Court Claim received from commercial landlord

[Merryck]

Hi all, I've been struggling to deal with this for the last couple of weeks, and have only just found this phenomenal forum!

I'm currently in the process of drafting my defence. I have already sent the Acknowledgement of Service.

The issue date was 18th September - received on 25th September. Claim form is from Civil National Business Centre.

Background

My brother and I ran a restaurant (limited company). We held a tenancy for just under 10 years with the landlord, who are a charity whose goal is to regenerate the local area. The pandemic devastated the business, I left in 2022, and with the issues surrounding rising costs my brother made the decision for the company to enter administration in early 2023.

Situation

There were issues surrounding the liquidation process, and he was advised by the liquidators not to give up the lease to the property as the landlord could also take possession of the business's assets. The liquidators entered the property to clear any saleable assets, left the place in a mess, and didn't take anything near what we thought they would.

The landlord contacted my brother and I as we were guarantors on the lease to ask us to clear away the rest and clean the property. We did what we could in the time given.

We received a bill from the landlord asking for just shy of £10k from us as guarantors on 16th August, demanding payment by 5th September. The bill was in no way descriptive, with numerous unrelated items listed against large sums of money. It includes a cleaning bill of £2300.

I responded on 5th September asking for a breakdown of costs, with a number of specific questions regarding some of the items listed. I also stated that we were awaiting some paperwork that would allow us to properly respond to the invoice sent.

I received a response on the 13th September from the landlord with no breakdown of costs, and some hastily written responses to some of my questions. More on this part below, but in their response email they stated that they were awaiting further information from their electrician. The last line of the email states they will be proceeding with an online claim against us.

The next we heard from them was the claim form.

I have sent off the Acknowledgement of Service, and also emailed the landlord reiterating my request for a breakdown, and highlighting our desire to settle this amicably outside of court. I have not had a reply to this email.

Questions

A lot of the examples I can find on here relate specifically to debt claims - in fact most of the advice I've been able to find has been entirely centred around this. Are there any resources I can look at that are more likely have information relating to my issue?

The landlord didn't send a letter before claim - how can I highlight this to the court?

In addition to the above point, the landlord demanded nearly £10k from us with 14 working days to pay. This, coupled with the intentionally unclear bill, the unwillingness to provide a breakdown, and the lack of a letter before claim leave me thinking they are trying to rush/bully/scare us into paying. I would like to point this out to the court, along with my request to settle things amicably without wasting court time - I'm not sure how to phrase this without admitting any liability or sounding like I'm complaining!

The landlord states in their Particulars of Claim that we gave them notice to surrender the lease. This was not done in any official capacity save for the phrase 'This is notice' in an email to the landlord from my brother. The lease states specifically (twice) that email cannot be considered a suitable method of providing notice regarding the lease. Had the landlord not taken possession of the property when they did we would have had access and been able to do more to clear it - lowering our costs. How can I state this for the court to consider? Should I include a copy of the lease, or quote the relevant sections?

In the landlord's reply to my email asking for a breakdown of costs, against my question regarding the cleaning bill, they stated the entire property was 'filthy'. I can prove that large parts of it were not filthy, though I'm not sure how I go about saying this.

Their Particulars of Claim is extremely light on detail - should I respond in my Defence to ONLY that which is stated on the claim form, or should I put in a more comprehensive defence including our prior communication? I don't want to find I send in too much and they disregard it, and the Particulars of Claim don't give me much to form a Defence around. At this point are they expecting everything I've got?

Finally, and I know there's a lot in here, particularly for a first post, my brother and I are both listed on the claim form as Defendants - our Defence will be joint, merely two copies of the same documents. Is this the correct way to go about it? We will separately draft a covering letter for the Defence, but should we mention that the contents within are the same?

I hope all this makes sense. There are a lot of other questions I have, but I don't want to go mad right now. I've got a lot of evidence to support us, and I'm confident that we'll be able to fight it as long as I can articulate it properly to the court.

[atticus]

There is a lot to cover here. If noone else replies, I will do so tomorrow.

[atticus]

In dealing with guarantee claims, the first thing that must be done is to examine the document containing the guarantee. Things to check include what the guarantee covers, the circumstances in which it can be called upon, and whether it has been properly signed or executed. If the claimant can satisfy all those tests, the circumstances in which a defence will succeed are rare, save in respect of possible argument about the amount that is properly payable.

The lack of a letter before claim may give you some argument about the costs to be paid to the claimant should you lose, but that is all.

I am sorry to say that if the guarantee is valid, you are unlikely to win. I will of course consider any specific points you would like to make.

As to the defence, this can be set out in one document expressed to be the Defence of both defendants, with a statement of truth signed by both of you. This should respond to the matters stated in the particulars of claim and should give your reasons for disputing liability. It may be that your best points will be about any lack of clarity in the sums claimed.

[islandgirl]

The cleaning - how was it when you moved in? Was it spotless? Do you have any photos of how it was left (and how it was when you moved in)?

[atticus]

Or is the "cleaning" in fact a dilapidations claim: this is commercial property.

[Merryck]

Thank you for the replies - I don't intend on contesting the validity of the guarantee, I don't think we'll get too far making that argument.

My understanding is that at this stage the Defence should cover only what is written in the Particulars of Claim, and that when mentioning the costs they're seeking we should at that point be stating that we need a breakdown of costs, and evidence that they incurred these costs that they have so far refused to supply, is that correct? As opposed to including their original invoice and making the full argument at that point.

islandgirl I do have evidence that the property was left in a terrible state, with a lot of equipment/mess/goods left behind by the previous tenant. I also have photographs of the large front of house area after I'd cleaned it. The two sets of photos next to each other paint a scathing picture, and fully undermine the landlord's position. This is mainly what gives me confidence in fighting them.

Should I be presenting this evidence now? Their particulars of claim state -

"We were disappointed to discover a large amount of work was required, including property still to be removed, repairs, & a deep clean throughout."

These are all points I have evidence to dispute, so I'm assuming that I should be presenting this evidence now, and requesting further documentation regarding the breakdown of costs in this initial Defence?

I think one of the problems I'm having is the breadth of the evidence I've got, and the scope of what they're claiming. They're claiming money for a vast range of issues, to the point it's been difficult to even keep track of the specifics - but then the Particulars of Claim, being a short summary of their claim are obviously quite light on the specifics and my understanding is that I should only be responding to that which is mentioned in the Particulars at this point, is that correct?

[atticus]

Can I suggest that you go back to the guarantee, and check exactly what you have guaranteed to pay. Does the claim include items outside the scope of the guarantee?

[Pezza54]

Hold back your evidence such as photographs until the court directs you to file documents such as your witness statement and evidence.
The procedure for filing evidence differs depending on which track the case has been allocated to.

[Pezza54]

As you have not received a reply to your email regarding your wish to settle the claim amicably you should write formally to the claimant asking if he will agree to the claim being referred to ADR/Mediation. The court is keen to see that all parties have tried to avoid going to court..

[Merryck]

Perfect, thank you. I'll look into doing these things.

With regards to the Guarantee, I'll have a close look over it this evening and see if I can find anything in there.

[Merryck]

I've been looking at the lease and the Particulars of Claim this evening. There are a number of items missing from the lease, including the Title Number for the property.

The dates are also empty where the lease mentions Exclusions of Sections 24-28 of the Landlord and Tentant Act 1954 - "a declaration dated _____ 2014 complying with paragraph 7 of Schedule 2 to that order was made by [My Name], whom the Tenant confirms was duly authorised by the Tenant to make the statutory declaration on its behalf" - I don't recall a declaration, I don't have one in my records. The date is empty which suggests this didn't take place?

Just below is says "declrations dated ______ 2014 complying with paragraph 7 of Shedule 2 to [the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003] were made by the Guarantors". Again, I don't have any memory, nor record of this. I'm not sure what ramifications these dates missing from the lease may have on their claim?

The lease lapsed in November 2022, and was considered to be a rolling monthly contract from then. I'm still trying to find these terms in the lease, but I'm not sure if that has any relevance?

Finally, looking closely at their Particulars of Claim;

"We were informed that [THE BUSINESS] Ltd had gone into liquidation. We acknowledged receipt of their notice to surrender their lease and vacate the property of [ADDRESS] as of 16/4/23.Ahead of their departure we requested as per their commercial lease with [LANDLORD] that they needed to clear the property of their possessions and to leave it in the same state of repair as they had received it at the start of their lease. We were not confident that this had been done and gained entry to the property on 4/5/23. We were disappointed to discover a large amount of work was required, including property still to be removed, repairs, & a deep clean throughout. After keeping the deposit [LANDLORD] was still owed £9,746.60. The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year from 04/05/2023 to 15/09/2023 on £9.746.60 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £2.14."

At no point do they name either of the Defendants in the Particulars of Claim. They merely mention the limited company that held the tenancy. At the point the company began the proceedings for liquidation I hadn't been a director for just over a year, and either way the company's liabilities can't pass to the directors.

They make no mention of our positions as guarantors. My understanding is that I can only respond to what is written in the Particulars of Claim. From what I can tell they have brought this case against us as directors of the company rather than guarantors, and therefore the statement of case should be stricken out as per 3.4(2)(a) section 3 of the Civil Procedure Rules:

"(3) those which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant."

https://www.justice.gov.uk/courts/pr...t03/pd_part03a

Am I correct here? If so, should my Defence at this point simply be something along the lines of "The Claimant's Particulars of Claim do not provide adequate information on whether the Defendants are liable for the costs claimed. The Company that held the lease with the Claimant went into liquidation and the Defendants, as directors of the Company, are not responsible for the liabilities held by the Limited Company."

I feel that if I don't make this point I could be at risk of accepting liability for the company's debts, which is a real concern of mine and something I'm keen to avoid. It has been made clear to me that representing, or appearing to represent the defunct company could cause both my brother and myself significant problems in future.

Bolded as this is my main concern here. I understand that I would merely be kicking the problem down the road a bit and that they will simply enter a new claim written correctly, but I DO NOT want it to be a matter of record that I accepted liability here.

It is clear I am going to need to discuss this with a legal professional, and I am fast running out of time to get this defence written and sent off. It was issued on 18th September.

[Merryck]

Unfortunately I wasn't able to get in contact with anyone in a professional capacity to discuss this, and I need to send my defence by Monday at the latest.

I've looked into the Insolvency Act and I'm going to base the initial defence on the lack of clarity in their Particulars of Claim, with the intention of seeking legal advice and getting the rest of my evidence together. I expect they'll enter a new claim that I'll be able to respond to properly.

[atticus]

What are you looking for in the Insolvency Act?

I agree that the Particulars of Claim are useless. Why not put in a Defence saying that the Particulars of Claim disclose no cause of action against the Defendants?

[atticus]

NB it is good that they say they accepted a surrender of the lease. Surrender ends the lease; if or when they get their act together, they may have precluded themselves from suing you as guarantors for the rent for the unexpired period of the lease term.

[Merryck]

Wow - I hadn't thought of that, thank you!!

In terms of the Insolvency Act I was going to point out section 217;

"(1)A person is personally responsible for all the relevant debts of a company if at any time—

(a)in contravention of section 216, he is involved in the management of the company, or..."

However, looking at 216...

"(3)Except with leave of the court or in such circumstances as may be prescribed, a person to whom this section applies shall not at any time in the period of 5 years beginning with the day on which the liquidating company went into liquidation—

(a)be a director of any other company that is known by a prohibited name, or

(b)in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company, or

(c)in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name."

So it doesn't really apply here I don't think. My main concern surrounding this part was that I wouldn't want to be found to have been representing the company and therefore liable for it's debts, but 216 relates to separate companies and prohibited names. Either way, I will refrain from offering any mediation at this point as my argument stands, like you say, that they haven't given any cause of action against the defendants, and I wouldn't want any offers of mediation to be consideredaccepting liability.