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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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Hi Alex, Following on from my earlier question, my case

Customer Question

Hi Alex,

Following on from my earlier question, my case is due to be seen in front of a county court judge.

To give a brief background again:
- My builder walked off my premises and did not complete the work agreed
- I duly notified them in writing of my rights
- Other work of theirs was also found to have problems
- I paid the builder in cash or transferred money directly into his personal account
- The builder also had a limited company which I would say he did not operate through
- I initially filed a claim with MCOL, and made a claim against the limited company and the builder personally
- The builder made a counter claim through his limited company stated I owed it money
- The builder had tried to dissolve the limited company which I have had suspended. He states that I have made the limited company insolvent as I did not make the payments to him

Previously Alex advised me:
"Also you are suing the builders on the basis that they have failed in their duties as Directors and have accepted person liability. I can get you some law later if this becomes an issue."
I never once received any invoices and I think the builder now wants to say that all his work went through his limited company which he now wants to close down. How can I go after him personally?


Submitted: 4 years ago.
Category: Law
Expert:  Alice H replied 4 years ago.
Good afternoon and thanks for coming back to me.

Just to be clear: is the builder saying he is not personally liable and that any action should be against the Ltd company which he is trying to dissolve?

I believe from previous discussion that the builders actions e.g. failing to manage his business properly, led to the demise of the company. Do you agree?


Customer: replied 4 years ago.

Hi Alex,


the builder had filed his accounts just prior to requesting the company be dissolved? The accounts only show £8000 deficit which happens to be the amount of his counterclaim? The accounts are very vague?


I have handed over £53,000 in cash to him personally and never to his company which I do not think he was actively trading under? I feel he is now trying to use his limited company to hide behind, even though I never received any invoices from him?


I agree he has not managed his company/business/affairs very well but I am trying to go after him personaly?

Expert:  Alice H replied 4 years ago.
No problem. Please let me consider the issues and I will respond later today with an answer. I also need to look at some sections of Companies Act 2006 so that I give you the law. Many thanks.
Expert:  Alice H replied 4 years ago.
Thanks for your patience.

You will need to make it clear as part of your claim that you handed the cash directly to the builder and as far as you were concerned the work was being done by him. In a civil claim you have to prove the case on the balance of probabilities - the fact that you were not sent invoices or receipts with the company details and that you handed over cash to the builder suggests to me that you should be able to prove the case to the required standard.

Additionally to ensure the court is aware of the law regarding personal liabilities of directors you will need to refer the Judge to the Companies Act 2006 which sets out directors duties, breaches of which could result in civil (and criminal sanctions).

The relevant parts of the Act are:

S171 to act within their powers - to abide by the terms of the company's memorandum and articles of association and decisions made by the shareholders;

S172 to promote the success of the company - directors must continue to act in a way that benefits the shareholders as a whole, but there is now an additional list of non-exhaustive factors to which the directors must have regard. This was one of the most controversial aspects of the new legislation at the drafting stage. These factors are:
-the long term consequences of decisions
-the interests of employees
-the need to foster the company's business relationships with suppliers, customers and others
-the impact on the community and the environment
-the desire to maintain a reputation for high standards of business conduct
-the need to act fairly as between members

S173 to exercise independent judgment - directors must not fetter their discretion to act, other than pursuant to an agreement entered into by the company or in a way authorised by the company's articles

S174 to exercise reasonable care, skill and diligence - this must be exercised to the standard expected of someone with the general knowledge, skill and experience reasonably expected of a person carrying out the functions of the director (the objective test) and also the actual knowledge, skill and experience of that particular director (the subjective test)

S175 to avoid conflicts of interest - methods for authorising such conflicts by either board or shareholder approval are also to be introduced

S176 not to accept benefits from third parties

S177 to declare an interest in a proposed transaction with the company - there are to be carve outs for matters that are not likely to give rise to a conflict of interest, or of which the directors are already aware. There will be an additional statutory obligations to declare interests in relation to existing transactions.

In view of the information you have given me, I think you should be able to prove most of the breaches above and if the court agrees, the builder will be held personally liable.

Hope this helps.

Expert:  Alice H replied 4 years ago.
Hi Kalvin

I am following up our conversation to see how you got on with the issue. If you need any further help then please let me know - remember I am a qualified UK Solicitor and able to help on most aspects of English Law. I am London based and usually able to respond to your query very quickly.

Alex Hughes