Bounced cheque - to court or not?

sportbeth

Long winded one this so I will put it in a nutshell.

Employer didn't pay me last year, resigned from the company records at companies house. Says he is untouchable for the workings of the company.

DTI are investigating and say he is liable even though he would vigorously defend it.

I have a cheque returned by my bank which was in his wife's name and a letter from him saying he owes me £3300. The Cheque is for £1800, that bounced in October, in December I got £2k cash but nothing since even though I have correspondance saying it was on its way.


The amount still owed to me is £1300, can I take him to small claims even though he has resigned from the company? It's too late for a tribunal, he made sure he faffed around and broke promises for the last year so I'm outside the timeline.

skintchick

If you have a letter from him admitting he owes you, I would contact him in writing (send recorded) and give him 7 days to pay or you will take him to small claims, and then do so.

sportbeth

I've tried that, then he sent me back an e-mail saying that he was no longer anything to do with the company as he had resigned and couldn't be held liable. (But he was the guy that employed me!!!!)

I don't know where that goes?? Technically I don't think the company should come into it as he's saying the tax man can't touch him either as he never filed accounts, so it's kind of him vs me!

zzzLazyDaisy

Take the wife to court for the dishonoured cheque

http://www.compactlaw.co.uk/free_legal_precedents/preced2n.html#Dishonoured

It is unlawful to bounce a cheque and (with a few rare exceptions that don't apply here) there is no defence. The fact that the debt was her husband's (or more likely the company's) is no defence. You are entitled to treat the cheque as cash, and if it was dishonoured, you are entitled to get a CCJ against her.

You need to write to her first, pointing out that the cheque was dishonoured and that unless you receive cash or cleared funds by (state a date 14 days from the date of the letter) you will start court proceedings. Send the letter by recorded delivery (although do keep a careful track of it, as some people are wise to this and refuse to accept delivery). If that happens, deliver it by hand but make sure you have a reliable witness who would be willing to go to court to confirm that you did do this.

Sadly, though, it doesn't end there. Once you get the CCJ you still have to get the money. If she is as hard faced as her husband, she may not care about having a CCJ on her record, and then you are faced with more court fees for enforcement proceedings.

However, one step at a time....

Daisy

greenwich

By strange coincidence, just after I read this post, I read the judgment of a High Court case decided in February. A company had gone into liquidation and some of its cheques had bounced. The directors were found to be personally liable for the cheques because the company name did not appear correctly on the cheques.

Here is what the judgment says: "25. Section 349(4) [of the Companies Act 1985]...makes an officer of a company...who on its behalf signs or authorises to be signed...a cheque in which the company's name is not [correctly] mentioned personally liable..."

[The case is Fiorentino Comm Guiseppe Srl v Farnesi (ch D), [2005] 1 WLR 3178.

So apart from a claim against the wife, you might also have a claim against the director himself, since he authorised his wife to issue a cheque on behalf of the company which didn't correctly show the company name.

So you might be able to sue the husband and the wife (for different reasons).

mountainofdebt

As I understand it (and I might be wrong here) but if the company was trading fraudently then the directors can become personally liable for the debts of company so I don't know if this helps.

I'm in sort of the same situation as you.....I am still waiting for last months pay having resigned from the company. Again as I understand it, you only have three months from the time of the incident (which I asume to be the date the pay wasn't paid) to take the matter to an employment tribunal.

Personally if you have a letter where they admit that they owe you this money I would threaten to take them to a small claims court.

sportbeth

Thanks for all your help guys. It's a toughie because although I have the correspondance admitting the debt, he's saying that as he has resigned from the company (But so have the other two directors!) that there is no-one to chase! I think the Wife is the best route.

Apparently he is very good at letting people chase him until it goes to court, but then eventually he coughs up when his back is against the wall, I just don't want to spend the money and have him get let off on a technicality.

Interestingly enough, I never got a cheque with the company name on it. Turns out that they thought that if they never had a bank account that there was no proof of trading at all. The DTI says otherwise!

zzzLazyDaisy

If the cheque was drawn on the wife's bank account, she is the one who is liable. It doesn't matter what the cheque was for, by writing the cheque she is accepting responsibility for paying that sum to you, and by bouncing he cheque she is acting unlawfully.

Just one more point. If I understand it correctly, because some money has been paid to you, the amount of the cheque is more than you are now actually owed? If that is right, I suggest that you ignore that for now and simply sue on the dishonoured cheque (which you are legally entitled to do).

She would have to then have to counterclaim for reimbursemet of the extra - but in order to do that, she would have to first admit that the rest of the money is in fact owed to you. So for tactical reasons it is best to let her raise that point

Good luck!

zzzLazyDaisy

mountainofdebt wrote:

as I understand it, you only have three months from the time of the incident (which I asume to be the date the pay wasn't paid) to take the matter to an employment tribunal..

Be careful when calculating the three months. You start with the date the wages were due, count forward three calendar months and then deduct one day. So if the start date is 2nd December, the last day for making a claim to the tribunal is 1st March. The time limits are strictly applied and you must have the claim stamped by the tribunal staff no later than the cut-off date.

For failure to pay wages the claim is 'unlawful deduction from wages' if it is expenses it is 'breach of contract'.....

Mostly the best advice is to simply claim 'unlawful deduction from wages and/or breach of contract' to be on the safe side. BUT think carefully about making a breach of contract claim if there is any chance at all that the employer might be able to make a claim against you, because the only time an employer can make a claim against an employee in the employment tribunal is i the employee makes a breach of contract claim.

Generally the best forum is an employment tribunal because they are used to dealing with employees who are not legally represented and will normally go out of their way to help you to put your case.

Dora_the_Explorer_5

If you had a payslip(s) giving NI and IR deductions - ask them if they've received them. Nobody else than you will ensure your NI contribs are ok. Hope this helps.