Barber: Defence bound to fail
The High Court has refused relief from sanctions for a solicitor who claimed a profit share of £97,000 from a mortgage broker to whom he had referred a client.
Insolvency and Companies Court (ICC) Judge Barber said there was no “good reason” why Stephen Henry Evans-Jones had failed to comply with a time limit to serve evidence in his dispute with former friend Charlotte Williams.
Ms Williams, sole director of Seaton Management, a mortgage broker and management consultant, was also granted an injunction restraining Mr Evans-Jones from presenting a winding-up petition against her company.
Judge Barber said it would be “an abuse of process to present or threaten to present a winding-up petition against a company as a means of putting pressure on it to pay a debt where there is a bona fide dispute on substantial grounds as to whether that money is owed”.
She said the “alleged agreement” between “former friends” Ms Williams and Mr Evans-Jones over the referral fee was oral and there was “a live dispute about its terms which can only be resolved by cross-examination”.
This was “a paradigm case of disputed issues of fact” that could not be resolved in the ICC on a petition.
The High Court heard that Mr Evans-Jones rang Ms Williams in June 2023, saying that a colleague from his old law firm, Fieldfisher, had called him about a client “looking for a bridging loan to try and save an asset that had been placed into administration”.
Ms Williams was told the asset had been valued at £17.5m and the client needed £9.5m to clear its loans.
She “agreed to assist”, but the terms are disputed, with Ms William saying that Mr Evans-Jones asked only that she ‘look after’ him for the referral. The solicitor argued that her company orally agreed to pay him 50% of its fee for the referral.
Ms Williams explained to the client that she would be charging a fixed broker fee of £100,000, in addition to any fee paid by the lender to her.
The fee was agreed and a lender found, and the deal completed in November 2023. After completion, Mr Evans-Jones “started demanding half of the fees” paid to the company.
He issued an invoice for £97,600, followed by a statutory demand.
The company responded, through its solicitors, to dispute the debt and seek an undertaking that he would not present a winding-up petition. This was followed by an application to the court to restrain him from doing so.
Shortly before the hearing in November 2023, Mr Evans-Jones agreed to give an undertaking pending the court’s decision.
ICC Judge Greenwood made an order setting out agreed directions, which included that the solicitor should serve the evidence within two weeks. He did so three weeks late and applied for relief from sanctions.
Judge Barber said the breach of the order was “serious and significant” and there was no “good reason” for it.
She said his suggestion that he was “unable to comply with the Greenwood order for personal reasons was at best misleading and at worst untrue”, given the “numerous written exchanges” with the company’s solicitor in which he was “seeking to negotiate a deal”.
Being a litigant in person, even “putting to one side” that he was a solicitor with litigation experience, was not a good reason for failure to comply.
Judge Barber said this was also a case where the court could “see, without much investigation, that the respondent’s defence to the injunction application is bound to fail”.
She said Mr Evans-Jones “knew full well that the debt was disputed at the time of serving the statutory demand”, which he served “with a view to putting pressure” on the company to pay the disputed debt. “This was not an appropriate use of the statutory demand process.”
Judge Barber refused Mr Evans-Jones relief from sanctions and granted a final injunction restraining him from presenting a winding-up petition.
Leave a Comment