The County Court has heard that “incompetence” at a firm of solicitors prevented compliance with a court order, as the latest chapter in litigation affecting failed P2P firm FundingSecure unfolds.
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Reporting by Daniel Cloake.
Two borrowers who used the platform to obtain £78k secured against a property in London are resisting attempts by FundingSecure to recover money after the loan defaulted.
The background to this matter can be read in “FundingSecure face new threat over alleged ‘secret commission’ payment” as exclusively covered by the mouseinthecourt.
We revealed that His Honour Judge Johns QC, at a previous preliminary hearing, had ruled that as FundingSecure was in Administration permission had to be sought from the High Court to add a claim of ‘Secret Commission’ to the case.
Barrister Robin Kingham, representing the P2P platform, explained that his clients had received a letter on 1st March 2022 requesting consent. We were told they replied asking for evidence about this alleged commission but the borrowers failed to address the point until 6 weeks after the deadline set by HHJ Johns.
Deputy District Judge Benjamin Wood gave a helpful summary of the case explaining that two issues would be raised at the trial. Questions of fact – whether the commission was secret, and was it paid. The second issue would be a question of law – what would be the consequences if a secret commission had been made.
DDJ Wood said that exhibited to the application was “a receipt for commission which if the pleading, as amended, is correct, then that is secret“.
Mr Kingham: “My client is in administration, consent from the court must be obtained before the claim is issued.“
DDJ Wood: “Why aren’t you consenting… is your client not consenting because of non compliance of the order?“
Mr Kingham replied that he hadn’t “received instructions” on that point and would need to leave court to ask over the phone.
DDJ Wood said that if Mr Kingham’s “point is that I don’t have jurisdiction to allow the counter claim to proceed” then it would be “manifestly appropriate” for FundingSecure to pay costs if this meant a delay to the trial.
A response of “it doesn’t make sense that they can sue us…” led the judge to interrupt with “them’s the rules” during a discussion about whether issuing a counterclaim constituted new proceedings or not.
When a company enters administration a moratorium prevent legal action unless the court consents.
“I want this to be resolved because of the imminent trial” said the judge as he request the parties return after 2pm to update the court.
Case Number: H10CL529
Fundingsecure Limited in administration -v- Fahmida Anwar and Ruxana Begum
Before Deputy District Judge Benjamin Wood
Court 52, County Court at Central London
10.00am 11/08/2022
FundingSecure were represented by Robin Kingham of Gough Square Chambers
Anwar & Begum were represented by George Mallett of Henderson Chambers
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