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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25424
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Dear sir/madame - can you help please If a builder sole trader

Resolved Question:

Dear sir/madame - can you help please
If a builder sole trader has JCT CONTRACT home build with client
He fails to novate his new LTD company to client.

contract begins in march
he changes company in august
continues work but in a shoddy major for two months, then terminates contract and
leaves a 20% of project unfinished which was under the JCT contract.
( he reckons lawfully i reckon unlawfully)

where do I stand
he is sueing me for 22k -- non payment
I need to counter sue for 60k for bad work and non completion of contract.
Does the client have to recognise any of the work done by the new LTD company,
its invoices, etc...

Can the client claim for items breached under the JCT contract she had with the sole trader

would the court regonise my obligtion to the new company
would the court regonise my sueing the soletrader fro all his breaches .

he states in a claim document that that prior to his incorporation all assets and liabilities of his sole trader company were transferred under a transfer as a going concern.

but i never signed anything that novated the company - but i did pay 1 invoice to the new company for some work

where doi stand -- does the new company have cause p claim against me
can i sue old soletrader for breaches of contract...

Thank you

Very distressed
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

can I ask if you have made payments to his company as opposed to the builder personally to date please?

Joshua :

on what basis does he believe that he is entitled to terminate the agreement? Is he claiming a right to do so for non-payment or for another reason?

Customer:

yes i have paid one invoice - a months works . his invoice was from his new company which has the same bank account as his old one so i jaust transfer the money to that account

Joshua :

Thanks - was the payment made in his company name or the original name of the builder as per your first payment?

Customer:

i just paid into the account that i normaly paid the one i was given at the start , it seems the account number is XXXXX same for his company

Joshua :

Without changing the account name - i.e. you didn't change the payee from Joe Bloggs to Jo Bloggs Ltd?

Customer:

well my reference in my bank transfer was always his first company name.

Customer:

he told me he changed company , bought new van , logos etc... new logo' ed build gear -- but he never novated contract

Joshua :

Understood - thank you. On what basis does he believe that he is entitled to terminate the agreement? Is he claiming a right to do so for non-payment or for another reason?

Customer:

he worked 2 month under his new name on a my new build. 8 months in his first name . I paid him one month , then i realised project 2 monthd behinf contract finish date soi with held next payment till we reviewed where we were . he agreed to a self arbrtraition with archects prior to me holding payment, so my my knowledge and contract staes that with GOOD REASON i can not pay ... he handed in noctice 7 days after saying my non payment was breach . of contract. -- ? which i believe unture as surely i have a right to evalute a project that is way behind schedule and a sort of techincal by the way is that I dont offically recognise his new company , ie i have no contract with that company -- but its the same guy still mR X

Joshua :

thank you. The first point is that your contract is with the original individual builder and not with his new company unless you have agreed that he may novate the agreement from himself to his new company. You may have agreed to this either expressly, which from what you say you have not, or impliedly by your actions, for example paying his new company rather than the individual under the contract-hence my above questions regarding payment. From what you say, your payments have continued exactly as they were originally prior to his new company been established and accordingly, I do not consider that you have impliedly given consents for novation.

Joshua :

JCT agreements as you will be aware contained provisions for stage payments throughout the course of the project as each stage is satisfactorily completed. If you as the client have concerns with regards XXXXX XXXXX completion of a particular stage then you can raise the issue initially with the builder and if you cannot reach agreement are able to refer the matter to arbitration or ultimately the County Court. By raising disputes, if there are genuine grounds for the dispute which you have made clear to the builder, it is in order to withhold payment in respect of that stage. If previous stages have been completed satisfactorily, then payment should be made in respect of those stages however based upon what you say, I believe this has been done. There is no right on the part of the builder to terminate the agreement by virtue of failure to pay on the above legitimate grounds

Joshua :

the agreement may contain a requirement that you both use arbitration failing which, it requires both of you to agree to the same. if you have already both agreed, then the arbitrator can proceed to resolve the dispute. If you have not both already agreed and there is no requirement in the agreement that both if you use arbitration, then the matter would need to proceed to the County Court.

Customer:

well you have it exactly in one

Customer:

so he sent the claim in for 22k

Customer:

so he sent the claim in for 22k to court and no i have defend wheteher he breached the contract and im entilted to all the goes with costs , excess delays, new builders

Joshua :

in terms of how you may consider proceeding, you may consider writing to the builder-not his company-expressing your disappointment at his approach. you will wish to express the contention that there is no contract between you and his limited company as an agreement has been signed between you and him personally and there has been no agreement between you to novate the agreement to his limited company. If he is carrying out work through his limited company, then he is subcontracting the work to his limited company which is a matter between he and his limited company you will only deal directly with him rather than his limited company.

you can consider going on to say that you have already provided him with a schedule of issues which you have identified with regards XXXXX XXXXX work carried out by him or his subcontracting limited company and pointing out the dispute resolution processes that have been agreed to under the agreement and/or subsequently between you both as above and request that he commits to the arbitration process failing which the matter will need to be resolved under the terms of your agreement either by compulsory arbitration if this is provided for or in the County Court. In addition, you wish to make him aware that you reserve your rights entirely should he refuse to engage in the above process both in terms of both the amount that may be owed to him and in respect of any difference in cost of an alternative contractor to complete the unfinished work following his breach of contract

Customer:

and secondy -- counter claim for all his beaches of the timber frames --- that his has not completed -- around 60K , so in essense the fact that he has changed the company name has no bearing on anything .

Joshua :

may I ask if he has issued a claim in the name of his limited company or as himself?

Customer:

he issued it with his LTD company saying he is sole director and but in the particulars of teh claim he staes that prior he operated as Mr X ..

Joshua :

thank you. The first issue with his claim therefore is that it is defective in that you have no agreement with his limited company and accordingly, you may consider writing to the court asking that the claimant struck out on the basis that it does not comply with civil procedure rule three in the the claim discloses no reasonable grounds for bringing the claim is the is no contract between you and the claimant. you can enclose a copy of your agreement with the sole trader stating that it was entered into prior to the limited company being formed and you have no agreement with the limited company. The court has power to strike out claims which are defective in this respect

Customer:

wow -- does that mean i dont have to defend the claim

Customer:

and where does it leave me in counterclaim ... i guess to MR X the sole trader.

Joshua :

on the basis that there is no agreement between you and the limited company, the claim would appear to be defective and accordingly, you can request that the court strikes out the claim on this basis under CPR 3.4. if the claim is struck out, then no defence is necessary as there is no claim. You can request a strikeout by simply writing to the court asking for the claim to be struck out giving the above reasons under the above rule. At the same time, it would be worthwhile you acknowledging the claim which doubles the amount of time you have to respond to 28 days

Customer:

one last thing

Customer:

one last thing the contract within the JCT contrcat which is for the TImber frame which he built

Joshua :

notwithstanding the above, there is of course nothing stopping the builder from issuing a second claim in his own name. In this respect, you can consider defending the claim on the above basis and if the agreement contains a requirement that arbitration is used or alternatively if you have both already agreed to arbitration, you can ask that the claim is adjourned to enable arbitration to take place. notwithstanding this, you can complete the form N9B which is a defence and counterclaim. In order to issue a counterclaim, you will ideally need to be able to quantify your potential counterclaim against the builder which would namely be the difference between the amount you have agreed to pay the builder overall and the amount you may have to pay another contractor to remedy the defects in the existing contractors work and finish the project

Customer:

sorry jsut getting tthe clause

Customer:

this is a clause under the tiber frame contract under the overall JCT Completion Clause


If TJ Construction fails to complete the three stages of the timber frame structure quoted in its entirety then the client (Ms Geraldine Elwood) has recourse to be reimbursed fully (100% of £69,500) for this product no matter up to what stage has being completed (ie the client will not be left with a half finished product that has no value unless completed).If in the event that the contract to build the main house at Rosanna, Vale rd. High Kelling comes to an end legally between TJ Construction and Ms Elwood, for whatever reason, he shall continue to supply staff /sub contractor to finish The agreed Timber Frame Product as of the 12th April 2013 ) to the agreed specification and TJ construction will paid in full by Ms Elwood the agreed sum when timber frame signed off.

Customer:

the wording is bizarre but none the less he signed it and the QS has found major breaches to thge the timber frame documentation

Customer:

does this mean i can claim for teh whole £69000

Joshua :

this causes on the face of it favourable to you basis that if you can demonstrate that the builder has unlawfully terminated the agreement, which based upon what you say above appears may be the case, then you may have a claim beyond what you are entitled to in common law as I set out above but in fact for the entire £69,000 as you say. Accordingly, it would appear that on the basis you can claim the contract has been terminated of lawfully, your counterclaim can be for the full £69,000. Remember your claim based upon what you say is against [Builder name] Trading as [Trading Name].

Joshua :

Because the amount is more than £10,000, it will be heard upon the fast track of the County Court which entitles you to to reclaim a certain degree of legal costs if successful, accordingly, you may decide you wish to ask a solicitor to assist you with certain aspects of the claim

Joshua :

is there anything above I can clarify for you any further?

Customer:

You have been fantastic , so sorry for my spelling im dylexic .

Joshua :

not at all. I do it all the time

Customer:

The is good news - will hisinsurance pay as he wont have the money

Joshua :

If I can assist any further as the situation develops please do no hesitate to let me know.

Joshua :

remember that if you are claiming against him personally a sole trader rather than his limited company then you have a claim against his personal assets such as his house and so on however on the basis he has indemnity insurance, insurance should cover which is of contract and therefore should cover any judgement obtained against him though this would ultimately depend upon the amount of cover and the wording of the policy in question but in general terms indemnity insurance should be available for you to claim against if necessary

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

thank you so much , you have relieved my distress no end /

Joshua :

A pleasure. I hope you resolve the matter with the minimum of distress.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Joshua and other Law Specialists are ready to help you