engage in what could be up to an 18 month long process as the case goes through the Courts.

[atticus]

That defence needs to be rewritten. If your husband is denying personal liability he needs to make this clear - which the draft does not do with sufficient clarity. It needs to be made absolutely clear that any contract was between the claimant and H's company, and that H was in no way a party.

Also, H should not say things like "The contract which I signed on XXX ..." without making it clear that he was signing for the company.

You say services were to be provided on a "pro-rata" basis. In your first post you said "pro bono". Which is it?