Tomlin Order voided by an IVA?

Mouse007

Friend is in an IVA which should lead to 100% payout with a bit left over.

His home has now been sold and the proceeds are with his supervisor ready to distribute to his creditors. However one creditor has suddenly upped their claim wiping out the potential surplus.

Prior to entering the IVA NatWest obtained a Tomlin Order for £18,000 against which £3,000 was paid. This arose from Personal Guarantees given for 2 companies.

NatWest are now claiming the IVA makes the Tomlin Order void and are trying to claim a significantly higher amount (£28,000) in the IVA.

His supervisor hasn’t got a clue and he is so broke he can’t afford to get any legal advice.

Any suggestions on how to tackle Nat West?

antrobus

Mouse007 wrote: »

...Prior to entering the IVA NatWest obtained a Tomlin Order for £18,000 against which £3,000 was paid. This arose from Personal Guarantees given for 2 companies. ....

A Tomlin Order is an agreed settlement between two parties. So NatWest did not obtain the order, your friend agreed to it.

Presumably, if the agreement was to pay £18,000 and friend only paid £3,000 before entering into an IVA, they have broken the terms of that agreement. As a general rule, if you breach a contract, the contract is voidable at the option of the other party, and thus NatWest would be perfectly entitled to do so.

Given that you state the IVA was projected to pay creditors in full, inclusive of the above, then I would assume that NatWest would have got their £15k, only a bit later than anticipated. It would be down to a court to decide whether or not that late payment was a sufficiently material breach to justify NatWest's repudiation.

Mouse007

antrobus wrote: »

As a general rule, if you breach a contract, the contract is voidable at the option of the other party, and thus NatWest would be perfectly entitled to do so.

Thanks antrobus. Would it change your opinion to know the schedule to the Tomlin Order stated

"2) Should the defendant fail to make any of the monthly repayments in accordance with paragraph 1 above, the Claimant shall be entitled to lift the stay of proceedings herein and enter Judgment against the Defendant for the said sum of £18,000 less any payment made." ?

Point 1) to the schedule just says the Defendant will pay £18,000 in full and final settlement by x per month starting on a date. There are no other points to the schedule.

The Order states that either party shall have permission to apply to the Court to enforce the terms of the said schedule and that there shall be no Order as to costs.

There are no other provisions relating to default, an IVA or any other eventualities.

Whilst I understand about breach of contract (and that a Tomlin Order is a contract), it looks to me like the contract terms only allow for recovery of the £18,000 less any payments received.