Warning of a Bankruptcy Petition in a week time - Please help

[Ogo]

I need assistance for a family friend. I thought I share the problem here for possible help and advice.

The story in brief.

My friend told me that he used to have a right of way to his back garden in his former property. I have attended a party at garden some years ago. There were two flats on the ground floor, one on the first. He was living on the ground floor flat with direct access to the back garden.

So he let the property out for a while and when he wanted to sell the property his estate agents were told by his two neighbours (the one on the other flat on the ground floor and that on the first floor) that he does not have any right to the back garden and interested buyers should not be shown the garden. After he unsuccessfully tried to resolve the issue quietly with the neighbours and with so much debt lingering he decided to seek injunction from the court.

He said that at a preliminary hearing of the injunction hearing his family and friends were not allowed inside the court on the basis that it was just a 15 minutes private discussion solely for the parties and the judge in which the judge would issue directions on how to proceed.

He said the Defendant came with a barrister at the County Court. That they then gave him schedule of cost totally about £4k. At the hearing the Barrister said the court should dismissed the case and award the Defendant the cost. He said he thought the judge echoed the amount. Then went on to state that the parties should try and resolve matters and that in six weeks he would call for another hearing.

He said he never received any further notice of hearing. Meanwhile he sold the property without access to garden. six months later he received Statutory Demand from the Defendant to his new family home. He saw that it came with an order of the court that he should pay the Defendant cost of the total amount in the schedule of cost. He said he never received the said order.

He said he wrote the court that the court should indicate the track the case was determined since no track was stated on the order and that the order be amended to include that the hearing was done in private. He said he also requested the court permission to appeal (note that this was after six months of the private hearing). He said no response was received from the court and he further wrote five letters to the court once every month to amend the order. He said he never knew how to appeal since he does not know whether it is a small claim track, fast claim track or multiclaim track. He said he never received any response from the County Court.

Meanwhile he contested the Statutory Demand which the Defendant issued in another County Court from the one they had the private hearing and he lost. Now he said he has a week to pay all the money awarded the Defendant which is just above £4,000, otherwise a Bankruptcy Petition will be issued against him.

I will appreciate help and advice.

[Johnboy007]

Re: Warning of a Bankruptcy Petition in a week time - Please help

The deeds to the property should show any access.
Did your friend send letters to the court by 'Recorded & Signed for' post?
A bankruptcy petition if granted, would have to involve both parties attending a bankruptcy hearing.
Your friend would have more than a week to either pay this money or at least some of it.
Bankruptcy would not necessarily be the ruling of the court. It depends on circumstances and any evidence provided.

[Ogo]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Thank you. Yes his deeds that I saw gave him access to the back garden.
He told me when we spoke that he did send two of the letters by recorded delivery, posted three with normal post (with one also sent via email delivery) and that he personally handed one to the Court staff in person.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Has he telephoned the court and asked them for copies of the judgment and orders ? If not he should. We need to know where he stands with regards this case first to be able to know what to do with the Bankruptcy Petition. Need to know if the second hearing took place.

What was the injunction he tried to take out? To prevent his neighbours access to his garden? Or was the injunction against his neighbour speaking to the estate agent?

Family and friends are not usually allowed access to the court unless given permission, usually by way of them acting as Mackenzie friends.

If the flat had access to the garden in the deeds then it sounds like the case was possibly just handled poorly. Seems odd for the neighbour to have engaged a barrister for a case like this though so wonder if more was going on.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Also if you can get a copy of the set aside application for the Stat Demand that might shine alight and help people advise, also the original injunction application may help.

Costs of £4k for this kind of hearing seem rather excessive I must say.

[stevemLS]

Re: Warning of a Bankruptcy Petition in a week time - Please help

I hestitate to disagree but family and friends are generally permitted to attend hearings given that all court hearings are in public unless the rules provide specifically otherwise (eg family courts, court of protection etc).

I suspect the reason for limiting attendance at the Directions Hearing was that they are usually held in chambers rather than in court and so space is very limited.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Bahh don't hesitate I was thinking of family court xxx Thanks Steve

[Ogo]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Thank you all for the help and assistance.

These are the responses to the questions asked:

He said the second hearing never took place and that the court staff has not been helpful to give him any information over the phone. That they would tell him to write. I have asked him to call again to confirm what address the court hold of him as there is the possibly they were sending letters to his former address.

He also told me that he had requested for a tape transcription request for the full proceedings which he said lasted no more than 20 minutes but the transcriber told him they have not received the tape and once they do they would let him know.

On the injunction: I have asked him to try and scan the exact documents that he filed and served to the court. So I will revert back. In general he said he only wanted access to the garden as he has always had. That when he was advised by the court staff to put a figure so that the claim can be properly understood and tracked he then spoke with his Estate Agent to tell him what would be the lost value. That he was advised by the Estate Agent it would be reduced by between £15,000 and £25,000. So he filled £12,500 for each of the defendant. That again the court staff said since he was having both defendants he must only have one form and put the total of £25,000. This was what he said he did. Like I said I have asked him to scan the injunction forms he lodged and served.

Furthermore, he told me that after he lost the contest of the Statutory Demand hearing heard at another County Court, the Solicitor who represented the Defendant requested for over £13,000 in costs. That the judge in this instance rebuked the Solicitor and only granted the Solicitor £100 in costs on behalf of the defendant.

[Ogo]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Two files attached in PDF.
The first attachment: Application for Injunction with Witness Statement used instead of Particulars of Claim.
The Second attachment - Dismissal of the Injunction Order and the Statutory Demand Order.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Court staff should NOT give legal advice.

Thanks for getting the paperwork having a look now.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Ok, it is a bit more complicated than initially described.

This is a full on dispute of ownership of the land surrounding the properties, as opposed to some irritating neighbours claiming your friend lost access to the garden through non use.

That ownership of the land needed to be sorted out first before any injuction could be put in place (then only if the neighbours continued their assertions of the ownership and access rights to the land).

The initial claim for injunctive relief AND damages of £25k would have put the claim into fast track so costs would be applicable. As he lost the claim the costs are payable as assessed.

What's the position now, he's sold the flat without access and suffered the loss on the sale price ? SO it goes down to experience and the land issue no longer exists in essence so we have no need to go into it, just these costs of £4k ordered when he lost the case.

This order of 15th July 2014 - what is that in relation to and who is the applicant. The way you described it it was a Statutory Demand bought by the defendant in the injunction claim - however it states the applicant pay the £100 costs (on the respondent claiming over £13k costs). Which makes the applicant your friend? So not entirely sure what's going on there.

[Ogo]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Thank you. I provided his narratives as stated in his witness statement.

The 15 July order is the statutory demand that the neighbours fixed on his new home. He contested the statutory demand and lost. The legal representative of the neigbours was denied requested cost of £13k as expenses they incurred to defend the statutory demand and the judge only awarded cost of £100.00.

Now he has been told to pay the awarded amount in full otherwise Bankruptcy petition would be issued against him without any further notice.

He expected an opportunity to have put his case across to the judge but was never given that opportunity. That the single Barrister representing the two neighbours told the judge to dismiss the case and it was dismissed. The single barrister representing the two neigbours requested for cost as was in the schedule and from that order the cost was awarded in full to the neigbours.

He wanted assistance or advice on how to appeal the decision of the District Judge who dismissed his injunction without giving him an opportunity to present his case. He said the case was not tracked and that the court has never responded to his various requests for the order be amended to state the intention of the court relating to the track. He said he believes it is extremely unfair to be deprived to present his case and yet he was awarded cost against him.

He also wanted assistance or advice on what to do with the bankruptcy order.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Right ok. The judgment of the 23rd September 2013 is set - the costs ordered at the £4k. The claim is stayed until 25th October. For what purpose or reason I do not know. He needs to ask the court if there were any other orders or documents following the hearing on the 23rd.

At the point the costs were ordered 23rd Sept they became owing. This is what the Stat Demand was enforcing so there was no defence to it, the costs should have been appealed at the time.

Now I get confused as this doesn't make sense.... ''The legal representative of the neighbours was denied requested cost of £13k as expenses they incurred to defend the statutory demand and the judge only awarded cost of £100.00. ''


Can you check this is fact please:

The neighbours issued the stat demand to recover the costs awarded on 23rd September - £4087.20

Your friend entered an application to set aside the Stat Demand, and lost

The neighbours barrister asked for £13k in costs for the set aside hearing? this was refused and awarded £100

So total amount owing to the neighbours is £4087.20 + £100.

If that is the case then that is correct and he now must pay the £4187.20 to the neighbours solicitors to avoid bankruptcy.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

Sorry to say I think he has been poorly advised in the past, if he was advised at all.

The issues with the land surrounding the property and ownership of it were far too complex to go straight in for an injunction.

Almost a year has passed since the original hearing and order of costs - any appeal would have needed to be bought immediately.

[Amethyst]

Re: Warning of a Bankruptcy Petition in a week time - Please help

I know your friend doesn't really want to hear this, but if he doesn't want to be made bankrupt he needs to get in touch with the solicitors and negotiate payment of that costs order within the next few days, and will have to put it down to experience.

Now he has been told to pay the awarded amount in full otherwise Bankruptcy petition would be issued against him without any further notice.

The Stat demand was for costs awarded in a county court judgment, they would have to have been appealed at the time. The Stat Demand is them enforcing that order, thus he has no defence to it (unless he'd already paid it or the costs weren't awarded etc) the court wouldn't be interested in hearing arguments about the land issue, he is only interested in the enforcement of the costs order. That's why his set aside app was dismissed and he wasn't given chance to go through the arguments.