Small Claims County Court, Free Legal Advice, Advisory, Claims, Defence
Before we give details on the individuals involved, their activities in these group of companies and what we believe in our assumption of what transpired, I would like to mention there is a solicitor who states on his firm's website that he acts for a number of clients who fell foul of these companies. He also refers to an individual online who is unregistered and is offering assistance to former customers of the companies in question and to exercise caution if seeking advice.
He also states on a forum that he shrugs his shoulders and cannot see what advice this individual could possibly offer. I have checked online for this individual and after much searching, ...................... I think I have found that individual !!!!
I believe it's Small Claims !!!
Now I must admit, if this firm of solicitors believes Small Claims is the individual, then Small Claims are extremely flattered that this firm of solicitors with so many clients would bother to make these comments. We hope that this firm of solicitors do not feel threatened by the services that Small Claims offer. In fact we wish this firm of solicitors much success presently and also in the future. We also wish the clients of this firm of solicitors who fell foul of Trade Price Group / Spa Serve / UkHotTubsForSale.com a fast and speedy conclusion to their cases.
Small Claims will now give you an account of what possibly happened during the trading months of these companies. It is an opinion and assumption by Small Claims and not fact, but based on the information collected and the conversations with Jonathon Husselby whom Small Claims met a few times at Stafford County Court.
Later on Small Claims will explain the role of the Police and Trading Standards in relation to their respective ongoing investigation now that certain individuals have been arrested and explain the time scales involved. Small Claims already has experience of assisting Trading Standards in the investigation of another company and its individuals in relation to fraud and misrepresentation involving around £3 million, and is well placed to give you an insight of what may transpire over a period of time.
Small Claims will also inform you of the role of The Official Receiver and his/hers duties
Small Claims hopes you will find the following sections very informing and the information given may change the views of those former customers of Trade Price Group / Spa Serve / HoTtubsForSale.com in relation to their expectations for the future.
Small Claims first became involved in 2009 when Spa Serve and its name were accumulating bad reviews on the net and the Trade Price Group was formed as the company name had a clean bill of health on the net.
Small Claims, on reviewing the clients' contracts with Spa Serve, discovered a clause in their terms and conditions "time is not of the essesnce". This term caused problems in relation to the Sale of Goods Act 1979 and other Acts as, in law, delivery is a matter of fact. In simple terms, although the T&C's stated delivery would be around 12 weeks, the statement "time is not of the essence" effectively negated the 12 week delivery time as the actual delivery date.
The clients who had contracts, stating a delivery time of around 12 weeks should have written to the respective company, when the 12 week period expired, to state they the client, was making the contract "time of the essence". This would have removed the "grey area" on what was the delivery date.
Small Claims discovered that some clients were still waiting up to a year before they decided to take any action. Other clients were promised delivery of 3 and 6 weeks if they paid all the money "upfront".
We further learnt that the manufacturing time from date of order of raw materials by the companies to date of arrival back to the UK in completed form was never going to be acheived within 12 weeks.
The acrylic used to form the hot tub was ordered from the USA. This was shipped to China by boat which takes around 6 weeks. It then took a further 3/4 weeks to mould the acrylic and fit all the pumps, heaters and ancillary equipment. It then takes another 6 weeks by boat to arrive back into the UK. On that basis we are into 16 weeks.
These processes were put together in batches of orders. So, orders of materials were amalgamated to fill a container, which meant further delays in shipping to the USA and then the completed hot tubs to fill another container to be sent back to the UK.
It may well be that the partners knew from the outset, they were never going to acheive a 12 week turnaround, unless they robbed Peter to satisfy Paul.
If this is true, then they have committed misrepresentation under The Misrepresentations Act 1967, Section 2 and breached The Consumer Protection from Unfair Trading Regulations Act 2008.
Some clients have made purchases through their own company, therefore The Business Protection from Misleading Marketing Regulations 2008 has been breached. This was a Statutory Instrument No 1276 of 2008.
As problems mounted against Spa Serve by their customers, court proceedings ensued and some clients were given refunds at the 11th hour before walking into the court room. We assume that there was sufficient cash flow to pay off these people at that time.
As the momentum gathered pace with more complaints on the net, we assume further litigation ensued by more customers, and although Trade Price Group / Spa Serve / UkHotTubsForSale.com always entered a defence to delay the enevitable, possibly cash flow was getting thin on the ground and the eventual intervention of Trading Standards has brought us to where we are today.
The Police, to be fair, not only have to deal with fraud, but buglary, theft, drunks, drug addicts, drug suppliers, uninsured drivers, domestic violence, murder, ABH, people smuggling and a host of other issues. They are inundated. Trading Standards deal with consumer issues.
When customers of Trade Price Group / Spa Serve / UkHotTubsForSale.com call the police and wish to report their predicament as a fraud, theft or deception, you are going to be well down the list in terms of their priorities. You will probably speak to a "Civvy" who will try to fob you off, as if they issue you with a crime number, it ruins their figures for clearing up crime.
There has been critism of the police on the net in relation to this matter and that they should have done something much earlier to shut down the operations of these individuals.
Small Claims will deal with this point in more depth under the heading of "Trading Standards" below
The role of the police in this matter would have been to be present with Trading Standards when the arrests were made on the individuals concerned.
In brief, his remit is to take possession of all the assets of the individuals, including houses, cars, bank accounts, shares, etc. Each individual will be interviewed and have to complete a comprehensive questionnaire not only what they have in their possession now, but if they sold a vehicle in the last year, and who they sold it to. They must also declare whether they are named in any will.
The O/R will also rely on any further information supplied by Trading Standards in their investigations and in this case, we assume, will take some considerable time to complete.
The O/R will be responsible to convert any assets recovered into cash for the creditors. Be aware that creditors could also include lenders for mortgages, credit card companies, finance companies where vehicles are concerned, landlords in relation to rents for the commercial properties where the business was conducted, etc, etc, etc.
The O/R will have to vet all creditors as bona fide.
The O/R will then submit a balance sheet showing the amount owing to creditors and the amount of any realised assets.
When this process is complete, he will make a recommendation to the county court on each individual, as to what length of time bankruptcy is to continue.
I have sympathy for Trading Standards (T/S) in general. They are underfunded, don't have the manpower and are inundated with complaints from people being ripped off on the net by companies purporting to be in this country, but are actually based abroad. Other complaints being goods not delivered,.not as described, my washing machine broke down and the retailer won't fix it, the plumber ripped me off, the roofer said he fixed it, but it still leaks and the garage said they reconditioned my engine, but just changed the plugs are some of the complaints they receive.
The fact is, this case is a mamouth task to take on and then to complete it and see it through.
For example, to coordinate the arrests simultaneously at 5 different addresses, as well as Trading Standards Officers, there would have to be uniformed police at each address. This would have had to be planned many weeks in advance. Even when the date was set to make the arrests, on the day it could have been cancelled due to not enough uniformed officers available because another incident that day occured which took preference. This scenario could have repeated again and again.
T/S would have had to carry out an enormous amount of work before they decided there was sufficient evidence to justify a warrant for the arrest of the individuals concerned. But their work has only started. T/S should have seized all the paperwork and computers at the private houses and business premises, together with any business assets for safe keeping.
Their next function is to go through the computers and extract information which they may rely on to bring any charges. This alone is very time consuming. I understand there may be 4/500 clients involved so T/S will need to obtain witness statements from all these people. This operation could take a year. Once all the relevant information is collated and if there is justification on the evidence to bring criminal charges, the barristers could take 6 months sifting through the evidence to decide which charges to lay before the courts.
The fact that the individuals were arrested and bailed until January 2011 means nothing at this stage. I anticipate that in January 2011, where more information has come to light, the individuals will be questioned and bailed again to a later date. During that time more information will come to light and at the next bail date, the individuals will be questioned again. This process could take some time and don't be surprised if it takes a year.
As pressure builds on these individuals, there maybe one or more who turn on the others in the hope that T/S will be lenient with them.
Make no mistake, if criminal charges are brought and they are found guilty, there could be some serious "porridge" involved.
Small Claims understands that some of the individuals arrested drive fancy cars and live in large houses. The fact of the matter is, the cars could well be on finance meaning those cars are the property of the finance companies. The houses could have large mortgages with a small equity and in any event, if a sale was forced by order of a court, you would expect a yield far lower than normal market conditions.
From our past experience, you should expect Trading Standards to carry out a thorough investigation in relation to amounts of money that may have been hived off elsewhere. T/S have powers to track and trace bank accounts, and the ability to spot lumps of money removed from accounts.
Unfortunately, those who suffered a loss will be eager to hear from the Trustte in relation to what the assets may realise.
There is a solicitor who has a number of cases in relation to the companies and individuals who controlled those companies. He states on his firm's website that if he ascertains the police or trading standards failed in their duty to protect consumers (and he suggests there are indications that suggest this), he will be looking to mount a group action to seek redress.
Small Claim's opinion is firstly, nobody knows the value of the assets. If, unlikely, there are sufficient assets to satisfy all the complainants, then you have have no action in quantum form. If, more likely, there are insufficient assets, you will only be able to quantify a claim when the assets are converted into cash, less expenses, by the Trustee.
In terms of the police, they can only charge someone (and this is carried out by the Crown Prosecution Service) when they have more than sufficient evidence. The role of the police is to investigate, gather evidence and submit it to the CPS. It may well be, that at the time of any investigation, the police concluded at that time there was insufficient evidence and decided it was a Civil Matter.
The police may rely on the contract clause "time is not of the essence", whereby at the time they investigated (if they did), insufficient time time had lapsed between the 12 week aprox delivery date and the date the police investigated.
Further, there could be another problem suing the police. If you were to give your car to someone to store for you and then subsequently that person sold your vehicle, you would naturally go to the police citing fraud and theft. If, while the police are investigation, you then start a civil claim in the county court, and the police hear of this, they will drop their investigation immediately.
The police may argue that point, as there were a number of civil cases going through the courts. They may also argue the investigation was on the basis of prioritising cases on the basis this was not urgent in comparison to the more urgent cases on its books.
Trading Standards (T/S), while stating they were given undertakings by the controllers of the companies concerned, we believe, at that time were also "tied up", because of the contractual term "time is not of the essence". again, they would have to have allowed sufficient time to lapse whereby that term was ineffectual. The time lapse would be, in a court's jurisdiction, a matter of fact. In reality the court would have to decide what was a sufficient time lapse, before that term could no longer be in effect.
We also stated earlier in this bulletin, that it may well be T/S had arranged many months earlier to carry out the arrests, but could only do so if there were sufficient numbers of police officers available to carry out these arrests simultaneously on the various addresses.
Persons wishing to form this action group for redress should be asking the solicitor concerned if this redress means financial compensation to them, the fees involved and the time scale.
In Small Claims limited opinion, and as we are not privy to the practices (if) used by the police or T/S or any documentation, this could be a long and drawn out process, and could fail in the end.
Our experience has shown, in matters like this case, presently, the anger felt by all the customers is at its height, but as time progresses the anger subsides, as the criminal investigation gets underway and most feel they dont wish to throw good money after bad.
Small Claims hopes this article has been useful to those who have been unfortunate to have suffered losses in this matter.