Can a Director of a Limited Company be sued by the Company he is a Director of?

[teak]

Can a Director of a Limited Company be sued by the Limited Company he is a Director of? I have a strange situation with a secretary, who is also the managing agent, of the dormant limited that was set up as an enfranchisement for leaseholders when the freehold was purchased. I am one of 3 directors of this limited company. I am contesting the service charge due to serious irregularities and there seems as though there is a little cartel of various managing agents clubbing together to try and oust me from my home (the other leaseholders are agents and let their flats, I'm the only leaseholder who actually lives at the property). The secretary of the company that I am a director of is also using a different name to the one he uses for his other limited companies, so there is no link, I guess, to his other limited companies on Companies House that he owns, such as a maintenance company as well as an estate agents. I have been served with a court claim by the management company which I am a director of. Under the claimant's name, i.e. the management company I am director of, it has 'care of' by one of the secretary's other companies, his estate agents who is the limited company that issues the service charge! Help would be much appreciated.

[atticus]

The answer to the headline question is "yes".

For help, you will need to give details of the case, and not just a stream of consciousness about the people running the company.

Presumably you will be contesting the claim. You may do well to collate details of the charges, and all estimates, notices etc given to leaseholders about the work.

[teak]

This claim is about service charges from 2017 to date. I have paid half of these service charges but now wish to contest. I have only ever been given one Section 20 Noice for major works and never been given estimates, breakdowns nor certificates. In the lease it states that the amount of service charges to be paid shall be ascertained and certified by a certificate signed by the lessor's auditors or accountants acting as experts and not arbitrators? It also states that one copy of the certificate be supplied by the Lessor to the Lessee. I have never been given such a certificate and am clueless to what that is.

[teak]

The Landlord, apparently, is also the Secretary of the enfranchisement limited company as well as the managing agent. I been told that this constitutes a Conflict of Interest?

[teak]

I have also personally undertaken works to the communal parts of property in 2021 because there were no funds in the service charge account at the time, this was agreed by the managing agent but he has not included these costs in the service charges to show as a credit? The works I undertook were due to flooding caused by the flats above my flat.

[teak]

As I'm new to this channel, am not sure how to proceed with posting Particulars of Claim for help. Do I post with personal details redacted?

[teak]

One further point regarding the claim, the managing agent's solicitors has informed my mortgage company, who in turn has sent me a notice to pay the outstanding service charge within 14 days or they will take action. Is this within the pre court protocol to notify my mortgage company when a judgement hasn't been made and I have acknowledged the claim stating that I wish to contest all of the claim?

[atticus]

Asking the mortgagee to pay to protect their security is a common tactic. You need to explain to the lender the details of your dispute and why you are not paying - and that they should not pay.

[teak]

I will write to the lender, thank you. I have also heard back from the solicitors regarding the issue I raised regarding breaching Pre Protocol by not having a Reply Form included in their Claim Form, which I understood a claim must have. Their reply...

'Accordingly, the Pre-action Protocol for Debt does not apply to claims for non-payment of service charge. Respectfully may we suggest you re-read our letter before action wherein it is made abundantly clear you are being pursued for a breach of covenant to pay the service charges. Accordingly, we maintain that the Pre-action Protocol for Debt has no application in this matter, an argument we have pursued and won numerous times in the county court when defendants fallaciously seek to argue its application as you are doing here.'

They have sent a Claim Form from a County Court? Please advise, thank you

[atticus]

First of all, if you have not already done so, you must complete your acknowledgement of service and return it to the court.

Then you must prepare your Defence. This will respond to each and every point in the Particulars of Claim. You will need to say, in respect of each point, whether you admit the point or dispute it. When you dispute a point you will need to say why. If this includes non-compliance by the claimant with requirements contained in legislation, then you should be clear about the legislative requirement and the claimant's failure to comply.

Consider asking the court to transfer the case to the First Tier Property Tribunal, which deals regularly with leasehold service charge disputes.

[teak]

Yes, I have sent acknowledgement of Claim via Money Claim.gov.uk. I will look to respond to each point of their Particulars of Claim, there are only 3 points relating to the lease and will prepare my defence. I will post when completed. Thank you

[teak]

The Particulars of Claim are:

1. In accordance with the terms of the lease, the Defendant is required to pay Service Charges and/or Ground Rent. This obligation is pursuant to clause Clause 2(a), which states:

To pay and contribute to the Lessor by way of further rent a service charge equal to 40 per centum of the expenses of:

1. By clause Claus 4 of the Lease, the Landlord may exercise the right of re-entry of forfeiture in the event of the Defendant’s non-payment of service charges. The clause provides as follows:

PROVIDED ALWAYS and these presents are upon this express condition that if and whenever the said rent hereby reserved or any part thereof shall be unpaid for Twenty-one days after any of the days hereinbefore appointed for payment of the same (whether the same shall have been legally demanded or not) or if and whenever the Lessee shall not in all things well and truly observe perform fulfil and keep all and singular the covenants by the Lessee herein contained then it) shall be lawful for the Lessor to re-enter the flat) or into any part thereof in the name of the whole and the same premises to have again reposses and enjoy as in its former estate and do expel thereout the Lessee and all other occupiers thereof these presents or anything herein contained to the contrary notwithstanding and without affecting the right) of action of the Lessor in respect) of any breach of the Lessee’s covenants herein contained.

1. By clause Claus 8 of the Lease, the Defendant is liable to pay the Claimant’s legal costs on a contractual basis. This clause includes all expenses, including legal fees and disbursements incurred in these proceedings. This clause proves as follows:

To pay to the Lessor all costs charges and expenses (including legal costs and fees payable to a Surveyor) which may be incurred by the Lessor in or in contemplation of any proceedings under Section 146 and 147 of the Law of Property Act 1925

[teak]

The Particulars of Defence are:

The Lessee for it)self and it)s assigns to the intent that the obligations may continue throughout the term hereby created HEREBY COVENANTS with the Lessor as follows that is to say:

1. By clause Claus 2 (b) (i) of the Lease, the Claimant has never issued a Certificate for the service charges.

The amount of the service charge and other charges hereinbefore covenanted to be ascertained and certified by a certificate (hereinafter called “the Certificate”) signed by the Lessor’s Auditors or Accountants acting as experts and not arbitrators annually and so soon after the end of the Lessor’s financial year as may be practicable and which Certificate shall relate to such year in manner hereinbefore mentioned

1. By clause Claus 2 (b) (iii) of the Lease, the Claimant has never supplied a Certificate to me, a lessee.

One copy of the Certificate for each such period shall be supplied by the Lessor to the Lessee and further copies on written request such further copies to be at the cost of the Lessee.

1. By clause Claus (b) (iv) of the Lease, the Claimant has never supplied a Certificate to me, with a breakdown or expenses and outgoings and summary of the service charge.

The Certificate shall contain a summary of the Lessor’s said expenses and outgoings incurred during the Lessor’s financial period to which it relates together with a summary of the relevant details and figures forming the basis of the service charge and other charges hereinbefore covenanted to be paid and Certificate (or a copy thereof duly certified by the party by whom the same was given) shall be conclusive evidence for the purposes hereof of the matters which it purports to certify____

1. By clause Claus (b) (v) of the Lease, the Claimant has never supplied me with a breakdown of expenses and outgoings.

The expression “the expenses and outgoings incurred by the Lessor” as hereinbefore used shall be deemed to include not only those expenses outgoings and other expenditure hereinbefore described which have been actually disbursed incurred or made by the Lessor during the period in question but also such reasonable part of all such expenses outgoings and other expenditure hereinbefore described which are of a periodically recurring nature (whether recurring by regular or irregular periods) whenever disbursed incurred or made including a sum or sums of money by way of reasonable provision for anticipated expenditure in respect thereof as the Lessor or it)s accountants or managing agents (as the case may be) may in their discretion allocate to the period in question as being fair and reasonable in the circumstances and which relates pro rata to the flat. ____

THE THIRD SCHEDULE OF THE LEASE

1. By clause Claus 6 of the Third Schedule of the Lease, the Claimant has ignored/refused my requests to rectify breaches of the lease by a Leaseholders tenants (Flat D) who has a dog.

No name writing drawing signboard plate or placard of any kind shall be put on or in any window on the exterior of the Flat or so as to be visible from outside the Flat no clothes or articles shall be hung or exposed outside the Flat or on any balcony thereof no milk bottle shall be placed on the front entrance steps of the Buildings no mat shall be shaken out of windows of the Flat and no bird dog or other animal or reptile which in the opinion of the Lessor may cause annoyance to any other Lessee or occupiers of the other flats comprised in the buildings shall be kept in the Flat___

1. By clause Claus 14 of the Third Schedule of the Lease, the Claimant has ignored/refused my requests to rectify breaches of the lease by the Leaseholder of (Flat B) who’s flat is not carpeted and has bare floorboards which cause noise nuisance.

To carpet the floors of the rooms in the flat other than the kitchen and bathroom which shall be kept covered________