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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 20907
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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We appointed a builder to carry out renovation work on our

Resolved Question:

We appointed a builder to carry out renovation work on our house.
During the project he asked for advance payments for the purchase of materials, which we made.

He told us that he had paid deposits for these materials and signed a document which stated that the ownership of this materials "held off site" was ours.

Later in the project it turned out that he had not purchased any of these materials at all and now he is entering liquidation.

We have been advised that this is fraud.

Could you please confirm if this is fraud and also what would you advise us to do next?
Submitted: 1 year ago.
Category: UK Law
Expert:  Stuart J replied 1 year ago.
did you make the payments to a limited company or to him as an individual?
how much money did you give him?
can we have as much background as possible please?
Thank you
Customer: replied 1 year ago.

The payment was made to a limited company of which he is the director.


 


The paper he signed stating the transfer of the materials was signed by him as director of the limted company (clearly stated underneath his signature).


 


I do understand that all he has done was in his role of director of the company and the responsability lies with the company but I thought that if we could prove fraudolent behaviour then this would become a criminal offence and he would have to respond of this personally.


 


The amount paid towards materials is approx £13,000.


 


We have all the documentation to prove what I am saying including:


- email from him stating that he needs the money to purchase the material


 


- his signature (albeit as director of the limited company) on the document stating the transfer of ownership of materials.


 


- precise evaluation carried out by our project manager which clearly state that the money was given towards purchasing the materials.


 


Finally, some of the payments where made as early as May 2013 and we found out that he had not purchased anything in August 2013, I believe he is entering in liquidation only now (Oct 2013).

Expert:  Stuart J replied 1 year ago.


Whether this is fraud or not would really depend on whether the
director of the company with who you arranged this new that the company was
going down the tubes at the time he asked you for the money. If that was the
case, this is certainly fraud or obtaining money by deception.

It would also depend whether the director shortly after you paid
the money gave himself a big fat bonus or wages or paid all his personal bills
or suchlike.



The first thing I would do is get as much information as possible
including accurate dates bank statements etc and I would go to the police. It
is debatable whether the police will simply say that this is a civil matter but
from the facts that you have given me, I think that the director has probably
been acting fraudulently.



If the police are not interested (I would speak to a senior
police officer) then you would be as well to speak to a solicitor who should
write to the director telling him that you are going to hold him personally
responsible and that you want the money back. If he is a director of a limited
company which is really just him hiding behind the shield of a limited company,
then it is possible to sue him personally.



The solicitor can also threaten an application to court for
pre-action disclosure of the bank statements of the limited company to see
exactly what happened to the money and whether he has indeed paid himself a big
fat bonus out of your money before going down the tubes.



I had a potential client (who I never actually asked for) who
paid herself £18,000 bonus before putting the company into liquidation a fortnight
later owing HMRC £20,000. By the time the revenue chased her, the money was spent.
The liquidator asked for the money back which was not forthcoming and
ultimately, she was made bankrupt.



This guy is potentially in exactly the same position as my potential
client was.



Do remember that if the director of the company is a man of straw
with no assets and no house etc then litigation may well be fruitless.



 

Customer: replied 1 year ago.

I am pretty sure he was already in very bad financial conditions at the time he asked for the money (in fact, right at the start of the project).


 


This statement is based on the following:


 


1. In a meeting at his office I have seen unpaid bills (not sure is these were company bills or personal) which were clearly "final reminders" of him needing to pay.


 


2. I have later found out that at least two of the builders working for him had not been paid, and I also heard that he owed money to various suppliers. However, I have no evidence for this.


 


3. After one of our payments in went "on holiday" in Cornwall, for a week during a May bank holiday, if I remember correctly.


 


I have no factual evidence for 1-2-3 but if an investigation was made which looked at the company and his own bank accounts, I believe it would be very easy to find evidence for this.


 


We have reported this to "Action Fraud" and have a crime reference number, but I don't know if this will be followed on. I have only completed the form online. I have mentioned the evidence that I have but I have not been able to upload any of this.


 


With regards XXXXX XXXXX assetts, he has a car and I assume he has a house, weather these are under his name or at somebodyelse's name (say, his wife's), I am not sure.


 


One thing is getting the money back, which I don't know if we ever will. But one other important aspect for us is making sure he does not walk off from this completely unpunished and able to do the same to other people... I would be happy with his criminal record being affected


 


 


 

Expert:  Stuart J replied 1 year ago.






I would certainly go to the police with this as I mentioned
earlier.



If you know his address, you can get a copy of the land registry
deeds for just 3 pounds here https://eservices.landregistry.gov.uk/www/wps/portal/!ut/p/b1/04_SjzS0tDQwMTIxMjLXj9CPykssy0xPLMnMz0vMAfGjzOKNjSxMDA1NjDwsjM3MDTxN3dyNDUNMjQ1MjPWDU_P0c6McFQH3SLFU/



section C, the charges register will show if he has a mortgage
and also if there are any second charges or charging orders or bankruptcy
orders.



Section A the proprietorship register will show who owns the
property. It would be worthwhile spending the 3 pounds to get that information.



You can get very basic information on the company here http://wck2.companieshouse.gov.uk/wcframe?name=accessCompanyInfo



and see whether it has been late filing accounts and whether it
has been liquidated or there is a proposal to strike off.



Can I answer any further questions for you?

Customer: replied 1 year ago.

Do you have any other advice on what else we should do apart from going to the police?


 


we had a preliminary meeting with a solicitor who was of the opinion that because the builder was acting as director of a limited company, it would be very difficult to prove fraudolent behaviour. His opinion was that it would be virtually impossible to win a court case.


 

Expert:  Stuart J replied 1 year ago.


If you take this to court yourself, you are going to need the
court's permission to sue the director personally although there is no reason
why you cannot issue proceedings against the limited company and the director
personally and let the judge decide whether he will allow the claim against the
director.

I think this is one where it would be worthwhile doing a little
bit of research and bringing the litigation yourself rather than paying £200
per hour for a solicitor.



The process is not difficult if you simply follow it step by step
it is just because of the amount involved there is a bit more paperwork than
there is in the Small Claims Court.



If however the builder declares himself bankrupt your only
recourse is the police.

Customer: replied 1 year ago.

Thanks this is all extremely useful.


 


sorry to bother you again, but just a couple more clarifications:


 


1. If we were to take him to court ourselves, where would we have to start? where can we find information on the procedure.


 


2. I am unsure if "bankruptcy" and liquidation are the same thing or if the first relates to the builder as an individual and the second to the company. As I said, we understand that the company is undergoing liquidation, however, we are not aware of the builder declaring personal bankruptcy.


 

Expert:  Stuart J replied 1 year ago.


There is no worry asking anything else, it is no bother at all.

You can keep posting questions on here and if you sign up for a
subscription which you pay monthly, (I don't know how it works but I know it is
available) you can ask unlimited questions for the one monthly fee. If you
email the site, they will send you details.



You can actually issue proceedings not just in the Small Claims
Court but in any court online here www.moneyclaim.gov.uk



and then simply follow the process. As each stage progresses, if
you have a query simply post a question.



The first thing that you need to get round of course is getting
the court to agree that the director is culpable as well is the limited
company. There is no point in pursuing the limited company if the limited
company has gone bust.



To prove the director is culpable, you are going to need details
of where your money went and in that respect, the first thing you may need is
an application to court (form N244, cost £175) for an order for pre-action
disclosure of the bank accounts showing the paper Trail for the money you paid.



Once you have that, you will have an idea whether you simply spirited
your money away.



Just because the police are not interested in bringing a criminal
fraud claim does not mean that you cannot bring a civil claim on the same
grounds against him personally

Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 20907
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
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PGD Law. 20 years legal profession, 6 as partner in High Street practice