Facing Court Action? Burying Your Head in the Sand Is Not an Option!

If you are facing court proceedings, burying your head in the sand is the worst option you can take and you should consult a lawyer straight away. In a case on point, a pair of businesspeople who failed to take that sensible step were stripped of valuable shareholdings and criticised by a judge for their spoiling tactics.

The pair failed to even acknowledge service of court documents after they were sued by a company. As a result, they missed the opportunity to put forward any arguments in their favour and a default judgment was entered against them. They were ordered to transfer their shares in a Monaco-based business to the company.

Their persistent failure to engage in the proceedings continued, however, and they took no steps to comply with that order. In those circumstances, the judge granted the company a further order, under Section 39 of the Senior Courts Act 1981, by which a court official was authorised to step into their shoes and execute the required share transfers.

In ruling on the matter, the judge was unimpressed by a number of emails the court had received from the pair and someone who purported to represent them. They stated, amongst other things, that the court had been misled, that one of them was seriously ill and that they had encountered difficulties in filing documents due to flaws in court IT systems.

The pair were not unsophisticated, at least one of them clearly having some legal knowledge, and the judge found that the timing of the emails indicated a pattern of uncooperative behaviour. They had not sought to defend the company’s claim on its merits and their very clear breach of the order requiring them to transfer the shares could not be permitted to continue. The pair were also ordered to pay the substantial legal costs of the case.