Knight v ABV Recycling Ltd

MR JUSTICE NUGEE: I have before me an appeal against the decision of District Judge Cross sitting in the St Albans County Court, dated 18 November 2013, in which he dismissed an application by Mr Knight, the appellant, for an order that a statutory demand issued by APS Recycling Limited, the respondent, be set aside.

The statutory demand is based on a personal guarantee said to have been given by Mr Knight for the debts of a company of which he was a director, namely Vast Group Holdings Plc, in respect of various services supplied by APS in the shape of provision of skips for taking away waste and for tipping of waste at one of their depots. The total sum claimed was some £4,200. The District Judge found in his brief judgment on 18 November that there was no genuine dispute on grounds which have any substance.

The jurisdiction which was invoked was that in rule 6.5 of the Insolvency Rules 1986 and under rule 6.5(4) the court may grant an application under rule 6.4, which is an application for an order setting a statutory demand aside, if (a) the debtor appears to have a counterclaim, set-off or cross demand (that does not apply); or (b) the debt is disputed on grounds which appear to the court to be substantial. (c) deals with security, and that does not apply, and (d) deals with the court being satisfied, on other grounds, that the demand ought to be set aside. In the present case, the only ground which is really in play is 6.5(4)(b), namely where the debt is disputed on grounds which appear to the court to be substantial.

There are in effect two questions: one is was there a genuine dispute on substantial grounds as to whether Mr Knight had signed the personal guarantee which was relied upon by APS and the other being whether there was a genuine dispute on substantial grounds that the company, Vast Group, owed the monies claimed on the invoices.

I will deal first with the question of the guarantee. APS' case is very straightforward. The story starts sometime in August 2012, when Mr Knight accepts that he signed as director on behalf of Vast a form called a credit application form. This asked for credit of £2,000. It said that the persons authorised to place orders were he himself, his position being given as director, and a S Tillier, whose position is given as site manager. He ticked the box for written orders and order numbers required, did not tick the box for verbal orders, and he sent that off to APS.

APS' documents show that on 20 August they wrote back to Vast at an address in Hemel Hempstead, which is Mr Knight's address:

When they first tried to recover monies in respect of the invoices from Vast, they gave the collection to a collection service called Top Service. Top Service wrote to APS in April of 2013 and by June 2013 they had written to Mr Knight personally, on 24 June, saying that:

Mr Knight's response to that on 25 June, which was to confirm receipt of your letter, was to say:

When the statutory demand was issued, which was on 1 September 2013, it made it clear that the claim was a claim against Mr Knight personally and Mr Knight applied promptly to set that aside on 17 September 2013, which he tells me is the day on which he received the statutory demand.

In the witness statement in support of the application to set aside the statutory demand, he says that the statutory demand first came into his possession on 17 September:

The comment of the District Judge in his judgment was that:

The question before me on appeal is whether that was a conclusion that he was entitled to come to in the light of the evidence that was before him. Mr Knight has addressed me at length on the basis that the burden of proof is on the creditor and that he tells me he did not sign the guarantee and that they have not even produced the original and he says what else was he to do. However, it does seem to me that the District Judge was entitled to take the view that the story being put forward by APS was an entirely coherent one. As I have said, it makes perfect sense that in response to the credit application form they should ask for a guarantee and they appear on the face of it to have received that back shortly afterwards.

It is of course the case that the court has no expert handwriting evidence, but I think that the court can take account of the fact that on the face of it the director's guarantee, which contains manuscript filling in Mr Knight's name and Vast Group's name and address, does not appear very different from the handwriting on page 10 of the bundle, which is the credit application form, which he accepts that he filled in. One would have expected, if he had ever received any such letter or ever had anything to do with any such guarantee or ever seen any such document, that the immediate reaction to him being told that he was personally liable under a guarantee would be to deny in very clear terms that he had ever seen the document or received it at all.

The only suggestion which has been put forward before me by Mr Knight is that APS must have fabricated the guarantee and this seems to me to be a very unlikely scenario. It does seem to me that APS would have very little to gain from fabricating documents of this type because, were they to do so, in the end it is unlikely they would be unable to proceed on the basis of them. I take the view that the District Judge was entitled to reach the conclusion that the lack of explanation from Mr Knight in relation to the guarantee form was something that satisfied him that there was no substantial dispute on this matter.

It then is necessary to consider the extent to which Vast Group was liable for the invoices which are claimed on by APS. In this respect, there is a list of invoices in the bundle at page 14 which lists some nine invoices totalling, as I have said, about £4,200.

Of those, one invoice is in relation to a building site at Honington Sports Pavilion. This is an invoice dated 6 September, that's at page 16 of the bundle, and it's broken down into seven separate items. Two of those items, those being the first item under ticket number 216667 for a six yard skip for general waste in relation to Honington Sports Pavilion and the last one on 6 September, ticket number 216847, which is a skip in relation to hazardous waste, were accepted before me by Mr Knight as being items that had been ordered by him in writing, and that order number is BK381914 and it's an order placed by email dated 21 August 2012, which is at page 27 of the bundle, in which he says:

In those circumstances, it seems to me that as a matter of law, regardless of all the other points that Mr Knight has wished to address me on and has addressed me on, it is not the practice of the court to set aside a statutory demand in circumstances where the undisputed amount or, to be more accurate, the amount which has not been shown to be disputed on substantial grounds, exceeds the statutory minimum of £750.

I rely for that proposition on a note in Sealy & Milman to rule 6.5, which refers to a decision of Lawrence Collins J, as he then was, in Interframe Limited v Brown [2005] EWHC 3527(Ch), where he apparently indicated that an overstated debt will not normally justify the setting aside of a statutory demand. It seems to me that in those circumstances, regardless of all the other points, I am obliged to dismiss the appeal.

It may be helpful, although it is not necessary, if I briefly indicate my views on the other matters which have been argued at some length before me. Firstly, there is an invoice in the sum of £239.40, which is said to be, by Ms Bate who gave evidence on behalf of APS, to be excess charges at £95 a tonne in relation to a skip delivered to Mr Knight's home address, 69 Hobbs Hill Road. Mr Knight does not dispute that that skip was delivered to Hobbs Hill Road and indeed has paid a standard charge for that skip. The standard charge which he was charged and paid was for £264. I have not seen the invoice, but that is what Ms Bate says.

She continues to explain that the standard charge included delivery and collection of a skip with up to one tonne of general mixed waste deposited in the skip. Waste in excess of one tonne was subject to a surcharge and she gives the rate: £95 per tonne. There is evidence before me that APS did notify Mr Knight that the excess charge for general waste was £95 per tonne. That is an email of 9 August from Joe to Mr Knight which says that the cost for skips includes for mixed waste £355 including the three tonnes and £95 per tonne thereafter. That email by itself does not explain the pricing that Mr Knight was actually charged, which, as I've said, was £264 said to be by Ms Bate for up to one tonne of general mixed waste, but it does justify the £95 per tonne figure for excess waste.

It does seem to me that there is evidence before the court that the skip was delivered and accepted by Mr Knight and there is evidence in the form of a ticket that the £264 was only for the first tonne and that there were 2.1 tonnes of excess surcharge. The ticket indicating that the original standard charge only covered one tonne is at page 24 and is consistent with what Ms Bate says. The ticket dealing with the surcharge of 2.1 tonnes is at page 26 and on the face of it justifies the figure of £199.50, which together makes up the sum claimed at £239.40.

In circumstances like this, where there is no dispute that the services were ordered, it does seem to me that it is incumbent on a putative debtor to put forward with some detail the reasons why what is said to be due is not due. Had Mr Knight said "I paid £264, I understood that covered three tonnes", then that might have given rise to a dispute. Had he said "I agree that I only paid for one tonne but I dispute that the excess was 2.1 tonnes", then, again, one could see the ambit of the dispute. But, despite the detail into which Ms Bate's witness statement goes, there is, so far as I am aware, no detailed case put forward by Mr Knight in answer to this paragraph. On the face of it, therefore, this does seem to be an invoice which is properly charged.

The next invoice deals with Honington Sports. I've already referred to the fact that that's broken down to seven particular items, two of which, as I've said, Mr Knight does not dispute. There are another four examples of skips or roll on roll off bins being charged and one weight surcharge, again charged at £95, and there is in fact another £148.20 charged for Honington Sports, which is another weight surcharge also in relation to one of the skips at that site.

These charges are all supported by tickets. The tickets are not signed, which is a point which Mr Knight relies on. But, as the District Judge correctly pointed out, there is no statement by Mr Knight and no evidence before the District Judge which would suggest that the goods or services were not ordered, or the goods or services were not provided or that they had been provided, and paid for. Instead, Mr Knight relies on the fact that no written orders had been placed.

However, it does seem to me that Ms van den Berg is right that Mr Knight himself explained that he was not onsite all the time, that he had some 15 sites which he was running, that the site manager for this particular site was Mr Tillier and it is entirely possible that Mr Tillier did indeed order the other skips and the other roll on roll off bins that Ms Bate refers to and which had been charged on the invoices.

Again, it does not seem to me that, in an application of this type to set aside a statutory demand, it is sufficient for the debtor simply to say that no evidence has been produced, where tickets have been produced which on the face of them appear to relate to a site at which Vast Group was carrying out work and which showed that those services were provided. It is incumbent on the debtor to give an account of what he says actually happened which enables the court to see what the ambit of the dispute is. In this case that might have involved speaking to Mr Tillier to find out whether he did order those skips. It might have involved Mr Knight saying that, if Mr Tillier did so, it was against any authority which he had been given on behalf of the company and the like.

However, although I'm not deciding this dispute, but only deciding whether the material before the court suggests that there is a genuine dispute which needs to be tried, I consider that it is entirely plausible that by appointing Mr Tillier as site manager and leaving him in charge of the site, Mr Knight has effectively on behalf of the company given him authority to place orders for services to be provided to the site; and that, if he did so verbally, then even though APS were not obliged to act on the verbal orders, if they chose to do so it does not mean that the company can take the benefit of the services without paying for them.

The remaining invoices all relate to tipping on weighbridge, where, as I understand it, APS is claiming the money, because Mr Tillier or someone else working ostensibly for Vast appeared with a van with waste at one of APS' sites and APS took the waste material and charged so much per kilogram or tonne.

Again, Mr Knight refers to the fact that this is not something where there is any written order. He told me that he did not have an account in the name of Vast Group with the van hire company, Brent Cross Commercials Limited, from which the vans were taken, but there is evidence in the form of tickets that vans did appear at APS' depot or transfer station, that the drivers gave the details of the account as being Vast's account, that the registration numbers which were taken were in most cases able to be traced back to the van hire company and of the four examples which are in the bundle three were hired by Mr Tillier, giving the account name as Vast Group, and one hired by a Mr Delius, again giving the account name as Vast Group.

This is prima facie evidence that Mr Tillier and others were taking waste to APS' transfer station on behalf of Vast Group. Again, I agree with the District Judge that the material before him was not detailed enough to enable him to understand what was being said on behalf of the company and hence on behalf of Mr Knight as to why what appears on its face to have happened was not actually what happened. It was, I think, incumbent either to say that this was not something which had taken place at all or to say that, if it took place, it was not something that was done on behalf of the company. That no doubt would have required enquiries of Mr Tillier as to what he was doing and whether he did himself and through others take waste from the site, that is a Vast's site, to APS.

In those circumstances, for the reasons I've already given, I'm obliged, it seems to me, to dismiss this appeal and I do think that on the material that is before the court at the moment, and the material that was before the District Judge, there is insufficient to establish a real and genuine dispute in relation to these matters.