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Max Lowry
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience:  LLB, 10 years post qualification experience
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I need some advice regarding the issuing of a winding up order

Resolved Question:

I need some advice regarding the issuing of a winding up order against my business. My main bone of contention is that we do not owe them the sum they are claiming, and we have in writing from them that this is the case. They are still stubbornly threatening us with action for the whole amount though.
The amount they are claiming is for £50,000, when they have agreed that there is a £15,000 overcharge in that amount.
Submitted: 2 years ago.
Category: Law
Expert:  Max Lowry replied 2 years ago.
Hi, welcome to the site. My name is ***** ***** I will help you with your question. Could you please tell me when was the petition served upon the company? When is the hearing listed for?
Thanks
Customer: replied 2 years ago.

As yet, we have not had anything served to us and I suspect it may be an initial threat on their part to make us pay the amount in full.

What I need to know, is whether if they should decide to do this, we get a chance to contest the amount outstanding? I can't say I know anything about the process, but I would imagine that a legal process must ensure a right to reply to put both sides of any argument?

And should this be the case, I would also imagine that anyone making judgement on a case such as ours would be likely to be unimpressed if a business were claiming for an amount it has also admitted is not the correct amount outstanding?

Thanks

Matt

Expert:  Max Lowry replied 2 years ago.
I understand. Just to get this straight they are claiming £50k and you have already overpaid by £15k? Kindly confirm.
Customer: replied 2 years ago.

No, they are a trade supplier, and we have an account with them on 60 days payment terms.

The acknowledged £15,000 overcharge fell within a month when we were due to pay them just over £17,000. The overcharged amount comprised most of that £17,000 and I requested, quite reasonably in my opinion, that they deduct the overcharged amount from the balance that they were requesting.

Their response was that they wanted the payment in full, and that the amount we were due to be credited we would get back in 60 days time as "that's how their system works".

For clarification, we did not owe them the £17,000 that they said we were due to pay as £15,000 of that was an overcharge.

Expert:  Max Lowry replied 2 years ago.
I understand, thanks.
The first thing to do is write back to the company and tell them in no uncertain words that the debt is not outstanding and it knows it is not outstanding – it is an abuse of process to proceed with a petition. Also tell the company that if it is intending to present a winding up petition you will have no choice but to make an immediate application to restrain presentation of the petition and in the circumstances you require, within 3 days of the date of your letter written confirmation that the threat to present the petition is withdrawn. You will also be seeking your costs against them. Send the letter by recorded delivery/email and keep a copy.
If you do not receive confirmation from the company within the 3 days you could, if you wanted, make an application to your local Court to apply to stop them presenting the petition. I would however wait until they present the Petition (because they may not go ahead with the threat). Once they present the petition they need to serve it on your company and after 7 days from service they can advertise the petition – this means it will be advertised in the London Gazette and once seen by your bankers could mean your bank account is frozen. Your application would need to be issued quickly at Court (and a copy served on the other side) before the 7 days expires. Depending how comfortable you feel doing this, you may wish to instruct a solicitor to assist you with putting the documents together. In your application you will be asking the Court to stop the advertisement and dismiss the Petition on the basis the debt is not owed.
The Court will then list the matter for a hearing at which you and the other side will turn up and argue the issues. However, based on what you say I do not think it will even get this far. It sounds like they are being a bully.
Please let me know if I can clarify anything for you.
Customer: replied 2 years ago.

Max,

Thanks very much for that reply, very helpful. There was one other issue relating to the matte that you have already touched on, and that is to do with our costs. When I first started to query the account and suspect the overcharging, I requested our accountants to pull all the paperwork relating to this company all the way back to January of this year. Myself and two others spent two days cross checking and querying any and all over charges before presenting it to them and their agreeing them. To my mind, the time we spent cross-checking their poor accounting should be time chargeable. Would you think that sounds reasonable, and more importantly legally enforceable?

Many thanks,

Matt

Expert:  Max Lowry replied 2 years ago.
Hi Matt, the general rule is that you cannot claim your own conpanies costs in dealing with the matter. Legal costs can be claimed. However, there is really no harm telling them the full costs figure when you write to them and say this will form part of your counterclaim if they do not withdraw the threat. It might make them think twice about proceeding. Be bullish on your letters but reasonable.
Max Lowry, Advocate
Category: Law
Satisfied Customers: 1457
Experience: LLB, 10 years post qualification experience
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