Building dispute with a limited company

Discussion in 'Legal' started by betamaxbandit, Oct 22, 2018.

  1. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    I'm a sole trader and work from home.

    I entered into a contract with a builder, a limited company, to renovate my home. I paid him a deposit before work commenced and then staged payments while work was progressing, totalling £X. I moved out of the property, into temporary accommodation, while work was progressing (I'm still there). The contract had a clause that work should be completed by Z date and the builder would ensure the property was habitable by that date. Work was very sporadic and despite me agreeing to extend the moving in date, having numerous meetings with the builder and seeing broken promises, work still did not progress without any explanation from the builder. In the end I terminated the contract because of breach of contract.

    I'm now wondering what the best thing to do is. The work done so far amounts to approximately £Y, as assessed by a chartered surveyor. There's no roof on my house and its completely uninhabitable. The builder has stated he's getting out of the building industry so I expect him to wind the company up very shortly.

    £X - £Y = several tens of thousands of pounds.

    If I make a court claim, I'm anxious that because its a limited company I'm dealing with, even though I have a good case, I won't get any money back. Looking up the builder on beta.companieshouse.gov.uk/ I see he has in the last few months created a few new companies, perhaps using my money to fund them.

    Any suggestions how can I get my money back, which I need to rebuild my home and carry on with my business please?
     
    Posted: Oct 22, 2018 By: betamaxbandit Member since: Oct 22, 2018
    #1
  2. SteLacca

    SteLacca UKBF Ace Free Member

    1,038 196
    You can object to any strike off application whilst you pursue your claim.
     
    Posted: Oct 22, 2018 By: SteLacca Member since: Jun 16, 2016
    #2
  3. Mr D

    Mr D UKBF Legend Free Member

    10,086 1,057
    Can go down civil route and get a CCJ from court against the limited company then try and enforce it. If company doesn't have any money and no assets you will be out of luck.
     
    Posted: Oct 22, 2018 By: Mr D Member since: Feb 12, 2017
    #3
  4. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,349 290
    If the CCJ/Bailiffs route does not work you may consider paying to Liquidate the Company (or waiting to see if he Liquidates it himself)

    However it will cost several thousand pounds for you to put the Company into Liquidation and you may not recover any money.

    Your petition costs will rank in priority to other costs and debts in the Lqn so if there are suffienct funds available this will be repaid first but your capital debt will rank as an unsecured creditor alongside other unsecured creditors.

    The Lqr will have the power to pursue the Director personally for any misconduct etc and report the misconduct to the Insolvency Services who can also take action but again this will depend on the evidence available and whether there are sufficient funds in the Lqn to take matters further.

    You can also complaint yourself to the Gateway here rather than wait for a Liquidator to do it:

    https://www.gov.uk/complain-about-a-limited-company

    You may be able to recover some of your money from the Bank - it's worth talking to them about S75 of the Consumer Credits Act.
     
    Posted: Oct 22, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #4
  5. Bob Morgan

    Bob Morgan UKBF Regular Free Member

    154 29
    Is there a Supervising Architect and a formal Building Contract?
     
    Posted: Oct 22, 2018 By: Bob Morgan Member since: Apr 15, 2018
    #5
  6. smallclaimsassistance

    smallclaimsassistance UKBF Enthusiast Full Member - Verified Business

    801 212
    Not can. Must.

    Your only option is to take legal action immediately. The sooner you do so, the better your chances of seeing any money. The corrollory is also true. Delay, and you can say goodbye to your cash.

    Dean
     
    Posted: Oct 22, 2018 By: smallclaimsassistance Member since: Jan 7, 2015
    #6
  7. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    Thanks for suggestions and advice, so far.

    > Is there a Supervising Architect and a formal Building Contract?
    There are architect plans, but no acting architect anymore.
    There is a building contract, but a custom type drawn up by the builder. Its not a JCT for instance.
     
    Posted: Oct 23, 2018 By: betamaxbandit Member since: Oct 22, 2018
    #7
  8. Gecko001

    Gecko001 UKBF Enthusiast Free Member

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    Did the contract describe the circumstances under which it may be terminated? A simple breach of contract may not be enough to allow one side to terminate a building contract.
     
    Posted: Oct 23, 2018 By: Gecko001 Member since: Apr 21, 2011
    #8
  9. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    Not explicitly, but as I said it did include a clause "... work should be completed by Z date and the builder would ensure the property was habitable by that date.". I assume if by that date the house wasn't habitable then the builder would be in breach?

    Another point. I've read that under certain circumstances a director can be liable, even in a limited company. Does this include negligence I wonder? And could it be that a director is negligent if they employed an unqualified subcontractor, which they did not supervise adequately?
     
    Posted: Oct 23, 2018 By: betamaxbandit Member since: Oct 22, 2018
    #9
  10. Mr D

    Mr D UKBF Legend Free Member

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    There would have to be an investigation for a director to be found anything. Not entirely sure who would investigate supervision of contractors or what impact it could have.

    Directors have liability protection by the company, getting past that appears to be quite a job unless an investigation takes place and finds certain issues.
     
    Posted: Oct 23, 2018 By: Mr D Member since: Feb 12, 2017
    #10
  11. Gecko001

    Gecko001 UKBF Enthusiast Free Member

    2,788 440
    The contractor might have breached the contract, but not all breaches of contract are grounds for terminating the contract. Not finishing on an agreed date written into a contract, would be a breach of contract, but it would not be sufficient grounds on its own to terminate a contract.

    If you were advised by a professional to terminate the contract, you might have grounds to claim damages from the professional.
     
    Posted: Oct 23, 2018 By: Gecko001 Member since: Apr 21, 2011
    #11
  12. Blaby Loyal

    Blaby Loyal UKBF Regular Free Member

    468 100
    A breach of contract on the face of it would make a contract voidable but not automatically void.

    You could choose to continue with the contract after the breach but claim for damages.

    You'll need to forget all and any notion of the director being investigated for negligence and/or personal liability purely from a costs perspective.
     
    Posted: Oct 23, 2018 By: Blaby Loyal Member since: Jun 12, 2018
    #12
  13. Bob Morgan

    Bob Morgan UKBF Regular Free Member

    154 29
    He saw you coming!
     
    Posted: Oct 23, 2018 By: Bob Morgan Member since: Apr 15, 2018
    #13
  14. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    Thanks Bob. Anything constructive, as I'm at a bit of a loss what to do.
     
    Posted: Oct 24, 2018 By: betamaxbandit Member since: Oct 22, 2018
    #14
  15. Blaby Loyal

    Blaby Loyal UKBF Regular Free Member

    468 100
    Have you actually made a demand on the builder for £X-£Y?

    If so, what was the outcome. If not, that might be the next step.

    If the contract was with a limited company (as it seems to have been) and it only has the usual 'builder's assets' then you'll need to be aware that your efforts are very likely to be in vain.
     
    Posted: Oct 24, 2018 By: Blaby Loyal Member since: Jun 12, 2018
    #15
  16. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    Yes, I've sent a Pre-Action Protocol. Also invited to ADR. And now just waiting for a response.
     
    Posted: Oct 24, 2018 By: betamaxbandit Member since: Oct 22, 2018
    #16
  17. Blaby Loyal

    Blaby Loyal UKBF Regular Free Member

    468 100
    OK - well you can't really do anything further until they either respond or don't respond.
     
    Posted: Oct 24, 2018 By: Blaby Loyal Member since: Jun 12, 2018
    #17
  18. betamaxbandit

    betamaxbandit UKBF Newcomer Free Member

    6 1
    The company hasn't responded to my Pre-Action Protocol and the time has now expired.
    But the company did phone me this week to inform me it was going into liquidation. Its not clear to me whether that is voluntary or compulsory.
    As a creditor is there an obligation on the company to inform me of the liquidator details so I can register as a creditor?
     
    Posted: Nov 10, 2018 at 10:28 PM By: betamaxbandit Member since: Oct 22, 2018
    #18
  19. Newchodge

    Newchodge UKBF Big Shot Free Member

    10,165 2,617
    That's a classic delaying tactic. Carry on with your proposed course of action until or unless someone official tells you something is happening.
     
    Posted: Nov 10, 2018 at 11:03 PM By: Newchodge Member since: Nov 8, 2012
    #19
  20. Mr D

    Mr D UKBF Legend Free Member

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    Yes they have an obligation to write to you as a creditor.

    However its worth signing up on companies house to be informed of changes to the company.
    If there is little or no money then the director may not use a liquidator, he can dissolve the company himself through companies house. You can object to any attempt to dissolve the company but if you then don't do something about it eventually companies house will ignore your repeated objections.
     
    Posted: Nov 11, 2018 at 12:16 AM By: Mr D Member since: Feb 12, 2017
    #20