This was an application by the borrowing companies’ director Des Philips to set aside a Statutory Demand served upon him by Lendy Ltd (In Administration). The court was told loans advanced by Lendy Ltd had defaulted and they sought to rely upon the Personal Guarantee offered by the director to repay them.
The court heard that this Statutory Demand was served on 29th September 2020 and was preceded by a letter before action sent on 17th Aug 2020 which had not been replied to. It is understood the demand was for some £4m.
Mr Parsons, the lawyer representing the applicant, told the court that the “fundamental problem” with Lendy’s Statuary Demand was that the issues raised had already been determined in court. Claiming that the demand constituted an abuse of process he submitted that Lendy were “seeking to go behind the decision of the court” and were “trying their luck for a second time”.
We heard that the first demand had been made in July 2017 and was ultimately set aside by the court for several reasons. This included there being “a significant counter claim or set off against the debt” available. It is understood this related to the ability of the secured property to be sold thus reducing the debt.
Additionally, the court had found that there was “a triable issue” on the defence of “undue influence” when the director had entered into the guarantees. The court was told that if Lendy wished to proceed with the demand then they should have issued a so-called Part 7 application and have the issue determined in court.
Mr Parsons explained that it was “baffling” the joint administrations of Lendy Ltd had expended money on a second statutory demand so similar to the first and asked the question whether they would have spent their own money on this.
In response Ms Sethi-Smith, the lawyer representing Lendy Ltd explained that this was a fresh demand as the underlying debt had changed. She explained that it was significant that the applicant did not reply to the letter before action which potentially could have avoided today’s hearing as the respondent could have considered its position.
In passing judgement on the issue of whether the Statutory Demand constituted an abuse of process District Judge Prigg said that “there is no doubt” it was an abuse.
He explained it had been demonstrated by reference to the two demands that it was the same debt and the same Personal Guarantee.
The court was told the only difference was the amount of money demanded, which had been reduced on the basis that the property had been sold. The issue of the “undue influence” was the same. The notion that Lendy wanted “to rehash the same arguments” in court was “nothing short of an abuse of process” the judge concluded.
Turning the courts attention to costs it was submitted that the respondent hadn’t replied to the letter before action. The judge ruled that there was no obligation for a response as Lendy should have been aware of the response, having already had the application determined in court before.
It was at this point the conference call, being held over the BTMeetMe system, disconnected me and I was unable to hear just how much costs Lendy Ltd would be paying.
In The County Court and The Family Court at Taunton
Wednesday 4 November 2020
Before District Judge Prigg
19. of 2020 ASASD Phillips -v- Lendy – 14.00 by BTMeetMe
Mouse in the Court 