Jonsey
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Tricky ex client

Ex client wants refund

I allowed a Limited Company client to pay in monthly installments in advance.  When it came to carrying out the work they were unable to provide me with the information required (other than a carrier bag of reciepts for thier lunch & illegible handwritten notes), ignored repeated emailed requests for information (but tried to contact me on Boxing day) and generally made it impossible for me to carry out the work.  Eventually I returned their "paperwork" along with a cheque for a refund of the fee less about 20% to cover the time I had spent trying to sort the mess out and a covering letter politely explaining why I was taking this action.

That was in January and to date they have not cashed the cheque.   Today I received a text message to say that they are shutting down the Limited Company and are unable to pay the cheque into the bank as it is made out to the Limited Company.  They want me to reissue a cheque written to them personally.

It sounds to me that they have deliberately not paid the cheque into the business account for four months and are now trying to personally recieve what should have been Company funds.  Could someone advise an appropriate response?

Many thanks!

 

 

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19th May 2017 15:22

You could simply state that, as you received the funds from the limited company, you are only able to refund the funds to the limited company. The ball is then in their court to sort out cashing the cheque you have already given them.

I have two concerns. It is possible that doing otherwise would be considered aiding money laundering. However, it seems equally possible that retaining the funds (if they never cash the cheque and the company is struck off) would be considered theft. Since failing to get the money is likely to lead to them taking action against you, a call to your PI insurer might help shed light on that.

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19th May 2017 15:25

Was a letter of engagement issued and approved?

What terms, as regards this type of event, were included, if any?

In any event, it appears that you really did try to be fair and reasonable. Others on here may comment as to whether your ex client has been?

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19th May 2017 15:36

I'd tell them it's due to the company and they would need to have the company reinstated or the bank account re-opened or whatever.

Was the company insolvent ? Is the shareholder the only remaining creditor ?

How much is involved ? Worth engaging a solicitor ? Or not ?

It may be that the money genuinely turns out to belong to the guy but there's not enough information here.

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19th May 2017 16:33

What are the exact facts that you can determine ?
Look at the Companies House website to see if a DS01 has been filed. You may be within the time limit to lodge an objection to the winding up. The bank would close the company account on the day the company is struck off - banks read the London Gazette to see which customer companies are being, and have applied to be, wound up (a company may owe the bank money!). As you hint the directors may not want to deposit the cheque because the company is overdrawn at the bank. If your bank account always had the funds to honour your cheque then you have done all you can to make the payment.

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By Mr_awol
19th May 2017 17:32

Ive had HMRC pay a tax refund to a director because the company had been struck off a bit too soon. They didn't bat an eyelid (I had expected some resistance).

If he's not querying the amount and just wants the refund (that you've agreed he's entitled to) paid to his nominee then in the absence of any actual cause for suspicion, I don't have too much of an issue really.

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19th May 2017 17:50

If I got some confirmation that all the creditors were paid up, I'd repay the money to the shareholder.

I wouldn't want to steal his money but, equally, it's not unreasonable to ask him to prove that it's his and not the bank's, or HMRC's or whatever.

Much depends on information not disclosed to us.

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By DJKL
to lionofludesch
19th May 2017 18:09

Tricky bit is that as state of records was the cause of the need to refund in first place ,what confidence that client has a real scooby what is actually due to HMRC

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to DJKL
19th May 2017 18:17

"Are HMRC pursuing a debt?" is the question I'd ask.

Bottom line is that there's only so many excuses I can make for keeping the guy's money before I become dishonest myself.

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20th May 2017 18:31

Lots of good advice given here but it's not your job to speculate whether the company's been struck off, whether the bank account has already been closed etc. The cheque is still valid and it sounds as if the directors are trying to pull a fast one (preferential treatment of creditors?) You probably don't have a contract with the directors (or certainly not pertaining to the refund). Any attempt to divert the money to the directors could be fraught with problems.

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to thomas34
20th May 2017 18:56

Will keeping the money help matters ?

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21st May 2017 07:53

He hasn't kept the money. What he must do is to keep written evidence that he's pointed out to the company (via the directors) that they haven't cashed the cheque and if they want a replacement they can have one once the original has been returned.

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21st May 2017 09:43

And this replacement will be payable to whom ?

The struck-off company ?

Sorry - we're short on information here as regarding the circumstances but it looks to me like the OP has some money belonging to someone else and is retaining it.

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By Jonsey
to lionofludesch
22nd May 2017 10:28

Thanks so much for your comment. Just want to be really clear that I'm not trying to retain funds belonging to someone else. I sent them a cheque which they haven't cashed. I'm absolutely willing to write another cheque, I just want to make sure I am handling it the correct way and not supporting them in any money laundering/ fraud type activity :)

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By Jonsey
to lionofludesch
22nd May 2017 10:28

Thanks so much for your comment. Just want to be really clear that I'm not trying to retain funds belonging to someone else. I sent them a cheque which they haven't cashed. I'm absolutely willing to write another cheque, I just want to make sure I am handling it the correct way and not supporting them in any money laundering/ fraud type activity :)

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to Jonsey
22nd May 2017 10:32

Personally, I take the view that, if the company has been struck off and there were no objections to the striking off, no-one but the shareholders has a claim any more.

At some point you have to draw a line under a company.

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21st May 2017 10:56

I thought only creditors could object to a Striking Off
When the cheque goes out of date put the money on deposit
Do not pay the directors

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By Jonsey
22nd May 2017 09:08

Thanks everyone, all really helpful advise.
I have written to them explaining my anti Money Laundering obligations and requested proof that the bank account is closed with no money owing and that the Company really is closing down. I've given them a 2 week deadline to provide this or I'll consider the matter closed as this has been dragging on for months.

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22nd May 2017 10:40

Presumably you've checked Co House to see if a DS01 has been filed, and how long ago?

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