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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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ThereMy family and I have recently been looking at buying

Resolved Question:

Hi There
My family and I have recently been looking at buying into a business (café/deli).
The business we were looking at was and is not currently on the market - We were sign posted to the owners via our accountant.
I paid £5000 directly into the owners bank account as asked to do so by them to show that we were serious following them showing us the accounts for 2012 and 2013 and having two viewings of the business/ property.
unfortunately, further down the line, the owners were not providing information that we asked for re 2014 accounts ( and copies of the 2012 and 2013 accounts they promised us)and also we were unable to reach a compromise around how long the owner would agree not to open another café for ( We asked that she would not open another within a five mile radius for 3 years and she stated she would only agree to 18 months).
As such we have withdrawn our offer and interest and have asked for our £5000 back and asked for this to be paid directly back to my account.
The owners are ignoring our e mails and phone calls.
Are they legally entitled to keep our £5000? ( Please note we did not sign anything)
Thanks Debbie
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 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 :

May I ask if there is any correspondence or documentation exchanged between you and the owners regarding the terms on which the £5K deposit was to be paid please? i.e. agreeing what the deposit was for and what conditions (if any) it was being paid under?

Customer:

Hi Joshua

Customer:

Hi Joshua, We made the offer of £37000 on the Weds morning and then when I met with the owner the following evening he asked me to pay the £5000 to show we were seriously interested in the business. I then paid this the following morning. My understanding of this was also that when this was paid we would have access alone ( without the owner and family looking over our shoulders as they had done up to this point) to study the accounts which we never received.

Customer:

There was nothing signed and there is nothing in black and white other than my bank account showing the £5000 being deposited into one of the owner's bank account. Since asking you the question one of the owners has rung my father and stated that they RE KEEPING THE £5000 to cover their incurred costs of drawing up the contract and lease and for the "nuisance" we have apparently caused!

Customer:

Thanks Debbie

Customer:

PS No conditions were stated.

Joshua :

Thank you. This is slightly difficult in that from what you say there is no written documentation at all governing the deposit whatsoever, not even an email exchange. Therefore to some extent it is one persons word against another as to what was or was not agreed.

Joshua :

Fortunately the burden of proof is upon the other party to show on the balance of probability that the deposit was paid on a non refundable basis or whatever basis on which he claims he is now entitled to keep it so gives you an upper hand but it is still less than an ideal basis on which to commence litigation to recover the money if this what you are ultimately forced to do.

Joshua :

Ideally you would probably start by trying to get some written documentation in place. This is easiest generally to achieve if you have an email address for the individual but can be done by post if not. If you do not have an email, you may try to obtain his email address by asking him over the phone. In an initial email or failing which letter sent with postage receipt from the post office, you can consider briefly setting out the facts to date including the details of your discussions and the basis that you paid the deposit, the reason you did not proceed and your request for the return of your deposit and reference to his telephone call citing the reason they have decided to keep the deposit.

Joshua :

The aim of this email is principally to establish some facts. Ideally he will reply to you not disputing the facts or not disputing the basis on which it was agreed the deposit was paid but reiterating the phone call that he has decided to keep the deposit because of the trouble you have caused or whatever his line is. This would then be very useful evidence of yor version of events because he has not disputed them. Even if he does not reply your email is still useful as it demonstrates that you have contacted him quickly and that he has failed to respond. This lends credibility to your statement of events.

Joshua :

Even if he is calculating and replies claiming a fictitious set of agreements you made for the deposit being non refundable, the burden of proof is on him to show this agreement on the balance of probability. If he were to do so it is important that you respond refuting his incorrect claims however in writing. Keep any email to the facts and clear and to the point and free of emotion. The reason for this is if it is produced in court it is helpful if a judge can quickly see the facts and labouring with superflous detail or emotive statements will impair this.

Joshua :

Either as part of your email or as a separate demand after the event you will need to clearly request the return of your deposit within 7-10 days and that if it is not returned within this timescale you will issue proceedings to recover the monies in the County Court.

Joshua :

You can issue proceedings online - this is cheaper and easier than issuing on paper - at the following link:

Joshua :

https://www.moneyclaim.gov.uk/web/mcol/welcome

Joshua :

There is a court issue fee of £185 if no more than £5K is claimed and a further fee of £335 if he defends and the matter goes to a hearing. These fees are recoverable from the other party if successful.

Joshua :

Litigation is never certain but providing you put in place the above steps, unless the other party has evidence that the deposit was agreed to be non refundable, given the burden is upon the other party to prove on the balance of probability that the deposit was non refundable, your claim would appear to have merit

Joshua :

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

Customer:

Hi Joshua Thank you for this. Please can you respond to the following to clarify for me - I do have an e mail that I sent to the owner which was about not having seen the accounts as yet and within this e mail I have stated that we expected to see these when we paid the £5000 to show our serious interest - Does this count as he did not refute this in a reply that the £5000 was not a refundable deposit ?? Also on 9th March I sent an e mail to the owner stating "please can you inform me when you will be depositing the £5000 that you owe to us as it is not currently showing in my bank account, Kind regards Debbie".

Joshua :

The first email you refer to is very helpful - in the absence of a detailed written agreement regarding the deposit there will typically be no singular pieve of evidence that will conclusively prove one persons position beyond all doubt. However that is not what is needed to succeed. Rather he has the burden to prove that it was non refundable not you and in addition you already evidence that shows at least a likely condition of the deposit being paid which has not been satisfied.

Joshua :

It would still seem sensible to me to "top this up" with an email along the lines I suggest above, setting out all of the pertinent facts to date before proceeding further as this will be very helpful if the matter does proceed to court and will be needed in any event for your written statement so it is far from a wasted exercise as you can reuse much of it for your statement.

Joshua :

If you can go to court with the combination of the above, and be very clear that the deposit was not a non refundable deposit, was made as a refundable payment to show goodwill and was made subject to conditions which were not fulfilled, and the other party does not have any written evidence showing that the deposit was refudnable which fro what you say he will not have, my view would be that you would have a better than 50% chance of success.

Joshua :

Have I been able to help you with all your questions on the above?

Customer:

Thanks Joshua this has been excellent advice and I will pass onto my business partner for us to work on tonight and over the weekend. I will be rating the feedback as excellent but does this mean the advice is finished or are we able to come back to you if I think of anything I haven't asked today?

Joshua :

Thanks. I'm glad I could assist. 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 but you can return at any time if you have any follow up questions. Leaving feedback does not lock the thread.

Joshua :

If I can assist any further as the situation develops please do not hesitate to revert to me

Customer:

Great stuff thank you have a lovely weekend

Joshua :

And you.

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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