School fees claimform

[ronwicks]

A friend has requested my assistance in defending a Claim Form for debt.

 

On the 2nd August 2010 she entered into a formal Settlement Agreement for a debt of £8467.84 to be settled by a payment of £50 per month.

 

This payment schedule has been fulfilled, with an occasional missed month that was caught up with on the following month, i.e. all payment were made up to date.

 

Unfortunately for understandable reasons in May and June she missed payments and had a Claim Form issued. Immediately she paid the £150 arrears to bring the Settlement Agreement payments up to date. Settlement debt now reduced to £6417.84.

 

The Claim Form is for £6767.84 (not deducting the £150 paid in July) plus 8% interest and Fees etc. - a Total of £10,176,46.

 

This Claim will be defended with a request for the hearing to be transferred to a local Court.

 

The question is:

 

Do we "defend all of this claim" with a defence that a Settlement Agreement is in force which has been fully paid up to date:

 

Or: defend part of this claim" and admit to a debt of £6417.48, the balance on the Settlement Agreement.

 

To my mind this is a frivolous,malicious and unnecessary Court Action for the sake of £150 arrears which would have been paid if they had made their usual reminder phone call.

[silverfox1961]

Hi

I have asked the site team to move this post to the Legal Issues forum where you will get lots of help.

Can you supply more details of the debt and whether the account includes charges.

 

Also can you post up the Particulars of Claim (POC) so that the others can see what is what (NO identification numbers or names)

[ims21]

Thread moved to Legal as requested.

 

Morning SF

[steampowered]

Hi Ronwicks

 

As well as the POC, can you also let us know what the Settlement Agreement says about late payments and what it says about termination (preferably type out the exact Agreement wording)

[ronwicks]

As requested, below are: Particulars of Claim - Settlement Agreement: and lastletter to Solicitor

 

PARTICULAR OF CLAIMS

 

The Claimant is the proprietor of a school which entered into acontract with the Defendant to provide educations services. A copy of thewritten terms (including contractual interest) are attached. Tuition fees aredue termly in advance, and most extras termly in arrears. The Defendant hasfailed to pay the sum claimed and is in breach of contract. Reminders have beensent. The Claimant seeks judgement for the debt and interest.

 

PARTICULARS

 

Invoice Invoice Outstanding Balance

 

Dated Due of Invoice £

 

02/05/2008 02/05/2008 1917.47

 

01/09/2008 01/09/2008 3245.53

 

01/01/2009 01/01/2009 1959.20

 

01/05/2009 01/05/2009 1789.70

 

12/08/2009 12/08/2009 358.94

 

Less Deposit refund of £ 600

 

Less payments of £1,900.00

 

 

 

AND THE CLAIMANT CLAIMS

 

1. The sum of £ 6,767.84

 

2. Interest pursuant to Section 69 of the County Courts Act 1984 at arate of 8.00% per annum equivalent to £ 3,063.62 from 02/05/2008 to04/07/2013

 

3. Further interest pursuant to Section 69 of the County Courts Act1984 at a rate of 8.00% per annum and thereafter at a daily rate of 1.48% untilpayment or judgement

 

Settlement Agreement

 

THIS AGREEMENT is made on the 3 August 2010 BIWEEN

 

1. RECITAL

 

1.1 The parties wish to agree terms to settle all claims outstanding betweenthem.

 

1.2 The parties have agreed to enter into this Agreement in relation to the sumowed by the Parent to the College for outstanding tuition fees and extras for REMOVED in relation to the Summer

 

Term 2008, Autumn Term 2008, Spring Term2009, Summer Term 2009 and the Leavers Bill.

 

i.3 The sum owed by the Parent in relation to outstanding fees and extras is f8,467.84plus interest at the contractual rate of 2% per month ("the Debt"). Theinterest as at I July 201 0 was 83,7 46 .53 .

 

2. AGREEMENT

 

2.1 The Parent agrees to pay to the College the total net sum of f8,467.84 ("the Settlement Sum"), to be paid by the monthly payments set out below, until theSettlement Sum has been discharged in full.

 

3. PAYMENTS

 

3.1 Subject to 3.2 and 3.3 below the Parent agrees to pay the Settlement Sum by way of consecutive monthly instalments of £50.00 from 1 July 2010. Subsequent payments will be due on or before 5s day of every month.

 

3.2 Higher and/or additional payments can be made at any point over and abovethe agreed schedule of payments and the Settlement Sum or the balance of theSettlement Sum shall be reduced accordingly.

 

3.3 The College reserves the right to require the Parent to produce a Statementof Income and Expenditure together with supporting documentation every 6 monthsand if appropriate require the monthly instalment amount payable in respect of theSettlement Sum to be increased.

 

3.4 Payments are to be received at the REMOVED head office at REMOVED and can be made by cheque made payable to "REMOVED". Or by telephone witha credit or debit card (credit card transactions are subject to 2% surcharge).

 

Banking details can be supplied upon request to enable payment by standing order.

 

4. DEFAULT

 

4.1 If the Parent fails to make a payment, a payment is late or if by cheque itfails to clear on first presentation or the Parent fails to produce a Statementof Income and Expenditure within l4 days of request to do so the College reservesthe right to commence legal action for the recovery of the Debt or the balance ofthe Debt still owed under this Agreement, plus legal costs,

 

4.2 This Agreement is disc losable for the purposes of enforcing its terms inthe event of default by the Parent.

 

AMENDMENTS

 

Any proposed amendment must be in writing andsigned by all parties.

 

CONFIDENTIALITY

 

 

The parties shall keep the terms of this Agreement confidential save as requiredby law and set out in clause 4.2.

 

7 ENTIRE AGREEMENT, GOVERNING LAW AI\D JURISDICTION

 

7.1 This Agreement constitutes the entire agreement and understanding betweenthe parties in settling all claims for unpaid fees.

 

7.2 This Agreement cannot be changed except by written agreement between the parties.The

 

interpretation construction and effect of this Agreement shall be governed and construedin all respects in accordance with the laws of England and the parties herebysubmit to the exclusive jurisdiction of the English Courts.

 

AS WITNESS this Agreement has been signed by each party or its duly authorisedrepresentative.

 

 

 

LETTER TO SOLICITOR

 

25th July 2013

 

Your Ref: REMOVED

 

 

Dear Sirs,

 

REMOVED College

 

SETTLEMENT AGREEMENT OF 2ND AUGUST 2010

 

 

Reference is made to the Settlement Agreement dated 2nd August 2010 and yourletter of 16th May 2013 which acknowledges instalment payments for the months of March and April (2013).

 

My payment today of £150.00 covers the default months of May, June and Julywhich would signify that I am now up to date and have completely fulfilled my commitment to pay the sum of £50.00 per month from 5th July 2010.

 

As often explained verbally on the phone, my domestic financial situation doesnot always permit me to pay the £50.00 each month, but as soon as possible afterwards I pay double to make up any default, and my payment record willconfirm this.

 

Also as I advised by phone, in November last year my Mother was diagnosed withsevere Alzheimer’s and I had no choice but to become her full time carer it is difficult in a Mental Care Home as she does not speak any English and has livedwith me all her life. This put me under severe stress and pressure and I forgot to pay my instalments on time, and I do not recall receiving your usualreminder phone call of my arrears.

 

For this I apologize and confirm that I will endeavour to adhere to the above Agreement.

 

 

Yours faithfully

[batty69]

you've named your child & her school while airing your financial dirty laundry on an internet forum. I suggest you edit your above post to remove all identifying information.

[steampowered]

I have removed some personal information for your protection. I will have a proper look at this a bit later.

[ronwicks]

I have removed some personal information for your protection. I will have a proper look at this a bit later.

 

Many thanks, I thought that I had carefully removed all personal information, but being new to this I missed some items, once again, thank you.

 

I will look forward to your advice.

[steampowered]

Unfortunately I think Clause 4 is fairly clear that the school is entitled to seek repayment of the entire debt if a payment is late. It was harsh of them to issue legal proceedings so quickly but they are entitled to do so under the Settlement Agreement. There is no obligation on the school to make a reminder phone-call.

 

As a Settlement Agreement has been signed it will be very difficult if not impossible to challenge the amount at this stage. Therefore I think the best approach might be to write to the Claimant on a letter titled 'without prejudice' explaining that your friend cannot afford higher payments and attaching a full income and expenditure statement. You can state that if the Claimant is successful in obtaining a CCJ, you will simply ask the court to set monthly payments on form N245 (and state that these may be lower than £150 a month). You can also state that, as the default was quickly remedied and as the friend made a reasonable repayment offer, the friend will contest any liability for legal costs if the matter proceeds.

 

I note they are claiming statutory interest at 8% per year. It will be possible to contest this if the contractual interest is lower. Please check if the contract with the school really provides for 2% interest per month. If it is per month you are better leaving the interest point alone, if the rate is 2% per year you should be contesting their claim for 8% interest.

[ronwicks]

Many thanks for your advice.

 

I will write a letter “Without Prejudice” on the lines you suggest but as the Defendant is self-employed it may give me a little difficulty to obtain Income and Expenditure information in time.

 

The original contract with the College - and the Settlement Agreement - states interest “at the rate of 2% per month”. So better not contest this claim.

 

The amount claimed is in accordance with our figures but without taking note of the payment in July of £150.

 

It is noted that in the Claim they have not made any reference to the Settlement Agreement and that all the payments of £1,900 received were in accordance with that Agreement and basically paid by due dates. Can reference be made to this in any defence?

 

Whilst writing the above letter, and awaiting a reply, time is going by and we need to “Acknowledge” so that she does not lose by default. In that Acknowledgement which box do we tick:

 

Defend all of this claim

Defend part of the claim - The amount is reduced by the £150.00

 

And then take a little more time to make our submission to the Court

[steampowered]

If it will take time to put an I&E statement together, perhaps write immediately and say that an I&E will follow. You can use form N245 as a template. I think the I&E is important because the purpose of this letter is to avoid a CCJ by convincing the Claimant that incurring the costs of pushing this forward would be pointless; regrettably I cannot see any substantial grounds for defending this in light of the Settlement Agreement (it is very odd that the Settlement Agreement is not mentioned in the POC).

 

If she ticks the box to Defend part of the claim only, that will mean a CCJ for that part. It may be better to tick "Defend all" to give a bit more time to negotiate.

 

It would be sensible to enclose proof of payment of the £150 with the letter if possible.

[ronwicks]

Below is a draft of the letter to be signed by the Defendant,

 

Attached will be some figures showing the her present Income and Expenses are roughly in balance but with Priority Debts (including this) of some £12,000. Precise details would need to be obtained to submit on N245

 

WITHOUT PREJUDICE

 

 

Reference is made to the above claim.

 

Since the 2nd August 2010 I have been making my regular payments and fulfilled my obligations until May and June 2013 when my domestic financial and family situation caused me to fail payments. However I paid up to date by 25th July.

 

In my present situation I would be unable to make any increased payments and If you proceed with this claim and obtain a CCJ I would request the Court to set the monthly payments at the same level in accordance with the existing Settlement Agreement. To support this request I attach approximate figures of my present Income, Expenditure and Debts. Precise amounts of the Priority Debts will be obtained from the creditors before submission.

 

Further, having maintained regular payments, and as the default was only for two months and immediately remedied, and I have fully complied with the Settlement Agreement and fully intend to continue these payments I would also contest any liability for legal costs if the matter proceeds.

 

I sincerely trust that this Claim will be set aside and that we may continue with payments as agreed in the Settlement Agreement

 

Yours faithfully

[steampowered]

Hi ronwick

 

I think that's a great letter. I would just add a statement explaining that the Defendant will seek an order that the Claimant is unable to recover any costs, as the Defendant cannot afford to make higher monthly repayments and fully expects that the amount set by the court will be equal to or lower than the monthly amount under the Settlement Agreement rendering the court proceedings pointless.

 

If the Defendant did not receive a letter before action, also state that you will draw the court's attention to non-compliance with the Pre-Action Protocol on the issue of costs.

[ronwicks]

"Without Prejudice" letter was sent on 30/7 and Recorded Delivery signed 31/7.

 

How long can we wait for a reply bearing in mind that "Date of Service" is 22nd July?

 

"Acknowledgement of Service" was sent and received in Salford also on 31/7 advising that we "intend to defend this claim". By what date must we submit our defence to the Court.

[steampowered]

Hi ronwicks

 

Responding to your PM - if the date of service is 22nd July, you get 14 days plus another 14 for filing the acknowledgement, taking you to 19 August. It is best not to leave this until the last minute.

 

The parties may agree an extension of up to 28 days between themselves. It may be worth follow-up your 'without prejudice' letter with another letter asking when you can expect to receive a response and requesting an extension while the parties negotiate.

 

If negotiations are fruitless you will have to decide whether it is worth defending. Personally I think your friend would be unlikely to win this claim, because Clause 4 of the Settlement Agreement allows the school to sue for the entire debt is a payment issued. Defending may add pressure in the sense that it would cause delay and possibly cost the school legal fees, but you also need to bear in mind that the school would have to pay the allocation fee (£40) and a further hearing fee (I believe £325). These would be recoverable from your friend, even in small claims track.

 

One option would be to file an admission for part of the money together with an income and expenditure statement asking the court to set monthly payments together with a Defence for the remaining part on the basis of (1) money already paid and (2) pursuant to section 69 (4) County Courts Act 1984, interest should only be awarded at the contractual rate of 2% and not the judgment rate of 8%. Bear in mind that a part-admission would result in a CCJ but this is difficult to avoid.

[ronwicks]

The Claimant has not responded to our letter and has not acknowledged the payments made in July and August so it would seem probable that they will pursue this through the Court.

 

In Defence we will acknowledge the balance remaining of the Settlement Agreement which will deduct the £200 paid in July and August.

 

Our Defence will be that this Claim is pointless in consideration of the Settlement Agreement of the 3rd. August 2010 (copy attached) which was not mentioned by the Claimant and which the Defendant has honoured by regular monthly payments over the past three years. The Defendant is the full time carer for an elderly mother who suffers from Alzheimer’s and does not speak English, only Portuguese, which gives great problems for other carers. Because of a serious problem with the mother the Defendant forgot the May and June payments that triggered this Claim. Those payments, with July and August have since been paid but not acknowledged by the Claimant and all payments are now up to date.

 

A letter was sent to the Claimant pointing out that the Settlement Agreement had been adhered to and that the Defendant’s present financial position precludes her from making an immediate full settlement and that her future payments could not be more than the present £50 per month and requested that the Claim be set aside. No reply was received. (Form N245 will be attached to support this)

 

In view of this punitory claim against a regularly paying creditor the Defendant requests the Court to allow the Settlement Agreement to continue and not to grant further interest nor Court costs and fees which only place a further unnecessary burden on an already regularly paying creditor who has made every effort to clear the debt.

[steampowered]

Hi

 

Use N9A for the admission and income/expenditure statement and N9B for the Defence.

 

N245 is used when you need to apply for monthly payments after judgment has been granted.

[ronwicks]

Thanks for the advice on the Forms to use.

 

As you have not commented can I presume that basically you concur with our defence strategy.

 

One further piece I will add is a request to transfer any hearing to a nearby Court as the Defendant is not able to leave her elderly, Alzheimer mother for any great length of time.

[steampowered]

I personally concur with the strategy. Ultimately the Settlement Agreement does allow for termination in the case of late payments so I do not think the court is likely to simply reinstate the Settlement Agreement. However, the court can set monthly payments which puts the Defendant in a similar position. Don't forget the point I made about interest in post #15.

 

You could even be a bit cheeky and ask for lower monthly payments then £50, if this is supported by the income and expenditure statement. That would pressure the Claimant to resume the Settlement Agreement without going through court. It might not be possible, but if you can it is better to resolve this by agreement rather than through the courts in order to avoid a CCJ on the Defendant's credit record.

 

The hearing should be automatically transferred to the Defendant's local county court without needing to indicate this on the Defence. This issue is dealt with by the Directions Questionnaire which is the next stage of the court process.

[ronwicks]

The Defendant's Income and Expenditure roughly balance out with little spare cash to pay off debts which could give us grounds to request the Court for lower repayments. As the Defendant already has so many other debts, about £15000, and already has CCJs she is not particularly worried about one more so we will proceed with our Defence and not bother to attempt any negotiation but leave it to the Claimant to contact us.

[steampowered]

Fair enough. Good luck.

[ronwicks]

In preparing the Defence I have had to do some calculations and think very deeply about this matter, especially your point about interest.

 

The Claimants have made a fundamental arithmetical error in not adhering to the Settlement Agreement. That calls for interest at 2% per month and the interest on 1 July 2010 was £3,746.53, Goodness knows what that has compounded to by July 2013.

 

The Court Claim is for the original basic debt plus interest at 8% per annum which is equivalent to £3,063.62 to 4th July 2013. Some £700 less than the amount in 2010.

 

Perhaps better not to mention the Settlement Agreement in the Defence and just try to get the Court to set a lower payment.

[ronwicks]

Defence has been filed admitting amount outstanding after recent payments and claiming that Defendant has never denied the debt and has in fact been paying regular monthly payments of £50 for last three years. In consideration of present domestic financial situation the Court has been requested to reduce payment to £30 monthly and deny Claimant’s request for interest and fees.

 

Letter now received from Claimants Solicitors “We advise that we are instructed to submit to Court an applications for Judgement with the intention of subsequently obtaining a Charging Order against your property”.

 

Can they make this application separate to the ongoing Claim?

[steampowered]

They would need a judgment first ronwicks. They would have to get a CCJ, then they might be able to apply for a charging order.

 

In circumstances where your friend is already paying what she can afford, not sure a charging order against the property would be of much use to them.

[AndyOrch]

Unless its an application for Summary Judgment...that can run independently to the trial process.