StewartR
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Not for me, but one of my close family members is at her wits' end. I've tried to help but I (and she) would really appreciate some additional insights from anyone who has more experience of company law, contract law, and/or builders than we have.
So the background is that she's having an extension built. It's a ground floor extension which also includes a basement, because the back of the house where it's being built is on quite a steep slope away from the house. I don't know how she selected the builders but they seemed like a decent local firm. Let's call the firm Bill & Ben Ltd, where Bill and Ben are the two directors who are also co-owners. She has a proper contract which has been drawn up in accordance with the Federation of Master Builders template. I've reviewed the contract and it seems pretty good.
At first things were progressing satisfactorily, if a bit slowly, but it wasn't really the builders' fault - the neighbours were making a song and dance about a party wall agreement. But then Bill and Ben fell out. As I understand it Ben is the main builder who was in charge on site, and Bill is the one who attended more to running the business side of things (contracts, purchasing, permissions, payroll, etc). Apparently Bill was getting frustrated at the amount of money the "snagging" phase of jobs was costing the business, because Ben can be a bit slapdash at times whereas Bill is more meticulous. And their clients are more meticulous too. So anyway, one day it all came to a head and Bill resigned as a director of the firm.
The next thing my relative is told is that Ben has also resigned as a director, and the firm has been put into liquidation. However Bill is still a director of Bill & Son Ltd, another local building firm, and he's turning up each day to progress the job.
Trouble is, whereas Bill & Ben Ltd was an organisation with several employees and the capability to have multiple things happening simultaneously, Bill & Son Ltd is effectively just Bill because Son is ill. Bill can fit the kitchen, but when he's doing that he's not laying the floor or fitting the windows. So it's going very slowly. Also Bill has mentioned that he can't afford to subcontract any of the work to make it happen faster, because he isn't making any profit on the job as it is. Plus there are a number of problems that Ben caused and need to be fixed (eg substantial damage to existing render on the side of the house; basement floor not laid evenly; rubble from basement dig-out not disposed of yet) which will cost even more money. She's concerned that, whilst Bill seems to be a decent guy who wants to complete the job for her, when he takes a step back and realises just how much is still to do, he may just decide to walk away from it. She's painfully aware that she is probably dependent on his good will.
When she mentioned to me about Bill & Ben Ltd being liquidated, I thought that can't be right. If the company was being liquidated, the liquidator would have had to review their assets and liabilities, and one of those liabilities is the completion of my relative's contract. But she's heard nothing from any liquidator, therefore there is no liquidator. And indeed Companies House confirms that Bill & Ben Ltd is still active.
I also can't believe that it's legal for Ben to resign as a director, when he was the sole director (Bill having already resigned). Surely companies have to have directors, don't they? Surely you can't just walk away from your responsibilities like that?
So my relative's immediate priorities are (1) keep Bill onside and continuing with the job, (2) agree with Bill a revised plan for completion (including clearing up the mess Ben made), and (3) chivvy Bill along to keep to the plan. But as I mentioned she's concerned that he might just walk away from it, so we need to understand what options she has.
Although there is a proper contract, I can't get my head around the contractual / legal situation here. The contract is with Bill & Ben Ltd, and Bill is no longer involved with Bill & Ben Ltd, but Bill & Son Ltd seem to be continuing to discharge the contract, although there is nothing in writing about this. (Indeed the contract contains no provisions for Bill & Ben Ltd to transfer their obligations to another company.) If things do go legal - and we're trying to prepare for that possibility, whilst also hoping to avoid it - I'm not sure whether she should be pursuing Bill & Ben Ltd, or Bill & Son Ltd, or Ben as the last remaining director of Bill & Ben Ltd.
Any suggestions?
So the background is that she's having an extension built. It's a ground floor extension which also includes a basement, because the back of the house where it's being built is on quite a steep slope away from the house. I don't know how she selected the builders but they seemed like a decent local firm. Let's call the firm Bill & Ben Ltd, where Bill and Ben are the two directors who are also co-owners. She has a proper contract which has been drawn up in accordance with the Federation of Master Builders template. I've reviewed the contract and it seems pretty good.
At first things were progressing satisfactorily, if a bit slowly, but it wasn't really the builders' fault - the neighbours were making a song and dance about a party wall agreement. But then Bill and Ben fell out. As I understand it Ben is the main builder who was in charge on site, and Bill is the one who attended more to running the business side of things (contracts, purchasing, permissions, payroll, etc). Apparently Bill was getting frustrated at the amount of money the "snagging" phase of jobs was costing the business, because Ben can be a bit slapdash at times whereas Bill is more meticulous. And their clients are more meticulous too. So anyway, one day it all came to a head and Bill resigned as a director of the firm.
The next thing my relative is told is that Ben has also resigned as a director, and the firm has been put into liquidation. However Bill is still a director of Bill & Son Ltd, another local building firm, and he's turning up each day to progress the job.
Trouble is, whereas Bill & Ben Ltd was an organisation with several employees and the capability to have multiple things happening simultaneously, Bill & Son Ltd is effectively just Bill because Son is ill. Bill can fit the kitchen, but when he's doing that he's not laying the floor or fitting the windows. So it's going very slowly. Also Bill has mentioned that he can't afford to subcontract any of the work to make it happen faster, because he isn't making any profit on the job as it is. Plus there are a number of problems that Ben caused and need to be fixed (eg substantial damage to existing render on the side of the house; basement floor not laid evenly; rubble from basement dig-out not disposed of yet) which will cost even more money. She's concerned that, whilst Bill seems to be a decent guy who wants to complete the job for her, when he takes a step back and realises just how much is still to do, he may just decide to walk away from it. She's painfully aware that she is probably dependent on his good will.
When she mentioned to me about Bill & Ben Ltd being liquidated, I thought that can't be right. If the company was being liquidated, the liquidator would have had to review their assets and liabilities, and one of those liabilities is the completion of my relative's contract. But she's heard nothing from any liquidator, therefore there is no liquidator. And indeed Companies House confirms that Bill & Ben Ltd is still active.
I also can't believe that it's legal for Ben to resign as a director, when he was the sole director (Bill having already resigned). Surely companies have to have directors, don't they? Surely you can't just walk away from your responsibilities like that?
So my relative's immediate priorities are (1) keep Bill onside and continuing with the job, (2) agree with Bill a revised plan for completion (including clearing up the mess Ben made), and (3) chivvy Bill along to keep to the plan. But as I mentioned she's concerned that he might just walk away from it, so we need to understand what options she has.
Although there is a proper contract, I can't get my head around the contractual / legal situation here. The contract is with Bill & Ben Ltd, and Bill is no longer involved with Bill & Ben Ltd, but Bill & Son Ltd seem to be continuing to discharge the contract, although there is nothing in writing about this. (Indeed the contract contains no provisions for Bill & Ben Ltd to transfer their obligations to another company.) If things do go legal - and we're trying to prepare for that possibility, whilst also hoping to avoid it - I'm not sure whether she should be pursuing Bill & Ben Ltd, or Bill & Son Ltd, or Ben as the last remaining director of Bill & Ben Ltd.
Any suggestions?
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