Received a claim - No Evidence - Do I have a case to answer?

[Annie87]

Hello,

Last year, March 2013 I set up a business with a old school friend of mine. As I had the industry specific knowledge it was agreed that she would pay the set up costs of the business.

A series of invoices covering the Registration of the business, Design and Web costs were issued and/or settled in March/April 2013. At no point, in the plethora of recorded email conversations was I ever asked for payment. I was never even copied in or sent any invoices.

In August 2013 due to a series of fall outs we decided to discontinue the business. Again in all the recorded conversation between then and now, at no point am I asked for payment.

Fast forward to present day (March 2014) I have had yet another falling out with my old business partner as I set up another (unrelated) business with different friend, she was not happy about this. As a result of her finding out about this she wrote me an angry letter stating that we agreed via email that I owed her for the set up costs of the first business.

I replied stating that this was not true and that I was also aware that a lot of these invoices are unpaid and owed by a business that no longer existed. I also requested she forward me the chain of emails where we allegedly agree to share the costs and also send me proof via bank statements that those invoices were paid.

She refused to do so (because they do not exist) and instead issued a court claim.

I find it astonishing that you are able to issue a claim over a dispute less than 24 hours old with no evidence.

I was just wondering whether it was possible to write to the court and ask for the case to be thrown out as there is no evidence rather than having to actually go to court over a frivolous and fictitious claim.

Any advice would be greatly appreciated, :-)

Annie

[wales01man]

Re: Received a claim - No Evidence - Do I have a case to answer?

Was this a legal partnership or a Ltd. company?

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

A Ltd. Company

[wales01man]

Re: Received a claim - No Evidence - Do I have a case to answer?

Is the company Liquidated or dissolved did you trade?

Important are you still a Director or shareholder?

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

Thanks for your swift replies :-)

The company is dissolved.

I was listed on companies house as a Director, Business Development Manager
My partner was listed on companies house as Director, Company Director

Not sure if this means anything?

[Amethyst]

Re: Received a claim - No Evidence - Do I have a case to answer?

DCA's do it all the time

Really though there should be certain pre action protocols followed. Did she indicate she would be taking court action ?

Keep any responses to her professional and formal as the email chain may be needed in court.

Do you have any emails from when you started the business and agreed ' As I had the industry specific knowledge it was agreed that she would pay the set up costs of the business.' ?

Do you have copies of the invoices etc ? - who was responsible for the accounts for the business ? did you have a business account set up ?

If you type up the particulars of claim that would be of help in seeing whether you just ask her claim to be struck out or in formatting a defence.

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

The Particulars of the Claim is literally the following:

"The claim is for payments owed towards the set up of the business

Web design £600
Web Services £483
Logo Design £113
Registration and set up costs £83"

___

So not much information for me to work with.

I have no access to the webmail platform anymore so I can not access any emails where the liability was originally discussed.

I was given access to the invoices only after the dispute was brought up last week.

There was a business account set up but it was never used. Instead the invoices that were paid were done so either using the claimant's personal account or the claimant's separate business account (she runs another business).

Finally, she did indicate in her penultimate letter that if I didn't pay in 12 hours she would file a claim. I replied requesting the evidence and to meet up to discuss it properly and she just ignored my request.

Thank you again - I'm finding all this quite scary!

[enquirer]

Re: Received a claim - No Evidence - Do I have a case to answer?

Looking at it first from the creditors point of view ...

Presumably, the money was spent, and goods and services ordered (and not paid for), by the company. If this is so, the debt effectively perished with the company.

However, if creditors can make a case that the company traded fraudulently, then it might be possible to pin liability on the Directors (this would be a long shot, and very unlikely unless the sum of money involved was quite substantial).

It could also be argued that you have been negligent in that as a Director, you should have been au fait with what was being spent (AGM, Annual Accounts, etcetera).

How did the company acquire the money in the first place? Normally, outside funding like this would go through the books as a Directors loan, and then be listed as a liability. A gift is also possible, although this is less common.

And then with regard to your former friend ...

Without any evidence whatsoever to back up her claim, she is going to face an uphill struggle. You certainly could apply for the claim to be struck out on the grounds that it has no prospect of success. There is a fee for this.

Beware the capriciousness of judges where strikeout applications are concerned, as decisions tend to be erratic. You could find that the claim goes forward and your fee is lost.

Either way, the court will certainly take an extremely dim view of a claim issued with such haste.

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

Thank you Enquirer,
How did the company acquire the money in the first place? It was not put through the books at all nor were any records made. I wasn't responsible for the accounts or operations which was why I was listed as a Business Development Manager as opposed to a Company Director. However, I understand and accept your point about being 'au fait'. A learning curve for me I guess!

So I guess I should defend the case? I have prepared the following to type into the form:

On the 14th of March 2014, for the first time ever, I was provided with access to the 'XXX Beauty’ Invoice folder on Google Drive accompanied by hostile and threatening letters asking for payment. This folder contained invoices that were issued or settled in March and April 2013. I believe I was never provided with access to these documents before this date because I was never to be held liable for these bills. Ms XXX has never asked me for payment for any of these bills nor has she sent me any invoices before 14th March when she decided I owed him this money. The invoices in question were either issued or settled up to twelve months ago. In the plethora of recorded and documented conversation I have had with Ms XXX during and since the time the invoices were issued, there is nothing at all to suggest my liability for the bills, that I entered into a credit agreement with Ms XXX or that Ms XXX has ever asked me for payment.


In less than 24 hours after bringing my liability in to question and after ignoring my suggesting to meet to discuss the dispute she had informed me she had issued a claim and asked me not to contact her regarding the dispute.


Finally, In an open attempt to remedy the dispute I wrote to Ms XXX saying that if she provides me with the bank statement information showing that she is at a loss and sends me the conversations she says are accessible where we allegedly agree that I am to be held jointly liable for the set up costs then I will happily arrange payment. I do not believe this is unreasonable. I have also offered to meet with her to discuss further.



I am astonished legal action has been taken over a dispute less than 24 hours old and I believe she is taking out this action not because he genuinely believes me to be liable but because she currently holds a grievance against me.


Is that OK to write?

[Amethyst]

Re: Received a claim - No Evidence - Do I have a case to answer?

It's a bit personal, give me ten xx

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

Thanks! :-) Really appreciated

[Amethyst]

Re: Received a claim - No Evidence - Do I have a case to answer?

1. The Defendant admits entering into a business venture with the Claimant in March 2013.
2. The basis of the verbal agreement to enter into the business venture was that the Defendant would provide the knowledge and experience and the Claimant would fund set up costs of the business.
3. The Claimant was responsible for the finances and accounts of the business and at no time before the 14^th March 2014 had the Claimant indicated that they had rescinded the verbal agreement made in March 2013.
4. The business venture didn’t take off and the business was closed by mutual consent on XXXXXXXX 2014.
5. The Defendant denies any liability for payment to the Claimant or any third party of the sums claimed or at all
6. Under Civil Procedure Rule 16.5 (4) Where the claim includes a money claim, a defendant shall be taken to require that any allegation relating to the amount of money claimed be proved unless he expressly admits the allegation. Therefore It is expected that the Claimant be required to prove the allegation that the money is owed as claimed.

Something like that? See what others think if it needs any more detail in at this stage. and obviously amend if I have anything incorrect.

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

Great, Makes perfect sense Amethyst. Thanks :-)

Great Help

[Amethyst]

Re: Received a claim - No Evidence - Do I have a case to answer?

If she continues with the claim after that you can put all your evidence etc together in a Witness Statement, so any phonecalls, log them, and emails keep them, any documents on google drive, get them printed off. Basically build up your evidence folder. Pity about the original emails being on webmail you don't have access to - did you have nothing in your own emails about initial start up costs, the discussion over the business idea etc?

[Annie87]

Re: Received a claim - No Evidence - Do I have a case to answer?

Thanks, unfortunately I have very little by way of emails. It's a lesson I won't need to be taught again though !