This is an article on 24 hours in the life of a committed and sensible McKenzie friend, Colin Phillips. We will publish the judgment that we believe is outstanding when it becomes available.
As a member of a financial support group who has been affected by the mis-selling if Interest Rate Swap Agreement or other inappropriate actions of the banks. I was contacted by a new member who needed advice in relation the actions of the bank.
In short, he had been told by his bank that (without just reason) his overdraft was called in (£180,000) and he had three hours to pay the money, clearly we don’t have that much available at such short notice. After the three hours, the bank called in the principal loan £3.5m on the basis that the company was insolvent. (Because he could not pay his overdraft (an on-demand facility).
The bank (applicant) then applied to the court for an administration order against the company (respondent). The case was set to be heard in London having been previously adjourned because of the lengthy submissions by both legal teams for the A. And the R all being far too much to be considered in the time allocated for the hearing.
Two days before the hearing in London the R legal team demanded £10,000 up front or they would not attend the hearing. R did not have this money so he decided to Act a LIP and seek a last-minute adjournment to employ a new legal team and to present new facts.
With only two days before the hearing, he asked my help to prepare for court and at the court act as a Mckenzie Friend. The court hearing was on Thursday.
24 hours as a Mckenzie Friend, (MF).
00.30. Got out of bed to (having had an early night at 21.00) to dress and complete skeleton argument to present to A at the hearing, working with other colleagues of the support group who had been working all day (and night) we finished the skeleton argument and had it done by 02.00.
02.30 Departed my home in Cornwall to meet with R at his home and together with his son we departed for the courts in London at 03.45. During the journey, we discussed the implications of R acting a LIP he was understandable nervous having never even been in a court before. Talk about in at the deep end!
My personal experience as a LIP is all of one failed attempt in the county court when I asked for an interim injunction against the same bank for a similar action against me. We did not dwell on my experience – (fortunately). My experience as an MF was until his case – Nil (we did not dwell on that either).
09.30 Arrived at the Companies Court in London (we made a good time on the journey) the hearing was scheduled for 10.30.
We had one hour to inform the court usher/manager that we had arrived and that R would be acting as a LIP and that we would like the Judge to accept a skeleton argument – sorry it was late but unavoidable and by the way we need the judge to agree to my acting as an MF (permission is required by the judge). All was agreed. All we had to do now was get R used to the courtroom and the environment of the courthouse and wait for the A legal team to arrive. All of us were very nervous would be an understatement.
10.25 A ’s legal team arrive ( no panic from us) when all six of them turned up 1 Barrister 1 Junior Barrister 2 Solicitors and 2 financial experts from the bank. Anyway, I gave them the skeleton argument (not our fault they turned up with only 5 mins to spare).
10.30 Court case begins MY LORD the judge is introduced he confirmed the LIP agreement, confirmed to the A that I was to be an MF and went on to permit R to allow his MF to speak on his behalf if required. This is a rare grant of permission by the judge for a lot of reasons as he did not restrict what I could say as an MF.
10.35 Judge takes 15 mins for A to read the skeleton argument (they should have got there earlier) But as they left the courtroom to ponder our application for an adjournment, it did give R time to reflect that it is now six legal experts against 1 LIP and his brand new MF so – No Pressure!!
During this interval the A barrister came to R to ask “was he relying on the new Skeleton Argument or the one produced for the last hearing” (which was adjourned). R looked at me for the answer and I did not know.. So we asked him if we had to choose and his reply was “yes –one or the other” so we agreed on the new one.
This was our first big mistake. First, we thought he must know the law and second, he was right and we had to make a choice. It turns out we were wrong on both counts. But read on.
10.50 The judge returns to continue proceedings inviting A to set out his case. Which he did, claiming that the bank had called in R overdraft he did not pay within the three hours given and so the bank called in his main loan and has (according to the bank) R was insolvent the bank has applied for the Administration Order (it was all a bit more technical than then but that case the basic case against R.
At this point, my job was to write copious notes on what he said. I was crap at that, I wrote too much and soon learned to bullet my notes on key points.
11.45 A finished his opening arguments. The judge turned to R and asked him for his reply but gave R some guidance as to how he should respond and in so doing the Judge now asked R if we were relying on his first Skeleton Argument or the new one and he was again unsure what to say and finally said “his new one”. The judge asked him why? So sticking to the principle I had drummed into him to “JUST TELL THE TRUTH” he told the judge because the A’s barrister had told him he could not rely on both! At this point, the Judge asked the A’s barrister if this was right? Whereupon the barrister wished the ground would open and take him down, he was caught out big time and the Judge was not pleased at all but confirmed to R he could actually rely on both! Which he immediately agreed to do!
The importance of this decision to rely on both arguments was to become pivotal in the outcome of the hearing- Read on;
11.50 It is now time for R to stand up and tell his side.
There is no way for me to write how R was feeling. Panic, lost. Confused, upset, are just some of the feelings but he none the less gave an excellent account by simply telling the judge the real facts of the matter in simple and plain English with no legal jargon.
He agreed he had an overdraft, he agreed to repay the overdraft but three hours is unreasonable. He said that the bank gave no explanation or logical reason for calling in the overdraft and that if the bank wanted him to repay his loan then he would do so by selling his assets and the same with the repayment of the overdraft but he did need time to arrange for the sale of assets. However, he completely denied and showed proof to the contrary that he was insolvent.
12.05 We broke for lunch for one hour. We had a brief meeting with Jeff Lampert from Help4LiPs.
13.05 The case began again with further a reply to the R comments and then R spoke in reply to C comments.
15.00 The judge had heard everyone speak and said that he would now sum up the case and give his verdict.
This took the judge 1 hour and 30 minutes. I will not go into the legal issues that he clearly set out and that were relevant to the case and how he should determine matters within the framework of the law.
During the judges summing up it would be impossible to describe all our feelings and once the judge confirmed our application for an adjournment was declined we were all certain that we had lost our case and once again the bank was winning. Not for the first time that day in court our emotions very nearly got the better of us at this so manifest injustice perpetrated by the bank who I thought that we had argued our case very well and had convinced the Judge through R’s heart rendering submission that he had worked hard all his life, He never ever missed a payment on his loan or his mortgage or his overdraft and that the bank had clearly Engineered his default of the loan by calling in his on demand facility (his overdraft) for absolutely no logical reason. It was interesting to note that the bank confirmed in court that they had never given a reason other than the overdraft “is an on-demand facility”.
The judge has turned down our application an adjournment went on to confirm that because the overdraft had been demanded and not paid then R was in default and met the requirement of the insolvency act. When the judge said that we knew we were finished.
16.30 The judge finished his summing up and declared that given to him are powers of discretion and that whilst the facts pay point in some ways to the bank's application for an administration order being met.
He was going to exercise his discretion and NOT grant the bank an administration order provided that R did the things he said he would do in his first skeleton argument and that was mainly to repay the bank by selling the assets secured with the bank.
16.40 We had won our case.
17.30 We left London to return to Cornwall clearly elated.
23.45 I arrived back home to a much-needed cup of tea.
00.30 I got back into bed as it had been a long 24 hr day but worth every second.
Moral of the story: Always be honest and tell the truth and don’t ever give up trying if you know you are right and been served an injustice.
This blogpost is for information purposes and should not be relied upon as legal advice because it does not consider or take into account your own personal circumstances. If in doubt, seek legal advice.