It is sad but true that all legal practitioners involved in recovering debts will recognise that upon insolvency or death of a creditor, the debtors often seek to deny liability to pay.
On 14 March 2014 Mrs Justice Rose gave judgment in the fascinating case of Capita Trust Ltd v Optical Service (UK) Ltd (LTL 14/3/2014) in which Simon represented an administrator of the estate of an ex-employee of the defendant company. Capita claimed that the company had maintained a loan account in respect of unpaid bonus payments and accrued interest which, at the time of the employee’s death in late 2006 amounted to £477,631. With interest, the claim amounted to nearly £700,000.
The loan was identified in the company’s 2006 financial statements as owing to “other creditors”. The company denied that the money was owed to the deceased, and after it was ordered to give specific disclosure of its nominal ledger relating to the loan account, it asserted that the debt was owed to the directors. Relying upon accounting and tax records, Capita applied for summary judgment on the basis that the unsupported assertions of the officers of the company should be rejected as being unrealistic. The Judge agreed, finding that the company’s defence was so incredible that it could properly be described as fanciful.