Commercial Enforcement 9781526512895, 9781526512864, 9781526512871

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Commercial Enforcement

Commercial Enforcement Third Edition

Owen Williams Michelle Kemp

BLOOMSBURY PROFESSIONAL Bloomsbury Publishing Plc 50 Bedford Square, London, WC1B 3DP, UK 1385 Broadway, New York, NY 10018, USA 29 Earlsfort Terrace, Dublin 2, Ireland BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc © Bloomsbury Professional Ltd 2021 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www.nationalarchives.gov.uk/doc/opengovernment-licence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998-2021. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN: HB: 978-1-52651-289-5 ePDF: 978-1-52651-287-1 ePub: 978-1-52651-288-8 Typeset by Evolution Design and Digital Ltd (Kent) To find out more about our authors and books visit www.bloomsburyprofessional.com. Here you will find extracts, author information, details of forthcoming events and the option to sign up for our newsletters

Preface to the third edition

‘In times of economic uncertainty, the ability to enforce a judgment effectively becomes a weightier consideration than in more benign economic climates.’ These were the words used by our predecessors to open the preface to the Second Edition of this work (published in 2008 at the height of the sub-prime financial crisis). As we write this in the midst of the Covid-19 pandemic crisis awaiting the inevitable economic collapse to bite, those words ring as true to us as they did to them. Michelle has, however, the advantage of viewing matters from New Zealand which has, so far, sailed through the pandemic. Whilst we cannot promise that this work will be as revolutionary as the theory of gravity (formulated by Isaac Newton whilst escaping from the plague) we trust our time spent in isolation working on it will at least maintain the original aim of this work of being a functional book for practitioners whilst also reviewing in some detail the most important legal authorities. We are very grateful to the authors of the Second Edition upon whose shoulders we have been able to stand although very few chapters in this edition have escaped substantial revision. The law as known to the authors is stated as at 1 August 2020. However, we have purposefully not included temporary legislative provisions presently in force due to the coronavirus pandemic caused by Covid-19. It is hoped that these temporary measures will shortly be of historical importance only. OWD, Penwood/MK, New Plymouth August 2020

Contents

Preface........................................................................................................................ v Table of Statutes......................................................................................................... xi Table of Statutory Instruments................................................................................. xix Table of Conventions...............................................................................................xxix Table of European Legislation................................................................................xxxi Table of Cases...................................................................................................... xxxiii Introduction Information about the judgment debtor’s assets....................................................3 Methods of enforcement........................................................................................3 Third party debt order............................................................................................3 Charging order.......................................................................................................3 Writ of control........................................................................................................4 Appointing a receiver by way of equitable execution............................................ 4 Comparison of assets reached by each form of enforcement................................. 4 Interest on judgments.............................................................................................6 Judicial statistics on enforcement...........................................................................6 CHAPTER 1 General rules about enforcement of judgments........................................... Introduction............................................................................................................9 General rules on enforcement..............................................................................12 Committal and writs of sequestration..................................................................13 Enforcement procedures not applicable to high court money judgments............ 15 Transfer of proceedings between the High Court and the County Court............. 21 Procedures in aid of enforcement.........................................................................24 Payment of judgment debt after enforcement commenced..................................29 Judgments that are set aside and stays of execution............................................. 31 General restrictions on enforcement....................................................................35 Criminal offences – harassment of debtors..........................................................42 Human rights........................................................................................................42

viii  Contents Insolvency and its effect on enforcement.............................................................45 Corporate judgment debtors.................................................................................45 Winding up...........................................................................................................45 Administration.....................................................................................................48 Company voluntary arrangements, restructuring plans and schemes of arrangement.....................................................................................................53 Administrative receivers....................................................................................... 53 Priority of floating charge holders and execution creditors................................. 54 Standalone moratorium........................................................................................54 Individual judgment debtors................................................................................55 Bankruptcy...........................................................................................................56 Individual voluntary arrangements.......................................................................58 County Court administration orders.....................................................................58 Conclusion: the interaction of the insolvency and enforcement regimes............. 59 Assignment of a judgment debt...........................................................................59 Enforcement of monetary awards made by bodies other than the High Court and County Court..................................................................................61 Law reform...........................................................................................................63 Pre-CPR authorities..............................................................................................66 Location of the judgment debtor’s assets............................................................. 67 Enforcement of an English judgment overseas.................................................... 67 Enforcement of foreign judgments in England.................................................... 70 Future potential regimes....................................................................................... 72 CHAPTER 2 Obtaining information about a judgment debtor’s assets........................... Introduction..........................................................................................................73 Public sources of information..............................................................................74 Inquiry agents.......................................................................................................89 Part 71 oral examination.................................................................................... 105 Procedure........................................................................................................... 106 Appendix 1.........................................................................................................144 Appendix 2.........................................................................................................148 Appendix 3.........................................................................................................149 CHAPTER 3 Third party debt orders................................................................................... Introduction........................................................................................................151 Debt owed by a third party.................................................................................153 Procedure........................................................................................................... 178

Contents  ix

CHAPTER 4 Charging orders................................................................................................ Introduction........................................................................................................209 Jurisdiction.........................................................................................................213 Assets that may be charged................................................................................ 217 Procedure for obtaining a charging order........................................................... 226 Order for sale.....................................................................................................269 Stop orders and stop notices............................................................................... 286 CHAPTER 5 Writs of control................................................................................................ Introduction........................................................................................................295 Transitional measures.........................................................................................299 What goods can an enforcement agent take?..................................................... 300 Procedure for obtaining a writ of control...........................................................315 Application for a writ of control........................................................................320 Delivery to an enforcement officer.....................................................................326 Validity and renewal of writ............................................................................... 329 Effect of a writ of control...................................................................................330 Stages of execution of a writ..............................................................................338 Notice of enforcement........................................................................................338 Entry into premises............................................................................................340 Locating goods on a highway............................................................................ 354 Taking control of goods.....................................................................................354 Securing goods taken into control...................................................................... 362 Payment by the judgment debtor........................................................................367 Sale.....................................................................................................................368 Claims to controlled goods.................................................................................378 Enforcement agents’ fees................................................................................... 385 Priority of writs..................................................................................................390 Insolvency..........................................................................................................392 Winding up.........................................................................................................393 Bankruptcy.........................................................................................................394 Human rights......................................................................................................396 Reform............................................................................................................... 398 Appendix............................................................................................................398 CHAPTER 6 Appointing a receiver by way of equitable execution................................... Introduction........................................................................................................401 The nature of a receiver...................................................................................... 403 The development of the modern jurisdiction.....................................................406 The modern jurisdiction to appoint a receiver by way of equitable execution.. 410 Assets amenable to equitable execution............................................................. 418

x  Contents Limitations of equitable execution..................................................................... 435 Practice and procedure.......................................................................................436 Effect of appointment of a receiver by way of equitable execution................... 441 General issues relating to receivership............................................................... 448 Interplay with the insolvency regime................................................................. 456 CHAPTER 7 Interest on judgments..................................................................................... Introduction........................................................................................................459 Period of interest................................................................................................460 Interest on costs..................................................................................................468 Rate of interest...................................................................................................478 When does interest stop running?......................................................................491 Practice and procedure.......................................................................................495 Reform...............................................................................................................495 Index .....................................................................................................................497

Table of Statutes

[All references are to paragraph numbers] A Administration of Justice Act 1920.... 1.232, 1.233, 5.94 s 9.........................................................1.233 (2).....................................................1.233 Administration of Justice Act 1956...........4.3, 6.90 s 34.......................................................1.145 (1)...................................................4.3, 6.90 (2)...................................................6.90  35........4.3, 4.6, 4.43, 4.44, 4.87, 4.157, 4.159 (3)............................................. 4.135, 4.136  36(1)...................................................6.90 Administration of Justice Act 1970........  1.14, 7.75 s 11(a), (b)............................................1.14  40(1)(a)..............................................1.124 (3)...................................................1.124  44.................7.71, 7.71, 7.72, 7.77, 7.78, 7.81  44A...................................7.4, 7.13, 7.73, 7.74 Sch 4.....................................................1.14 Agricultural Credits Act 1928................. 5.54, 5.55 s 9(1), (2), (4), (8).................................5.55 Agricultural Holdings Act 1986 s 85.......................................................4.32 Apportionment Act 1870 s 2.........................................................3.25 Arbitration Act 1950.................................7.77 s 20....................................................7.77, 7.104 Arbitration Act 1996.................................1.202 s 49(1)...................................................7.102 (3)...................................................7.104 (4)............................................. 7.103, 7.104  66.......................................................5.73 (1), (2)...................................... 1.202, 7.105  101.....................................................7.10 Armed Forces Act 2006 s 356.....................................................6.59 Army Act 1881 s 141.....................................................6.59 Army Act 1955 s 203(1).................................................6.59 Attachment of Earnings Act 1971.......... 1.26, 1.27, 1.28, 1.29, 3.64, 3.65 s 1.........................................................1.26 (1).....................................................1.26 (1A)..................................................1.26

Attachment of Earnings Act 1971 – contd s 1(2)(b), (c)..........................................1.26  2(a).....................................................4.69 3(3).....................................................1.34 (6).....................................................1.14  4.........................................................1.27  6.........................................................1.34  7(4).....................................................1.34 8(2)(a)................................................1.27 (b)..............................................1.27, 5.73  13.......................................................1.34  14.......................................................1.33 (4)...................................................1.33  15.......................................................1.34  16.......................................................1.29  22.......................................................1.28  23..................................................... 1.33, 1.36 (1), (2), (5).....................................1.36  24.......................................................1.28 (1)................................................... 3.65 (2)..................................................1.28, 3.65  25(2)...................................................1.27 Sch 2.....................................................1.14 Sch 3................................................... 1.28, 1.34 B Bankers’ Book Evidence Act 1879...........3.136 Banking Act 1987 Sch 2.....................................................3.90 Bankruptcy Act 1861 s 73.......................................................1.176 Bankruptcy Act 1869................................5.138 s 12.......................................................5.138  87.......................................................1.176 Bankruptcy Act 1883 s 45............................................... 1.176, 6.175, 6.176, 6.178  145.....................................................5.252  146.....................................................6.90 Bankruptcy Act 1887 s 45.......................................................5.325 Bankruptcy Act 1914 s 40.......................................................1.176 (1)...................................................1.177  167.....................................................1.164

xii  Table of Statutes Bankruptcy and Deeds of Arrangement Act 1913 s 15........................... 5.257, 5.261, 5.263, 5.264 Bills of Exchange Act 1882 s 3.........................................................3.24  81A.....................................................5.21 Bills of Sales Act 1878..............................5.39 s 12.......................................................5.41  16.......................................................5.41 Bills of Sales Act (1878) Amendment Act 1882.................................................5.39 C Charging Orders Act 1979... 3.168, 4.8, 4.19, 4.23, 4.35, 4.38, 4.42, 4.43, 4.44, 4.54, 4.56, 4.57, 4.60, 4.67, 4.70, 4.87, 4.153, 4.156, 4.157, 4.173, 4.202, 4.270, 4.271 s 1..............1.142, 1.181, 4.30, 4.42, 4.269, 6.90 (1)................ 1.5, 4.18, 4.20, 4.24, 4.26, 4.30, 4.69, 4.84, 4.190, 4.202 (2).....................................................4.69 (a)................................................4.71 (d)................................................4.70 (3).....................................................4.20 (5)............... 2.197, 4.20, 4.140, 4.152, 4.184, 4.186, 4.258, 4.270 (a)................................................4.173 (b).......................................... 4.156, 4.165 (6), (7)..........................................4.30, 4.193 (8).....................................................4.30  2..............................................4.33, 4.43, 4.44 (1)(a)(i).............................................4.42 (ii).......................................... 4.42, 4.54 (b)................................................4.59 (i)............................................4.59 (ii)...........................................4.59 (iii)........................................ 4.42, 4.59 (2)................................. 4.34, 4.59, 4.63, 4.65 (a)................................................4.42 (b)...............................................4.46, 4.50 (c)................................................4.52 (3)...................................................4.50, 4.53 (7)...................................................4.63, 4.65  3(1)...................................... 4.21, 4.197, 4.258 (2)......................... 4.105, 4.121, 4.135, 4.136 (4).............1.156, 4.8, 4.26, 4.28, 4.87, 4.134, 4.135, 4.220, 4.248 (5).............4.152, 4.177, 4.182, 4.206, 4.207, 4.208, 4.210, 4.211 (6).....................................................4.217 (7).....................................................4.63  5(1)................................................4.274, 4.276 (2).....................................................4.273 (4)............................................... 4.281, 4.288 (5)............................................... 4.276, 4.293  6.........................................................4.42 (1)......................................... 4.46, 4.47, 4.48, 4.49  7.......................................................4.43, 4.44 Cheques Act 1992.....................................5.21 Child Support Act 1991 s 33.......................................................4.32 Civil Evidence Act 1968 s 14.......................................................2.246

Civil Jurisdiction and Judgments Act 1982.................................. 2.194, 2.198, 5.94 s 2(c).....................................................2.199  3.........................................................2.215  4.........................................................1.231  18.......................................................1.236 Sch 6.....................................................1.236 Sch 7.....................................................1.236 Civil Procedure Act 1997 s 1.........................................................4.273 (1), (3)..............................................7.81 Sch 1.....................................................4.273 Common Law Procedure Act 1852...........4.202 Common Law Procedure Act 1854...........3.50 s 60.......................................................2.129  61.................................................3.3, 3.4, 3.16  62–70.................................................3.3 Companies Act 1928 s 69, 70.................................................1.145 Companies Act 1929 s 268, 269.............................................1.145 Companies Act 1948 s 95.......................................................4.135  98.......................................................4.136  325.....................................1.139, 1.145, 4.271 (2).................................................4.271  326.....................................................1.145 Companies Act 1985.................................2.37 s 395.....................................................4.134  396.....................................................4.134  621, 622.............................................1.145 Companies Act 2006...........1.165, 2.35, 2.36, 2.37, 2.41, 4.136 s 30(1)...................................................2.31  162............................................... 2.270, 2.271  163–165.............................................2.270  275–279.............................................2.270  441...................................... 2.30, 2.270, 2.271  442–446....................................... 2.270, 2.271  447.....................................................2.270  853A..............................................2.270, 2.271 Pt 25 (ss 859A–894).............................2.270 s 859.....................................................2.271 Pt 25 Ch A1 (ss 859A–859Q)...............2.271 s 859A...................................................4.134  859G...................................................2.33  859I....................................................2.33  859K...................................................2.31  860.....................................................4.134  874.....................................................4.134  878.....................................................4.134  889.....................................................4.134 Pt XXXIV (ss 1044–1059)...................2.29 s 1085...................................................2.29  1139...................................................3.113  1200...................................................2.65  1201(b)...............................................2.65  1202(1), (2)........................................2.65  1203...................................................2.65  1204...................................................2.65 Companies (Consolidation) Act 1908 s 140.....................................................1.135 Computer Misuse Act 1990......................2.92 s 1(1), (2)..............................................2.92

Table of Statutes  xiii Computer Misuse Act 1990 – contd s 17(2)...................................................2.92 Consular Relations Act 1968..... 1.96, 1.121, 1.122 s 1(1).....................................................1.121  11.......................................................1.122 Sch 1.....................................................1.121 Consumer Credit Act 1974........................5.85 s 129.....................................................7.95  141.....................................................7.95 Consumer Rights Act 2015.......................7.95 Contempt of Court Act 1981 s 14(1)...................................................2.235 Corporate Insolvency and Governance Act 2020..................1.165, 1.168, 2.31, 5.234 County Courts Act 1984............................4.69 s 23(c)............................................. 4.220, 4.260  40.......................................................1.41 (2)...................................................4.260 (4)...................................................1.41 (6)...................................................1.45 (b)..............................................1.41 (7)...................................................1.41  42(2)..................................................1.47, 1.50 (5) 1.49 (5)(b)..............................................7.25 (6)................................................. 1.49, 7.25  71.......................................................1.89  74.......................................................7.3 (5A)................................................7.75  85.......................................................5.85  86.......................................................4.193 (1)............................................... 4.30, 4.194  88.......................................................1.55  107.....................................................6.100  108...................................................3.43, 3.44  109(1).................................................3.200  112................................................. 1.187, 2.24 (1).................................................1.187  112A...................................................2.24  114, 115.............................................1.187  145.....................................................4.69 Courts Act 2003..........................1.207, 5.5, 5.108, 5.109, 5.114 s 2(1).....................................................5.118  98.......................................................2.24 (1)...................................................1.208 (3)(a)..............................................2.26  99.......................................................5.7  109(1).................................................5.126 Sch 7.....................................................5.5, 5.85 para 1................................................5.108  2(1)......................................5.114, 5.115  3(1)...........................................5.108 4(1A)........................................ 5.5, 5.7 (2)...........................................5.5,  5................................................5.185  7................................................5.310 (1), (2), (4), (5).......................5.128  8.............................................. 5.5, 5.126  9................................................5.5  10..............................................5.5  11..............................................5.5 Sch 8 para 264............................................5.126

Criminal Damage Act 1971 s 9.........................................................2.247 Criminal Justice Act 1988.........................6.156 Crown Proceedings Act 1947........1.96, 1.103, 7.68 s 17.......................................................1.103 (1)–(3)............................................1.103 24(1)...................................................7.4 24(2)...................................................7.68  25(1)............................................... 1.107, 5.42 (2)............................................... 1.108, 5.42 (3).................................... 1.107, 1.108, 5.42 (4)........................ 1.104, 1.106, 2.153, 3.90, 5.42, 6.97  26(1)............................................. 1.102, 5.140  27.......................................................3.91 (1)(c)..............................................3.91  38(3)...................................................1.103  40(1)...................................................1.103  47.......................................................4.66 D Damages Execution Act 1285...................5.2, 6.90 preamble...............................................5.2 Data Protection Act 1984...................... 2.73, 2.118 Data Protection Act 1998..........................2.89 Data Protection Act 2018..............2.74, 2.89, 2.118 s 170.....................................................2.90 Debtors Act 1869......................................1.14, 5.2 s 4.........................................................1.14  5.........................................................1.14  6.........................................................1.63 Deeds of Arrangement Act 1914...............1.172 Diplomatic Privileges Act 1964........... 1.96, 1.115, 1.120, 1.121 s 2(1).....................................................1.115 (2).....................................................1.116  4.........................................................1.120 Sch 1.....................................................1.115 art 22................................................5.183  30................................................5.183 E Electricity Act 1989 s 27D.....................................................7.14 Employment Tribunals Act 1996 s 15.......................................................1.196 Enterprise Act 2002..............................1.148, 1.166 s 248.....................................................1.148 European Union (Withdrawal Agreement) Act 2020 s 39(1)...................................................1.219 F Family Law Act 1996 s 31(10).................................................4.261 Finance Act 1927 s 127.....................................................5.156 Finance Act 1999 s 112(3).................................................1.191 Sch 13...................................................1.191 Finance Act 2003 s 125.....................................................1.191 Finance Act 2008 s 127.....................................................5.155

xiv  Table of Statutes Financial Services and Markets Act 2000 s 335.....................................................2.63 Foreign Judgments (Reciprocal Enforcement) Act 1933..............1.232, 1.233, 2.194, 5.94 s 2.........................................................1.233  4.........................................................1.233 Fraud Act 2006 s 13.......................................................2.247 Freedom of Information Act 2000............2.7 s 1(1).....................................................2.7 s 3(1).....................................................2.7 Sch 1.....................................................2.7 G Greater London Authority Act 1999 s 213.....................................................5.47  216(4).................................................5.47 H Housing Act 1969 s 6(14)...................................................7.93 Human Rights Act 1998... 1.97, 1.125, 1.130, 2.74, 2.83, 2.252, 4.184, 4.242, 4.251, 4.253, 5.332 s 2(1).....................................................1.130  6.........................................................4.242 (1).....................................................1.125 (3).....................................................1.126 (a)................................................2.105 I Insolvency Act 1985 s 179.....................................................1.176 Insolvency Act 1986............1.97, 4.32, 4.270, 5.27, 5.73, 5.235, 5.318, 5.319, 5.327 Pt A1 (ss A1–A55)...........................1.150, 1.168 s A2.......................................................1.168 Pt A1 Ch 2 (ss A3–A8).........................1.169 s A6.......................................................1.169 A8(2)(a)..............................................2.31 A9–A11..............................................1.169 A18.....................................................1.170 (3)................................................1.160 A20................................................1.170, 1.171 A21(1)(a), (c).....................................1.170 (e)................................................1.171 Pt A1 Ch 5 (ss A34–A41).....................1.168 s A38.....................................................1.169  7(4)(b)................................................1.151 Pt II (ss 8–27).......................................1.148 s 15(4)...................................................4.234  29(2)...................................................1.166  43(5)...................................................2.31  84(3)...................................................2.31  86.......................................................1.140  109(1).................................................2.31  117(2), (2A).......................................1.3  122(1)(f).............................................1.3  123(1)(a), (b)......................................1.3  126(1).................................................1.135  128(1).................................................1.146  129(1).................................................1.140 (1A)..............................................1.140

Insolvency Act 1986 – contd s 129(2).................................................1.140  130(1).................................................2.31 (2).................................................1.147  174A...................................................1.170  183............. 1.145, 1.176, 1.180, 3.201, 3.202, 4.269, 4.272, 5.264, 5.318, 6.175, 6.176, 6.178 183(1)....................1.137, 1.140, 1.144, 1.157, 2.11, 5.319 (2)(a)...................................... 1.168, 3.177 (b)............................................5.323 (c)............................................1.144 (3)........................................... 1.142, 3.202 (a)............................1.140, 4.269, 5.319 (b)............................................4.269 (c)............................................6.175 (4)............................................1.145, 1.182  184......................... 5.264, 5.318, 5.320, 5.322 (1), (2)..........................................5.320 (3), (4)..........................................5.321 (5).................................................5.322  186.....................................................5.318  189(2), (4)..........................................7.121  248(b).................................................1.155  252.....................................................4.167  254(1)(b)............................................1.186 (2).................................................1.186  267.....................................................3.30 (2)(a), (c)......................................1.2 (4).................................................1.2  268(1)(b)............................................1.2  278(a).................................................1.176  283.....................................................5.27 (2)(a)............................................5.30  285(1), (2)..........................................1.173 (3)............................................1.174, 1.184  313.....................................................4.32  328(4), (5)..........................................7.121  335A...................................................4.234  346........................ 1.180, 3.201, 3.202, 4.210, 4.269, 4.272, 5.264, 5.318, 5.330, 6.175, 6.176, 6.178 (1)...........1.157, 1.175, 1.183, 1.184, 2.11, 5.325, 5.329 (2)...........................................5.326, 5.329 (3)................................5.327, 5.327, 5.329 (4).................................................5.328 (5)........................................... 1.181, 3.202 (a)............................1.182, 4.269, 5.325 (b)......................................4.269, 6.175 (6)...........................................1.183, 5.329 (7).................................................5.330  383(2).................................................1.161  390(3)(a), (b)......................................6.151  423.....................................................1.132  424.....................................................1.132 (1)(c)............................................1.132 Sch A1 para 3(2)...........................................1.165 Sch B1..................................................1.148 para A20(1)(f), (g)............................1.150  5................................................1.152 7, 8............................................1.150

Table of Statutes  xv Insolvency Act 1986 – contd Sch B1 – contd para 10, 11........................................1.151 12..............................................1.151 (5).........................................1.151  13..............................................1.151 (1)(e).....................................1.140  14..............................................1.150 22..............................................1.150  23..............................................1.150 25(a), (c)...................................1.150 25A...........................................1.150 35, 37, 38..................................1.151  43(6).........................................1.154  44..............................................1.152 64A...........................................1.170  71..............................................1.155 Insolvency Act 2000..................................1.165 International Organisations Act 1968... 1.96, 1.123 s 1(2).....................................................1.123 (b)................................................1.123 Sch 1 Pt I para 1...........................................1.123 International Organisation Act 2005.........1.123 Interpretation Act 1978..........................1.27, 2.149 s 5.........................................................4.42  17(2)(b)..............................................4.69 Sch 1.....................................................4.42 Investigatory Powers Act 2016.................2.74 s 1, 3.....................................................2.93 J Judgments Act 1838............... 4.3, 4.26, 4.35, 7.13, 7.17, 7.39, 7.41, 7.42, 7.44, 7.51, 7.54, 7.75, 7.106 s 11.......................................................6.90  13.......................................................4.3  14.......................................................4.4  17............... 4.24, 4.25, 5.97, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10, 7.12, 7.13, 7.14, 7.15, 7.16, 7.17, 7.21, 7.22, 7.23, 7.24, 7.25, 7.34, 7.36, 7.37, 7.41, 7.42, 7.43, 7.49, 7.51, 7.54, 7.58, 7.67, 7.71, 7.72, 7.74, 7.76, 7.81, 7.100, 7.108, 7.121, 7.124 (1).......................................... 7.7, 7.8, 7.106 (2)...................................................7.9  19.......................................................6.90 Judgments Act 1840 s 1.........................................................4.4 L Land Charges Act 1925.............4.115, 4.116, 4.136 Land Charges Act 1972............4.104, 4.105, 4.108, 4.113, 4.118, 4.123, 4.136, 4.217 s 2(4).....................................................4.113  5(1)............................................... 4.106, 4.114 (b)................................................2.14 (4).....................................................4.107 (7)...............................................4.109, 4.118 (10)...................................................4.111  6.........................................................6.95 (1)................................................. 2.14, 4.111

Land Charges Act 1972 – contd s 6(1)(a)................................................4.123 (b)................................................6.95 (c)................................................2.14 (1A)..................................................4.113 s 6(2)................................................. 4.115, 6.95 s 6(4).................................................4.118, 6.95  8....................................................4.110, 4.117 9(1).....................................................4.119  14.......................................................4.104  17(1).................................. 4.106, 4.108, 4.115 Land Drainage Act 1991 s 54.......................................................5.26 Land Registration Act 1925......................4.136 s 28(1)(b)..............................................7.86 Land Registration Act 2002....4.104, 4.121, 4.122, 4.123, 4.136, 4.217, 7.86 s 4.........................................................4.103  32(1)..............................................4.123, 4.124 (2)...................................................4.124  33(a)(i)...............................................4.129  34(1)............................................. 4.123, 4.124 (2)...................................................4.125 (3)(c)..............................................4.125  35(1)...................................................4.126 (3)...................................................4.128  36(1)...................................................4.126  40(1)................................................4.129, 6.96  41....................................................4.129, 6.96  43(1)(c)...............................4.123, 4.129, 6.96  46.......................................................4.130  66.......................................................2.46  73(7)...................................................4.126  77.......................................................4.122  87(1)(a), (b)........................................4.123 Law of Property Act 1925.........1.191, 4.228, 4.234 s 1(6).....................................................4.40  30................4.175, 4.176, 4.180, 4.182, 4.221, 4.224, 4.225, 4.227, 4.231, 4.232, 4.239, 6.91  34(1)...................................................4.40  36(2)...................................................4.40  90.......................................................4.264 (1)...................................................4.264  101(1).................................................4.264  136............................................... 1.190, 1.191  195(1), (3), (5)...................................6.90  198.......................................4.109, 4.118, 6.95 (2).................................................4.113 Limitation Act 1980...........1.96, 1.100, 4.25, 7.115 s 20(5)................................................... 7.116  24.........................................1.99, 7.109, 7.110 (1).............................1.98, 1.99, 1.100, 5.66, 5.71, 7.111, 7.112, 7.115 (2)................................. 7.111, 7.113, 7.114, 7.115, 7.116, 7.118 Limited Liability Partnerships Act 2000...2.40 s 9.........................................................2.271 Local Government Finance Act 1988 s 62A.....................................................5.26 M Magistrates Courts Act 1980 s 76(1)...................................................5.156

xvi  Table of Statutes Magistrates Courts Act 1980 – contd s 125(a), (b)..........................................5.156  125A...................................................5.118 Married Women’s Property Act 1882.......1.65 s 10.......................................................1.32 Matrimonial Causes Act 1973.............4.179, 4.180 Pt II (ss 21–40A)............................4.174, 4.175 s 25(1)...................................................4.186 Matrimonial Homes Act 1967...................4.250 Matrimonial Homes Act 1983...................4.250 Mercantile Law Amendment Act 1856.....5.126 Merchant Shipping Act 1995 s 8(7).....................................................2.54  34.......................................................6.59 N National Lottery Act 1998 s 2(13)...................................................7.14 P Partnership Act 1890............................... 4.32, 4.60 s 9.........................................................2.65  23..................................................... 4.60, 4.83 (1)...................................................5.45 (2)...............................4.62, 5.45, 6.87, 6.88 (3)...................................................4.61  24.......................................................2.65  33.......................................................4.61 Pension Schemes Act 1993 s 159.....................................................6.59 Pensions Act 1995 s 91.......................................................6.59 Perjury Act 1911 s 1(1).....................................................2.242 Police Pensions Act 1976 s 9.........................................................6.59 Private International Law (Miscellaneous Provisions) Act 1995 s 1(1).....................................................7.73 Proceeds of Crime Act 2002.........2.88, 2.95, 2.251 s 12.......................................................7.14  329................................................. 2.88, 2.251  340.....................................................2.251 (3).................................................2.88 Protection from Harassment Act 1997......2.91 s 1(2).....................................................2.91  2.........................................................2.91  3.........................................................2.91 (2), (3), (5).......................................2.91  7(2)–(4)..............................................2.91 R Railway Companies Act 1867...................5.46 s 3–5.....................................................5.46 Regulation of Investigatory Powers Act 2000.................................................2.74 s 1......................................................... 2.93 Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 s 2.........................................................5.73 S Sale of Farming Stock Act 1816...............5.53 Sale of Goods Act 1893 s 26........................... 5.126, 5.127, 5.132, 5.135

Sale of Goods Act 1893 – contd s 60.......................................................5.126  62(1)...................................................5.126 Schedule...............................................5.126 Senior Courts Act 1981.............................6.90 s 35A............................................ 7.3, 7.10, 7.56 (1)(b)...........................................7.15  37.......................... 1.131, 6.4, 6.10, 6.24, 6.28 37(1)......1.59, 1.64, 1.67, 2.149, 2.151, 2.152, 2.202, 2.205, 6.26, 6.31, 6.68, 6.71 (3)...................................................1.59 (4)...................................................6.90 (5)...................................................6.95  40.......................................................3.43 (2), (3)............................................3.44 (6)...................................................3.200  40A(1)................................................3.200 (1B).............................................3.200  51.......................................................6.77  72.......................................................2.247  138.................................................5.28, 5.126  139(1), (2)..........................................3.91  152..................................................... 5.126  152(4).................................................6.90 Sch 7..................................................5.126, 6.90 Settled Land Act 1925 s 36(4)...................................................4.40 Sheriffs Act 1887.......................................5.114 Solicitors Act 1974....................................4.32 s 43.......................................................2.97  44(1), (2)............................................2.98  73.......................................................4.32 State Immunity Act 1978........... 1.96, 1.109, 1.110 s 1(1).....................................................1.109  3(3).....................................................1.113  13(2)...................................................1.112 (b)..............................................1.109 (3)...................................................1.112 (4)..............................................1.110, 1.113 (5)..............................................1.112, 1.114  14.......................................................5.83 (1), (2)............................................1.110 (4)...................................1.110, 1.113, 1.130  17(2)...................................................1.112 Statute of Frauds (1677) s 16..................................................5.126, 5.127 Superannuation Act 1972 s 5(1).....................................................6.59 Supreme Court Act 1981 see Senior Courts Act 1981 Supreme Court of Judicature Act 1873.....3.16, 6.1, 6.22 s 25................................... 6.23, 6.24, 6.25, 6.39 (6)...................................................1.191 (8)...................................................6.25 Supreme Court of Judicature Act 1875..... 3.3, 6.1, 6.22 Supreme Court of Judicature (Consolidation) Act 1925 s 45.......................................................6.24 T Theft Act 1968 s 31.......................................................2.247

Table of Statutes  xvii Trustee Act 1925 s 50.......................................................4.264 Tribunals, Courts and Enforcement Act 2007........... 1.20, 1.196, 1.207, 1.209, 1.212, 2.6, 4.193, 5.13, 5.53, 5.56, 5.57, 5.132, 5.147, 5.214, 5.257, 5.279, 5.339, 5.341 Pt 3 (ss 62–90)...................................... 5.1, 5.7 s 62.......................................................5.1 (4)................................................... 5.1 s 63................................................. 1.209, 5.117 (2)...................................................5.8 (c)..............................................5.118 (3)............................................. 5.117, 5.118 (4), (5)............................................5.118  64.......................................................1.209 (1)...................................................5.118  66.......................................................5.10  71...............................................1.24, 5.3, 5.13  86.......................................................5.3  88.......................................................5.140 Pt 4 (ss 91–105)........................1.211, 2.6, 2.268 s 91, 92.................................................1.38  94.......................................................4.256  95–105...............................................1.211  106.....................................................1.187  135.....................................................5.16 Sch 12...................................................  5.1, 5.5, 5.7, 5.8, 5.10, 5.15, 5.16, 5.20, 5.47, 5.49, 5.50, 5.59, 5.118, 5.124, 5.125, 5.126, 5.131, 5.137, 5.147, 5.148, 5.153, 5.154, 5.159, 5.164, 5.168, 5.172, 5.174, 5.180, 5.220, 5.228, 5.246, 5.247, 5.264, 5.311 para 2(1)...........................................5.117 (2)......................................... 5.8, 5.117 3..................................... 5.17, 5.19, 5.50 (1).....................5.20, 5.21, 5.23, 5.279 (2)......................................... 5.16, 5.22 4................................................  5.124, 5.126, 5.127, 5.130, 5.137, 5.139 (2)..................................... 5.128, 5.311 5................... 5.125, 5.126, 5.127, 5.130, 5.137, 5.139, 5.313 (1)..................................... 5.127, 5.137 (2)..................5.40, 5.125, 5.127, 5.137 (3)..................................... 5.125, 5.130 (4)...........................................5.125 6...........................................5.137, 5.233 7................................................5.9 9................................................5.9, 5.16 10............................................ 5.16, 5.18 (2).........................................5.16 11..............................................5.16 (a)....................................... 5.16, 5.57 12.......................................... 5.16, 5.207 (2), (3).............................. 5.16, 5.207 13..............................................5.194 (1)....................................... 5.9, 5.191 (b)...............................5.193, 5.194 (2).........................................5.194 14..................5.148, 5.154, 5.158, 5.175, 5.176, 5.179, 5.200 (2)–(4), (6)............................5.148

Tribunals, Courts and Enforcement Act 2007 – contd Sch 12 – contd para 15................... 5.50, 5.149, 5.150, 5.154, 5.156, 5.174, 5.175, 5.176, 5.179 (1)–(3)..................................5.149 16..................5.153, 5.154, 5.175, 5.179, 5.202, 5.222, 5.223 17..............................................5.154 18..............................5.152, 5.156, 5.157 (a)...................................5.157, 5.179 (b)...................................5.156, 5.157 (c).........................................5.157 18A...........................5.153, 5.156, 5.157 (b)......................................5.156 (d)......................................5.158  19....... 5.152, 5.153, 5.156, 5.177, 5.223  19A.....5.153, 5.156, 5.178, 5.223, 5.224 (1)(d), (e)...........................5.223 (2)......................................5.223 20................. 5.154, 5.155, 5.157, 5.174, 5.179, 5.185 (2)....................................5.172, 5.179  21............................. 5.152, 5.154, 5.185 (2).........................................5.174 22..............................................5.152 (2).........................................5.185 24..............................................5.152 25..............................................5.187 28..............................................5.200 (4)–(6)..................................5.200 30..............................................5.181 31(1), (2)..................................5.195 (3).........................................5.185 (5).........................................5.195 33..............................................5.200 (3), (4)..................................5.200 34.........................................5.205, 5.279 (1)–(3)..................................5.206 35(2)(a).....................................5.237 (b)...............................5.237, 5.279 (3)(a)–(c)..............................5.237 36(1)(b)....................................5.279 37.........................................5.238, 5.247 (1).........................................5.237 (2)........................5.228, 5.237, 5.238 38..............................................5.238 39................................. 5.9, 5.238, 5.279 (1).........................................5.238 40.......................5.9, 5.238, 5.239, 5.270 (4)–(7)..................................5.241 41.............................................5.9, 5.238 (1)........................5.245, 5.250, 5.252 (2)....................................5.250, 5.252 (4), (5)..................................5.251 42............................................5.9, 5.238 (1), (2)..................................5.248 43.........................................5.248, 5.301 (3).........................................5.248 47...........................................5.21, 5.253 48................................... 5.9, 5.21, 5.253 49................................... 5.9, 5.21, 5.253 (1)..................................... 5.21, 5.253 (2)........................5.253, 5.270, 5.297

xviii  Table of Statutes Tribunals, Courts and Enforcement Act 2007 – contd Sch 12 – contd para 49(5)–(8)..................................5.253 50........................................ 5.235, 5.307 (1).........................................5.235 (2)................................... 5.235, 5.305 (b)....................................5.20 (3)................................... 5.233, 5.305 (4).........................................5.305 (5).........................................5.235 (6)................................... 5.235, 5.179 (7).........................................5.279 51..............................................5.260 (1)–(7)..................................5.259 (6)........................ 5.234, 5.254, 5.256 52..............................................5.228 (b).........................................5.228 53..............................................5.228 54.........................................5.228, 5.229 55, 56........................................5.228 57........................................ 5.228, 5.229 58(1), (2)..................................5.233 (3)................................... 5.180, 5.233 (4).........................................5.233 59(4)–(6)..................................5.234 60................................5.16, 5.266, 5.325 (1)....................................5.273, 5.277 (2).........................................5.16 (3).........................................5.274 (4)(a), (b)..............................5.274 (5)–(7)..................................5.274 61..............................5.125, 5.131, 5.279 (2), (3)..................................5.131 62..............................................5.293 63............................... 5.44, 5.254, 5.260 (4).........................................5.254 64...........................................5.44, 5.260 (4).........................................5.255 65..............................................5.260 (1)................................... 5.256, 5.263 (3).........................................5.256

Tribunals, Courts and Enforcement Act 2007 – contd Sch 12 – contd para 66........................................ 5.100, 5.180 (2), (3)..................................5.180 (5)(a), (b)..............................5.180 (6), (8)..................................5.180 (9).........................................5.180 68..............................................5.186 Sch 13 para 130............................................5.47 Sch 14 para 2(a)...........................................5.13 Sch 23 Pt 4...................................................5.13 para 3...........................................5.53 Trusts of Land and Appointment of Trustees Act 1996................ 4.41, 4.43, 4.234 s 1.........................................................4.41  14............... 4.114, 4.176, 4.220, 4.221, 4.224, 4.230, 4.231, 4.233, 4.241, 4.251, 4.253, 4.254, 6.91  15...........................4.231, 4.232, 4.233, 4.234, 4.235, 4.236, 4.238, 4.239, 4.241, 4.251, 4.253, 4.254 (1)...................................................4.235 (2)...................................................4.234 (3)............................................. 4.234, 4.235 U Universities and College Estates Act 1925.................................................4.41 V Value Added Tax Act 1994 s 87.......................................................1.196 W Water Resources Act 1991 Sch 15 para 12..............................................5.26

Table of Statutory Instruments

[All references are to paragraph numbers] Agricultural Credits Fees Order 1985, SI 1985/372 reg 2......................................................5.55 Air Navigation Order 2016, SI 2016/765.2.58 Attachment of Debts (Expenses) Order 1996, SI 1996/3098..........................3.200 Attachment of Earnings (Employer’s Deduction) Order 1991, SI 1991/356......................................1.34 Certification of Enforcement Agents Regulations 2014, SI 2014/421..... 5.7, 5.8, 5. 118, 5.144, 5.219 para 3, 7................................................5.118 Charging Orders Act 1979 (Commencement) Order 1980, SI 1980/627 art 2.......................................................4.43 Church of England Pensions Measure 2018, SI 2018/9 reg 34(3)...............................................6.59 Civil Jurisdiction and Judgments (Amendment) (EU  Exit) Regulations 2019, SI 2019/479........1.220 reg 92....................................................1.231 Civil Legal Aid (Costs) Regulations 2013, SI 2013/611 reg 11....................................................4.42 Civil Procedure (Amendment No  4) Rules 2001, SI 2001/2792......... 1.205, 2.128, 2.264, 4.10 r 1(c)................................................. 1.10, 1.205 Civil Procedure (Amendment No  5) Rules 2001, SI 2001/4015................1.205 Civil Procedure (Amendment) Rules 2002, SI 2002/2058..........................1.206 r 26........................................................6.7 36........................................................6.7 Sch 7.....................................................6.7 Sch 10...................................................6.7 Civil Procedure (Amendment) Rules 2012, SI 2012/505............................2.134 Civil Procedure (Modification of Enactments) Order 1998, SI 1998/2940 7.5 Civil Procedure Rules 1998, SI 1998/3132................5.11, 5.55, 5.69, 7.27, 7.30, 7.34, 7.38, 7.51

Civil Procedure Rules 1998 – contd Pt 1 r 1.1(1)..................................................1.213 (2)(b).............................................6.110 (c)..............................................6.110 1.4.......................................................3.148 Pt 2 r 2.1.......................................................7.30 2.3(1)...............................................2.172, 4.83 2.4(a)..................................................4.83 2.9.......................................................1.5 Pt 3 r 3.1(2)(f)............................................ 1.81, 1.87 (7)..................................................1.89 3.7, 3.7A1, 3.7B.................................7.66 Pt 4 r 4(1)................................................6.102, 6.104 Pt 6........................................................3.112 r 6.2(2)..................................................3.113 6.3................................................... 3.114, 4.93 6.8.................................................2.159, 2.160 (3)(a), (b).......................................2.159 6.15............................................... 2.159, 2.160 (3)................................................2.159 6.27.....................................................2.159 6.30(2)................................................2.158 Pt 8................... 1.202, 4.16, 4.219, 4.277, 4.288 PD 8A...................................................5.41 Pt 16 r 16.4(1)–(2).........................................7.3 16.6.....................................................3.160 Pt 19......................................................1.191 Pt 23............. 1.17, 1.47, 1.48, 1.199, 3.67, 3.93, 3.127, 4.60, 4.214, 4.277, 4.292, 4.306, 5.18, 5.74, 5.155, 5.212, 5.224, 5.250, 5.279, 5.284, 5.302, 6.88, 6.98, 6.102, 6.165 r 23.2(1), (2), (5)...................................6.100 23.3(1)................................................6.102 23.7(3)(b)...........................................6.104 PD 23A para 12.1...........................................6.104 Pt 25......................................................1.59 r 25.1(1)(g)...........................................2.192 25.2(1)(b)...........................................6.122

xx  Table of Statutory Instruments Civil Procedure Rules 1998 – contd PD 25..................................................3.55, 3.57 PD 25A.................................................6.122 para 5.1(1)........................................6.122 Pt 26 r 26.2.....................................................3.99 Pt 30 r 30.1–30.4............................................1.56 Pt 31......................................................2.191 r 31.8.....................................................2.191 (1)................................................2.191 (2)................................................2.191 (b)...........................................2.191 31.22(2)..............................................2.258 Pt 32......................................................2.103 r 32.1.....................................................2.103 Pt 36...................................7.51, 7.66, 7.79, 7.81 r 36.13(1), (2).......................................7.66 36.14(3)..................................  7.51, 7.79, 7.80 36.17(4)..............................................7.81 36.21...................................................7.81 (2)............................................7.51, 7.81 (3)..............................................7.51 (b).........................................7.81 Pt 38 r 38.6.....................................................7.66 Pt 40......................................................1.10 r 40.2(2)(a)............................................7.12 40.6(3)(b)(ii).......................................7.20 40.7.....................................................7.11 40.8......................... 7.8, 7.11, 7.16, 7.17, 7.22, 7.37, 7.39, 7.40 (1)..............................................7.11, 7.42 (a)............................................7.7 (b)...........................7.7, 7.9, 7.33, 7.51 (2)............7.7, 7.9, 7.22, 7.33, 7.51, 7.104 40.8A.................................................1.93, 1.94 40.9.....................................................3.57 40.9A..................................................1.89 40.10................................................. 5.83, 7.24 40.11...................................................1.5, 5.14 (a)..............................................1.89 40.14A...............................................1.47, 5.87 PD 40B................................ 1.199, 6.113, 6.168 para 9.1....................................... 6.113, 6.117  10..............................................1.7  13.1...........................................1.199  13.2...........................................1.200 Pt 43 PD 43....................................................7.65 para 45.5(1)......................................7.65 Pt 44...........................2.261, 3.198, 4.22, 4.201, 5.78, 6.174 r 44.2(6)................................................7.39 (g)......................7.37, 7.38, 7.39, 7.41, 7.44, 7.45, 7.56 44.3.....................................................7.37 (6)(g).....................  7.37, 7.38, 7.39, 7.45, 7.39, 7.47, 7.50, 7.51, 7.52, 7.53, 7.54, 7.64 44.7.....................................................7.34 44.9(2)................................................7.67 PD 44.....................................2.261, 7.65, 6.174 para 45.5(1)......................................7.65

Civil Procedure Rules 1998 – contd Pt 45......................................................6.174 r 45.1(2)(c)......................................2.259, 6.174 (3)................................................2.259 (4)................................................5.107 45.5.....................................................2.259 45.6................................................2.259, 4.204 45.7.....................................................2.155 PD 45....................................................7.65 para 45.5(1)......................................7.65 Pt 46 PD 46....................................................7.65 para 45.5(1)......................................7.65 Pt 47 r 47.7.....................................................7.32 47.8(3)................................................ 7.43, 7.58 47.14(4)(b).........................................7.58 47.20(1), (2), (5), (6)..........................7.65 PD 47....................................................7.65 para 45.5(1)......................................7.65 Pt 48 r 48.2(1)(a)............................................6.77 PD 48....................................................7.65 para 45.5(1)......................................7.65 Pt 52 r 52.7...................................................1.82, 1.86 52.16...................................................1.83 52.21(3).......................................  3.192, 4.218 PD 52 para 2A.............................................3.192 Pt 62......................................................7.105 r 62.2(1)................................................1.202 62.18...................................................1.202 62.19...................................................7.105 Pt 66......................................................3.95 r 66.6........................................1.105, 3.90, 4.66 66.7........................................1.105, 3.92, 3.93 (4), (5).........................................3.94 (7)................................................3.95 Pt 69............................... 1.206, 6.7, 6.98, 6.100, 6.105, 6.174 r 69.1(2)................................................6.10 69.2.....................................................6.160 (1)(a)–(c).....................................6.99 (3)................................................6.170 69.3.....................................................6.101 69.4.....................................................6.121 69.5...............................................6.147, 6.154 (1)................................................6.148 (2)...........................................6.170, 6.126 69.6(1)................................................6.165 (2)................................................6.165 69.7.....................................................6.156 (2)................................................6.156 (3)(a), (b).....................................6.158 (4), (5).........................................6.158 69.8.....................................................6.168 (1)................................................6.166 (3)–(6).........................................6.168 69.9(1)–(3).........................................6.169 69.10(2)..............................................6.172 69.11(1)........................................6.170, 6.172 (2)........................................6.171, 6.173 PD 69.........6.7, 6.47, 6.42, 6.116, 6.152, , 6.158

Table of Statutory Instruments  xxi Civil Procedure Rules 1998 – contd PD 69 – contd para 3.1.............................................6.103  4.1.............................................6.106 (2).................................... 6.60, 6.106 (a), (b).............................6.106 (3)........................................6.107 (d)...................................6.36 (4)........................................6.147  4.2....................................... 6.106, 6.160  4.3....................................... 6.106, 6.161  4.4.............................................6.106  5............................................ 6.50, 6.110  6.2.............................................6.149  7.1....................................... 6.149, 6.153  7.2(1)........................................6.151 (2)........................................6.152  7.3(1)........................................6.151 (2)........................................6.152  8.1–8.3......................................6.165  9.2, 9.3......................................6.158  9.6.............................................6.159  10.1...........................................6.166  10.2, 10.3..................................6.167 Pt 70..................1.10, 1.203, 1.205, 1.213, 6.174 r 70.1(2)(c)............................................2.222 (d)...........................................1.131 70.2.....................................................6.174 (2)................................................1.11 (b)...........................................1.12 70.2A..................................................1.210 70.3.....................................................1.42 70.4.....................................................1.13 70.5.....................................................1.196 (2)................................................1.196 (4)(a), (b).....................................1.197 (6), (7).........................................1.198 70.6.................................................1.79, 5.316 PD 70..............................................1.210, 2.142 para 1.1(5)........................................6.174  2.1–2.4......................................1.56  3.1.............................................1.43  4.1, 4.2......................................1.197  6................................................7.114  7.1.............................................1.74  7.2........................................... 1.74, 5.98 Pt 71........... 1.15, 1.30, 1.205, 1.206, 1.213, 2.5, 2.6, 2.7, 2.26, 2.50, 2.52, 2.125, 2.126, 2.127, 2.128, 2.129, 2.130, 2.131, 2.133, 2.139, 2.143, 2.145, 2.148, 2.151, 2.152, 2.153, 2.155, 2.156, 2.157, 2.158, 2.160, 2.175, 2.188, 2.190, 2.197, 2.206, 2.203, 2.204, 2.219, 2.220, 2.222, 2.225, 2.226, 2.227, 2.229, 2.234, 2.236, 2.245, 2.250, 2.251, 2.252, 2.253, 2.256, 2.257, 2.258, 2.259, 2.264, 3.76, 3.105, 3.136, 4.55, 4.80, 4.115, 4.261, 5.43, 5.100, 6.46, 6.174 r 71.1............................................... 2.126, 2.130 71.2(1)..............................  2.141, 2.151, 2.182 (b)..................................... 2.144, 2.148 (2).......................................... 2.133, 2.134 (b)..................................... 2.132, 2.142

Civil Procedure Rules 1998 – contd r 71.2(3).......................................... 2.133, 2.134 (4).......................................... 2.140, 2.141 (5)................................................2.141 (6)................................................2.142 (b)............... 2.184, 2.188, 2.191, 4.115 (7)................................................2.143 71.3.....................................................2.230 (1)....................2.155, 2.155, 2.159, 2.160 (2)................................................2.159 71.4.....................................................2.161 (1)................................................2.165 71.5(1)...........................................2.163, 2.230 (a)............................................2.164 (b), (c).....................................2.165 (2).......................................... 2.163, 2.230 (b)...........................................2.163 71.6(1)................................................2.166 (2).......................................... 2.137, 2.142 (3)(a)...................................... 2.136, 2.170 (b)...........................................2.172 71.7.....................................................2.224 71.8................................................2.228, 2.229 (1)................................................2.228 (c)............................................2.236 (2)................................................2.229 (3)............................... 2.154, 2.162, 2.229 (4)................................................2.229 (b)...........................................2.233 PD 71....................................................2.141 para 1.1.............................................2.133  1.2.............................................2.134  1.3.............................................2.140  2.1....................................... 2.132, 2.142  2.2....................................... 2.137, 2.142  3................................................2.155  4.1.............................................2.167  4.2(2)........................................2.170  4.3.............................................2.171  5.1, 5.2......................................2.172  6................................................2.229  6.2.............................................6.88  6.4.............................................6.88  7................................................3.130  7.1.............................................2.229  7.2.............................................2.230  8.1, 8.2......................................2.232  8.3, 8.4......................................2.233  8.5.............................................2.234  8.6.............................................2.235 Pt 72..........................1.158, 1.205, 1.206, 1.213, 1.212, 2.197, 3.3, 3.5, 3.9, 3.11, 3.13, 3.41, 3.71, 3.97, 3.98, 3.100, 3.102, 3.105, 3.113, 3.117, 3.126, 3.128, 3.129, 3.170, 4.56, 6.174 r 72.1.....................................................3.21 (1)................................................3.4, 3.68 72.2(1)(a)............................................3.9 72.3........................................3.98, 3.99, 3.101 (1)(a)............................................3.100 (b)(ii).......................................3.99 72.4.....................................................3.108 (1), (2).........................................3.107 (4)................................................3.110

xxii  Table of Statutory Instruments Civil Procedure Rules 1998 – contd r 72.4(5)................................................3.126 72.5............................................... 3.109, 3.112 (1)(b)(i)........................................3.111 (2)................................................3.114 72.6...............3.132, 3.136, 3.142, 3.145, 3.146 (1).......................................... 3.133, 3.134 (2).......................................... 3.133, 3.137 (3).................... 3.133, 3.138, 3.140, 3.141 (4)..........................................3.142, 3.144 72.7...............................................3.126, 3.127 (2)................................................3.127 (5)................................................3.130 72.8...........................3.86, 3.151, 3.159, 3.165 (1)................................................3.151 (2)................................................3.154 (3)................................................3.145 (4)............................... 3.145, 3.151, 3.154 (5)................................................3.155 (6).......................................... 3.164, 3.167 (a)............................................3.195 (c).......................................3.162, 3.165 (d)...........................................3.165 72.9(1)................................................3.189 (2).......................................... 3.186, 3.188 (3).......................................... 3.156, 3.156 72.10..............................3.66, 3.194, 4.53, 6.79 (1)(a)..........................................3.66 (b).........................................3.67 (3)..............................................3.67 72.11...................................................3.194 (a), (b)........................................3.194 PD 72....................................................3.98 para 1.2.............................................3.101  1.3.............................................3.102  1.12...........................................3.101  3.1.............................................3.53 (1).....................................3.54, 3.134 (2)........................................3.134  3.2.............................................3.54  4................................................3.99  5.1–5.3......................................3.127  5.6.............................................3.129  6................................................3.193 Pt 73.................. 1.10, 1.205, 1.206, 1.213, 4.10, 4.67, 4.85, 4.101, 4.140, 4.148, 4.250, 4.250, 4.262, 4.274, 4.277, 4.282, 4.290, 6.174 r 73.1(2)(b)...........................................4.71 73.3(1)................................................4.75 (2)..............................................4.71, 4.73 (d)...........................................4.71 (3)................................................4.73 (4)................................................4.76 73.4(1)................................................4.83 (2)................................... 1.157, 4.84, 4.85 73.4(2)–(4).........................................4.82 (6)......................... 4.84, 4.85, 4.93, 4.137, 4.138, 4.144 73.5.......................................... 4.84, 4.85, 4.88 (1)................................................4.93 (2)................................................4.93 73.6(2)................................................4.83 (3).............................................. 4.84, 4.85

Civil Procedure Rules 1998 – contd r 73.7................................................... 4.77, 4.97 (1), (3)–(5)...................................4.93 (7).............................................4.89, 4.100 (c)............................................4.92 (f)...................................... 4.288, 4.290 73.8(1)............................................4.95, 4.138 (2)............................................4.97, 4.147 (a)............................................4.204 (c)............................................4.148 (3)................................. 4.98, 4.199, 4.294 73.9............................................... 4.100, 4.214 (1), (2).........................................4.215 (3)................................................4.216 73.10..............................................4.224, 4.260 (1).........................................4.222, 4.253 (2)............................. 4.137, 4.138, 4.260 (3)..............................................4.143 (5)..............................................4.143 (6)..............................................4.143 (6A)......................................4.143, 4.215 (7)..............................4.145, 4.147, 4.215 (d).........................................4.147 73.10A(2)....................................  4.137, 4.138 (3)....................................  4.145, 4.147 (a).......................................4.85 73.10C............................... 4.253, 4.259, 4.260 (2), (3).....................................4.260 (4)...........................................4.259 (5)...........................................4.261 73.11...................................................4.276 73.12(1)(a)..........................................4.279 (b).........................................4.286 (2)(a), (b)...................................4.277 (3).........................................4.281, 4.288 73.13...................................................4.283 73.14...................................................4.287 73.15(1), (2).......................................4.292 73.16(b)..............................................4.293 73.17..............................................4.294, 4.303 (1).........................................4.296, 4.297 (2).........................................4.296, 4.298 (3)..............................................4.296 (4)..............................................4.300 73.18(1)(a)..........................................4.300 (2)(a), (b).................. 4.295, 4.300, 4.302 73.19...................................................4.293 (1), (2).......................................4.303 73.20...................................................4.300 (1), (2).......................................4.304 73.21...................................................4.300 (1)..............................................4.305 (2), (3).......................................4.306 PD 73................... 3.98, 4.76, 4.92, 4.250, 4.264 para 1.2.............................................4.77 1.3.............................................4.74  4................................................4.261  4.2....................................... 4.224, 4.260 4.3.............................................4.260  4.4.............................................4.261  4.5.............................................4.262  6.4.............................................4.62 Appendix A......................................4.264 Appendix B......................................4.299

Table of Statutory Instruments  xxiii Civil Procedure Rules 1998 – contd Pt 74....................................... 1.196, 1.231, 7.58 r 74.2–74.11..........................................1.233 74.4(6)................................................4.143 74.14–74.18........................................1.236 Pt 75 r 75.7(7)(d)...........................................4.91 Pt 81......................1.16, 1.21, 1.22, 2.229, 6.113 r 81.2.....................................................1.22 81.4..............................1.21, 1.22, 6.113, 6.117 81.5............................................... 6.113, 6.117 81.9............................................... 6.113, 6.117 81.20...................................................1.16 (3)..............................................1.17 81.26(1)..............................................1.17 Pt 83............................................1.210, 5.7, 5.62 r 83.1.....................................................5.11 (1)................................................1.20 83.2.................................5.64, 5.65, 5.66, 5.75 (b)................................................5.73 (3)..........................................1.191, 3.170 (a)............................................1.101 (4)..............................................5.74, 5.75 (5)................................................5.74 (7A).............................................5.80 (b)........................................5.80 (7B).............................................5.80 (8)................................................5.72 83.2A..................................................1.16 83.4.....................................................5.120 (5)................................................5.312 (a)............................................5.310 (7)...........................................5.123, 5.274 83.5................................................... 5.12, 5.14 83.7...........................................1.87, 1.92, 1.93 (4)(a), (b).....................................1.89 (5), (6).........................................1.90 83.8.....................................................5.104 83.9.....................................................5.88 (1)................................................5.84 (3)................................................5.82 (4)................................................5.88 (5)................................................5.82 (a)............................................5.106 (iii)......................................5.83 (b)....................................... 5.14, 5.106 (6)................................................5.106 83.10...................................................5.101 83.11...................................................5.56 83.13...................................................1.21 83.14...................................................1.22 83.19................................................. 1.55, 5.87 (2), (3)..................................... 1.52, 5.87 (4)..............................................1.55 83.21...................................................5.54 PD 83....................................................5.93 Pt 84.................................................... 1.210, 5.7 r 84.3(2)........ 5.143, 5.155, 5.180, 5.195, 5.212, 5.224, 5.230, 5.250, 5.279, 5.284, 5.302 84.4.....................................................5.143 (3)(a), (b).....................................5.143 84.5.....................................................5.119 (1)................................................5.119

Civil Procedure Rules 1998 – contd r 84.5(3)................................................5.121 84.6.....................................................5.212 84.8.....................................................5.224 84.9(1)(a)............................................5.149 (2)................................................5.149 84.10...................................................5.195 84.11(2)(a), (b)...................................5.251 (3)..............................................5.251 84.12(2)..............................................5.230 84.13...................................................5.180 84.14...................................................5.51 (3)...........................................5.51, 5.302 84.15...................................................5.279 84.16...................................................5.306 84.18...................................................5.8 Pt 85............... 1.95, 1.210, 5.7, 5.18, 5.33, 5.45, 5.123, 5.274, 5.284, 5.286 r 85.3............................................... 5.273, 5.284 85.4.....................................................5.268 (1)................................................5.268 (2)................................................5.269 (3), (4).........................................5.270 (5), (6).........................................5.271 (7)..........................................5.272, 5.277 85.5....................................5.272, 5.277, 5.278 (2), (3), (5)...................................5.273 (6)................................................5.274 85.7.....................................................5.285 (7), (8).........................................5.275 85.8.....................................................5.280 (1)................................................5.281 (a)–(c).....................................5.281 (2)–(4).........................................5.281 (5)................................................5.282 (6)(a), (b).....................................5.282 (7)................................................5.283 85.9.....................................................5.280 (2), (3), (5), (6)............................5.284 85.10...................................................5.286 (1)..............................................5.287 (2)..............................................5.288 (3)..............................................5.289 (4)..............................................5.290 85.11...................................................5.290 85.12...................................................5.290 (2)..............................................5.290 PD 85....................................................1.210 r 87.7(5)(b)...........................................1.88 Pt 89......................................................1.33 r 89.3.....................................................1.32 89.4(1)................................................1.32 89.5(5)................................................1.36 89.7(14)..............................................1.26 89.8.....................................................1.34 89.10...................................................1.34 89.16, 89.17........................................1.33 89.19, 89.22........................................1.31 Sch 1 RSC............................................4.10, 5.7 Order 17...........................................5.278 Order 45 r 1................................................... 1.93, 3.32 5.....................................................1.131 6.....................................................1.89

xxiv  Table of Statutory Instruments Civil Procedure Rules 1998 – contd Sch 1 RSC – contd r 7.....................................................6.113 11..................................................1.93, 1.94 Order 46...........................................5.7 r 2(1)(e)............................................1.123 Order 47 r 1.......................................... 1.90, 1.92, 1.93 Order 115.........................................1.196 Sch 2 CCR............................................4.10 r 1.55 Order 26 r 5(1).................................................5.67 Order 27...........................................1.32 Civil Proceedings Fees Order 2008, SI 2008/1053 Sch 1.....................................................5.76 para 7.1....................................... 2.139, 5.105  7.3(a).................................... 3.106, 6.99 (b)........................................4.82  8.3.............................................2.139  8.4(a).................................... 3.106, 6.99 (b)........................................4.82  8.7.............................................1.32  8.9.............................................1.197 10.2...........................................5.41 Civil Procedure (Amendment No  2) Rules 2012, SI 2012/2208...............1.16, 1.89 Civil Procedure (Amendment No  2) Rules 2014, SI 2014/482..................1.209 Civil Procedure (Amendment No  3) Rules 2020, SI 2020/747..................1.16 Civil Procedure (Amendment No  4) Rules 2014, SI 2014/867..................1.209 Civil Procedure (Amendment) Rules 2014, SI 2014/407...........................1.209, 5.7 Civil Procedure (Amendment) Rules 2016, SI 2016/234............................4.10 Civil Procedure (Modification of Enactments) Order 1998, SI 1998/2940 7.5 Civil Procedure (Modification of Enactments) Order 2002, SI 2002/439 art 1.......................................................4.273  2.......................................................4.273  5(a)..................................................4.273 Community Legal Service (Cost Protection) Regulations 2000, SI 2000/824 reg 4......................................................4.42 Companies Act 2006 (Amendment of Part  25) Regulations 2013, SI 2013/600......................... 2.31, 2.33, 4.134 Companies Act 2006 (Commencement No  1, Transitional Provisions and Savings) Order 2006, SI 2006/3428 2.34 Companies and Limited Liability Partnerships (Filing Requirements) Regulations 2016, SI 2016/599........2.270 Companies (Disclosure of Address) (Amendment) Regulations 2018, SI 2018/528......................................2.270 Companies (Model Articles) Regulations 2008, SI 2008/3229..........................2.37 Companies (Tables A to F) (Amendment) (No  2) Regulations 2007, SI 2007/2826....................................2.37

Companies (Tables A to F) (Amendment) Regulations 2007, SI 2007/2541......2.37 Court Funds Rules 1987, SI 1987/821 r 63(1)...................................................4.281 Council Tax (Administration and Enforcement) Regulations 1992, SI 1992/613................................... 4.32, 4.71, 4.206 reg 50....................................................4.32  51(4)...............................................4.206 County Court Jurisdiction Order 2014, SI 2014/503......................................4.260 County Court Rules 1981, SI 1981/1687 Order 30................................................3.3 Order 31................................................4.10 Order 33................................................1.210 County Courts (Interest on Judgment Debts) (Amendment) Order 2019, SI 2019/903......................................7.3 County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184....7.3, 7.25, 7.74, 7.95 art 1(2)..................................................7.25 (4)..................................................7.3  2.......................................................7.3 (1)..................................................7.106 (2)................................................ 7.16, 7.34 (3)(a)..............................................7.95 3.......................................................7.23 4.......................................................7.106 (1), (2)...........................................7.119 (3)..................................................1.27 5.......................................................7.3 (2)..................................................7.74 6(1)..................................................1.76 (2)..................................................1.77 County Courts Jurisdiction Order 1981, SI 1981/1123.................................4.69, 4.260 European Order for Payment and European Small Claims Procedure (Amendment etc) (EU  Exit) Regulations 2018, SI 2018/1311......1.227 Financial Services and Markets Act 2000 (Exemption) Order 2001, SI 2001/1201 art 4.......................................................3.90 Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 art 5.......................................................3.90 High Court and County Courts Jurisdiction Order 1991, SI 1991/724 art 4A....................................................5.85 8(1)(a)............................................ 1.50, 5.85 (b), (c).......................................5.86 (1A)...............................................5.85 High Court Enforcement Officers (Amendment) Regulations 2004, SI 2004/673......................................5.5 High Court Enforcement Officers Regulations 2004, SI 2004/400...... 5.5, 5.115 reg 3......................................................5.108  4......................................................5.115  8......................................................5.116  12(2)...............................................5.116

Table of Statutory Instruments  xxv High

Court Enforcement Officers Regulations 2004 – contd reg 13(3A)............................................5.308 Sch 1.....................................................5.108 Sch 3 para 5................................................5.51 Human Rights Act 1998 (Commencement No 2) Order 2000, SI 2000/1851.....5.332 Insolvency Act 1986 (Amendment) Order 2015, SI 2015/922............................1.2 Insolvency Practitioner Regulations 1990, SI 1990/439............................6.151 Insolvency Practitioner Regulations 2005, SI 2005/524............................6.151 Pt III......................................................6.151 Sch 2.....................................................6.151 Insolvency Proceedings (Monetary Limits) (Amendment) Order 2004, SI 2004/547......................................5.327 Insolvency Rules 1986, SI 1986/1925 r 12.44(1)........................................5.320, 5.321 12.57(1)(a)..........................................5.320 (b).........................................5.321 (c)..........................................5.326 (d).........................................5.237 Insolvency (England and Wales) Rules 2016, SI 2016/1024 r 3.3, 3.4................................................1.151 3.9.......................................................1.153 3.23.....................................................1.153 3.27.....................................................1.154 (3)(c)............................................1.154 Pt 11 (rr 3.53–3.61)..............................2.17 r 7.2.......................................................2.31 10.13...................................................2.14 10.27...................................................2.14 10.32(3)(a)(i)......................................2.14 10.33...................................................2.14 10.34(3)(a)(i)......................................2.14 10.46...................................................2.14 r 11.13(3)..............................................2.17 (4)..............................................2.19 11.14, 11.15........................................2.17 12.39...................................................2.20 14.23(1)..............................................7.120 (6), (7).......................................7.121 Insolvent Partnerships (Amendment) Order 2005, SI 2005/1516................1.148 Judgment Debts (Rate of Interest) (No 2) Order 1982, SI 1982/1427................7.72 Judgment Debts (Rate of Interest) Order 1971, SI 1971/491............................7.72 Judgment Debts (Rate of Interest) Order 1977, SI 1977/141............................7.72 Judgment Debts (Rate of Interest) Order 1979, SI 1979/1382..........................7.72 Judgment Debts (Rate of Interest) Order 1980, SI 1980/672............................7.72 Judgment Debts (Rate of Interest) Order 1982, SI 1982/696............................7.72 Judgment Debts (Rate of Interest) Order 1985, SI 1985/437............................7.72 Judgment Debts (Rate of Interest) Order 1993, SI 1993/564............................7.72

Judicial Pensions (Preservation of Benefits) Order 1995, SI 1995/634 art 7.......................................................6.59 Land Charge Fees Rules 1990, SI 1990/327 Sch 1.............................................. 4.110, 4.119, 6.75 Land Charges Rules 1974, SI 1974/1286 r 3(2).....................................................4.119 5..........................................................4.110 10........................................................4.120 13........................................................4.104 Sch 2.....................................................4.110 Land Registration (Amendment) Rules 2018, SI 2018/70..............................4.133 Land Registration Fee Order 2004, SI 2004/595 Sch 3.....................................................4.131 Land Registration Fee Order 2006, SI 2006/1332 Sch 3.....................................................4.127 Pt 1...................................................2.47 Pt 2...................................................2.48 Land Registration Fee Order 2013, SI 2013/3174...................................2.47, 2.48 Sch 3.....................................................4.131 para 1................................................6.96 Land Registration Rules 2003, SI 2003/1417 r 11(3)...................................................2.46 54........................................................4.133 (2)(b)..............................................4.133 81(1)(a)...............................................4.127 (b)..............................................4.125 83........................................................4.127 84(1)...................................................4.124 85(1)...................................................4.128 86........................................................4.126 87........................................................4.126 92(1)............................................... 4.131, 6.96 93(s)...................................................6.96 97(1)...................................................4.132 135(1), (4)..........................................2.48 136......................................................2.49 137(2), (3)..........................................2.49 145......................................................2.45 (2).................................................2.45 172(1).................................................4.123 (2)d......................................... 4.123, 4.129 (3)........................................... 4.123, 4.129 Sch 4................................................. 4.130, 6.96 Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008, SI 2008/1913......2.270 Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, SI 2008/1911..........................2.270 Limited Liability Partnerships (Amendment etc) Regulations 2020, SI 2020/643.........................1.168, 2.41 Limited Liability Partnership (Amendment) Regulations 2005, SI 2005/1989....................................1.148 Limited Liability Partnerships (Application of Companies Act 2006) (Amendment) Regulations 2013, SI 2013/618............................2.270

xxvi  Table of Statutory Instruments Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, SI 2009/1804................................2.41, 2.271 Pt 8 (regs 30, 31)..................................2.270 Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016, SI 2016/340........2.271 Limited Liability Partnerships Regulations 2001, SI 2001/1090......2.40, 2.267 Merchant Shipping (Registration of Ships) Regulations 1993, SI 1993/3138....................................2.54 reg 2......................................................2.53 (5).................................................5.61 Mortgaging of Aircraft Order 1972, SI 1972/1268....................................2.59 National Health Service Pension Scheme Regulations 1995, SI 1995/300 Pt T reg T3(1)..........................................6.59 Overseas Companies Regulations 2009, SI 2009/1801....................................2.29 Parliamentary Pensions (Consolidation and Amendment) Regulations 1993, SI 1993/3253 Pt R reg R1(1)..........................................6.59 Partnerships (Accounts) Regulations 2008, SI 2008/569............................2.65 Register of Judgments, Orders and Fines (Amendment) Regulations 2009, SI 2009/474......................................2.24 Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595......1.208, 2.24 reg 9......................................................2.26 (b), (c)...........................................2.26 10, 11, 26........................................2.25 27, 28................................... 2.24, 2.25, 2.27 Registration of Title Order 1989, SI 1989/1347....................................4.103 Road Vehicles (Registration and Licensing) Regulations 2002, SI 2002/2742 reg 27....................................................5.59 (1)(e)...........................................2.60 Rules of Court of 1875 Order XLV............................................3.50 r 1............................................... 2.129, 2.175 Rules of the Supreme Court 1887 Order XLII r 32.................................. 2.145, 2.147, 2.223 Rules of the Supreme Court 1965, SI 1965/1776 Order 11 r 9(4).................................................2.158 Order 18 r 17...................................................3.160 Order 30................................................6.7 Order 42 r 3(2).................................................7.60 5A(2)(b)(iii)...................................7.20 Order 45......................................1.10, 3.3, 3.183 r 5.....................................................1.16

Rules of the Supreme Court 1965 – contd Order 45 – contd r 6.....................................................3.195 11...................................................1.93 Order 46................................................5.7 r 2(1).................................................3.170 Order 47 r 1.....................................................1.92 Order 48........ 2.129, 2.138, 2.141, 2.145, 2.149, 2.150, 2.151, 2.162, 2.181, 2.185, 2.186, 2.188, 2.190, 2.193, 2.195, 2.197, 2.198, 2.201, 2.202, 2.203, 2.206, 2.204, 2.209, 2.210, 2.211, 2.215, 2.219, 2.224, 3.76, 4.55 r 1.....................................................2.149 Order 49.................... 2.197, 3.3, 3.4, 3.69, 3.72, 3.74, 3.75, 3.103, 3.116, 3.117 r 1(1).................................................3.75 8.....................................................3.188 Order 50..................................4.10, 4.140, 4.148 r 1(3).................................................4.140 Order 51................................................6.7 Order 77.............................................. 3.90, 3.86 r 15(1)(a)..........................................3.90 16...................................................3.92 (1)(a)..........................................3.90 (2A), (2B)..................................3.85 (3)...............................................3.86 Order 88 r 5A..................................................4.251 5A(f)..............................................4.250 Order 117.........................................1.210 Small Limited Liability Partnerships (Accounts) Regulations 2008, SI 2008/1912....................................2.270 Taking Control of Goods (Fees) Regulations 2014, SI 2014/1...... 5.1, 5.5, 5.7, 5.146, 5.293, 5.302, 5.303, 5.305 reg 2(2).................................................5.293 4(3).................................................5.299 (5)(a).............................................5.295 (b).............................................5.296 6......................................................5.293 (1)(a).............................................5.294 (b).............................................5.295 (c)(i), (ii)..................................5.296 (d).............................................5.297 (2).................................................5.297 8......................................................5.300 (2).................................................5.300 (a).............................................5.227 (3).................................................5.300 9............................................... 5.300, 5.301 (2).......................................... 5.301, 5.302 (3), (4)...........................................5.301 10................................................5.51, 5.302 11....................................................5.303 (2).........................................5.303, 5.305 (3)...............................................5.303 (4)...............................................5.305 (a), (b)....................................5.303 (5)...............................................5.303 12....................................................5.304 13..............................................5.227, 5.305

Table of Statutory Instruments  xxvii Taking Control of Goods (Fees) Regulations 2014 – contd reg 13(2)–(6).........................................5.305 14....................................................5.297 15....................................................5.279 16....................................................5.306 Sch 1.....................................................5.299 Table 2.................. 5.294, 5.295, 5.296, 5.297 Taking Control of Goods Regulations 2013, SI 2013/1894........... 5.1, 5.5, 5.7, 5.28, 5.148, 5.149, 5.166, 5.245 reg 4....................... 5.16, 5.26, 5.34, 5.38, 5.280 (1)(a)–(f).......................................5.26 (2).................................................5.26 5................................ 5.16, 5.26, 5.38, 5.280 6......................................................5.143 (1)–(4)...........................................5.143 7......................................................5.144 8......................................................5.224 (1)............................................5.145, 5.244 (2).................................................5.145 9......................................................5.119 (2).................................................5.122 (3).................................................5.119 (4)(a)–(c)......................................5.119 10(2)..........................................5.166, 5.176 (3)...............................................5.166 11.............................................. 5.189, 5.193 12....................................................5.212 13....................................................5.212 (2)(a), (c)....................................5.212 14(1)(a)–(c)....................................5.215 (2)...............................................5.216 15(4)...............................................5.218 (5)(a), (b)....................................5.218 (6)...............................................5.218 (7)...............................................5.217 16(2)...............................................5.216 (a)–(c)....................................5.216 (3)...............................................5.216 16(1)(a)–(d)....................................5.192 (2)...............................................5.192 (3)......................................... 5.196, 5.204 (a)–(e)....................................5.196 (4)...............................................5.192 17(1)...............................................5.193 (2)...............................................5.193 (b)...........................................5.196 (3)...............................................5.193 18(2), (3).........................................5.194 (4)...............................5.194, 5.196, 5.204 (5)–(7).........................................5.194 19....................................................5.197 20....................................5.150, 5.161, 5.164 21.............................................. 5.151, 5.188 (2)......................................... 5.175, 5.187 22(2)–(5).........................................5.151 23.............................................. 5.151, 5.187 24....................................................5.176 25(1)–(4).........................................5.224 26(a)–(j)..........................................5.224 27....................................................5.224

Taking Control of Goods Regulations 2013 – contd reg 28....................................................5.155 29(2)...............................................5.195 30..............................................5.201, 5.203 (1)...............................................5.205 (2)...............................................5.201 (a)–(e)....................................5.201 (f)...........................................5.201 (i)........................5.205, 5.206, 5.217 (3)...............................................5.202 (4)...............................................5.203 31....................................................5.201 (1), (2).........................................5.204 32...............................................5.201, 5.205 (1)(a)–(e)....................................5.205 (2)...............................................5.205 33(1)...............................................5.206 (a)–(d)....................................5.206 (e)..................................... 5.206, 5.217 (2)...............................................5.206 34....................................................5.198 (1)(a)..................................... 5.198, 5.246 (b), (c)....................................5.198 (2)...............................................5.198 35(2)(a)......................................5.237, 5.279 (b)...........................................5.237 (3)(a)–(c)....................................5.237 37(2)...............................................5.238 38....................................................5.239 (2)...............................................5.239 39....................................................5.240 (1)(a)–(e)....................................5.240 (f), (g)............................... 5.240, 5.247 (h)–(k)....................................5.240 (2)...............................................5.242 (3)(a)–(c)....................................5.243 40....................................................5.244 41(1)(a)–(d)....................................5.245 42....................................................5.248 (1)–(3).........................................5.248 43....................................................5.248 45(1)...........................................5.21, 5.253 (2)...............................................5.200 46(1)–(6).........................................5.253 47............................................. 5.230, 5.253 (2)...............................................5.229 (3)...............................................5.230 (g)...........................................5.230 (5), (6).........................................5.230 48....................................................5.253 49.............................................. 5.253, 5.274 (1)...............................................5.253 (6)–(8).........................................5.253 Tribunals, Courts and Enforcement Act 2007 (Consequential, Transitional and Saving Provision) Order 2014, SI 2014/600............................... 5.1, 5.7, 5.10 Unfair Terms in Consumer Contracts Regulations 1994, SI 1994/3159.... 7.95, 7.96 Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083......7.95

Table of Conventions

[All references are to paragraph numbers] Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Brussels, 27 September 1968)........1.221, 2.209, 2.211, 2.215 Art 2......................................................2.219 16....................................................2.217 (5).................. 2.199, 2.200, 2.212, 2.217, 2.219, 3.82 19....................................................3.83 24....................................................2.214 Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Lugano, 16 September 1988)....... 1.218, 1.220, 1.221, 1.223, 1.224, 1.239, 2.215 Art 2......................................................2.219 16(5)..............................2.199, 2.208, 2.219 24....................................................2.214 27, 28..............................................1.224 46–48..............................................1.223 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (The Hague, 2 July 2019).................1.240 European Convention on Human Rights (Rome, 4 November 1950).......... 2.83, 2.252, 5.332 Art 6.....................................1.129, 2.252, 2.253, 2.258, 5.335 (1).................................1.128, 1.129, 1.130

European Convention on Human Rights (Rome, 4 November 1950) – contd Art 8.................2.87, 2.105, 2.107, 2.252, 2.254, 2.257, 2.258, 4.251, 4.255, 5.333, 5.336, 5.337 (1)...........................................5.335, 5.337 (2).................................................5.337 10................................................ 2.87, 2.258 Protocol 1 Art 1.....................................1.130, 5.333, 5.334, 5.335, 5.336, 5.338 Hague Convention on Choice of Court Agreements (The Hague, 30  June 2005)...........................................1.238, 1.240 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958)...................................1.216 Vienna Convention on Consular Relations (Vienna, 22 April 1963)...................1.121 Vienna Convention on Diplomatic Relations 1961 (Vienna, 18  April 1961)............................... 1.115, 1.116, 1.117 Art 1......................................................1.117 22(1), (3)........................................1.116 30(1)...............................................1.117 31(1)(c)...........................................1.118 (3)...............................................1.118 32(1), (2), (4)..................................1.119 37....................................................1.117 (1)...............................................1.118

Table of European Legislation

[All references are to paragraph numbers] PRIMARY LEGISLATION TREATIES Treaty establishing the European Community (Rome, 25 March 1957) Art 293..................................................2.215 REGULATIONS Council Regulation (EC) 44/2001 of 22  December 2000 on jurisdiction and the enforcement of judgments in civil and commercial matters.......1.218, 1.219, 1.221, 1.223, 1.224, 2.208, 2.214, 2.215 Art 22.................................................. 3.82, 6.19 (5).........................................2.199, 2.208, 2.219, 2.220, 6.19 25....................................................3.83 31....................................................2.214 33, 34..............................................1.224 53, 54..............................................1.223 Council Regulation (EC) 1206/2001 of 28  May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters..............2.127 Regulation (EC) 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims...........................1.227 Art 3, 5..................................................1.227 33....................................................1.227

Regulation (EU) 1215/2012 of 12  December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters...................1.218, 1.219, 1.220, 1.221, 1.223, 1.224, 2.208, 2.214, 2.215 Art 4......................................................2.219 24....................................................3.82 (5)................... 2.199, 2.208, 2.219, 2.222 27....................................................3.83 35....................................................2.214 39....................................................1.223 49(1)...............................................1.224 50....................................................1.224 66....................................................1.219 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27  April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC...............................2.74, 2.89, 2.90 Art 4(1).................................................2.89 (3).................................................2.89 5......................................................2.90 83....................................................2.90 Recital 14..............................................2.89 DIRECTIVES Directive 95/46EC of the European Parliament and of the Council of 24  October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data.......2.89

Table of Cases

[All references are to paragraph numbers] 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd [2019]  EWHC  1920 (QB), [2019] 7 WLUK  315, aff’d [2020]  EWCA  Civ 588, [2020] 3 WLR  777, [2020] 5 WLUK  19, [2020] BPIR 1007............................................................5.4, 5.20, 5.126, 5.127, 5.128, 5.137, 5.311 A A & M Records v Darakdjian [1975] 3 All ER 983, [1975] 1 WLR 1610, 119 SJ 644..................4.23 ACLBDD Holdings v Staechelin [2018] EWHC 428 (Ch), [2018] 3 WLUK 93............................7.75 AIG  Capital Partners Inc v Kazakhstan [2005]  EWHC  2239 (Comm), [2006] 1  WLR  1420, [2006] 1 All ER 284, [2006] 1 All ER (Comm) 1, [2006] 1 Lloyd’s Rep 45, QBD............... 1.113, 1.130, 3.22 Abbey National plc v Moss [1994] 2  FCR  587, [1994] 1  FLR  307, [1994] Fam Law 255, 26 HLR 249....................................................................................................................... 4.228, 4.234 Adedeji v Pathania [2015] EWHC 1434 (Ch).................................................................................1.191 Aero Properties Holdings Ltd v Citycrest Properties Ltd [2003] All ER (D) 218 (Jun)............. 4.59, 4.139 Alawiye v Mahmood (t/a Amsons) [2006] EWHC 277 (Ch), [2007] 1 WLR 79, [2006] 3 All ER 668, Ch D..........................................................................................................................3.101 Alcom Ltd v Republic of Colombia [1984] AC  580, [1984] 2 All ER  6, [1984] 2 WLR  750, [1984] 2 Lloyd’s Rep 24, 128 SJ 315, [1984] LS Gaz R 1837, HL........................................1.114 Alfred Schefenacker v Horvat [2020] EWHC 506 (Ch), [2020] 2 WLUK 497..............................2.222 Allied Irish Bank v Ashford Hotels Ltd [1997] 3 All ER 309, [1998] BCC 440, CA.....6.74, 6.123, 6.126, 6.132, 6.137, 6.162 Amari Lifestyle Ltd (t/a Amari Super Cars v Warnes) [2017] EWHC 1891 (Ch), [2018] Ch 161, [2018] 2 WLR 416, [2017] 7 WLUK 491...............................................................................4.223 Amec Process & Energy Ltd v Stork Engineers & Contractors BV (No 3) [2002] All ER (D) 48 (Apr)........................................................................................................................................7.47 American Concentrated Must Corpn v Hendry [1893] WN 67, 57 JP 788, 62 LJQB 388, 5 R 331, 37 SJ 475, 68 LT 742, 9 TLR 445, CA...................................................................................5.163 Ames v The Trustees of the Birkenhead Docks (1855) 20 Beav 332, 24 LJ Ch 540, 1 Jur NS 529, 3 WR 381, 25 LTOS 121........................................................................................6.141, 6.144, 6.145 Amoco (UK) Exploration Company v British American Offshore Ltd (No 2) [2002] BLR 135, [2001] All ER (D) 327 (Nov).......................................................................................7.45, 7.46, 7.47 Andrew, Re, ex p Official Receiver (Trustee) [1937] Ch 122, [1936] 3 All ER 450, 106 LJ Ch 195, [1936-7] B & CR 205, 80 SJ 932, 155 LT 586, 53 TLR 90, CA...................................... 1.177, 1.178 Angel v Smith 9 Ves 335, 32 ER 632, [1803-13] All ER Rep 48.............................................. 6.141, 6.142 Anglesey (Marquis), Re, Countess De Galve v Gardner [1903] 2 Ch  727, 72  LJ  Ch  782, 52 WR 124, 89 LT 584, 19 TLR 719.................................................................... 6.104, 6.126, 6.132 Anglo-Italian Bank v Davies (1878) 9 Ch D 275, 47 LJ Ch 833, 27 WR 3, 39 LT 244, CA......  6.22, 6.25, 6.56 Archer v Williams [2003] EWHC 1670 (QB), [2003] EMLR 869, [2003] All ER (D) 55 (Jul).....4.192 Ash v Dawnay (1852) 17 JP 183, 22 LJ Ex 59, 8 Exch 237, 20 LTOS 103.................................... 5.188 Ash v McKennitt. See McKennitt v Ash Ashburton (Lord) v Nocton [1915] 1 Ch 274, 84 LJ Ch 193, 59 SJ 145, 111 LT 895, 31 TLR 122, CA...........................................................................................................................................6.104 Ashover Fluor Spar Mines Ltd v Jackson [1911] 2 Ch 355, 80 LJ Ch 687, 55 SJ 649, 105 LT 334, 27 TLR 530.............................................................................................................................7.16

xxxiv  Table of Cases Ashworth v Earl of Uxbridge (1842) 2 Dowl NS 377, 12 LJQB 39, 7 Jur 237...............................5.310 Assetco plc v Grant Thornton UK LLP  [2019]  EWHC  592 (Comm), [2019] 2  WLUK  589, [2019] 1 Costs LR 197.......................................................................................................... 1.84, 1.85 Attack v Bramwell (1863) 27 JP 629, 3 B & S 520, 32 LJQB 146, 9 Jur NS 892, 1 New Rep 315, 11 WR 309, 7 LT 740..............................................................................................................5.163 Att-Gen v Guardian Newspapers Ltd (No  2) [1990] 1 AC  109, [1988] 3 All ER  545, [1988] 2 WLR 805, 132 SJ 566, [1988] NLJR 47, CA......................................................................2.86 Austin-Fell v Austin-Fell [1990] Fam 172, [1990] 2  All ER  455, [1990] 3  WLR  33, [1990] FCR 743, [1989] 2 FLR 497, [1989] Fam Law 437, [1989] NLJR 1113.............4.185, 4.189 Ayshford v Murray (1870) 23 LT 470..............................................................................................5.246 Azuonye v Kent [2019]  EWCA  Civ 1289, [2019] 4  WLR  101, [2019] 7  WLUK  296, [2019] BPIR 1317...................................................................................................................1.2 B B v B [1978] Fam 181, [1979] 1 All ER 801, [1978] 3 WLR 624, 122 SJ 643...............................2.188 B v B (injunction: restraint on leaving jurisdiction) [1997] 3 All ER 258, [1998] 1 WLR 329, [1997] 2 FLR 148................................................................................................1.14, 1.65, 1.66, 1.67 BCS Corporate Acceptances Ltd v Terry [2019] EWHC 3133 (QB), [2019] 9 WLUK 499...........5.149 Babanaft International Co SA v Bassatne [1990] Ch 13, [1989] 1 All ER 433, [1989] 2 WLR 232, [1988] 2 Lloyd’s Rep 435, 133 SJ 46, [1989] 4 LS Gaz R 43, [1988] NLJR 203, CA....2.202, 2.207, 3.89, 6.81, 6.84 Badeley v Consolidated Bank (1888) 34 Ch D 536, 35 WR 106, 55 LT 635..................................3.96 Bank of China v NBM LLC [2001] EWCA Civ 1933, [2002] 1 All ER 717, [2002] 1 All ER (Comm) 472, [2002] 1 WLR  844, [2002] 1 Lloyd’s Rep 506, [2002] 09  LS  Gaz R  29, 146 SJ LB 22, [2001] All ER (D) 267 (Dec)..........................................................................3.89 Bank of Ireland Home Mortgages Ltd v Bell [2001] 2 All ER (Comm) 920, [2001] 3 FCR 134, [2001] 2 FLR 809, [2001] Fam Law 805, [2000] All ER (D) 2105, CA................4.237, 4.238, 4.258 Bank of Scotland v Bennett [2004] EWCA Civ 988, 148 SJ LB 943, [2004] All ER (D) 417 (Jul), CA........................................................................................................................................5.71, 7.115 Bankers Trust Co v Galadari (Chase Manhattan Bank NA, intervener) [1987] QB 222, [1986] 3 All ER 794, [1986] 3 WLR 1099, [1986] 2 Lloyd’s Rep 446, 130 SJ 986, [1987] LS Gaz R 341, CA................................................................................................... 5.120, 5.315, 5.316, 5.317 Bankers Trust Co v Namdar [1997] NPC 22, [1997] EGCS 20, CA.........................................4.232, 4.234 Banque Nationale de Paris plc v Montman Ltd [2000] 1 BCLC 576, [1999] All ER (D) 837........4.208 Barclays Bank International Ltd v Levin Bros (Bradford) Ltd [1977] QB 270, [1976] 3 WLR 852, [1976] 3 All ER 900, [1977] 1 Lloyd’s Rep 51, [1976] 7 WLUK 63, (1976) 120 SJ 801......1.6 Barclays Bank plc v Eustice [1995] 4 All ER 511, [1995] 1 WLR 1238, [1995] 2 BCLC 630, [1995] BCC 978, [1995] NLJR 1503, CA..............................................................................2.115 Barclays Bank plc v Hendricks [1996] 1 FCR 710, [1996] 1 FLR 258, [1996] Fam Law 148, [1996] BPIR 17 [1996] 1 FLR 258................................................................................... 4.227, 4.232 Barclays Bank v Forrester [1987] CLY 2537.............................................................................. 4.59, 4.142 Baring v Noble, Clayton’s Case 1 Mer 572, 35 ER 781, [1814-23] All ER Rep 1..........................1.75 Barnett v Eastman (1898) 67 LJQB 517..........................................................................................3.25 Barras v Aberdeen Steam Fishing & Trawling Co Ltd [1933] AC 402, [1933] All ER Rep 52, (1933) 45 Ll L Rep 199, 1933 SC (HL) 21, 1933 SLT 338, [1933] 3 WLUK 34..................5.127 Bath v Bath [1901] 1 Ch 460, 70 LJ Ch 270, 49 WR 341, 45 SJ 239, 84 LT 107, 17 TLR 196.....4.100, 4.285 Beasley v Roney [1891] 1 QB 509, 55 JP 566, 60 LJQB 408, 39 WR 415, 65 LT 152..................3.51 Beeston Shipping Ltd v Babanaft International SA, The Eastern Venture [1985] 1 All ER 923, 127 SJ 682, CA........................................................................................... 2.154, 2.162, 2.226, 2.234 Belgian Grain & Produce Co Ltd v Cox & Co (France) Ltd [1919] WN 308, 317, 1 Ll L Rep 256, CA...........................................................................................................................................7.29 Bendon Media Ltd (t/a Picture Canning Co) v Nywave Ltd [2007] EWCA Civ 109, CA..............1.84 Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479, [1977] 2 All ER 902, [1977] 3 WLR 136, 121 SJ 157, 241 Estates Gazette 917......................................................2.83 Biguzzi v Rank Leisure plc [1999] 4 All ER 934, [1999] 1 WLR 1926, CA..................................1.213 Bim Kemi AB v Blackburn Chemicals Ltd (costs) [2003] EWCA Civ 889..................................7.53, 7.54 Birdi v Price [2018]  EWHC  2943 (Ch), [2019] 3  All ER  250, [2019] Bus LR  489, [2018] 11 WLUK 517, [2019] BPIR 306..........................................................................................5.30, 5.32 Blackman v Fysh [1892] 3 Ch 209, 2 R 1, 67 LT 802, CA.............................................................6.20 Blight v Brewster [2012]  EWHC  165 (Ch), [2012] 1  WLR  2841, [2012] 2  WLUK  289, [2012] BPIR 476, [2012] Pens LR 203...................................................... 3.64, 6.67, 6.71, 6.72, 6.73 Blunt v Park Lane Hotel Ltd 1942] 2 KB 253, [1942] 2 All ER 187, 111 LJKB 706, 167 LT 359, 58 TLR 356, CA.....................................................................................................................2.246

Table of Cases  xxxv Booth v Trail (1883-84) LR 12 QBD 8, QBD.................................................................................3.64 Borthwick v Elderslie Steamship Co (No 2) [1905] 2 KB 516, 74 LJKB 772, 10 Asp MLC 121, 53 WR 643, 49 SJ 618, 93 LT 387, 21 TLR 630, [1904-7] All ER Rep Ext 1347, CA........ 7.16, 7.28 Bourne v Colodense Ltd [1985]  ICR  291, [1985]  IRLR  339, (1985) 82  LSG  923, (1985) 129 SJ 153................................... 6.16, 6.18, 6.21, 6.30, 6.31, 6.35, 6.41, 6.54, 6.74, 6.75, 6.76, 6.77 Bowkett v Fuller’s United Electric Works Ltd [1923] 1  KB  160, 92  LJKB  412, [1923]  B  & CR 75, [1922] All ER Rep 281, 128 LT 303, CA...................................................................1.135 Boyd v Profaze (1867) 16 LT 431...................................................................................5.161, 5.163, 5.165 Brereton v Edwards (1888) 21 QBD 226, 52 JP 647, 59 LT 336....................................................4.203 Brereton v Edwards (1888) LR 21 QBD 226, aff’d (1888) LR 21 QBD 488.................................4.203 Brinks Mat v Elcombe [1988] 3 All ER 188....................................................................................3.57 British Arab Commercial Bank plc v Ahmad Hamad Algosaibi & Brothers Co [2011] EWHC 2444 (Comm), [2011] 9 WLUK 644, [2011] 2 CLC 736, [2011] BPIR 1568.......................... 4.167, 4.170 British Steel Corpn v Granada Television Ltd [1981] AC 1096, 1144, [1981] 1 All ER 417, 452, [1980] 3 WLR 774, 818, 124 SJ 812, HL...............................................................................2.248 Brookes v Harris [1995] 1 WLR 918, 139 SJ LB 129.....................................................................5.30 Broomleigh Housing Association Ltd v Okonkwo [2010]  EWCA  Civ 1113, [2010] 10 WLUK  264, [2011]  CP  Rep 4, [2011]  HLR  5, [2010] 42  EG  104 (CS), (2010) 107 (41) LSG 22............................................................................................................................2.229 Brown v Perrott (1841) 4 Beav 585.................................................................................................5.20 Bullivant v A-G for Victoria [1901] AC 196, 70 LJKB 645, 50 WR 1, [1900-3] All ER Rep 812, 84 LT 737, 17 TLR 457, HL...................................................................................................2.115 Burn v London & South Wales Coal Co [1890] WN 209................................................................2.38 Burnet v Francis Industries plc [1987] 2  All ER  323, [1987] 1  WLR  802, 131  SJ  841, [1987] LS Gaz R 2194, CA.....................................................................................................1.92 Burrell & Sons v Read (1894) 11 TLR 36, CA...............................................................................3.191 Burston Finance Ltd (in liquidation) v Godfrey [1976] 2  All ER  976, [1976] 1  WLR  719, 120 SJ 404, CA...................................................................................................... 3.181, 4.166, 4.203 Burton v Roberts (1890) 29 LJ Exch 483........................................................................................3.23 C C & W Berry Ltd v Armstrong-Moakes 2007] EWHC 2101 (QB), [2007] BPIR 1199, [2008] 1 P & CR DG1, QBD............................................................................................. 4.152, 4.208, 4.212 C Putnam & Sons v Taylor [2009] EWHC 317 (Ch), [2009] 1 WLUK 546, [2009] BPIR 769......4.230, 4.254 CAS (Nominees) Ltd v Nottingham Forest plc [2001] 1 All ER 954, [2000] All ER (D) 1115.....2.37 CIMC  Raffles Offshore (Singapore) Pte Ltd v Yantai CIMC  Raffles Offshore Ltd [2014] EWHC 1742 (Comm), [2014] 5 WLUK 322..............................................................2.156 Cadogan v Lyric Theatre Ltd [1894] 3 Ch 338, 63 LJ Ch 775, 7 R 594, 71 LT 8, 10 TLR 596, CA............................................................................................................................ 6.56, 6.104, 6.127 Caillaud v Estwick (1794) 2 Anst 381.............................................................................................5.22 Calor Gas v Piercy. See Debtor, a (Nos 31/32/33 of 1993), Re, ex p Calor Gas v Piercy Camdex International Ltd v Bank of Zambia (No 2) [1997] 1 All ER 728, [1997] 1 WLR 632, CA...........................................................................................................................................1.62 Campbell v Mirror Group Newspapers Ltd [2004] UKHL 22, [2004] 2 AC 457, [2004] 2 All ER 995, [2004] 2 WLR 1232, [2004] 21 LS Gaz R 36, [2004] NLJR 733, 148 SJ LB 572, [2004] IP & T 764, 16 BHRC 500, [2004] All ER (D) 67 (May), HL...................................2.87 Canada Enterprises Corpn Ltd v Macnab Distilleries Ltd [1987] 1  WLR  813n, [1981] Com LR 167, CA.............................................................................................................................1.92 Capewell v Customs & Excise Commissioners, sub nom Capewell v Revenue & Customs Commissioners [2007]  UKHL  2, [2007] 1  WLR  386, [2007] 2  All ER  370, [2007] 2 Costs LR  287, [2007]  BPIR  678, (2007) 104(7)  LSG  26, (2007) 157  NLJ  223, (2007) 151 SJLB 198, HL..................................................................................................................6.156 Caribbean Products (Yam Importers) Ltd, Re, Tickler v Swains Packaging Ltd [1966] Ch 331, [1996] 1 All ER 181, [1966] 2 WLR 153, 110 SJ 32, CA................................................ 1.139, 1.179 Carleton (Earl of Malmesbury) v Strutt & Parker (A  Partnership) [2008]  EWHC  424 (QB), (2008) 105(15) LSG 24, (2008) 158 NLJ 480, (2008) 152(14) SJLB 29, QBD....................7.55 Carlile v Parkins (1822) 3 Stark 163................................................................................................5.246 Carnegie v Giessen [2005] EWCA Civ 191, [2005] 1 WLR 2510, [2005] CP Rep 24, [2005] 1 CLC 259, (2005) 102(18) LSG 23, CA...............................................................................1.9, 4.56 Caudery v Finnerty (1892) 61 LJQB 496, 66 LT 684, 8 TLR 532..................................................7.23 Cave v Capel [1954] 1 QB 367, [1954] 1 All ER 428, [1954] 2 WLR 325, 98 SJ 143, CA...........5.59 Celador Radio Ltd v Rancho Steak House Ltd, Riaz v Designer Collection Ltd [2018] EWHC 219 (QB), [2018] 2 WLUK 364.....................................................................................................5.277

xxxvi  Table of Cases Chatterton v Watney (1881) 17 Ch D 259, 50 LJ Ch 535, 29 WR 573, 44 LT 391, CA................. 3.115 Choice Investments Ltd v Jeromnimon [1981] QB 149, [1981] 1 All ER 225, [1980] 2 WLR 80, 124 SJ 883, CA........................................................................................................ 3.46, 3.111, 3.122 Chubb v Dean [2013] EWHC 1282 (Ch), [2013] 4 WLUK 521.....................................................7.100 Church of Scientology Advanced Organisation Saint Hill Europe & South Africa v Scott [1996] 6 WLUK 323, [1997] BPIR 418.............................................................................................5.30 Citro (a bankrupt), Re [1991] Ch 142, [1990] 3 All ER 952, [1990] 3 WLR 880, [1991] 1 FLR 71, [1990] Fam Law 428, 134 SJ 806, [1990] 28 LS Gaz R 43, [1990] NLJR 1073, CA........4.225, 4.22, 4.228, 4.234, 4.235 Clarke, Re [1898] 1 Ch 336, 67 LJ Ch 234, 46 WR 337, 42 SJ 324, 78 LT 275, 14 TLR 274, CA........................................................................................................................................... 5.138 Clarke v Coutts & Co [2002] EWCA Civ 943, [2002] BPIR 916, [2002] 26 EG 140 (CS), (2002) 99(26) LSG 40, CA................................................................................................ 1.156, 1.157, 4.272 Clayton’s Case. See Baring v Noble, Clayton’s Case Close Invoice Finance Ltd v Pile [2008]  EWHC  1580 (Ch), [2008] 5  WLUK  445, [2009] 1 FLR 873, [2008] BPIR 1465, [2009] Fam Law 204........................................... 4.230, 4.253, 4.254 Cobra Golf Inc v Rata [1998] Ch 109, [1997] 2 All ER 150, [1997] 2 WLR 629...........................2.250 Coco v AN Clark (Engineers) Ltd [1968] FSR 415, [1969] RPC 41, Ch D....................................2.85 Cohen v Hale (1878) 3 QBD 371, 47 LJQB 496, 26 WR 680, 39 LT 35........................................3.118 Colour Quest Ltd v Total Downstream UK plc [2009] EWHC 823 (Comm), [2009] 4 WLUK 342, [2010] 2 Costs LR 140............................................................................................................7.42 Co Ltd, a v Republic of X [1990] 2 Lloyd’s Rep 520, [1989] 12 WLUK 350................................1.119 Combined Weighing & Advertising Machine Co, Re 43 Ch D  99, 59  LJ  Ch  26, 1 Meg 393, 38 WR 67, [1886-90] All ER Rep 1044, 61 LT 582, 6 TLR 7, CA........................................3.111 Company (Nos 22 & 23 of 1915), Re [1915] 1 Ch 520, CA...........................................................6.18 Contract Facilities Ltd v Rees Estate (Application for Stay) [2003] EWCA Civ 465, CA.............1.84 Conway v Petronius Clothing Co Ltd [1978] 1 All ER 185, [1978] 1 WLR 72, 122 SJ 15............ 2.38 Cooper v Brayne. See Surridge v Cooper, Cooper v Brayne Cory Bros & Co Ltd v Turkish SS Mecca (Owners), The Mecca [1897] AC 286, 66 LJP 86, 8 Asp MLC 266, 45 WR 667, 45 ER 667, [1895-9] All ER Rep 933, 76 LT 579, 13 TLR 339, HL...........................................................................................................................................1.75 Crabtree v Robinson (1885) 15 QBD 312...................................................................... 5.161, 5.163, 5.164 Crane & Sons v Ormerod [1903] 2  KB  37, 72  LJKB  507, 52 WR  11, 47  SJ  517, 89  LT  45, 67 JP Jo 231, CA.....................................................................................................................5.257 Crantrave Ltd v Lloyds Bank plc [2000] QB 917, [2000] 2 All ER (Comm) 89, [2000] 4 All ER 473, [2000] 3 WLR 877, [2000] Lloyd’s Rep Bank 181, [2000] 20 LS Gaz R 42, 144 SJ LB, CA....................................................................................................................................3.123 Crawshaw v Harrison [1894] 1  QB  79, 63  LJQB  94, 1 Mans 407, 10  R  608, 69  LT  860, 10 TLR 29...............................................................................................................................5.252 Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553, [1971] 3 All ER 1192, [1972] 2 WLR 91, 116 SJ 59..................................................................................................2.115 Croshaw v Lyndhurst Ship Co [1897] 2 Ch  154, 66  LJ  Ch  576, 45  WR  570, 41  SJ  508, 76 LT 553................................................................................................................................6.104 Crowe v Price (1889) LR 22 QBD 429, CA....................................................................................6.59 Cruz City 1 Mauritius Holdings v Unitech Ltd [2014] EWHC 3131 (Comm), [2015] 1 All ER (Comm) 336, [2014] 10 WLUK 22, [2015] 1 BCLC 377, [2014] Bus LR D25........ 6.31, 6.43, 6.47, 6.48, 6.53, 6.85, 6.86, 6.132 Cummins v Perkins [1899] 1 Ch 16, 68 LJ Ch 57, 47 WR 214, 43 SJ 112, 79 LT 456, 15 TLR 76, CA...........................................................................................................................................6.162 Curtis v Maloney [1951] 1 KB 736, [1950] 2 All ER 982, 66 TLR (Pt 2) 869, [1950] 10 WLUK 68, (1950) SJ 761..........................................................................................................................5.261 D Dalton (a bankrupt), Re [1963] Ch  336, [1962] 2  All ER  499, [1962] 3  WLR  140, 106 SJ 510..................................................................................................................... 5.209, 5.210, 5.211 Dar Al Arkan Real Estate v Al Refai [2015] EWHC 1793 (Comm)...............................................1.92 Dashwood v Dashwood [1927] WN 276, 64 LJNC 431, 71 SJ 911................................................7.22 Davey & Co v Willamson & Sons [1898] 2  QB  194, 67  LJQB  699, 46 WR  571, 42  SJ  525, 78 LT 755................................................................................................................................1.167 Davies, Re, ex p Williams 7 Ch App 314, 36 JP 484, 41 LJ Bcy 38, 20 WR 430, [1861-73] All ER Rep 960, 26 LT 303.................................................................................................... 5.127, 5.138 Davis v Freethy (1890) 24 QBD 519, 59 LJQB 318, CA................................................................3.96 Dawson v Preston (Law Society, Garnishees) [1955] 3  All ER  314, [1955] 1  WLR  1219, 99 SJ 797.................................................................................................................................3.30

Table of Cases  xxxvii Debtor, a (Nos 31/32/33 of 1993), Re, ex p Calor Gas v Piercy [1994] 2  BCLC  321, [1994] BCC 69......................................................................................................... 4.88, 4.167, 4.168 Debtor, Re, ex p Peak Hill Goldfield Ltd [1909] 1  KB  430, 78  LJKB  354, 16 Mans 11, 100 LT 213, CA..................................................................................................... 6.126, 6.132, 6.133 Debtor (No 1838 of 1911), Re [1912] 1 KB 53, 81 LJKB 107, 19 Mans 12, 56 SJ 36, 105 LT 610, 28 TLR 9, CA.........................................................................................................................1.91 Defries v Creed (1865) 34 LJ Ch 607, 11 Jur NS 360, 6 New Rep 17, 13 WR 632, 12 LT 262.....6.140, 6.141, 6.143 Derby & Co Ltd v Weldon (Nos 3 & 4) [1990] Ch 65, [1989] 1 All ER 1002, [1989] 2 WLR 412, 133 SJ 83, CA.........................................................................................................................1.69 Den Norske Bank v Antonatos [1999]  QB  271, [1998] 3  All ER  74, [1998] 3  WLR  711, [1998] All ER (D) 137, CA................................................................................................2.246, 2.250 De Peyrecave v Nicholson (1894) 10 R 532, 42 WR 702, 71 LT 255.............................................6.17 De Sena v Notaro [2020] EWHC 1366 (Ch), [2020] 5 WLUK 430 ,[2020] Costs LR 737............7.55 Deutsche Bank AG v Sebastian Holdings Inc [2015] EWHC 2773 (QB), [2015] 10 WLUK 181, [2016] CP Rep 2......................................................................................................................2.157 Deutsche Bank AG v Sebastian Holdings Inc [2017] EWHC 913 (Comm), [2016] 4 WLUK 671, [2017] Costs LR 1030.............................................................................................................1.85 Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd (t/a Shell International Trading Co) [1990] 1 AC 295, [1988] 2 All ER 833, [1988] 3 WLR 230, [1988] 2 Lloyd’s Rep 293, 132  SJ  996, [1988] 28  LS  Gaz R  45, HL, on appeal from Deutsche............................................................................................. 3.76, 3.172, 3.173, 3.175, 3.176 Di Pede v Italy judgment of 26 September, 1996, Reports of Judgments & Decisions 1996-IV....1.129 Dickinson, Re, ex p Charrington & Co 22 QBD 187, 58 LJQB 1, 6 Morr 1, 37 WR 130, [188690] All ER Rep 877, 60 LT 138, 5 TLR 82, CA.................................................... 6.124, 6.126, 6.140 Diligent Finance Co Ltd v Alleyne (1972) 23 P & CR 346.............................................................4.116 Director General of Fair Trading v First National Bank plc [2000] QB 672, [2000] 2 WLR 1353, [2000] 2  All ER  759, [2000] 1  All ER (Comm) 371, [2000] Lloyd’s Rep Bank 130, [2000] CCLR 31, (2000) 97(7) LSG 39, revs’d [2001] UKHL 52, [2002] 1 AC 481, [2001] 2 All ER (Comm) 1000, [2002] 1 All ER 97, [2001] 3 WLR 1297, [2002] 1 Lloyd’s Rep 489, [2001] NLJR 1610, [2001] All ER (D) 355 (Oct), HL................................................. 7.82, 7.94 Dixon v Dixon [1904] 1 Ch 161, 73 LJ Ch 103, 89 LT 272............................................................6.140 Doe d Westmoreland & Perfect v Smith (1827) 6 LJOSKB 44, 1 Man & Ry KB 137...................5.23 Douglas v Hello! Ltd (No 7) [2004] EWHC 63 (Ch), [2004] EMLR 230, [2004] All ER (D) 202 (Jan).......................................................................................................................................7.53, 7.54 Drover v Beyer (1879) 13 Ch D 242, 49 LJ Ch 37, 28 WR 110, 41 LT 393, CA............................1.63 Dubai Aluminium Co Ltd v Al Alawi [1999] 1 All ER 703, [1999] 1 WLR 1964, [1999] 1 Lloyd’s Rep 478, [1999] 1 All ER (Comm) 1.................................................... 2.69, 2.73, 2.94, 2.117, 2.118, 2.119, 2.121, 2.122, 2.124 Duer v Frazer [2001] 1 All ER 249, [2001] 1 WLR 919, [2000] All ER (D) 601................ 5.66, 5.67, 5.68 Duncan v Garratt (1824) 1 C & P 169, 2 LJOSKB 142..................................................................5.58 Dunlop & Ranken Ltd v Hendall Steel Structures Ltd [1957] 3 All ER 344, [1957] 1 WLR 1102, 101 SJ 852...................................................................................................3.11, 3.31, 3.34, 3.35, 3.37 DuPont Nutrition Biosciences ApS (formerly Danisco A/S) v Novozymes A/S [2013] EWHC 483 (Pat), [2013] 3 WLUK 91..................................................................................................... 7.10, 7.39 E ED & F Man (Sugar) Ltd v Haryanto (No 3) (The Times, 9 August 1996), CA.............................7.115 Ealing London Borough v El Isaac [1980] 2 All ER  548, [1980] 1 WLR  932, 76  LGR  417, 40 P & CR 423, 124 SJ 344, CA............................................................................................7.93 Economic Life Assurance Society v Usborne [1902] AC 147, 71 LJPC 34, 85 LT 587, HL....... 7.87, 7.88, 7.90, 7.91, 7.93, 7.96 Edge v Kavanagh (1888) 24 LRI.....................................................................................................5.247 Edmunds v Edmunds [1904] P 362, 73 LJP 97, 91 LT 568........................................................... 3.59, 3.60 Edwards v Bank of Scotland plc [2010] EWHC 652 (Ch), [2010] 3 WLUK 341...........................4.230 Edwards v Edwards (1876) 2 Ch D 291, 45 LJ Ch 391, 24 WR 713, 34 LT 472, CA....................6.143 Edwards & Co v Picard [1909] 2 KB 903, 78 LJKB 1108, 101 LT 416, 25 TLR 815, CA..........6.12, 6.25, 6.48, 6.54, 6.56 Elwell v Jackson (1885) 1 TLR 454, CA.........................................................................................3.119 Erven Warnink BV v J Townend & Sons (Hull) Ltd (No 2) [1982] 3 All ER 312, [1982] Com LR 184, [1982] RPC 511, (1982) 79 LSG 987, (1982) 126 SJ 465, CA................................7.35 Essex (Sheriff), Re, Terrell v Fisher (1862) 10 WR 796..................................................................5.266 European Central Rly Co, Re, ex p Oriental Financial Corpn (1876) 4 Ch D 33, 46 LJ Ch 57, 25 WR 92, 35 LT 583, CA........................................................................................... 7.83, 7.84, 7.85

xxxviii  Table of Cases Evans v Rival Granite Quarries Ltd [1910] 2 KB 979, 79 LJKB 970, 18 Mans 64, 54 SJ 580, 26 TLR 509, CA.....................................................................................................................1.167 Evans v Roberts (1826) 5 B & C 829, 4 LJOSKB 313, 8 Dow & Ry KB 611, 108 ER 309, [182434] All ER Rep 534.................................................................................................................5.52 Evelyn v Lewis (1844) 3 Hare 472................................................................................. 6.141, 6.143, 6.144 Ezekiel v Orakpo [1997] 1 WLR 340, CA........................................... 4.23, 4.25, 4.28, 7.116, 7.117, 7.118 F FG Hemisphere Associates LLC v Congo [2005] EWHC 3103 (QB), QBD..................................3.178 Fattal v Walbrook Trustees (Jersey) Ltd [2009] EWHC 1674 (Ch), [2009] 6 WLUK 141, [2009] 4 Costs LR 591................................................................................................... 7.39, 7.40, 7.42, 7.57 Federal Commerce & Navigation Co Ltd v Tradax Export SA (The Maratha Envoy) [1977] QB 324, [1977] 2 WLR 122, [1977] 2 All ER 41, [1977] 1 Lloyd’s Rep 217, (1976) 120 SJ 834 rev’sd [1978] AC 1, [1977] 3 WLR 126, [1977] 2 All ER 849, [1977] 2 Lloyd’s Rep 301, (1977) 121 SJ 459, HL............................................................................................1.6 Felton v Callis [1969] 1 QB 200, [1968] 3 All ER 673, [1968] 3 WLR 951, 112 SJ 672...............1.63 Ferrera v Hardy [2015] EWCA Civ 1202, [2015] 10 WLUK 182, [2016] HLR 9..........................3.21 Field v Field [2003] 1 FLR 376.......................................................................................................6.72 Field v Field [2002] All ER (D) 405 (Oct)......................................................................................3.64 Fiona Trust & Holding Corp v Privalov [2008] EWHC 1748 (Comm), QBD................................2.75 Fiona Trust v Privalov [2011]  EWHC  1312 (Comm), [2011] 5  WLUK  687, [2011] 3 Costs LO 338....................................................................................................................................7.42 First National Securities Ltd v Hegerty [1985] QB 850, [1984] 1 All ER 139, [1984] 3 WLR 769, [1985] FLR 80, 126 SJ 836, aff’d [1985] QB 850, [1984] 3 All ER 641, [1984] 3 WLR 769, 48 P & CR 200, [1985] FLR 80, [1984] Fam Law 315, 128 SJ 499 CA.............. 4.174, 4.177, 4.179, 4.180, 4.184 Fisher v Dudding (1841) 9 Dowl 872, 10 LJCP 323, 3 Man & G 238, 3 Scott NR 516.................7.35 Flegg v Prentis [1892] 2 Ch 428, 61 LJ Ch 705, [1891-4] All ER Rep 1272, 67 LT 107............. 6.17, 6.78 Forster v Baker [1910] 2 KB 636, CA.............................................................................................1.191 France v Campbell (1841) 9 Dowl 914, 6 Jur 105...........................................................................5.20 Francis v Nash (1815) Cas T H 53...................................................................................................5.16 Franklin v R (No 2) [1974] QB 205, [1973] 3 All ER 861, [1973] 3 WLR 636, 117 SJ 663, CA..2.153 Fraser v Oystertec plc (Third Party Debt Order) [2004] EWHC 1582 (Ch), [2004] 5 WLUK 472, [2006] 1 BCLC 491, [2005] BPIR 381...................................................................................3.158 Fred Perry (Holdings) Ltd v Genis [2014] 8 WLUK 40, [2015] 1 P & CR DG5............................4.253 French v Gething [1922] 1 KB 236, CA..........................................................................................1.132 Fripp v Bridgewater & Taunton Canal Co (1845) 3 WR 356..........................................................6.142 Fuggle v Bland (1883) 11 QBD 711................................................................................................6.78 Fundo Soberano de Angola v Jose Filomeno dos Santos [2018] EWHC 2199 (Comm), [2018] 8 WLUK 155...........................................................................................................................3.57 G Galbraith v Grimshaw & Baxter [1910] 1 KB 339, 79 LJKB 369, 17 Mans 86, 102 LT 113 , aff’d [1910] AC 508, 79 LJKB 1011, 17 Mans 183, [1908-10] All ER Rep 561, 54 SJ 634, 103 LT 294, HL.......................................................................................................................3.111 Gamlen Chemical Co (UK) Ltd v Rochem Ltd (1980) 124 SJ 276, CA.........................................2.116 Gasus Dosier-und Fördertechnik v Netherlands (Application 15375/89) (1995) 20 EHRR 403, ECtHR.....................................................................................................................................5.238 Gater Assets Ltd v Nak Naftogaz Ukrainiy [2008] EWHC 1108 (Comm), QBD....................... 7.10, 7.105 General Horticultural Company, Re, ex p Whitehouse (1886) 32 Ch D  512, 55  LJ  Ch  608, 34 WR 681, 54 LT 898........................................................................................................3.96, 3.111 Giles v Grover (1832) 9 Bing 128, 6 Bli NS 277, 1 Cl & Fin 72, 2 Moo & S 197, 131 ER 563, [1824-34] All ER Rep 547, HL......................................................................................... 5.127, 5.138 Giles v Kruyer [1921] 3 KB 23, 90 LJKB 1274, 125 LT 731, 37 TLR 561......  6.125, 6.133, 6.134, 6.135, 6.136, 6.137, 6.138 Gill v Continental Gas Co (1872) LR 7 Exch 332, 41 LJ Ex 176, 21 WR 111, 27 LT 424.......... 4.35, 4.98 Giuseppe (Rocco) & Figli v Tradax Export SA [1983] 3 All ER 598, [1984] 1 WLR 742, [1983] 2 Lloyd’s Rep 434, 128 SJ 243...............................................................................................7.77 Gladstone v Padwick (1871) LR 6 Exch 203, 40 LJ Ex 154, 19 WR 1064, 25 LT 96....................5.129 Glegg v Bromley [1912] 3 KB 474, 81 LJKB 1081, [1911-13] All ER Rep 1138, 106 LT 825, CA.....................................................................................................................................1.193, 1.195 Golder v United Kingdom (Application 4451/70) (1975) 1 EHRR 524, ECtHR............................1.129 Goldschmidt v Oberrheinische Metallwerke [1906] 1  KB  373, 75  LJKB  300, 54  WR  255, 50 SJ 238, 94 LT 303, 22 TLR 285, CA............................................................................... 1.70, 6.40

Table of Cases  xxxix Goldspan Ltd, Re [2001] 10 WLUK 776, [2003] BPIR 93.............................................................4.192 Good Challenger Navegante SA  v Metalexportimport SA  [2003]  EWCA  Civ 1668, [2004] 1 Lloyd’s Rep 67, (2004) 101(2) LSG 27, CA..........................................................................5.69 Goodman v Robinson (1886) 18 QBD 332, 56 LJQB 392, 35 WR 274, 55 LT 811, 3 TLR 212...1.191 Gouraud v Edison Gower Bell Telephone Co of Europe (1888) 57 LJ Ch 498, 59 LT 813............2.37 Grech v Board of Trade (1923) 16 Ll L Rep 262, [1923] 7 WLUK 43...........................................5.73 Greenwood, Re, Sutcliffe v Gledhill [1901] 1 Ch 887, 70 LJ Ch 326, 49 WR 461, [1900-3] All ER Rep 97, 84 LT 118............................................................................................................3.19 Greer, Re, Napper v Fanshawe [1895] 2 Ch 217, 59 JP 441, 64 LJ Ch 620, 2 Mans 350, 13 R 598, 43 WR 547, 39 SJ 503, 72 LT 865, [1895-9] All ER Rep Ext 2129.......................................3.66 Grosvenor Metal Co Ltd, Re [1950] Ch 63, [1949] 2 All ER 948, 93 SJ 774, 65 TLR 755...........1.144 H Habib Bank Ltd v Central Bank of Sudan [2014] EWHC 2288 (Comm), [2014] 6 WLUK 164....7.115 Haji-Ioannou v Frangos [2006] EWHC 279 (Ch), [2006] 2 Costs LR 315 , aff’d [2006] EWCA Civ 1663, [2008] 1 WLR 144, [2007] 3 All ER 938, [2007] CP Rep 14, [2007] 2 Costs LR 253, (2006) 156 NLJ 1918, CA......................................................................................................7.58 Hale v Victoria Plumbing Co Ltd [1966] 2 QB 746, [1966] 2 All ER 672, [1966] 3 WLR 47, 110 SJ 331, 198 Estates Gazette 389, CA......................................................................... 3.160, 3.161 Hall v Pritchett (1877) 3 QBD 215, 47 LJQB 15, 26 WR 95, 37 LT 671........................................3.58 Haly v Barry (1868) 3 Ch App 452, 37 LJ Ch 723, 16 WR 654, 18 LT 491, CA.......... 4.200, 4.201, 4.202, 4.203, 4.272 Hamilton v Al-Fayed (Costs), sub nom Hamilton v Fayed (Costs), Al-Fayed v Hamilton (Costs [2002]  EWCA  Civ 665, [2003]  QB  1175, [2003] 2  WLR  128, [2002] 3  All ER  641, [2002]  CP  Rep 48, [2002] 3 Costs LR  389, [2002]  EMLR  42, (2002) 99(25)  LSG  34, (2002) 146 SJLB 143, CA......................................................................................................6.77 Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065, [2001] All ER (D) 258 (Dec).................................................................................................1.83, 1.84 Hancock v Austin (1863) 14 CBNS 634, 32 LJCP 252, 10 Jur NS 77, 2 New Rep 243, 11 WR 833, 8 LT 429..................................................................................................................................5.163 Hancock v Smith 41 Ch D 456, 58 LJ Ch 725, [1886-90] All ER Rep 306, 61 LT 341, 5 TLR 459, CA...........................................................................................................................................3.47 Hardy Exploration & Production (India) Inc v Government of India [2018] EWHC 1916 (Comm), [2019]  QB  544, [2019] 2 WLR  159, [2018] 2 Lloyd’s Rep 331, [2018] 7 WLUK  587, [2018] 2 CLC 405...............................................................................3.4, 3.11, 3.12, 3.87, 3.88, 4.56 Harlow & Milner Ltd v Teasdale [2006] EWHC 1708 (TCC), [2006] BLR 359, QBD.................4.260 Harman v Glencross [1985] Fam 49, [1984] 2 All ER 577, [1984] 3 WLR 759, [1984] FLR 652, [1984] Fam Law 182, 128 SJ 662, [1984] LS Gaz R 1763, aff’d [1986] Fam 81, [1986] 1 All ER 545, [1986] 2 WLR 637, [1986] 2 FLR 241, [1986] Fam Law 215, 130 SJ 224, [1985] LS Gaz R 870, [1986] NLJ Rep 69, CA...................4.173, 4.177, 4.179, 4.180, 4.182, 4.183, 4.184, 4.187, 4.188, 4.189, 4.208, 4.218, 4.225 Harris v Beauchamp Bros [1894] 1 QB 801, 63 LJQB 480, 9 R 653, 42 WR 451, 70 LT 636, CA............................................................................................ 6.21, 6.23, 6.25, 6.26, 6.27, 6.42, 6.48 Harrison & Bottomley, Re [1899] 1 Ch 465, [1899] 1 WLUK 115.................................................6.132 Hawkins v Gathercole (1852) 1 Drew 12, 21 LJ Ch 617, 16 Jur 650.................. 6.141, 6.142, 6.144, 6.145 Hawks v McArthur [1951] 1 All ER 22, [1950] WN 581, 95 SJ 29, [1951] 1 TLR 308............... 4.36, 4.99 Heathcote v Livesley (1887) 19 QBD 285, 51 JP 471, 56 LJQB 645, 36 WR 127.........................5.325 Helstan Securities v Hertfordshire County Council [1978] 3 All ER 262, [1978] 5 WLUK 96, 76 LGR 735.............................................................................................................................6.59 Heppenstall v Jackson & Barclays Bank Ltd [1939] 1 KB 585, [1939] 2 All ER 10, 108 LJKB 266, 83 SJ 276, 160 LT 261, 55 TLR 489, CA............................................................................. 3.11, 3.40 Hickman v Maisey [1900] 1  QB  752, 69  LJQB  511, 48  WR  385, 44  SJ  326, 82  LT  321, 16 TLR 274, CA.....................................................................................................................2.77 Hirsch v Coates (1856) 18 CB 757, 25 LJCP 315, 4 WR 656, 27 LTOS 202.................................3.111 Hirschorn v Evans [1938] 2 KB 801, [1938] 3 All ER 491, 107 LJKB 756, 82 SJ 664, 159 LT 405, 54 TLR 1069, CA...............................................................................................3.51, 3.52, 3.55, 3.56 Hodder v Williams [1895] 2 QB 663, 59 JP 724, 65 LJQB 70, 14 R 757, 44 WR 98, [1895-9] All ER Rep 1028, 40 SJ 32, 73 LT 394, 12 TLR 24, CA..............................................................5.169 Holder v Supperstone [2000] 1 All ER 473, [1999] 47 LS Gaz R 34, [1999] EGCS 145............. 4.26, 4.28 Hollinshead v Hazleton [1916] 1 AC 428, [1914-15] All ER Rep 1117..........................................3.61 Holmes v Millage [1893] 1 QB 551, 57 JP 551, 62 LJQB 380, 4 R 332, 41 WR 354, 37 SJ 338, 68 LT 205, 9 TLR 331, CA...................................................................... 6.25, 6.30, 6.56, 6.59, 6.104 Holt v Heatherfield Trust Ltd [1942] 2 KB 1, [1942] 1 All ER 404, 111 LJKB 465, 86 SJ 174, 166 LT 251, 58 TLR 274........................................................................................................3.111

xl  Table of Cases Holtby v Hodgson (1889) 24 QBD 103, 59 LJQB 46, 38 WR 68, 62 LT 145, 6 TLR 24, CA.......3.30 Horizon Technologies International Ltd v Lucky Wealth Consultants Ltd [1992] 1 All ER 469, [1992] 1 WLR 24, [1992] 2 LS Gaz R 32, 135 SJ LB 204.....................................................7.21 Hornsby v Greece (Application 18357/91) 24 EHRR 250, [1998] ELR 365, ECtHR....1.129, 4.243, 5.335 Houlditch v Marquess of Donegal, 5 ER 955, (1834) 8 Bli NS 301, KB........................................6.82 Hudson v Fletcher (1909) 12 WLR 15.............................................................................................5.167 Hudson’s Concrete Products Ltd v D B Evans (Bilston) Ltd, (1961) 105 SJ 281...........................4.166 Hulme v Brigham [1943] KB 152, [1943] 1 All ER 204, 112 LJKB 267, 87 SJ 39, 168 LT 7, 59 TLR 109.............................................................................................................................5.25 Hume v Druyff (1873) LR 8 Exch 214, 42 LJ Ex 145, 29 LT 64....................................................1.63 Hunt v Hooper (1844) 1 Dow & L 626, 13 LJ Ex 183, 8 Jur 203, 12 M & W 664, 152 ER 1365, 2 LTOS 425............................................................................................................ 5.313, 5.315, 5.317 Hunt v RM Douglas (Roofing) Ltd [1990] 1 AC 398, [1988] 3 All ER 823, [1988] 3 WLR 975, 132 SJ 1592, [1989] 1 LS Gaz R 40, HL.......................................... 7.16, 7.35, 7.36, 7.37, 7.42, 7.51 Hutchinson v Birch (1812) 4 Taunt 619..................................................................................... 5.171, 5.172 Hyam v Freeman (1890) 35 SJ 87...................................................................................................3.24 I I v K [1884] WN 63......................................................................................................................  6.50, 6.54 IDC Ltd v Marrons [2001] BPIR 600, Ch D............................................................................. 4.152, 4.166 IPC Media Ltd v Highbury Leisure Publishing Ltd (Indemnity Costs) [2005] EWHC 283 (Ch), (2005) 28(3) I.P.D. 28017, Ch D.............................................................................................7.53 Ideal Bedding Co Ltd v Holland [1907] 2 Ch 157...................................6.5, 6.17, 6.18, 6.78, 6.132, 6.139 Ile de Ceylan, The [1922]  P  256, 91  LJP  222, 16 Asp MLC  23, [1922]  All ER  Rep 264, 128 LT 154, 38 TLR 835...................................................................................................... 5.58, 5.61 Interpool Ltd v Galani [1988]  QB  738, [1987] 3  WLR  1042, [1987] 2  All ER  981, [1987] 6 WLUK 270, [1987] 2 FTLR 315, (1987) 137 NLJ 613, (1987) 131 SJ 1392.............. 2.158, 2.193, 2.198, 2.199, 2.200, 2.202, 2.203, 2.205, 2.206, 2.207, 2.209, 2.210, 3.4, 3.75, 3.76, 3.77, 3.79, 4.55, 4.56 Involnert Management Inc v Aprilgrange Ltd [2015]  EWHC  2834 (Comm), [2015] 10 WLUK 230, [2015] 2 CLC 405, [2015] 5 Costs LR 813...................................................7.41 Irani Finance Ltd v Singh [1971] Ch  59, [1970] 3 All ER  199, [1970] 3 WLR  330, 21  P  & CR 843, 114 SJ 636, 215 Estates Gazette 577, CA........................................................4.6, 4.43, 4.44 Islamic Investment Co of the Gulf (Bahamas) Ltd v Symphony Gems NV [2008] EWCA Civ 389, CA............................................................................................................................. 2.229, 2.231 J J Wallis Ltd v Legge Walls (J) Ltd v Legge [1923] 2 KB 240, 92 LJKB 717, 129 LT 129, CA.....6.59 JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [2017] EWCA Civ 267, [2018] 1 WLR 24, [2017] 4 WLUK 259, [2017] BCC 222, [2018] 1 BCLC 165..................1.165 JSC BTA v Ablyazov [2013] EWHC 1361 (Comm), [2013] 4 WLUK 594....................................6.93 JSC BTA  Bank v Ablyazov [2014]  EWHC  2788 (Comm), [2014] 8  WLUK  139, [2014] 2 CLC 263...............................................................................................................................2.115 JSC BTA Bank v Ablyazov [2010] EWCA Civ 1141, [2010] 10 WLUK 429, [2011] Bus LR D119........................................................................................................................................1.69 JSC  Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015]  EWCA  Civ 139, [2016] 1 WLR  160, [2015] 2 All ER (Comm) 816, [2015] 2 WLUK  922, [2015] 1  CLC  238, [2015] WTLR 991, [2015] 2 P & CR DG4.............................................................................2.192 JSC VTB Bank v Skurikhin [2015] EWHC 2131 (Comm), [2015] 7 WLUK 651...... 6.46, 6.53, 6.67, 6.73 Jacobs v Latour (1828) 5 Bing 130, 6 LJOSCP 243, 2 Moo & P 201, 130 ER 1010, [1824-34] All ER Rep 96...............................................................................................................................5.58 James W Elwell, The [1921] P 351, 90 LJP 132, 355, 15 Asp MLC 418, 125 LT 796, 37 TLR 178, 835, 8 Ll L Rep 115............................................................................................................ 5.61, 5.138 Jelks v Hayward [1905] 2 KB 460, 74 LJKB 717, 53 WR 686, 49 SJ 685, 92 LT 692, 21 TLR 527, [1904-7] All ER Rep Ext 1633................................................................................................5.257 Jelle Zwemstra Ltd v Walton & Stuart [1997] CLY 3002...................................4.208, 4.209, 4.211, 4.212 Joachimson v Swiss Bank Corpn [1921] 3 KB 110, 90 LJKB 973, 26 Com Cas 196, [1921] All ER Rep 92, 65 SJ 434, 125 LT 338, 37 TLR 534, CA............................................... 3.42, 3.43, 3.120 Joannis Vatis (No 2), The [1922] P 213, 91 LJP 196, 16 Asp MLC 13, 127 LT 494, 38 TLR 566, 10 Ll L Rep 756...................................................................................................................... 5.61 Johnes v Claughton (1822) Jac 573........................................................................................... 6.142, 6.143 Jolliffe v Willmett & Co [1971] 1 All ER 478, 114 SJ 619..................................................2.69, 2.78, 2.81 Jones & Co v Coventry [1909] 2 KB 1029, 79 LJKB 41, 53 SJ 734, 101 LT 281, 25 TLR 736.....6.59

Table of Cases  xli Jones Bros (Holloway) Ltd v Woodhouse [1923] 2 KB 117, 92 LJKB 638, 67 SJ 518, 129 LT 317, [1923] All ER Rep Ext 734.....................................................................................................5.263 Jones v Atherton (1816) 7 Taunt 56, 2 Marsh 375...........................................................................5.314 Jones v Barnett [1899] 1 Ch 611, 68 LJ Ch 244, 47 WR 493, 80 LT 408.......................................6.127 Jones v Secretary of State for the Department of Energy & Climate Change [2014] EWCA Civ 363, [2014] 3  All ER  956, [2014] 3  WLUK  809, [2014]  CP  Rep 33, [2014] 3 Costs LO 541.........................................................................................................................7.39, 7.56, 7.78 Jones v Thompson (1858) EB & E 63, 27 LJQB 234, 4 Jur NS 338, 6 WR 443, 31 LTOS 80.......3.30 Jones v University of Warwick [2003] EWCA Civ 151, [2003] 3 All ER 760, [2003] 1 WLR 954, 72  BMLR  119, [2003] 11  LS  Gaz R  32, [2003]  NLJR  230, [2003]  PIQR P23, 147  SJ LB 179, [2003] All ER (D) 34 (Feb)............................................................ 2.77, 2.104, 2.106, 2.107, 2.108, 2.110, 2.112 Judgment Debtor (No 2176 of 1938), Re [1939] Ch 601, [1939] 1 All ER 1, 108 LJ Ch 376, [1938-1939] B & CR 154, 83 SJ 93, 160 LT 92, 55 TLR 322................................................6.20 K K v K [1977] Fam 39, [1977] 1 All ER 576, [1977] 2 WLR 55, 120 SJ 782, CA...........................7.35 K v Sweden (Application No 13800/88)........................................................................4.246, 5.336, 5.338 Keightley v Birch (1814) 3 Camp 521.............................................................................................5.247 Kennett v Westminster Improvement Comrs (1855) 25  LJ  Ex 97, 11 Exch 349, 3  WR  597, 3 CLR 1079, 25 LTOS 248.....................................................................................................3.171 Kensington International Ltd v Congo [2007] EWCA Civ 1128, [2008] 1 WLR 1144, [2008] 1 All ER (Comm) 934, [2008] 1 Lloyd’s Rep 161, [2008] CP Rep 6, [2007] 2 CLC 791, (2007) 104(45) LSG 31, CA.....................................................................................1.60, 2.248, 2.250 Kerby v Denby (1836) 5 LJ Ex 162, 2 Gale 31, 1 M & W 336, Tyr & Gr 688...............................5.161 Klamer v Kyriakides & Braier (a firm) [2005] 3 WLUK 62, [2005] BPIR 1142............................3.30 Koch v Mineral Ore Syndicate, London & South Western Bank Ltd, Garnishees (1910) 2 Legal Decisions Affecting Bankers, 54 SJ 600, CA..................................................................... 3.45, 3.103 Kremen v Agrest [2013] EWCA Civ 41, [2013] 2 WLUK 107, [2013] 2 FLR 187, [2013] FCR 181, [2013] BPIR 497, [2013] Fam Law 669.................................................................................4.185 Kuruma, Son of Kaniu v R [1955] AC 197, [1955] 1 All ER 236, [1955] 2 WLR 223, 119 JP 157, 99 SJ 73............................................................................................................................. 2.101, 2.102 Kuwait Airways Corpn v Iraqi Airways Co (disclosure: fraud exception) [2005] EWCA Civ 286, [2005] 1 WLR 2734, [2005] 3 WLUK 513, [2005] CP Rep 32, (2005) 102 (21) LSG 33, (2005) 155 NLJ 468................................................................................................................2.113 Kuwait Airways Coron v Iraq Airways Co [2010] EWCA Civ 741, [2010] 4 WLUK 423............2.156 Kuwait Airways Corpn v Iraqi Airways Co (No 2) Kuwait Airways Corpn v Iraqi Airways Co (No 2) [1995] 1 All ER 790, [1994] 1 WLR 985, [1994] 8 LS Gaz R 38, 138 SJ LB 39, CA......................................................................................................................................... 7.60, 7.63 Kuwait Oil Tanker Co SAK v Al Bader [2008] EWHC 2432 (Comm), [2008] 10 WLUK 444.....7.115 Kuwait Oil Tanker Co SAK v Qabazard [2003] UKHL 31, [2004] 1 AC 300, [2003] 2 All ER (Comm) 101, [2003] 3 All ER 501, [2003] 3 WLR 14, [2003] 28 LS Gaz R 32, 147 SJ LB 750, [2003] All ER (D) 167 (Jun)........................................................ 2.219, 3.4, 3.77, 3.82, 4.56 Kwok Chi Leung Karl v Comr of Estate Duty [1988] 1 WLR 1035, [1988] STC 728, [1988] 7 WLUK 121, (1988) 85 (33) LSG 44, (1988) 132 SJ 1118..................................................3.87 L LR Avionics Technologies Ltd v Federal Republic of Nigeria [2016] EWHC 1761 (Comm)........1.114 Lancaster Motor Co (London) Ltd v Bremith Ltd [1941] 1  KB  675, [1941] 2  All ER  11, 110 LJKB 398, [1940-1] B & CR 24, 165 LT 134, 57 TLR 418, CA.................................... 3.183 Lane v Stern (1862) 3 Giff 629, 9 Jur NS 320, 10 WR 555....................................................... 6.142, 6.145 Leader, The (1868) LR 2 A & E 314, 37 LJ Adm 57, 3 Mar LC 118, 17 WR 61, 18 LT 767.........3.157 Lee (George) & Sons (Builders) Ltd v Olink [1972] 1 All ER 359, [1972] 1 WLR 214, 116 SJ 102, CA..................................................................................................................................... 3.182, 4.149 Lee v Gansel (1774) 1 Cowp 1, Lofft 374, 98 ER 935, [1558-1774] All ER Rep 465............. 5.163, 5.169, 5.170 Legg v Evans (1840) 4 JP 123, 8 Dowl 177, 9 LJ Ex 102, 4 Jur 197, 6 M & W 36, 151 ER 311, [1835-42] All ER Rep 472......................................................................................................5.58 Leicester Circuits Ltd v Coates Brothers plc [2002] EWCA Civ 474.............................................1.82 Levasseur v Mason & Barry [1891] 2 QB 73, 60 LJQB 659, 39 WR 596, 64 LT 761, 7 TLR 436, CA................................................................................................................. 6.18, 6.104, 6.131, 6.132 Levermore v Levermore [1980] 1 All ER 1, [1979] 1 WLR 1277, 1 FLR 375, 10 Fam Law 87, 123 SJ 689...............................................................................................................................6.91

xlii  Table of Cases Linden Garden Trust v Lenesta Sludge Disposals [1994] 1 AC 85, [1993] 3 WLR 408, [1993] 3 All ER 417, [1994] 7 WLUK 264, 63 BLR 1, 36 Con LR 1, [1993] EG 139 (CS), (1993) 143 NLJ 1152, (1993) 137 SJLB 183.....................................................................................6.59 Llewellin v Llewellin [1985] CA Bound Transcript 640.................................................................4.182 Lloyd v Sandilands (1818) 8 Taunt 250, 2 Moore CP 207..............................................................5.169 Lloyd v Svenby (Costs) [2006] EWHC 576, QBD..........................................................................7.53 Lloyd, Re (1879) 12 Ch D 447, [1879] 7 WLUK 13.................................................................6.162, 6.163 Lloyd’s Bank Ltd v Medway Upper Navigation Co [1905] 2 KB 359, 74 LJKB 851, 54 WR 41, [1904-7] All ER Rep 433, 93 LT 224......................................................................................6.116 Lloyds & Scottish Finance Ltd v Modern Cars & Caravans (Kingston) Ltd [1966] 1 QB 764, [1964] 2 All ER 732, [1964] 3 WLR 859, 108 SJ 859........................5.59, 5.127, 5.132, 5.133, 5.135 Lloyds Bank plc v Byrne [1993] 2 FCR 41, [1993] 1 FLR 369, [1993] Fam Law 183, 23 HLR 472, CA............................................................................................................... 4.226, 4.228, 4.234, 4.235 London Corp v Cox (1867) LR 2 HL 239, HL................................................................................3.3 London Permanent Benefit Building Society v de Baer [1969] 1 Ch 321, [1968] 1 All ER 372, [1968] 2 WLR 465, 19 P & CR 143, 111 SJ 946, 205 Estates Gazette 105...........................1.94 London Tara Hotel Ltd v Kensington Close Hotel Ltd (Costs) [2011] EWHC 29 (Ch), [2011] 1 WLUK 132, [2011] 2 Costs LO 197....................................................................................7.42 Long v Clarke [1894] 1 QB 119, 58 JP 150, 63 LJQB 108, 9 R 60, 42 WR 130, [1891-4] All ER Rep 1145, 38 SJ 55, 69 LT 564, 10 TLR 71, CA........................................................ 5.161, 5.163 Lonrho Ltd v Shell Petroleum Co Ltd [1980]  QB  358, [1980] 2  WLR  367, 124  SJ  205, 130 NLJ 393, CA.................................................................................................................... 2.4 Loson v Stack [2018] EWCA Civ 803, [2018] 4 WLUK 211, [2018] BPIR 1085.........................1.89 Loughlin v Singh [2014] EWHC 912 (Admin), [2014] 3 WLUK 732............................................7.10 Lowsley v Forbes (t/a LE  Design Services) [1999] 1 AC  329, [1998] 3 All ER  897, [1998] 3 WLR 501, [1998] 2 Lloyd’s Rep 577, [1998] NLJR 1268, 142 SJ LB 247, [1998] All ER (D) 382, HL................................................ 1.99, 1.100, 5.66, 5.81, 7.110, 7.111, 7.113, 7.114, 7.118 Lucas v Harris (1886) 18 QBD 127, 51 JP 261, 56 LJQB 15, 35 WR 112, 55 LT 658, 3 TLR 106, CA...........................................................................................................................................6.59 Lucas v Lucas & High Comr for India [1943] P 68, [1943] 2 All ER 110, 112 LJP 84, 87 SJ 193, 168 LT 361, 59 TLR 281........................................................................................................3.61 Lucas v Nockells (1833) 10 Bing 157, 7 Bli NS 140, 1 Cl & Fin 438, 3 Moo & S 627, HL..........5.127 Lucas v Peacock (1846) 9 Beav 177................................................................................................4.283 Lucy v Wood [1884] WN 58............................................................................................................3.26 M MWP v Emmott see Michael Wilson & Partners Ltd v Emmott McCusker v McRae 1966 SC 253, [1966] 7 WLUK 72..................................................................2.38 MacDonald v Tacquah Gold Mines Co (1884) 13  QBD  535, 53  LJQB  376, 32  WR  760, 51 LT 210, CA............................................................................................3.49, 3.50, 3.51, 3.55, 3.56 MacInnes v Gross [2017] EWHC 127 (QB), [2017] 4 WLR 49, [2017] 2 WLUK 125, [2017] 2 Costs LR 243..........................................................................................................................7.44 McKennitt v Ash, sub nom Ash v McKennitt [2006] EWCA Civ 1714, [2008] QB 73, [2007] 3 WLR 194, [2007] EMLR 4, (2007) 151 SJLB 27, CA........................................................2.87 Mackinnon v Donaldson, Lufkin & Jenrette Securities Corpn [1986] Ch  482, [1986] 1  All ER 653, [1986] 2 WLR 453, 130 SJ 224.............................................................................2.198, 3.89 Maclaine Watson & Co Ltd v International Tin Council [1988] Ch 1, [1987] 3 All ER 787, [1987] 3 WLR 508, [1987] BCLC 653, 3 BCC 346, 131 SJ 1062, [1987] LS Gaz R 2764...........6.28, 6.30, 6.34, 6.42, 6.56, 6.74, 6.76, 6.77 Maclaine Watson & Co Ltd v International Tin Council (No  1) [1989] Ch  253, [1988] 3 WLR 1169, [1988] 3 All ER 257, (1988) 4 BCC 659, (1988) 132 SJ 1495, CA................6.77 Maclaine Watson & Co Ltd v International Tin Council (No  2) [1987] 1 WLR  1711, [1987] 3 All ER 886, [1987] BCLC 653, (1988) 85(2) LSG 36, (1987) 131 SJ 1659 , aff’d [1989] Ch 286, CA.................................................................................................2.149, 2.150, 2.152, 2.205 McLeod v Butterwick, sub nom Khazanchi v Faircharm Investments Ltd [1996] 1 WLR 995, [1996] 3 All ER 236 , aff’d [1998] 1 WLR 1603, [1998] 2 All ER 901, (1999) 77 P & CR 29, [1998] 3 EGLR 147, [1999] RVR 190, [1998] EG 46 (CS), (1998) 95(17) LSG 31, (1998) 148 NLJ 479, (1998) 142 SJLB 142, [1998] NPC 47, (1998) 76 P & CR D8..........5.5, 5.161 Macnicoll v Parnell (1887) 35 WR 773...........................................................................................6.78 McPherson v Temiskaming Lumber Co Ltd [1913]  AC  145, 82  LJPC  113, 107  LT  664, 29 TLR 80..........................................................................................................................5.127, 5.138 McPhilemy v Times Newspapers Ltd [2001]  EWCA  Civ 933, [2001] 4 All ER  861, [2002] 1 WLR 934, [2001] EMLR 858, [2001] All ER (D) 200 (Jun)............................................. 7.78, 7.81 Mahtani v Sippy [2013] EWCA Civ 1820, [2013] 9 WLUK 581...................................................1.85

Table of Cases  xliii Maidstone Palace of Varieties Ltd, Re. See Palace of Varieties Ltd, Re, Blair v Maidstone Palace of Varieties Ltd Manchester & Liverpool District Banking Co v Parkinson (1888) 22 QBD 173, 58 LJQB 262, 37 WR 264, 5 TLR 135, CA............................................................................... 1.70, 6.34, 6.39, 6.40 Manchester & Milford Rly Co, Re, ex p Cambrian Rly Co (1880) 14 Ch D 645, 49 LJ Ch 365, 42 LT 714, CA........................................................................................................................6.9 Manchester City Council v Pinnock [2010] UKSC 45, [2011] 2 AC 104, [2010] 3 WLR 1441, [2011] 1  All ER  285, [2011]  PTSR  61, [2010] 11  WLUK  96, [2011]  HRLR  3, [2010]  UKHRR  1213, 31  BHRC  670, [2011  HLR  7, [2010]  BLGR  909, [2011]  L  & TR 2, [2010] 3 EGLR 113, [2010] 45 EG 93 (CS), (2010) 107 (44) LSG 16, (2011) 108 (8) LSG 20, (2010) 154 (42) SJLB 30, [2010] NPC 109........................................................4.255 Manning Wanless Building Supplies Ltd v Puskas & Flemke (1962) 39 WWR 672 (Can).......... 6.44, 6.92 Mapleson v Sears (1911) 56 SJ 54, 105 LT 639, 28 TLR 30...........................................................3.58 Marathon Asset Management LLP v Seddon [2017] EWHC 479 (Comm), [2017] 3 WLUK 341, [2017] 2 Costs LR 255............................................................................................................7.44 Marine & General Mutual Life Assurance Society v Feltwell Fen Second District Drainage Board [1945] KB 394, 109 JP 114, 114 LJKB 94, 172 LT 100..............................................1.91 Marley Tile Co Ltd v Burrows [1978]  QB  241, [1978] 1  All ER  657, [1977] 3  WLR  641, 121 SJ 153, CA.......................................................................................................................1.178 Marshall v James [1905] 1 Ch 432, 74 LJ Ch 279, 53 WR 363, 49 SJ 259, 92 LT 681..................3.191 Martin v McGuiness 2003 SLT 1136, 2003 SLCR 998, OH...........................................................2.112 Martin v Nadel [1906] 2 KB 26, 75 LJKB 620, 54 WR 525, 95 LT 16, 22 TLR 561, CA.............3.73 Masri v Consolidated Contractors [2008] EWCA Civ 876, CA......................... 2.127, 2.141, 2.144, 2.156, 2.206, 2.220 Masri v Consolidated Contractors International Co SAL  [2008]  EWCA  Civ 876, [2009] 2  WLR  699, [2009] Bus LR  246, [2009] 1 Lloyd’s Rep 42, [2008] 7  WLUK  856, [2008]  CP  Rep 42, [2008] 2  CLC  126, [2009]  IL  Pr 9, [2008]  BPIR  1524, rev’sd [2009]  UKHL  43, [2010] 1 AC  90, [2009] 3  WLR  385, [2009] 4 All ER  847, [2010] 1  All ER (Comm) 220, [2009] Bus LR  1269, [2009] 2 Lloyd’s Rep 473, [2009] 7 WLUK 807, [2009] CP Rep 47, [2010] BCC 25, [2009] 2 BCLC 382, [2009] 2 CLC 366, [2009] BPIR 1029, (2009) 159 NLJ 1137, (2009) 159 NLJ 1250........................ 2.127, 2.141, 2.144, 2.156, 2.158 Masri v Consolidated Contractors International Co SAL [2007] EWHC 3010 (Comm), [2008] 1 All ER (Comm) 305, [2007] 12 WLUK 609, [2008] IL Pr 14, aff’d [2008] EWCA Civ 303, [2009] QB 450, [2009] 2 WLR 621, [2009] Bus LR 168, [2008] 2 Lloyd’s Rep 128, [2008] 4 WLUK 119, [2008] CP Rep 28, [2008] 1 CLC 657, [2008] IL Pr 37, [2008] BPIR 531, CA..............................................................1.59, 1.62, 2.206, 2.220, 6.6, 6.19, 6.30, 6.31, 6.35, 6.42, 6.61, 6.65, 6.68, 6.70, 6.80, 6.83, 6.85, 6.125, 6.132 Masri v Consolidated Contractors International Co SAL [2008] EWHC 2492 (Comm), [2008] 10 WLUK 512..................................................................................................... 6.38, 6.39, 6.42, 6.86 Maudslay, Sons & Field, Re [1990] 1 Ch 602...............................................................................6.82, 6.83 Mercantile Credit Co Ltd v Ellis [1987] 3 WLUK 133...................................................................4.193 Mercantile Credit Co Ltd v Huxtable (The Times, 1 April 1987), (The Independent, 17 March 1987).......................................................................................................................................4.193 Mercantile Group (Europe) AG  v Aiyela [1994]  QB  366, [1994] 1  All ER  110, [1993] 3 WLR 1116, CA....................................................................................................................1.60 Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniia Nafrogaz Ukrainy [2014] EWCA Civ 1603, [2014] 12 WLUK 326, [2015] 1 CLC 1........................... 3.11, 3.29, 3.101 [2015] EWHC 1930 (Comm)...........................................................................................................6.69 Mesher v Mesher & Hall [1980] 1 All ER 126n, CA.......................................... 4.182, 4.187, 4.188, 4.258 Michael Wilson & Partners Ltd v Emmott [2019] EWCA Civ 219, [2019] 4 WLR 63, [2019] 4 All ER 1054, [2019] All ER (Comm) 761, [2019] 2 WLUK 374, [2019] 1 CLC 303........1.62 Michael Wilson & Partners Ltd v Sinclair (No 2) [2017] EWCA Civ 55, [2017] 1 WLR 3069, [2017] 2 WLUK 156, [2017] 1 CLC 161, [2017] BLR 125...................................................1.87 Middleton v Chichester (1871) 6 Ch App 152, 40 LJ Ch 237, 19 WR 369, 24 LT 173..................1.14 Midland Bank plc v Pike [1988] 2 All ER 434, Ch D.....................................................................4.221 Midtown Acquisitions LP  v Essar Global Fund Ltd [2018]  EWHC  789 (Comm), [2018] 1 WLUK 137...........................................................................................................................4.170 Midtown Acquisitions LP  Essar Global Fund Ltd [2017]  EWHC  2206 (QB), [2017] 8 WLUK 319.......................................................................................................................5.50, 5.174 Mikki v Duncan [2017]  EWCA  Civ 57, [2017] 1  WLR  2907, [2017] 2  WLUK  110, [2017] BPIR 490.....................................................................................................................5.30 Miliangos v George Frank (Textiles) Ltd [1976] AC 443, [1975] 3 All ER 801, [1975] 3 WLR 758, [1975] 2 CMLR 585, [1976] 1 Lloyd’s Rep 201, 119 SJ 774........................................... 1.6, 1.8, 1.9

xliv  Table of Cases Miller v Mynn (1859) 1 E & E 1075, 28 LJQB 324, 5 Jur NS 1257, 7 WR 524, 33 LTOS 184.....3.54 Miller v Tebb (1893) 9 TLR 515, CA..............................................................................................5.163 Mitchell v Lee (1867) LR 2 QB 259, 8 B & S 92, 36 LJQB 154, 15 WR 337, 15 LT 502, QB......3.25 Moffat v Lemkin (formerly High Sheriff of Greater London) (unreported, 24 November 2003)...5.32, 5.33, 5.35 Monte Developments Ltd (in administration) v Court Management Consultants Ltd [2010] EWHC 3071 (Ch), [2011] 1 WLR 1579, [2010] 11 WLUK 769, [2011] 1 BCLC 368, [2011] 2 Costs LO 163............................................................................................................4.23 Moore v Peachey (1892) 66 LT 198................................................................................................3.191 Morgan v Hart [1914] 2 KB 183, 83 LJKB 782, 110 LT 611, 30 TLR 286, CA.......6.18, 6.25, 6.34, 6.132 Morris v Salberg (1889) 22  QBD  614, 53  JP  772, 58  LJQB  275, 37  WR  469, 61  LT  283, 5 TLR 376, CA.......................................................................................................................5.100 Mortgage Corp Ltd v Shaire, Mortgage Corp Ltd v Lewis Silkin (a firm) [2001] Ch 743, [2001] 4 All ER 364, [2001] 3 WLR 639, 80 P & CR 280, [2000] 2 FCR 222, [2000] 1 FLR 973, [2000] Fam Law 402, [2000] 3  EGLR  131, [2000] 11  LS  Gaz R  37, [2000]  EGCS  35, [2000] BPIR 483, [2000] All ER (D) 254...................................................4.233, 4.236, 4.237, 4.239 Mosley v News Group Newspapers Ltd [2008] EWHC 1777 (QB), (2008) 158 NLJ 1112, QBD.2.87 Mubarak v Mubarak [2002]  EWHC  2171, (Fam), [2002]  EWHC  2171 (Fam), [2003] 2 FLR 553...................................................................................................2.138, 2.181, 2.184, 2.224 Murphy v Young & Co’s Brewery plc & Sun Alliance & London Insurance plc [1997] 1 All ER 518, [1997] 1 WLR 1591, [1997] 1 Lloyd’s Rep 236, CA...............................................6.77 Mustard v Flower [2019] EWHC 2623 (QB), [2019] 10 WLUK 167.............................................2.111 N Nash v Lucas (1867) LR 2 QB 590, 32 JP 23, 8 B & S 531...................................................... 5.161, 5.163 National Crime Agency v Dong [2017] EWHC 3116 (Ch), [2017] 12 WLUK 157, [2018] Lloyd’s Rep FC 28, [2018] BPIR 477, [2018] 1 P & CR DG20.........................................................4.141 National Guild of Removers & Storers Ltd v Jones [2012] EWCA Civ 216..................................4.140 National Westminster Bank Ltd v Allen [1971] 2  QB  718, [1971] 3  All ER  201, [1971] 3 WLR 495, 22 P & CR 1081, 115 SJ 688, 221 Estates Gazette 149................................... 4.42, 4.43 National Westminster Bank plc v Powney [1991] Ch  339, [1990] 2  All ER  416, [1990] 2 WLR 1084, 60 P & CR 420, 134 SJ 285, CA...........................................................5.66, 5.67, 5.69 National Westminster Bank plc v Rushmer [2010]  EWHC  554 (Ch), [2010] 3  WLUK  570, [2010] 2 FLR 362, [2010] Fam Law 590................................................................................4.254 Nationwide Building Society v Wright [2009]  EWCA  Civ 811, [2010] Ch  318, [2010] 2  WLR  1097, [2009] 7  WLUK  760, [2009] 2  BCLC  695, [2009]  BPIR  1047, [2009] 3 EGLR 39, [2009] 40 EG 132, [2009] 31 EG 73 (CS), [2009] NPC 102.......................4.166, 4.213 Nelson v Greening & Sykes (Builders) Ltd [2007] EWCA Civ 1358, [2008] 8 EG 158, (2007-08) 10 ITELR 689.........................................................................................................................4.54 Newman v Rook (1858) 23 JP 296, 4 CBNS 434........................................................... 3.151, 3.165, 4.149 Nightingale Mayfair Ltd v Mehta [1999] All ER (D) 1501........................................................4.141, 4.148 Ninemia Maritime Corpn v Trave Schiffahrtsgesellschaft mbH & Co KG, The Niedersachen [1984] 1 All ER  398, [1983] 1 WLR  1412, [1983] 2 Lloyd’s Rep 600, [1984]  LS  Gaz R 198, CA...............................................................................................................................3.57 Nitrate Producers Steamship Co v Short Bros Ltd (No 2), sub nom Nitrate Producers SS Co v Short Bros Ltd [1922] All ER Rep 710, (1922) 12 Ll L Rep 1, (1922) 127 LT 726, HL.......7.31 Nixon v Freeman (1860) 5 H&N 647..............................................................................................5.163 North Shore Ventures Ltd v Anstead Holdings Inc [2012] EWCA Civ 11, [2012] 1 WLUK 271, [2012] WTLR 1241, (2012) 109 (8) LSG 16.................................................................... 2.190, 2.191 Nova Productions Ltd v Mazooma Games Ltd (Interest on Costs), Nova Productions Ltd v Bell Fruit Games Ltd (Interest on Costs) [2006]  EWHC  189 (Ch), [2006]  RPC  15, (2006) 29(3) IPD 29024, Ch D...........................................................................................................7.53 Novoship (UK) Ltd v Mikhaylyuk [2013] EWHC 89 (Comm), [2013] 1 WLUK 305................. 7.17, 7.75 Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1998] 1 All ER 305, [1997] 1 WLR 1627, [1998] 01 LS Gaz R 24, [1998] 05 EG 150, 142 SJ LB 29, 75 P & CR D28, HL.........................................................................................................................................7.29, 7.62 O Oak Co-operative Building Society v Blackburn [1968] Ch 730, [1968] 2 All ER 117, [1968] 2 WLR 1053, 19 P & CR 375, 112 SJ 172, 205 Estates Gazette 1101, CA..................... 4.115, 4.116 O’Brien v Killeen [1914] 2 Ir R 63..................................................................................................3.191 O’Connor v Amos Bridgman Abattoirs Ltd (The Times, 13 April 1990)........................................7.8

Table of Cases  xlv O’Driscoll v Manchester Insurance Committee [1915] 3  KB  499, 13  LGR  1156, 79  JP  553, 85 LJKB 83, 59 SJ 597, 113 LT 683, 31 TLR 532, CA.............................3.11, 3.26, 3.27, 3.28, 3.29, 3.31, 3.32, 3.36, 3.60, 3.96 O’Neill v Avic International Corpn (UK) Ltd [2019] EWHC 374 (QB), [2019] 2 WLUK 395.....7.54 O’Rourke v Darbishire [1920] AC 581, 89 LJ Ch 162, [1920] All ER Rep 1, 64 SJ 322, 123 LT 68, 36 TLR 350, HL......................................................................................................................2.114 Orwell Steel (Erection & Fabrication) Ltd v Asphalt & Tarmac (UK) Ltd [1985] 3 All ER 747, [1984] 1 WLR 1097, 128 SJ 597, [1984] LS Gaz R 2935.................................................... 1.60, 1.61 Oshawa v Brennan Paving Co [1955] 1 DLR 321...........................................................................3.37 Otkritie International Investment Management Ltd v Urumov [2014]  EWHC  755 (Comm), [2014] 3 WLUK 418...............................................................................................................1.83 Overseas Aviation Engineering (GB) Ltd, Re [1963] Ch  24, [1962] 3  All ER  12, [1962] 3 WLR 594, CA...................................................................................................4.5, 4.7, 4.135, 6.175 Oyston v Asker [2018] EWHC 608 (QB), [2018] 3 WLUK 292.......................5.156, 5.157, 5.158, 5.159, 5.160, 5.174, 5.179, 5.223 P Packman Lucas Ltd v Mentmore Towers Ltd [2010] EWHC 1037 (TCC), [2010] 5 WLUK 298, [2010] BLR 465, [2011] Bus LR D37................................................................... 4.192, 4.223, 4.260 Palace of Varieties Ltd, Re, Blair v Maidstone Palace of Varieties Ltd [1909] 2 Ch  283, 78 LJ Ch 739, 16 Mans 260, [1908-10] All ER Rep 678, 101 LT 458...................................6.144 Palmer, Re, ex p Richdale (1882) 19 Ch D 409, 51 LJ Ch 462, 30 WR 262, 46 LT 116, CA.........3.119 Panamena Europea Navigacion (Compania Ltda) v Frederick Leyland & Co Ltd (J Russell & Co) [1947] AC 428, [1947] LJR 716, 176 LT 524, HL..........................................................3.37 Paquine v Snary [1909] 1 KB 688, 78 LJKB 361, 100 LT 220, 25 TLR 212..................................6.59 Parbola Ltd, Re, Blackburn v Parbola Ltd [1909] 2 Ch  437, 78  LJ  Ch  782, 53  SJ  697, 101 LT 382........................................................................................................................ 6.104, 6.130 Parker v Camden London Borough Council, Newman v Camden London Borough Council [1986] Ch  162, [1985] 2  All ER  141, [1985] 3  WLR  47, 84  LGR  16, 17  HLR  380, 129 SJ 417, [1985] LS Gaz R 2334, CA...............................................................................6.26, 6.27 Parker v Pocock (1874) 30 LT 458..................................................................................................6.141 Parr v Tiuta International [2016] EWHC 2 (QB), [2016] 1 WLUK 73...........................................7.98 Parsons v Mather & Platt Ltd [1977] 2 All ER 715, [1977] 1 WLR 855, 121 SJ 204................7.107, 7.108 Patel v Singh [2002] EWCA Civ 1938, [2002] All ER (D) 227 (Dec)................................. 5.69, 5.70, 5.71 Payne v Drewe 4 East 523, 1 Smith KB 170, 102 ER 931, [1803-13] All ER Rep 744..................5.127 Peake v Carter [1916] 1 KB 652, 85 LJKB 761, [1914-15] All ER Rep 586, 114 LT 273, CA......5.45 Pearce, Re, ex p Official Receiver, Trustee [1919] 1 KB 354, 88 LJKB 367, [1918-1919] B & CR 131, 120 LT 334, [1918-19] All ER Rep Ext 1324, CA...................................................1.164 Peck v Craighead [1995] 1 BCLC 337, [1995] BCC 525............................................... 1.157, 1.161, 5.139 Pelling v Bow County Court [2005] EWCA Civ 384......................................................................2.162 Perkes v Landon (1988) 15 NSWLR 408 (NSW Sup Ct)...............................................................6.145 Perry v Phoenix Assurance plc [1988] 3  All ER  60, [1988] 1  WLR  940, 56  P  & CR  163, 132 SJ 1147, [1988] 33 LS Gaz R 42..............................................................................  4.108, 4.113 Philis v Greece (Applications 12750/87, 13780/88 & 14003/88) (1991) 13 EHRR 741, ECtHR...1.129 Pickering v Wells [2002]  EWHC  273 (Ch), [2002] 2  FLR  798, [2002]  All ER (D) 281 (May)................................................................................................ 4.220, 4.230, 4.234, 4.250, 4.253 Pirtek (UK) Ltd v Deanswood Ltd [2005]  EWHC  2301 (Comm), [2005] 2 Lloyd’s Rep 728, QBD........................................................................................................................................7.105 Pluczenik Diamond Co NV v W Nagel (a firm) [2019] EWHC 3126 (QB), [2019] 11 WLUK 358, [2019] Costs LR 2117.......................................................................................................2.131, 2.181 Popple v Sylvester (1882) 22 Ch D 98, 52 LJ Ch 54, 31 WR 116, 47 LT 329.............................. 7.85, 7.89 Potts, Re, ex p Taylor [1893] 1  QB  648, 62  LJQB  392, 10 Morr 52, 4  R  305, 41  WR  337, 37 SJ 306, 69 LT 74, 9 TLR 308, [1891-4] All ER Rep Ext 1544, CA.................. 6.18, 6.104, 6.126, 6.135, 6.176, 6.177 Powell v Herefordshire Health Authority [2002]  EWCA  Civ 1786, [2003] 3  All ER  253, [2002] All ER (D) 415 (Nov)................................................................................................ 7.49, 7.50 Power Curber International Ltd v National Bank of Kuwait SAK [1981] 1 WLR 1233, [1981] 3 All ER 607, [1981] 2 Lloyd’s Rep 394, [1981] 6 WLUK 138, [1981] Com LR 224..........3.86 Practice Direction (Judgment: Foreign Currency) [1976] 1 WLR 83............................................4.56, 5.89 Pritchard v Westminster Bank Ltd[1969] 1  All ER  999, [1969] 1  WLR  547, 113  SJ  142, CA..................................................................................................................................... 3.177, 3.180 Proctor v Nicholson (1835) 7 C & P 67...........................................................................................5.58 Property & Bloodstock Ltd v Emerton, Bush v Property & Bloodstock Ltd [1968] Ch 94, [1967] 3 All ER 321, [1967] 3 WLR 973, 111 SJ 414, 202 Estates Gazette 1223, CA.....................4.266

xlvi  Table of Cases Prudential Assurance Co Ltd v McBains Cooper (a firm) [2001] 3  All ER  1014, [2000] 1 WLR 2000, [2000] NLJR 832, [2000] All ER (D) 715, CA................................................7.11 Pugh v Griffith (1838) 7 Ad & El 827, 7 LJQB 169, 2 Jur 614, 3 Nev & PKB 187, 112 ER 681...5.173 Purdy v Cambran [1999] All ER (D) 1518, CA...............................................................................1.213 R R v Bird (1679) 2 Show 87..............................................................................................................5.171 R v Cox & Railton 14 QBD 153, 49 JP 374, 54 LJMC 41, 15 Cox CC 611, 33 WR 396, [18815] All ER Rep 68, 52 LT 25, 1 TLR 181.................................................................................2.115 R v Grossman (1981) 73 Cr App R 302, [1981] Crim LR 396, CA............................................ 3.89, 3.136 R v Leatham 25 JP 468, 3 E & E 658, 30 LJQB 205, 8 Cox CC 498, 7 Jur NS 674, 9 WR 334, 3 LT 777, [1861-73] All ER Rep Ext 1646.............................................................................2.102 R  v Nugent [1977] 3  All ER  662, [1977] 1  WLR  789, 65 Cr App Rep 40, 141  JP  702, 121 SJ 286...............................................................................................................................2.69 R v Shamji (1989) 11 Cr App Rep (S) 587, CA..............................................................................2.243 R (on the application of Bempoa) v London Borough of Southwark [2002] EWHC 153 (Admin), [2002] All ER (D) 178 (Feb)...................................................................................................5.159 R (on the application of Ram) v Secretary of State for the Home Department [2004] EWHC 1, [2004] PIQR P28, QBD..........................................................................................................1.108 Rainbow v Moorgate Properties Ltd [1975] 2 All ER  821, [1975] 1  WLR  788, 119  SJ  274, CA.................................................................................3.168, 3.179, 4.87, 4.153, 4.157, 4.159, 4.166 Raja v Van Hoogstraten [2018] EWHC 3261 (Ch), [2018] 11 WLUK 496....................................1.94 Rambus Inc v Hynix Semiconductor UK Ltd (formerly Hyundai Electronics UK Ltd), Rambus Inc v Micron Europe Ltd [2004] EWHC 2313 (Pat), [2005] FSR 19, (2005) 28(1) IPD 27114, Ch D...................................................................................................................................... 7.45, 7.53 Ranfield v Ranfield (1860) 1 Dr & AM 310....................................................................................6.141 Rank Film Distributors Ltd v Video Information Centre (a firm) [1982] AC 380, [1980] 2 All ER 273, [1980] 3 WLR 487, [1980] FSR 242, 124 SJ 757, CA.............................................2.71 Ratcliffe v Burton (1802) 3 Bos & P 223, 127 ER 123...................................................................5.171 Reed v Harrison (1778) 2 Wm Bl 1218...........................................................................................5.188 Reichert v Dresdner Bank AG (No 2): C-261/90 [1992] ECR I-2149, ECJ.............................. 2.217, 2.219 Rekstin v Severo Sibirsko Gosudarstvennoe Akcionernoe Obschestvo Komseverputj & Bank for Russian Trade Ltd [1933] 1 KB 47, 102 LJKB 16, [1932] All ER Rep 534, 76 SJ 494, 147 LT 231, 48 TLR 578, CA.................................................................................. 3.42, 3.120, 3.121 Republic of Costa Rica v Strousberg (1880) 16 Ch D 8, 50 LJ Ch 7, 29 WR 179, 43 LT 399, CA.............................................................................. 2.175, 2.176, 2.177, 2.178, 2.179, 2.180, 2.181 Reyes v Al-Malki [2017] UKSC 61, [2019] AC 735, [2017] 3 WLR 923, [2018] 1 All ER 629, [2017] 10 WLUK 394, [2017] ICR 1417, [2018] IRLR 267..................................................1.118 Richards v IP Solutions Group [2016] EWHC 2599 (QB), [2016] 11 WLUK 773........................7.54 Richardson v Richardson [1927]  P  228, 96  LJP  125, [1927]  All ER  Rep 92, 71  SJ  695, 137 LT 492, 43 TLR 631.......................................................3.73, 3.74, 3.75, 3.79, 3.80, 3.81, 3.117 Ridout v Fowler [1904] 1 Ch 658, 73 LJ Ch 325, 90 LT 147, aff’d [1904] 2 Ch 93, CA.......... 6.58, 6.126, 6.132, 6.155 Rihan v Ernst & Young Global [2020] EWHC 1380 (QB), [2020] 6 WLUK 79............................7.17 Roberts v Death 8 QBD 319, 51 LJQB 15, 30 WR 76, [1881-5] All ER Rep 849, 46 LT 246... 3.47, 3.166 Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 2 AC  192, [1983] 1 All ER  564, [1983] 2  WLR  305, [1983] Com LR  564, [1983]  BCLC  28, 127  SJ  138, HL, rvsg Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 2  AC  192, [1982] 1  All ER  685, [1982] 1 WLR 301, 126 SJ 81, CA............................. 1.157, 3.151, 3.168, 3.169, 3.179, 3.180, 3.181, 4.84, 4.88, 4.139, 4.140, 4.144, 4.152, 4.153, 4.154, 4.155, 4.160, 4.161, 4.164, 4.165, 4.168, 4.173, 4.180, 4.203, 4.210, 4.271, 4.272 Robinson v Bailey [1942] Ch  268, [1942] 1  All ER  498, 111  LJ  Ch  161, 86  SJ  105, 166 LT 216................................................................................................................4.31, 4.190, 4.191 Robinson v Peace (1838) 7 Dowl 93, 2 Jur 896..............................................................................5.20 Robson v Smith [1895] 2 Ch 118, 64 LJ Ch 457, 2 Mans 422, 13 R 529, 43 WR 632, 72 LT 559, 11 TLR 351.............................................................................................................................1.167 Rocco Giuseppe & Figli v Tradax Export SA [1984] 1 WLR 742, [1983] 3 All ER 598, [1983] 2 Lloyd’s Rep 434, (1984) 81 LSG 1518, (1983) 133 NLJ 868, (1984) 128 SJ 243, QBD......7.77 Rodwell v Phillips (1842) 1 Dowl NS 885, 11 LJ Ex 217, 9 M & W 501......................................5.52 Rogers v Whiteley [1892]  AC  118, 61  LJQB  512, [1891-4]  All ER  Rep 682, 66  LT  303, 8 TLR 418, HL..................................................................................................................3.115, 3.121 Ropaigealach v Allied Irish Bank [2001]  EWCA  Civ 1790, [2001] 47  EGCS  146, [2002] 03 EG 130, [2001] All ER (D) 174 (Nov), CA................................ 4.155, 4.165, 4.194, 4.196, 4.203

Table of Cases  xlvii Rosseel NV v Oriental Commercial & Shipping Co (UK) Ltd [1991] 2 Lloyd’s Rep 625, rev’sd [1991] EG 94 (CS), CA....................................................................................................4.148, 4.150 Royal Bank of Scotland v Etridge (No 2) & other appeals, Barclays Bank plc v Coleman, Bank of Scotland v Bennett, Kenyon-Brown v Desmond Banks & Co (a firm) [2001] UKHL 44, [2002] 2 AC 773, [2001] 4 All ER 449, [2001] 2 All ER (Comm) 1061, [2001] 3 WLR 1021, [2002] 1 P & Cr D25, [2002] 1 Lloyd’s Rep 343, [2001] 3 FCR 481, [2001] 2 FLR 1364, [2001] Fam Law 880, [2001]  NLJR  1538, [2001] 43  EGCS  184, [2001] 5  LRC  684, [2001] All ER (D) 156 (Oct)...................................................................................................4.258 Royal Oak Property Co Ltd v Iktilat [2008] EWHC 1703 (Ch), Ch D...........................................4.54 Russell v East Anglian Rly Co (1850) 6 Ry & Can Cas 501, 20 LJ Ch 257, 14 Jur 1033, 3 Mac & G 104, 16 LTOS 317..........................................................................................6.142, 6.144, 6.145 Ryan v Shilcock (1851) 16 JP 213, 21 LJ Ex 55, 7 Exch 72, 15 Jur 1200, 18 LTOS 157..............5.161 S SAS  Institute Inc v World Programming Ltd (No  3 Apportionment) [2019]  EWHC  2496 (Comm), [2019] 9 WLUK 298...............................................................................................  7.18, 7.75 SCF Finance Co Ltd v Masri (No 3) [1987] QB 1028, [1987] 1 All ER 194, [1987] 2 WLR 81, 131 SJ 22, [1987] LS Gaz R 37, CA........................ 3.4, 3.69, 3.70, 3.71, 3.74, 3.75, 3.76, 3.77, 3.79 St Michael & All Angels, Tettenhall Regis, Re [1995] Fam 179, [1996] 1 All ER 231, [1995] 3 WLR 299..............................................................................................................................2.71 Salt v Cooper 16 Ch D 544, 50 LJ Ch 529, 29 WR 553, [1874-80] All ER Rep 1204, 43 LT 682, CA................................................................................................................... 6.15, 6.56, 6.104, 6.127 Sampson v Seaton Rly Co (1874) LR 10 QB 28, 44 LJQB 31, 23 WR 212, 31 LT 672.................3.162 Sampson, Re, sub nom Sampson v Sampson [1896] 1 Ch 630, Ch D............................................3.19 Samuel v Duke (1838) 6 Dowl 537, 7 LJ Ex 177, Horn & H 127, 3 M & W 622...................  5.127, 5.135 Sandy v Yukon Construction Co Ltd (1961) 26 DLR (2d) 254, Alb SC (App Div)......................3.35, 3.37 Sargent’s Trusts, Re (1879) 7 LR Ir 66............................................................................................5.21 Sartoris’ Estate, Re, Sartoris v Sartoris [1892] 1 Ch 11, 60 LJ Ch 634, 64 LT 730, CA, appd Sartoris’ Estate, Re, Sartoris v Sartoris [1892] 1 Ch 11, 61 LJ Ch 1, 40 WR 82, [1891-4] All ER Rep 193, 36 SJ 41, 65 LT 544, 8 TLR 51, CA..................................................................6.132 Saunders v United Kingdom (Application 19187/91) 23  EHRR  313, [1998] 1  BCLC  362, [1997] BCC 872, 2 BHRC 358, ECtHR................................................................................. 2.253 Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2009] EWHC 773 (Pat), [2009] 2 WLUK 641, (2009) 32 (6) IPD 32046.................................................................................7.42 Searle v Choat (1884) 25 Ch D 723, 53 LJ Ch 506, 32 WR 397, 50 LT 470, CA......................6.127, 6.129 Seashore Marine SA v Phoenix Assurance Plc (The Vergina) (No 3) [2002] 1 Lloyd’s Rep 238, QBD........................................................................................................................................7.51 Services Europe Atlantique Sud (SEAS) v Stockholms Rederiaktiebolag SVEA, The Folias [1979]  AC  685, [1979] 1  All ER  421, [1978] 3  WLR  804, [1979] 1 Lloyd’s Rep 1, 122 SJ 758, HL.......................................................................................................................1.6 Seyman v Gresham (Semayne’s Case )(1604) 5 Co Rep 91a, Cro Eliz 908, Moore KB 668, Yelv 29, 77 ER 194, [1558-1774] All ER Rep 62..................................................................... 5.159, 5.161 Sharp v Blank [2020] EWHC 1870 (Ch), [2020] 7 WLUK 186, [2020] Costs LR 835........7.39, 7.44, 7.54 Shaw v Hudson (1879) 48 LJ Ch 689..............................................................................................4.278 Shephard, Re, Atkins v Shephard (1889) 43 Ch D 131, 59 LJ Ch 83, 38 WR 133, 62 LT 337, 6 TLR 55, CA....................................................................................................................... 6.18, 6.34 Silva Pontes v Portugal (Application 14940/89) (1994) 18 EHRR 156, ECtHR............................1.128 Simcoe v Jacuzzi Group UK  [2012]  EWCA  Civ 137, [2012] 1  WLR  2393, [2012] 2  All ER 60, [2012] 2 WLUK 469, [2012] CP Rep 21, [2012] 2 Costs LR 401, (2012) 156 (7)  SJLB 31................................................................................................................................  7.40, 7.42 Singer & Co v Fry (1915) 84 LJKB 2025........................................................................................6.132 Singh v Kenyan Insurance Ltd [1954]  AC  287, [1954] 1  All ER  847, [1954] 2  WLR  607, 98 SJ 231........................................................................................................................... 5.257, 5.261 Singh v Singh [2016] EWHC 1432 (Ch), [2016] 6 WLUK 418......................................................2.111 Sinnott v Bowden [1912] 2 Ch  414, 81  LJ  Ch  832, [1911-13] All ER  Rep 752, 107  LT  609, 28 TLR 594.............................................................................................................................3.96 Slade v Abbhi [2020] EHWC 935 (QB), [2020] 4 WLUK 179...................................... 2.158, 2.159, 2.258 Slade (t/a Richard Slade & Co) v Abbhi [2019] EWHC 355 (Comm), [2019] 3 WLUK 10, [2019] 1 Costs LR 137.......................................................................................................................3.30 Slater v Pinder (1871) LR 6 Exch 228, 35 JP 744, 40 LJ Ex 146, 19 WR 778, 24 LT 631.............5.138 Smallcomb v Buckingham (1697) 1 Salk 320...........................................................................5.313, 5.315 Sneyd, Re, ex p Fewings (1883) 25 Ch D 338, 53 LJ Ch 545, 32 WR 352, 50 LT 109, CA........ 7.85, 7.87, 7.96, 7.97

xlviii  Table of Cases Sociedade Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 QB 310, [1990] 3 All ER 283, [1991] 2 WLR 280, CA...................................................................................... 2.248, 2.249 Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003]  UKHL  30, [2004] 1 AC 260, [2003] 2 All ER (Comm) 65, [2003] 3 All ER 465, [2003] 3 WLR 21, [2003] 2 Lloyd’s Rep 405, [2003] 28 LS Gaz R 31, [2003] NLJR 948, 147 SJ LB 749, [2003] All ER (D) 157 (Jun)...................1.158, 1.159, 1.214, 2.197, 2.206, 3.3, 3.4, 3.77, 3.78, 3.83, 3.84, 3.85, 3.89, 3.111, 3.116, 3.136, 3.172, 3.187, 3.188, 4.56, 6.84 Société Générale du Commerce et de l’Industrie en France v Johann Maria Farina & Co [1904] 1 KB 794, 73 LJKB 355, 52 WR 404, 48 SJ 329, 90 LT 472, 20 TLR 367, CA....2.145, 2.146, 2.147 Soinco SACI  v Novokuznetsk Aluminium Plant (Appointment Of Receiver) [1998]  QB  406, [1998] 2 WLR 334, [1997] 3 All ER 523, [1997] 2 Lloyd’s Rep 330, QBD..........................3.173, 6.13, 6.14, 6.29, 6.35, 6.44, 6.61, 6.63, 6.64, 6.66, 6.67, 6.76, 6.114, 6.132, 6.133, 6.139 Soinco SACI v Novokuznetsk Aluminium Plant (No 2) [1998] 2 Lloyd’s Rep 346, CA..........3.173, 3.174, 3.176 Somatra Ltd v Sinclair Roche & Temperley [2003] EWCA Civ 1474, [2003] 2 Lloyd’s Rep 855, 147 SJ LB 1241, [2003] All ER (D) 400 (Oct), CA............................................................. 7.52, 7.53 Sonatrach v Statoil [2014] EWHC 875 (Comm), [2014] 2 All ER (Comm) 857, [2014] 2 Lloyd’s Rep 252, [2014] 4 WLUK 108, [2014] 1 CLC 473................................................................7.105 Southam v Smout [1964] 1  QB  308, [1963] 3 All ER  104, [1963] 3 WLR  606, 107  SJ  513, CA................................................................................................................5.161, 5.162, 5.163, 5.164 Sowerby v Sowerby (1982) 44 P & CR 192....................................................................................4.111 Standard Chartered Bank v Ceylon Petroleum Corpn [2011]  EWHC  2094 (Comm), [2011] 8 WLUK 6, (2011) 108 (33) LSG 27......................................................................................7.75 Standard Property Investment plc v British Plastics Federation (1985) 53 P & CR 25...................4.115 Stevens v Hince [1914] WN 148, 58 SJ 434, 110 LT 935, 30 TLR 419.......................................... 5.22 Stevens v Hutchinson [1953] Ch 299, [1953] 1 All ER 699, [1953] 2 WLR 545, 97 SJ 171..... 6.91, 6.125, 6.132, 6.139 Stevens v Phelips (1875) 10 Ch App 417, 44 LJ Ch 689, 23 WR 716, CA in Ch...........................3.23 Storey v Robinson (1795) 6 Term Rep 138.....................................................................................5.166 Stumore v Campbell & Co [1892] 1 QB 314, 61 LJQB 463, 40 WR 101, [1891-4] All ER Rep 785, 36 SJ 90, 66 LT 218, 8 TLR 99, CA...............................................................................3.161 Sturges v Countess of Warwick (1913) 58 SJ 196, 30 TLR 112, CA..............................................2.223 Sucden Financial Ltd v Fluxo-Cane Overseas Ltd [2009]  EWHC  3555 (QB), [2009] 12 WLUK 138.........................................................................................................................2.131 Sunbolf v Alford (1838) 2 JP 136, 7 LJ Ex 60, 1 Horn & H 13, 2 Jur 110, 3 M & W 248.............5.166 Surridge v Cooper, Cooper v Brayne (1858) 27 LJ Ex 446, 31 LTOS 265.....................................3.111 T Tapp v Jones (1875) LR 10 QB 591, 44 LJQB 127, 23 WR 694, 33 LT 201............3.13, 3.25, 3.96, 3.158 Tarasov v Nassif (11 February 1994, unreported), CA....................................................................2.249 Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank & Trust Co (Cayman) Ltd [2011] UKPC 17, [2012] 1  WLR  1721, [2011] 4 All ER  704, [2011] 6  WLUK  479, [2011]  BPIR  1743, [2011] WTLR 1249, 14 ITELR 102............................... 3.64, 6.31, 6.67, 6.68, 6.70, 6.71, 6.72, 6.73 Tate Access Floors Inc v Boswell [1991] Ch  512, [1991] 2 WLR  304, [1990] 3 All ER  303, [1990] 6 WLUK 119, (1990) 140 NLJ 963, (1990) 134 SJ 1227...........................................2.248 Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq [2017] UKSC 64, [2018] AC 690, [2017] 3 WLR 1170, [2018] 2 All ER 675, [2018] 1 All ER (Comm) 1005, [2018] 1 Lloyd’s Rep 29, [2017] 10 WLUK 582, [2017] 2 CLC 511................. 3.4, 3.11, 3.48, 3.84, 3.86, 3.96, 4.56 Taylor v Lawrence [2002]  EWCA  Civ 90, [2003]  QB  528, [2002] 2  All ER  353, [2002] 3 WLR 640, [2002] 12 LS Gaz R 35, [2002] NLJR 221, CA.................................................2.72 Taylor v Roe [1894] 1 Ch 413, 63 LJ Ch 282, 3 R 306, 42 WR 426, 38 SJ 142, 70 LT 232..........7.34 Tchenguiz v Imerman [2010] EWCA Civ 908, [2011] Fam 116, [2011] 2 WLR 592, [2011] 1 All ER 555, [2010] 7 WLUK 889, [2010] 2 FLR 814, [2010] 3 FCR 371, [2010] Fam Law 1177, (2010) 154 (30) SJLB 32..............................................................................................2.111 Teekay Tankers Ltd v STX Offshore & Shipping Co [2014] EWHC 3612 (Comm)......................3.113 Tennant v Trenchard 4 Ch App 537, 38 LJ Ch 169, 20 LT 856, [1861-73] All ER Rep Ext 1923..4.220 Thai-Lao Lignite (Thailand) Co Ltd v Laos [2013]  EWHC  2466 (Comm), [2013] 2 All ER (Comm) 883, [2013] 8 WLUK 87..........................................................................................1.113 Thomas v Bunn [1991] 1  AC  362, [1991] 1  All ER  193, [1991] 2  WLR  27, 135  SJ  16, [1990] NLJR 1789, HL.............................................................................. 7.16, 7.17, 7.18, 7.36, 7.51 Thomson v Clerk (1596) Cro Eliz 504............................................................................................5.235 Timber Shipping Co SA v London & Overseas Freighters Ltd [1972] AC 1, [1971] 2 All ER 599, 2 WLR 1360, [1971] 1 Lloyd’s Rep 523, 115 SJ 404, HL.....................................................7.104

Table of Cases  xlix Tink v Rundle (1847) 10 Beav 318............................................................................................ 6.141, 6.144 Tomlinson v Tomlinson [1980] 1 WLR 322, [1980] 1 All ER 593, (1979) 10 Fam Law 88, (1980) 124 SJ 47, Fam Div.................................................................................................................2.69 Toseland Building Supplies Ltd v Bishop t/a Bishop Groundworks (unreported, 28  October 1993), CA................................................................................................... 5.28, 5.29, 5.30, 5.32, 5.34 Tournier v National Provincial & Union Bank of England[1924] 1 KB 461, 93 LJKB 449, 29 Com Cas 129, [1923] All ER Rep 550, 68 SJ 441, 130 LT 682, 40 TLR 214, CA................3.135 Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd [1939] 2 KB 395, [1939] 2 All ER 613, [1939] 5 WLUK 4.....................................................................................................2.248 Truex v Toll [2009]  EWHC  396 (Ch), [2009] 1  WLR  2121, [2009] 4  All ER  419, [2009] 3 WLUK 164, [2009] 5 Costs LR 758, [2009] 2 FLR 250, [2009] BPIR 692, [2009] PNLR 21, [2009] Fam Law 474, (2009) 159 NLJ 429............................................................................3.30 Trustor AB v Smallbone (No 2) [2001] 3 All ER 987, [2001] 1 WLR 1177, [2001] 2 BCLC 436, [2001] 20 LS Gaz R 40, [2001] NLJR 457, 145 SJ LB 99, [2001] All ER (D) 206 (Mar)....2.4 Turcan, Re (1888) 40 Ch D 5, [1888] 11 WLUK 1.........................................................................6.59 Turner v Jones (1857) 1 H & N 878, 26 LJ Ex 262, 5 WR 318, 156 ER 1457, 28 LTOS 341........3.124 Two Companies (0022 & 0023 of 1915), Re [1915] 1 Ch 520, 84 LJ Ch 382, [1915] HBR 65, 59 SJ 302, 112 LT 1100, 31 TLR 241, CA.............................................................................6.18 Tyrrell v Painton [1895] 1  QB  202, 64  LJP  33, 11  R  589, 43  WR  163, 39  SJ  79, 71 LT 687................................................................................................................. 6.78, 6.126, 6.132 U UCB Home Loand Corpn Ltd v Grace [2011] EWHC 851 (Ch), [2011] 3 WLUK 695.................6.45 Union Bank of Finland Ltd v Lelakis [1997] 1  WLR  590, [1996] 4  All ER  305, [1996] 5 WLUK 182, [1996] CLC 1821, (1996) 146 NLJ 305..........................................................2.158 United Norwest Co-operatives Ltd v Johnstone (The Times, 24 February 1994)...........................2.250 Usborne v Limerick Market Trustees [1900] 1 IR 85, CA..............................................................7.88 V VB  Football Assets v Blackpool Football Club (Properties) Ltd (formerly Segesta Ltd) [2019] EWHC 530 (Ch), [2019] 2 WLUK 537, [2019] BCC 896..........................................6.47 Vale SA  v BSG  Resources Ltd (in administration) [2020]  EWHC  2021 (Comm), [2020] 7 WLUK 444...........................................................................................................................2.133 Vaughan v McKenzie [1969] 1 QB 557, [1968] 1 All ER 1154, [1968] 2 WLR 1133, 112 SJ 212, 206 Estates Gazette 129..........................................................................................................5.165 Ventouris v Mountain, The Italia Express [1991] 3 All ER 472, [1991] 1 WLR 607, [1991] 1 Lloyd’s Rep 441, [1991] NLJR 236, CA................................................................................2.115 Vik v Deutsche Bank AG  [2018]  EWCA  Civ 2011, [2019] 1  WLR  1737, [2019] 1  All ER (Comm) 789, [2018] 9 WLUK 59, [2018] 2 CLC 601.....................................................2.157, 2.229 Vinall v De Pass [1892] AC 90, 61 LJQB 507, 66 LT 422, 8 TLR 387, [1891-4] All ER Rep Ext 1861, HL.................................................................................................................................3.152 Vitol SA  v Capri Marine Ltd [2008]  EWHC  378 (Comm), [2009] Bus LR  271, [2008] 2 WLUK 767, [2008] BPIR 1629..................................................................................... 2.148, 2.156 Von Hannover v Germany (59320/00) [2004] EMLR 21, (2005) 40 EHRR 1, 16 BHRC 545, ECHR......................................................................................................................................2.87 W WT Lamb & Sons v Rider [1948] 2 KB 331, [1948] 2 All ER 402, [1949] LJR 258, 92 SJ 556, 64 TLR 530, CA..................................................................................................................... 5.79 Walker v Rowe [1999] 2 All ER (Comm) 961, [2000] 1 Lloyd’s Rep 116, [2000]  CLC  265, QBD........................................................................................................................................7.105 Waller v Weedale (1604) Noy 107...................................................................................................5.235 Walsh v Misseldine [2000] All ER (D) 261, CA.............................................................................1.213 Walton v Allman [2015] EWHC 3325 (Ch), [2016] 1 WLR 2053, [2015] 11 WLUK 459, [2017] 1 FLR 927, [2016] BPIR 1056, [2016] Fam Law 168.......................................................... 4.37, 4.45 Ward v Smith (1848) 6 Hare 309.....................................................................................................6.141 Watkins v Watkins [1896] P 222, 65 LJP 75, 44 WR 677, 74 LT 636, 12 TLR 456, [1895-9] All ER Rep Ext 2014....................................................................................................................6.59 Watkins, Re, ex p Evans (1879) 13 Ch D 252, 49 LJ Bcy 7, 28 WR 127, 41 LT 565, CA..............6.155 Watson v Murray & Co [1955] 2 QB 1, [1955] 1 All ER 350, [1955] 2 WLR 349, 99 SJ 112.......5.188, 5.210 Webb v Stenton (1882-83) LR 11 QBD 518, CA................... 3.11, 3.15, 3.16, 3.17, 3.18, 3.19, 3.24, 3.50, 3.64, 6.30, 6.66

l  Table of Cases Webster, Re, ex p Official Receiver [1907] 1 KB 623, 76 LJKB 380, 14 Mans 20, 51 SJ 230, 96 LT 332, 23 TLR 275.....................................................................................................3.122, 3.124 Welch v Kracovsky (1919) 3 WWR 361 (British Columbia CA)....................................5.161, 5.169, 5.170 Wellesley v Mornington (1862) 1 New Rep 13, 11 WR 17, 7 LT 590............................................4.278 Wells v Kilpin (1874) LR 18 Eq 298, 44 LJ Ch 184, 22 WR 675..............................................6.104, 6.127 Westacre Investments Inc v Yugoimport SDPR, sub nom The State-Owned Company Yugoimport SDPR (aka Jugoimport-SDPR) [2008] EWHC 801 (Comm), QBD.................................1.101, 3.170 Westhead v Riley (1883) 25 Ch D 413, 53 LJ Ch 1153, 32 WR 273, 49 LT 776..........................6.56, 6.79 Westinghouse Electric Corp Uranium Contract Litigation MDL Docket, sub nom Rio Tinto Zinc Corp v Westinghouse Electric Corp (Nos.1 & 2), RTZ Services Ltd v Westinghouse Electric Corp [1978] AC 547, [1978] 2 WLR 81, [1978] 1 All ER 434, [1978] 1 CMLR 100, (1978) 122 SJ 32, HL.........................................................................................................................2.248 Westinghouse Uranium Contract, Re. See Rio Tinto Zinc Corpn v Westinghouse Electric Corpn, RTZ Services Ltd v Westinghouse Electric Corpn Whalley v Willamson (1836) 7 Car & P 294...................................................................................5.161 White v Williams [2011]  EWHC  494 (Ch), [2011]  PTSR  1151, [2011] 3  WLUK  368, [2011] WTLR 899...................................................................................................................4.152 White v Wiltshire (1619) Cro Jac 555, Palm 52, 2 Roll Rep 137....................................................5.173 White, Son & Pill v Stennings [1911] 2  KB  418, 80  LJKB  1124, 55  SJ  441, 104  LT  876, 27 TLR 395, CA.....................................................................................................................3.101 Whiteheart (Bankrupt), Re, ex p Trustee in Bankruptcy v John A Clark & Co (Castle Dawson) Ltd (1971) 116 SJ 75......................................................................................................... 6.125, 6.126 Wicks v Shanks (1893) 67 LT 109............................................................................................. 3.192, 4.218 Widgery v Tepper (1877) 6 Ch D 364, 25 WR 872, 37 LT 297, CA............................................. 4.22, 4.23 Williams, ex p see Davies, Re, ex p Williams Williams v Philips (1957) 41 Cr App Rep 5, 121 JP 163.................................................................2.94 Wilson (D) (Birmingham) Ltd v Metropolitan Property Developments Ltd [1975] 2 All ER 814, CA............................................................................................................... 3.178, 3.180, 4.158, 4.166 Winter v Miles (1809) 10 East 578..................................................................................................5.184 Wintle v Williams (1858) (1858) 3 H & N 288, 27 LJ Ex 311, 6 WR 501......................................3.197 Wise v Birkenshaw (1860) 29 LJ Ex 240, 8 WR 420, 2 LT 223.................................... 3.111, 3.166, 3.192 Wokuri v Kassam [2012]  EWHC  105 (Ch), [2013] Ch  80, [2012] 3 WLR  427, [2012] 2 All ER 1195, [2012] 1 WLUK 630, [2012] ICR 1283, (2012) 109 (20) LSG 26.........................1.118 Wood v Dunn (1866) LR 2 QB 73, 7 B & S 94, 36 LJQB 27, 15 WR 180, 15 LT 411..................3.156 Wood v Lowe [2015] EWHC 2634 (Ch), [2015] 9 WLUK 373, [2015] BPIR 1537......................5.30 Woodhouse & Co Ltd v Woodhouse (1914) 30 TLR 559, CA........................................................2.37 Woodland v Fuller 11 Ad & El 859, 9 LJQB 181, 4 Jur 743, 3 Per & Dav 570, 113 ER 641, [1835-42] All ER Rep 343......................................................................................................5.127 X X v France (1982) 5 EHRR 298......................................................................................................4.248 Y Yorkshire Engine Co v Wright (1872) 21 WR 15............................................................................1.63 Z Z  Ltd v A-Z  & AA-LL  [1982]  QB  558, [1982] 1 All ER  556, [1982] 2 WLR  288, [1982] 1 Lloyd’s Rep 240, 126 SJ 100, CA...........................................................................................3.55 Zappia v Italy (1996) ECHR 43................................................................................................. 1.128, 1.129 Zehetner v Austria (Application 20082/02) [2009] ECHR 1119.....................................................4.255

Introduction

‘As many a claimant has learned to his cost, it is one thing to recover a favourable judgment; it may prove quite another to enforce it against an unscrupulous defendant. But an unenforceable judgment is at best valueless, at worst a source of additional loss.’ Lord Bingham in Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260, 267. As the quotation from Lord Bingham above illustrates, a court judgment affords a judgment creditor no guarantee that payment will actually be made by the judgment debtor. All too often, the process of obtaining judgment is only the first step in successfully recovering the amounts owed to a claimant. Litigation can be a timeconsuming and expensive business, not just in terms of legal costs but also in lost management time and lost revenue from profitable activities. Where the defendant is a wealthy individual or organisation, the availability of assets to satisfy the judgment may be less of a concern. However, a claimant faced with an impecunious or unscrupulous defendant may face a pyrrhic victory if there are no assets against which to enforce. To compound matters, the substantial costs of pursuing litigation will have been incurred which, without an effective means of recovery, is nothing more than a further source of loss. The prospects of successful enforcement should therefore always be considered at the outset, before proceedings are even issued, rather than as an afterthought once judgment has been obtained. This will involve careful consideration of the potential defendant’s assets, the location of those assets, its solvency, the existence of other creditors and any impediments to enforcement peculiar to the potential defendant or its assets. It is an integral feature of the English civil justice system that the court does not automatically enforce its judgments. The courts provide various procedures for the enforcement of judgment debts and it is up to the judgment creditor to choose the most effective and appropriate means of enforcement when a judgment debtor fails to pay. Making an informed choice between the various procedures available in the light of the judgment debtor’s circumstances lies at the heart of effective enforcement. It will also be important to distinguish between judgment debtors who ‘can’t pay’ and those who ‘won’t pay’. Judgment creditors will not wish to waste further time

2  Introduction and money pursuing enforcement against debtors who genuinely lack the means to pay. However, distinguishing between judgment debtors who are genuinely lacking the means to satisfy a judgment and those who are deliberately evading payment is often problematic, particularly at the start of enforcement proceedings. Accurate information as to a judgment debtor’s true means is fundamental to effective enforcement. There are also strong public policy considerations for ensuring that effective methods are available to facilitate the enforcement of civil judgments. Without effective methods of enforcing the court’s judgments, the court system would become discredited and ultimately unworkable. Recognition of this fact was central to the government’s Civil Enforcement Review, which began in March 1998. The March 2003 ‘Effective Enforcement’ White Paper represents the government’s conclusions from that Review and states at the outset: ‘People ordered to pay a court judgment … have little or no incentive to do so if they know there is no effective means of enforcing it. Unless there is prompt and effective enforcement the authority of the courts, the effectiveness of penalties, and the public confidence in the justice system are all undermined.’  Since the last edition of this book great steps have been taken to implement much of the changes identified as a result of this review. The enforcement of civil judgments has also been recognised as integral to the right to a fair trial under art 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, which now has a very significant role to play in English law following the entry into force of the Human Rights Act 1998. The human rights considerations that arise in the context of court enforcement procedures are considered towards the end of Chapter 1.  This book is concerned with the subject of commercial enforcement in the English and Welsh courts, that is, the enforcement of high value, money judgments in the High Court of England and Wales. The means by which a judgment creditor can elicit information as to a judgment debtor’s assets, and thus ascertain what methods of enforcement are likely to prove the most fruitful, are described in Chapter 2 of this book. Chapters 3–5 cover the most common methods of enforcement available in the High Court for the enforcement of judgment debts, namely third party debt orders (Chapter  3), charging orders (Chapter  4) and writs of control (Chapter  5). Chapter  6 considers the law relating to the appointment of a receiver by way of equitable execution, which may assist a judgment creditor collecting in a judgment debtor’s assets to satisfy a judgment debt where other methods of enforcement are causing hinderance and are difficult. Since the circumstances in which a judgment creditor has to resort to enforcement proceedings will, by definition, mean that there is delay in payment of the judgment debt, Chapter 7 considers the law relating to interest on judgment debts. Chapter 1 considers the rules of general applicability relating to the enforcement of money judgments and provides an overview of the methods of enforcement covered in this book, together with other considerations that may be relevant to a judgment creditor in seeking to choose which method of High Court enforcement to employ.

Charging order  3

INFORMATION ABOUT THE JUDGMENT DEBTOR’S ASSETS Information is the key to effective enforcement. It will enable a judgment creditor both to avoid wasting time and resources on fruitless enforcement proceedings when faced with a judgment debtor without the means to pay, and also to select the method or methods of enforcement most likely to result in satisfaction of his judgment where the judgment debtor does have assets amenable to enforcement. Information relating to the judgment debtor’s means may have come into the judgment creditor’s possession during the course of the litigation. However, given the importance of proper information about the judgment debtor’s assets to effective enforcement, Chapter  2 is devoted to the various methods by which a judgment creditor can obtain further information through public sources, the use of inquiry agents, and orders to obtain information from the judgment debtor. It also describes the methods by which a judgment creditor can check whether a judgment debtor is insolvent, since the judgment debtor’s insolvency may mean that effort spent on taking enforcement steps is wasted. Where a judgment creditor decides to conduct a court examination of a judgment debtor to obtain information on his assets by making an application under CPR Pt 71, the questions put to the judgment debtor should be tailored by reference to information already known to the judgment creditor. METHODS OF ENFORCEMENT Once a judgment creditor has information as to the judgment debtor’s assets and means, it can consider which method or methods of enforcement will be most likely to result in the satisfaction of his judgment debt. THIRD PARTY DEBT ORDER A third party debt order directs a third party who itself owes a debt to the judgment debtor to discharge that debt by paying it directly to the judgment creditor. The fact that virtually every judgment debtor will maintain a bank account is likely to make this method of enforcement always worth considering. Whether it is worth applying for such an order is likely to depend on the health of the judgment debtor’s bank balance. Use of the third party debt order procedure is not confined to bank accounts and it can be used to attach any debt owed to the judgment debtor by a third party. However, the procedure cannot be used to attach future wages and salaries, for which an attachment of earnings order is needed (an outline of which is provided at paras 1.25–1.38). CHARGING ORDER A charging order is a means of securing a judgment debt by imposing a charge over a judgment debtor’s property. They are commonly used to impose a charge over a judgment debtor’s house or commercial premises, but are also available in relation to securities and funds in court. The charging order places the judgment debtor in the position of a secured creditor. With such security in place, the judgment creditor may be content to wait until the judgment debtor sells the property, when the sale proceeds

4  Introduction will be used to discharge the charge and satisfy the judgment debt. However, if the judgment debtor is not prepared to wait for such a sale, it can itself apply to the court for a sale of the charged property. A  charging order is likely to be a useful method of enforcement where the judgment debtor owns land or property which is not mortgaged or where the value of the property to be charged significantly exceeds charges already held over the property. WRIT OF CONTROL A writ of control is a method of taking control of the judgment debtor’s goods to satisfy a money judgment. In the context of enforcement of judgments in commercial cases, writs of control are likely to be worth considering where the judgment debtor owns high value goods that would raise good prices at a public auction or if sold by private tender. In the case of corporate judgment debtors, the use of writs of control to take control of company property, such as stock, machinery, office equipment or vehicles may also be considered.

APPOINTING A RECEIVER BY WAY OF EQUITABLE EXECUTION Appointing a receiver by way of equitable execution is an often-overlooked procedure that can provide access to a judgment debtor’s assets that cannot, without hinderance or difficulty, be reached through other methods of enforcement. It can be used to collect assets such as rental income, future debts or to enforce contractual rights which the judgment debtor is refusing to enforce. Equitable execution operates as a residual form of enforcement because it is only available where other methods of enforcement cause legal or practical difficulties. Each of the procedures outlined above are considered in more detail in Chapters 2–6.

COMPARISON OF ASSETS REACHED BY EACH FORM OF ENFORCEMENT The following table illustrates the main assets against which third party debt orders, charging orders, writs of control and receivers by way of equitable execution can be used. It is intended as a broad overview – the individual chapters should be consulted for further details of the operation of the method of enforcement and for any restrictions and difficulties that might apply. Asset Aircraft Bank accounts Bank notes Claim under an indemnity Crown assets2 Crown debt owed to3 judgment debtor

Third party debt order ✗ ✓ ✗ ✗ ✗ ✗

Charging order ✗ ✗ ✗ ✗ ✗ ✗

Writ of control ✓ ✗ ✓ ✗ ✗ ✗

Equitable1 execution ✗ – ✗ ✓ ✗ ✗

Comparison of assets reached by each form of enforcement  5

Asset Damages (pre-assessment) Damages (post-assessment) Debts (present) Debts (future) Dividends Funds in court Goods Government stock Interest under a trust Interest under a will Land (freehold interest) Land (leasehold interest) Land (rents) Machinery Pensions11 Shares Ships Units in a unit trust Vehicles Wages / salary12

Third party debt order ✗ ✓ ✓ ✗ ✗4 ✗7 ✗ ✗ ✗ ✗ ✗ ✗ ✗8 ✗ ✗ ✗ ✗ ✗ ✗ ✗

Charging order ✗ ✗ ✗ ✗ ✓5 ✓ ✗ ✓ ✓ ✗ ✓ ✓ ✗ ✗ ✗ ✓ ✗ ✓ ✗ ✗

Writ of control ✗ ✗ ✗ ✗ ✗ ✗ ✓ ✗ ✗ ✗ ✗ ✗ ✗ ✓10 ✗ ✗ ✓ ✗ ✓ ✗

Equitable1 execution ✓ – – ✓ ✓6 – ✗ ✗ – ✓ ✗ ✗ ✓9 ✗ ✗ ✗ ✗ ✗ ✗ ✗

  1 As explained further in Ch 6, the appointment of a receiver by way of equitable execution is a residual method of enforcement. In general, equitable execution is only available where: (a) the asset cannot be reached using another method of enforcement; or (b) the asset can theoretically be reached using another method of enforcement but this would be legally or practically difficult. For this reason, where the dash (-) symbol appears, this indicates that equitable execution may theoretically be possible but would not normally be granted because another enforcement method is available.   2 As explained in paras 1.104–1.105, the Crown is immune from all normal methods of enforcement available to a subject. Instead a statutory procedure for obtaining payment of judgment debts owed by the Crown exists, which is explained at paras 1.106–1.107.   3 As explained in paras 3.93–3.95, a special procedure exists under the Crown Proceedings Act 1947, s 27, to attach debts owed by the Crown to a judgment debtor.   4 Unless the dividend is due at the time the interim third party debt order is served. A third party debt order cannot be used in respect of future dividends.   5 Dividend income can only be charged under a charging order over certain government stock, stock of various English and foreign bodies and units in a unit trust.   6 Future dividends in respect of securities which cannot be subject to a charging order could in principle be subject to equitable execution.   7 However, CPR 72.10 provides a procedure whereby a judgment creditor can apply for an order that money in court be paid to him in satisfaction of a judgment debt. See further paras 3.66–3.67.   8 Unless the rent is due at the time the interim third party debt order is served. A third party debt order cannot be used in respect of future rent.   9 Future rent cannot be attached under a third party debt order and can only be attached by appointing a receiver by way of equitable execution. 10 However, the machinery must not be or have become a fixture to the land. See further para 5.25. 11 The correct method of attaching pensions is an attachment of earnings order. In some circumstances some pension rights can be subject to equitable execution. See paras 1.25–1.38. See also Ch 6. 12 The correct method of attaching wages and salary is an attachment of earnings order. See paras 1.25– 1.38.

6  Introduction INTEREST ON JUDGMENTS Interest on judgment debts is considered in detail in Chapter 7. On enforcement, the interest which has accrued since judgment is recoverable together with the principal judgment debt. JUDICIAL STATISTICS ON ENFORCEMENT It is instructive to consider data on the methods of enforcement most commonly favoured by judgment creditors. Each quarter judicial statistics about the courts are published by the Ministry of Justice. The following statistics show the available data in relation to enforcement proceedings in the County Court and High Court, Queen’s Bench Division. County Court Attachment Third Party Charging of earnings Debt Orders Orders

2019 Applications Orders made 2018 Applications Orders made 2017 Applications Orders made 2016 Applications Orders made 2015 Applications Orders made 2014 Applications Orders made

61,940 31,744 82,564 38,362 88,839 41,475 82,318 42,896 92,688 50,120 73,641 52,674

3,180   955 3,250 1,004 3,403 1,080 3,081   985 3,330 1,059 3,865 1,087

29,744 26,727 28,231 26,180 34,487 31,846 36,809 31,719 49,350 46,886 53,407 44,653

Orders to obtain information from judgment debtors –  9,132 – 12,062 – 15,283 – 16,381 – 18,311 – 22,108

Warrants of control

– 289,547 – 345,471 – 270,020 – 190,028 – 148,728 –  97,986

2019 2018 2017 2016 2015 2014

2,075 1,853 2,180 2,648 2,181 3,421

London

90,194 75,530 86,497 66,743 49,823 37,846

Outside London

92,269 77,383 88,677 69,391 52,004 41,267

Total

Writ of fi fa/ writ of control

 69 115 128 193 144 445

London – – – – – –

Outside London  69 115 128 193 144 445

Total

Charging order (RCJ only)

High Court – Queen’s Bench Division

 48  14  39  52  65 201

– – – – – –

 48  14  39  52  65 201

Third party debt order (final) (RCJ only) London Outside Total London 67 42 35 45 71 95

London – – –  26 118  12

Outside London

Order for questioning

 67  42  35  71 189 107

Total

Judicial statistics on enforcement  7

8  Introduction It is clear that in both the High Court and the County Court, the use of writs of control or the County Court equivalent, warrants of control, are overwhelmingly the most commonly used methods of enforcement. Charging orders and third party debt orders are the next most widely used method of enforcement. The prevalence of writs of control and warrants of control is likely to have a number of explanations not least the fact that most judgments are for modest sums. A public visit by an enforcement agent to the judgment debtor’s home or business followed by taking control of goods and the threat of the sale of the judgment debtor’s goods may be seen as more likely to induce payment of the debt than other enforcement procedures. In addition, the issue of a warrant or writ of control is an administrative procedure that does not generally involve further court hearings. This may be a perceived benefit to a judgment creditor with litigation fatigue. However, in the context of commercial enforcement and high value debts, charging orders or third party debt orders may prove a more efficient means of satisfying the judgment debt unless particularly high value goods can be identified.

CHAPTER 1

General rules about enforcement of judgments

INTRODUCTION Insolvency as a means of enforcement? 1.1  The use of insolvency proceedings as a means of exerting pressure on a judgment debtor to pay a judgment debt should also be given due consideration at the start of any enforcement process. Insolvency is a collective realisation of the assets available for the benefit of all creditors, rather than a method of enforcement solely for the benefit of a single judgment creditor. Detailed consideration of the law on insolvency is therefore outside the scope of this book. However, an outline of key considerations from an enforcement perspective is provided. 1.2  Bankruptcy proceedings can be initiated in the case of an individual judgment debtor provided the creditor can prove that the debtor cannot meet their debts as they fall due. This is deemed to be the case either where the debt exceeds £5,000 (increased from £750 on 1  October 2015)1 and a demand (in prescribed form – usually known as a statutory demand) has been served and 21 days passed or where execution or other process issued on a judgment debt is returned unsatisfied in whole or in part.2 As per David Richards LJ in Azuonye v Kent (in her capacity as trustee of the bankrupt estate of the appellant):3 ‘In the very broadest of terms, the purpose of bankruptcy is to provide protection to the bankrupt against the claims of creditors in respect of debts and liabilities as at the commencement of the bankruptcy and to realise the property owned by the bankrupt as at that date and distribute the realised proceeds among those creditors’. The prospect of bankruptcy can be a useful tactic where the judgment debtor’s profession makes it inconvenient for him to be adjudged bankrupt, as is the case with many professionals and company directors. 1 2 3

IA 1986, s 267(2)(a), (4) and The Insolvency Act 1986 (Amendment) Order, SI 2015/922, para 2. IA 1986, ss 267(2)(c) and 268(1)(b). [2019] EWCA Civ 1289 at [8].

10  General rules about enforcement of judgments 1.3  Similarly, a company registered in England and Wales may be the subject of a winding up petition if the creditor can prove that it is insolvent. A  company is deemed unable to pay its debts if the debt exceeds £750 and a statutory demand has gone unanswered1 or if execution or other process issued on a judgment debt is returned unsatisfied in whole or in part.2 The High Court has jurisdiction to wind up any company registered in England and Wales and may do so under the Insolvency Act 1986 (IA 1986), s 122(1)(f), where the company is unable to pay its debts. It is worth noting that the County Court also has concurrent jurisdiction3 where the amount of the company’s paid up share capital does not exceed £120,000. However, proceedings must be commenced in the High Court if, during the six months immediately preceding the presentation of the petition, a company’s registered office was (for all or for most of that period) in the London insolvency district.4 The High Court has a streamlined petitions process so generally it is best to issue there. 1 2 3 4

IA 1986, s 123(1)(a). IA 1986, s 123(1)(b). IA 1986, s 117(2). IA 1986, s 117(2A).

If insolvency is a possibility, should enforcement be attempted? 1.4  More generally, where the judgment creditor has doubts as to the solvency of the judgment debtor he should consider seriously whether there is likely to be any merit in bringing enforcement proceedings at all. Bankruptcy and winding up effectively operate as an automatic stay on enforcement proceedings and a judgment creditor who has not completed enforcement before the commencement of a bankruptcy or winding up will not be entitled to retain the benefit of it. Less formal forms of insolvency can also have serious effects on a judgment creditor’s ability to enforce his judgment. The relationship between the insolvency regime and the law on enforcement in this regard is considered further at paras 1.132–1.188 below. The impact of the commencement of bankruptcy or winding up on each of the methods of enforcement considered in this book is discussed in more detail in each of the relevant chapters. Chapter 2 (paras 2.10–2.23 and 2.34) describes the methods by which a judgment creditor can seek to ascertain whether a judgment debtor is insolvent.

Time for payment of a money judgment 1.5  Before considering the steps which a judgment creditor can take to enforce a judgment, it is worth noting that enforcement procedures are generally not available before the judgment debt is actually due.1 A judgment or order for the payment of an amount of money may specify the date by which payment must be made.2 Where no such time limit is imposed, a party must comply with the judgment or order for the payment of an amount of money (including a costs order) within 14 days of the date of the judgment or order.3 1

However, a charging order can be obtained in respect of a judgment debt which is not immediately payable: Charging Orders Act 1979, s 1(1). See further Chapter 4.

Introduction  11 2

3

Civil Procedure Rules 1998, SI  1998/3132 (CPR) 2.9 provides that, where the court gives a judgment, order or direction which imposes a time limit for doing any act, the judgment, order or direction must, wherever practicable, specify the calendar date (and time of day) by which an act must be done. In practice, judgments or orders for the payment of money often do not specify such a time limit. CPR  40.11, except where (a) the judgment or order specifies a different date for compliance (including specifying payment by instalments), (b) any rule of the CPR specifies a different date for compliance with the judgment or order; or (c) the court has stayed the proceedings or the judgment or order.

Judgments in a foreign currency 1.6  The English or Welsh court can award judgment for a sum of money expressed in a foreign currency.1 This power may be exercised irrespective of whether the applicable law of the contract is English law2 or foreign law.3 It is not restricted to claims for payment of debts4 and extends to claims for damages for breach of contract whether the claim is for liquidated5 or unliquidated damages.6 Enforcement of an English or Welsh judgment which is expressed in a foreign currency should not be confused with the enforcement of foreign judgments (see further paras 1.215– 1.240). However, English or Welsh judgments awarded in a foreign currency raise particular administrative issues. 1 2 3 4 5 6

Miliangos v George Frank (Textiles) Ltd [1976] AC 443, HL and see also Barclays Bank International Ltd v Levin Brothers (Bradford) Ltd [1977] QB 270. Federal Commerce and Navigation Co Ltd v Tradax Export SA, The Maratha Envoy [1977] QB 324, CA (reversed subsequently but on grounds not bearing on this point: [1978] AC 1). Miliangos v George Frank (Textiles) Ltd [1976] AC 443, HL. Miliangos v George Frank (Textiles) Ltd [1976] AC 443, HL. Federal Commerce and Navigation Co Ltd v Tradax Export SA, The Maratha Envoy [1977] 1 QB 324, CA. Services Europe Atlantique Sud (SEAS) v Stockholms Rederiaktiebolag at Stockholm SVEA, The Folias [1979] AC 685, HL.

1.7  The judgment will be for payment of the amount of the foreign currency or the sterling equivalent at the time of payment. The order should be in the following terms:1 ‘It is ordered that the defendant pay the claimant [state the sum in the foreign currency] or the Sterling equivalent at the time of payment.’ 1

PD 40B, para 10.

1.8  There are statements by their Lordships in Miliangos v George Frank (Textiles) Ltd,1 which suggest that the ‘time of payment’ means the date on which the claimant is given leave to levy execution for a sum expressed in sterling.2 This was said to reflect the fact that a judgment expressed in foreign currency must be converted into sterling before it is enforced so that ‘those responsible for enforcing the judgment (whether by levying execution or otherwise) may know what steps are open to them and how far they can go’.3 1 [1976] AC 443. 2 Eg [1976] AC 443 at 497 498, per Lord Cross of Chelsea, HL. 3 Miliangos v George Frank (Textiles) Ltd [1976] AC 443 at 498, per Lord Edmund-Davies, HL.

12  General rules about enforcement of judgments 1.9  In Carnegie v Giessen,1 the Court of Appeal considered whether the court has the power to make a charging order to secure an amount expressed in a foreign currency. It concluded that charging orders could be made in a foreign currency, despite the fact that the making of a final charging order is regarded as the end of the enforcement process. The conversion into sterling would take place when the property subject to the charging order was realised. It was observed that ‘the common principle underlying all the speeches [in the Miliangos case] is that conversion should be made as close as practicable to the date of payment, having regard to the realities of enforcement procedures.’ The references to ‘the date when the court authorises enforcement’ could not be treated as being of general application. The Court observed that a Practice Direction of 1993, which it did not consider to have been revoked or superseded, provided that the court ‘will … make an order for the sterling equivalent to the judgment expressed in foreign currency’. The Court then stated: ‘However, that is a matter of practice rather than law. The 1993 Direction was expressly stated to be “subject to any order or direction which the court may make or give in a particular case.” It was not mandatory.’ 1 [2005] EWCA Civ 191.

GENERAL RULES ON ENFORCEMENT Judgments and orders 1.10  The Civil Procedure Rules 19981 (CPR), Pt 70 contains general rules about the enforcement of judgments and orders.2 By virtue of the rules contained in CPR Pt 40 and Pt 70 an order may be enforced in the same manner as a judgment.3 The general rules relating to the enforcement of judgments and orders were formerly contained in the Rules of the Supreme Court 19653 (RSC), Ord 45. These were continued in part at Sch 1 of the CPR for some time but as a result of the April 2014 update to the CPR4 enforcement provisions were consolidated. 1 SI 1998/3132. 2 CPR Pt 70 came into force on 25 March 2002: SI 2001/2792, para 1(c). 3 SI 1965/828. 4 Including Civil Procedure (Amendment) Rules 2014, SI 2014/407.

Use of any method of enforcement available 1.11  A  judgment creditor is free to use any method of enforcement which is available, save where an enactment, rule or practice direction provides otherwise.1 1 CPR 70.2(2).

Multiple enforcement proceedings 1.12  Similarly, except where an enactment, rule or practice direction provides otherwise, a judgment creditor may use more than one method of enforcement either

Committal and writs of sequestration  13

at the same time or one after the other.1 As will be seen, the method of enforcement chosen by the judgment creditor will be determined by the assets of the judgment debtor that are available for enforcement. The judgment debtor may have a number of different assets which are amenable to different methods of enforcement. In the context of enforcement of judgments in commercial cases, the costs incurred in connection with enforcement proceedings are likely to be small in comparison to the size of the judgment debt, which may in any event exceed the value of any one of the judgment debtor’s assets. The use of concurrent enforcement proceedings should therefore be considered. 1 CPR 70.2(2)(b).

Enforcement against a non-party 1.13  Where a judgment or order is given or made in favour of a person who is not a party to the proceedings, it may be enforced by or against that person by the same methods as if he were a party.1 Permission to enforce the judgment or order is not required. 1 CPR 70.4.

COMMITTAL AND WRITS OF SEQUESTRATION 1.14  Historically, orders for payment of money were ultimately enforced through imprisonment. However, Dickensian images of debtors languishing in Newgate prison became a thing of the past with the introduction of the Debtors Act 1869. The general object of the Debtors Act 1869 was to abolish imprisonment for nonpayment of debts, with certain limited exceptions.1 Section 5 of the Act preserved the court’s powers to commit a judgment debtor in default of payment of a judgment debt or instalment order to prison for a term not exceeding six weeks. However, those powers were severely curtailed by the Administration of Justice Act 1970. The High Court’s jurisdiction to commit to prison for defaults in payment of a judgment debt or instalment order is now confined to defaults in respect of High Court maintenance orders.2 As Wilson J observed in B v B (injunction: restraint on leaving jurisdiction):3 ‘… Parliament has clearly determined that such invasion of personal liberty should be strictly limited even in the cause of enforcing judgment debts.’ 1 See Middleton v Chichester (1871) 6 Ch App 152. Debtors Act 1869, s  4 provides: ‘With the exceptions herein-after mentioned, no person shall … be arrested or imprisoned for making default in payment of a sum of money. There shall be excepted from the operation of the above enactment: 1. Default in payment of a penalty, or sum in the nature of a penalty, other than a penalty in respect of any contract: 2. Default in payment of any sum recoverable summarily before a justice or justices of the peace: 3. Default by a trustee or person acting in a fiduciary capacity and ordered to pay by a court of equity any sum in his possession or under his control: 4. Default by any attorney or solicitor in payment of costs when ordered to pay costs for misconduct as such, or in payment of a sum of money when ordered to pay the same in his character of an officer of the court making the order: 5. Default in payment for the benefit of creditors of any portion of a salary or other income in respect of the payment of which any court having jurisdiction in bankruptcy is authorised to make an order: 6. Default in payment of sums in respect of the payment of which orders are in this Act authorised to

14  General rules about enforcement of judgments

2

3

be made: Provided, first, that no person shall be imprisoned in any case excepted from the operation of this section for a longer period than one year; and, secondly, that nothing in this section shall alter the effect of any judgment or order of any court for payment of money except as regards the arrest and imprisonment of the person making default in paying such money.’ Administration of Justice Act 1970 (AJA 1970), s 11(a). Similarly, Administration of Justice Act 1970, s 11(b) confines the County Court’s jurisdiction under Debtors Act 1869, s 5, to defaults in respect of High Court or County Court maintenance orders or judgments for the payment of the taxes, contributions, premiums and other liabilities specified in AJA 1970, Sch 4. A person entitled to enforce a judgment or order under the Debtors Act 1869, s 5, will issue a judgment summons seeking an order for committal, although the court has discretion (under Attachment of Earnings Act 1971 (AEA 1971), s 3(6)) to make an attachment of earnings order instead of an order of committal on such application in respect of a judgment debt for the taxes, contributions, premiums or other liabilities specified in AEA 1971, Sch 2. [1998] 1 WLR 329 at 331.

1.15  The court also has specific powers of committal in relation to CPR  Pt  71 proceedings (orders to obtain information from judgment debtors) (see Chapter 2) and attachment of earnings orders (see paras 1.25–1.38). 1.16  Non-payment of a judgment debt will constitute civil contempt of court and may be punishable by writ of sequestration. CPR  Pt  81, section VII, provides the rules about applications to the High Court for a writ of sequestration to enforce a judgment, order or undertaking. CPR Pt 81, section II provides the rules for committal for breach of a judgment, order or undertaking. These sections, with modifications, replace provisions previously found in CPR  Sch  1, RSC  Ord 45 (Enforcement of Judgments and Orders).1  A  writ of sequestration may be available, with the permission of the court, where a person who is required by a judgment or order to do an act within a time specified in that judgment or order (as extended or abridged by the court or agreed in writing by the parties) does not do it within that time.2 In any event, neither committal nor sequestration are direct means of enforcing a judgment debt and contempt of court does not itself give rise to any claim in damages. Rather, sequestration may potentially form a means of exerting pressure on a judgment debtor to meet his judgment debt so as to avoid sequestration of his assets. 1

Amended by Civil Procedure (Amendment No. 2) Rules 2012, SI 2012/2208. CPR Pt 81 will be reformed with effect from 1  October 2020. However, CPR  Pt  81 as it was in force immediately before 1  October 2020 continues to have effect for the purposes of CPR  83.2A (application for permission to issue writ of sequestration), but only in so far as CPR 83.2A provides for enforcement by means of a writ of sequestration in cases where no proceedings for contempt of court are brought. See The Civil Procedure (Amendment No. 3) Rules 2020, SI  2020/747, para  2. From 1  October 2020 where the reformed Pt 81 applies it will continue to set out the requirements for a contempt application. 2 CPR 81.20.

1.17  A  writ of sequestration can be obtained against the judgment debtor’s property or, in the case of a corporate judgment debtor, the property of any director or other officer of the body.1 However, sequestration is a severe remedy and, as with civil contempt generally, will only be granted in serious cases. Leave of the court is required to issue a writ of sequestration and the application must be made in accordance with CPR Pt 23 and be heard by a judge.2 The procedural rules relating to the application and issue of a writ of sequestration are set out in CPR Pt 81. 1 CPR 81.20(3).

Enforcement procedures not applicable to High Court money judgments  15 2

CPR 81.26(1). Although note that CPR Pt 81 will be reformed with effect from 1 October 2020. However, CPR Pt 81 as it was in force immediately before 1 October 2020 continues to have effect for the purposes of CPR 83.2A (application for permission to issue writ of sequestration), but only in so far as CPR 83.2A provides for enforcement by means of a writ of sequestration in cases where no proceedings for contempt of court are brought. See The Civil Procedure (Amendment No. 3) Rules 2020, SI 2020/747, para 2. From 1 October 2020 where the reformed Pt 81 applies it will continue to set out the requirements for a contempt application.

1.18  The effect of a writ of sequestration is to place the contemnor’s property into the hands of sequestrators, who will manage the property and receive rents or profits until the court orders how the property should be dealt with. However, the property remains in the contemnor’s ownership and no title to or interest in the property is conferred upon the judgment creditor. As it is not a direct means of enforcement this means it is rarely used to enforce money judgments. However, the remedy may prove most useful where the defaulting judgment debtor is a company since it may act as a means of putting pressure on the officers of the company to take the necessary steps to ensure that the company complies with the judgment so as to obtain the release of the property in the hands of the sequestrators. ENFORCEMENT PROCEDURES NOT APPLICABLE TO HIGH COURT MONEY JUDGMENTS 1.19  This book is concerned with methods of enforcement that are available in the High Court for the enforcement of judgments for the payment of a sum of money. Some enforcement procedures therefore fall outside the scope of this book, namely certain forms of writs of execution, distress, judgment summonses, attachment of earnings orders and self-help remedies. However, an outline of each of these procedures is provided in paras 1.20–1.38 below together with an indication of when they are likely to be relevant in a commercial enforcement scenario. Writs of execution 1.20  Writs of execution encompass, writs of possession, writs of delivery, writs of sequestration and any further writ in aid of one of these writs.1 The law relating to writs of execution was substantially amended when the Tribunals, Courts and Enforcement Act 2007 came into force and a statutory regime of taking control of goods and writs of control replaced the old system of execution against goods (writs of fieri facias). The enforcement of money judgments by writs of control is covered in Chapter 5 of this book. An outline of the circumstances in which writs of sequestration may be available in aid of the enforcement of a judgment debt has been provided in paras 1.14–1.18. 1 CPR 83.1(l).

Writs of possession 1.21  A writ of possession is a method of enforcing a judgment or order for the giving of possession of land.1 It is therefore outside the scope of this book, which is concerned with the enforcement of money judgments.

16  General rules about enforcement of judgments 1

CPR  83.13. Judgments for the giving of possession of land may also be enforced by an order of committal and writs of sequestration in certain circumstances: see CPR  81.4 and 81.20. See para 1.16 n 1 concerning the reform of CPR Pt 81.

Writs of delivery 1.22  Where a judgment is given or order is made for the delivery of any goods which does not give the person against whom judgment is made the alternative of paying the assessed value of the goods, it may be enforced by ‘writ of specific delivery’. A  judgment or order that requires delivery of any goods or payment of their assessed value may be enforced by ‘writ of delivery’.1 Writs of delivery for the recovery of goods (or their assessed value) are outside the scope of this book, which is concerned with the enforcement of money judgments. 1

CPR 83.14. In certain circumstances such judgments or orders may also be enforced through orders of committal and writs of sequestration: see CPR 81.4 and 81.20. See para 1.16 n 1 concerning the reform of CPR Pt 81.

Judgment summons 1.23  A judgment summons orders a judgment debtor in default of an order to pay a sum of money to attend court to be examined as to his means of complying with the order and to give reasons why he should not be committed to prison for the default. However, in the High Court these are only available in relation to defaults in respect of High Court maintenance orders1 and are not therefore relevant in the context of enforcement of commercial judgments. 1

See further para 1.14.

Distress 1.24  In certain circumstances an injured party is personally entitled to seek redress for the wrong done to him rather than seek recourse through the courts. One example is the right of distress damage feasant, whereby a man who finds another’s chattel on his land unlawfully may impound it to compel the owner of the chattel to make good any damage done.1 Distress for rent was an ancient remedy which entitled a landlord who is owed unpaid rent to enter the demised premises and seize and sell goods found there to satisfy the unpaid rent. This has now been replaced by the Tribunals, Courts and Enforcement Act 20072 and a procedure known as CRAR (Commercial Rent Arrears Recovery). This is more strictly regulated than the old regime. Such self-help remedies are also outside the scope of this book. 1 2

See further Clerk and Lindsell on Torts (22nd edn, Sweet & Maxwell, 2018), Ch 30. Tribunals, Courts and Enforcement Act 2007, s 71.

Attachment of earnings orders 1.25  Although this book is concerned with methods of enforcement that are available in the High Court, a judgment creditor may wish to give some consideration

Enforcement procedures not applicable to High Court money judgments  17

to attachment of earnings orders in the context of commercial enforcement. Where the judgment debtor is a highly paid employee or likely to be in receipt of a high pension, an attachment of earnings order may prove attractive. 1.26  The statutory provisions relating to the attachment of earnings orders as a means of enforcing the discharge of monetary obligations were consolidated in the Attachment of Earnings Act 1971 (AEA 1971). The High Court only has jurisdiction to make an attachment of earnings order to secure payments under a High Court maintenance order.1 It has no such jurisdiction in relation to judgment debts. However, the County Court has exclusive jurisdiction to make an attachment of earnings order to secure the payment of a judgment debt in civil litigation2 of £50 or more.3 It is possible for High Court judgments to be transferred to the County Court for the purposes of enforcement (see paras 1.39–1.45). 1 2 3

AEA 1971, s 1(1). AEA 1971, s 1. AEA 1971, s 1(2)(b) and CPR 89.7(14). The County Court may also make attachment of earnings orders in respect of High Court or County Court maintenance orders and County Court administration orders: AEA 1971, ss 1(1A) and 1(2)(c).

Interrelation with other methods of enforcement 1.27  Where an attachment of earnings order has been made to secure payment of a judgment debt,1 no order or warrant of commitment shall be issued in consequence of any enforcement proceedings relating to the judgment debt that were begun before the attachment of earnings order was made.2 Further, AEA 1971, s 8(2)(b) provides that ‘so long as the [attachment of earnings] order is in force, no execution for recovery of the [judgment] debt shall issue against any property of the [judgment] debtor without the leave of the County Court’. There are no cases interpreting this provision and it is unclear whether ‘execution’ is used in its narrow sense to mean seizure of goods (ie a warrant of control) or its wider sense to mean all forms of enforcement.3 Where a judgment creditor is therefore contemplating using a number of enforcement methods to secure payment of a judgment debt, he should be aware that using an attachment of earnings order may preclude the use of other forms of enforcement. From a practical perspective, an attachment of earnings order should therefore only be sought after other methods of enforcement have been given due consideration. It may also be worth nothing that where an application is made for an attachment of earnings order to secure payment of a judgment debt and it appears to the court that the judgment debtor has other creditors, the court must consider whether the case is one in which all the debtor’s liabilities should be dealt with together under a County Court administration order.4 However, given that such orders can only be made where the judgment debtor’s total indebtedness does not exceed £5,000, this is unlikely to be relevant in a commercial enforcement scenario (see para  1.187). A  further drawback of using the attachment of earnings procedure is that interest ceases to accrue on the judgment debt once the order is in place.5 1 2 3

References in AEA 1971 to sums payable under a judgment debt include a reference to the payment of costs:(AEA 1971, s 25(2). AEA 1971, s 8(2)(a). The Interpretation Act 1978 does not assist because it does not define ‘execution’.

18  General rules about enforcement of judgments 4 5

AEA 1971, s 4. See County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 4(3).

Earnings 1.28  ‘Earnings’ are defined in AEA  1971, s  24 as any sums payable to a person by way of wages or salary (including any fees, bonus, commission, overtime pay or other emoluments payable in addition to wages or salary under a contract of service), pension1 (including annuities and periodical payments by way of compensation for loss, abolition or relinquishment or diminution in emoluments of any office or employment) and statutory sick pay.2 Certain types of payments are specifically excluded and are not attachable under the provisions of AEA 1971, including pay to members of Her Majesty’s forces, social security benefits and disability payments.3 Attachment of earnings orders are available in respect of persons in the employment of the Crown.4 1

2 3 4

Modern pensions are much more flexible beasts than they were in 1971. It seems likely that the AEA  1971 applies only to annuities and their equivalent (so a pension in draw down would not count – See Ch 6 for a discussion concerning the use of a receiver by way of equitable execution concerning pensions). After deduction of tax and National Insurance Contributions: AEA 1971, Sch 3. AEA 1971, s 24(2). AEA 1971, s 22, contains provisions as to the operation of attachment of earnings orders in respect of Crown employees.

1.29  Before considering whether to apply for an attachment of earnings order, it will be important for the judgment creditor to ascertain not only the amount but also the exact nature of the income received by the judgment debtor to determine whether it constitutes ‘earnings’ for the purposes of AEA 1971. The attachment of earnings procedure cannot be used where, for example, the judgment debtor is selfemployed or where he is a partner who withdraws his share of the profits through drawings on account. The court has a power to determine whether payments are earnings for the purpose of an attachment of earnings order and an application for such a determination can be made by the judgment debtor, the judgment creditor or the judgment debtor’s employer.1 1

AEA 1971, s 16.

1.30  Information as to the judgment debtor’s earnings may have been obtained through the prior use of CPR Pt 71 proceedings (see Chapter 2). Alternatively, the judgment debtor may provide the relevant information following service of the application for an attachment of earnings order (see para  1.33). In addition, each County Court is obliged to maintain an index of all attachment of earnings orders for that district. The index may be searched free of charge1 and will reveal whether other attachment of earnings orders have been made against that judgment debtor. The results may mean it is not worth seeking an Attachment of Earnings Order. 1 Form N336.

Consolidated attachment of earnings order 1.31  If there are existing attachment of earnings orders, the judgment creditor may apply for his judgment to be consolidated with those other judgments under

Enforcement procedures not applicable to High Court money judgments  19

a consolidated attachment of earnings order.1 The sums paid under a consolidated attachment of earnings order will be distributed in proportion to the amounts payable under the respective judgments.2 However, the existence of other attachment of earnings orders is likely to indicate that this method of enforcement will lead to some delay before the whole of the judgment debt is repaid. 1 CPR 89.19. 2 CPR 89.22.

Procedure 1.32  The procedural rules relating to attachment of earnings orders were contained in the County Court Rules 1984 (CCR) Ord 27. However, for applications bought on or after 6 April 2016, CPR Pt 89 replaced CCR 27 and centralised applications which are now filed in the County Court Money Claims Centre1. If necessary, the judgment should first be transferred to the County Court (see paras 1.40–1.45). Form N337 should be filed, certifying the amount of money remaining due under the judgment and that the whole or any part of instalments due under the judgment remain unpaid.2 The fee for lodging an application for an attachment of earnings order is £110.3 1 CPR 89.3. 2 CPR 89.4(1). 3 Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, para 8.7.

1.33  The court will issue the application and serve a copy on the judgment debtor informing him that he should either pay the judgment debt or furnish the information requested as to his earnings (in Form N56, known as a ‘statement of means’) within eight days.1 If the judgment debtor fails to pay the judgment debt or to provide a statement of means within that eight-day period, the court may make an order requiring him to do so.2 The court has power to enforce the requirements for provision of information, which, if not complied with, ultimately may lead to imprisonment of the judgment debtor for up to 14 days and a fine.3 In addition, the court has power to order the judgment debtor’s employer to provide specified particulars of the judgment debtor’s earnings and anticipated earnings.4 1 2 3 4

AEA 1971, s 14(4) and CPR 89.5. This usually takes the court between five and ten working days after filing. AEA 1971, s 14. AEA 1971, s 23 and CPR 89.8, 89.16 and 89.17. AEA 1971, s 14 and CPR 89.6.

1.34  The court has a discretion to make an attachment of earnings order but to do so it must appear to the court that the judgment debtor has failed to make one or more payments required by the judgment.1 The standard attachment of earnings order is Form N60 and will be directed to the judgment debtor’s employer. It will direct the employer to make periodic deductions from the judgment debtor’s earnings and pay the amounts specified to the collecting officer of the court.2 The order will specify both the normal deductions rate (that is, the rate at which the court thinks it is reasonable for the judgment debtor’s earnings to be applied to meet the judgment debt) and the protected earnings rate (that is, the rate below which the court thinks the judgment debtor’s earnings should not be reduced having regard to the judgment

20  General rules about enforcement of judgments debtor’s earnings and needs).3 The court collecting officer will pay the sums received under the attachment of earnings order to the judgment creditor4 and payments made to the court collecting officer under the attachment of earnings order will be deemed to be payments made by the judgment debtor so as to discharge the judgment debt.5 Both the judgment debtor and his employer are obliged to inform the court in the event of any change in his employment and earnings while an attachment of earnings order is in force.6 1 2 3

4 5 6

AEA 1971, s 3(3). AEA 1971, s 6. AEA 1971, s 6 and Sch 3. The employer will also be allowed to deduct £1 from the judgment debtor’s earnings towards his clerical and administrative costs on making each deduction (AEA 1971, s 7(4) and Attachment of Earnings (Employer’s Deductions) Order 1991, SI  1991/356). The judgment creditor may also be allowed his costs of making the application: see CPR 89.10. After deducting any applicable court fees. AEA 1971, s 13. AEA 1971, s 15.

1.35  The judgment debtor may within 14 days of service of the attachment of earnings order apply on notice for the order to be reconsidered.1 In practice, the judgment debtor often makes such application to suspend the attachment of earnings order to permit him to make payments direct to the judgment creditor without having to involve his employer. Where a judgment debtor does not wish his employer to know about the judgment debt, an application for an attachment of earnings order may therefore be a means of exerting pressure on the judgment debtor to pay the judgment debt and a suspended order may result in the debt being paid off more quickly. 1 CPR 89.7(3).

Offences 1.36  If a judgment debtor has been given notice of a hearing of an application for an attachment of earnings order or for the variation of such an order fails to attend the hearing, or alternatively attends and refuses to be sworn or to give evidence, he may be imprisoned by the judge for up to 14 days.1 A judgment debtor also commits an offence if he fails to provide the information required by the court or to notify the court of changes in his employment details.2 An employer who fails to comply with an attachment of earnings order or fails to notify the court of a change in a judgment debtor’s employment and earnings, or provides false particulars of these matters to the court will also be guilty of an offence.3 1 2 3

AEA 1971, s 23(1). AEA 1971, s 23. AEA  1971, s  23(2). AEA  1971, s  23(5) sets out certain defences to these offences. Note also CPR 89.5(5).

Reform of the attachment of earnings procedure 1.37  The Effective Enforcement White Paper published in March 2003 reviewed the current operation of attachment of earnings orders and sought to identify aspects in which it could be improved. The paper noted that the current procedure has certain

Transfer of proceedings between the High Court and the County Court  21

failings from the judgment creditor’s perspective in that it is initially dependent on the judgment debtor to both provide a statement of means and to do so accurately. 1.38  The White Paper proposed a fixed table process setting out a sliding scale of deductions dependent on the net amount earned per month by the judgment debtor, with the option for both the judgment creditor and the judgment debtor to apply for a review if they can show that the table deduction rates fall well below or above what the judgment debtor can afford. The White Paper also proposed tracking the judgment debtor’s employment through Inland Revenue records to provide the courts with a reliable source of employment details. These proposals led to the enactment of ss  91 and 92 of the Tribunals, Courts and Enforcement Act 2007. At the time of writing, these provisions had not yet been brought into force. Proposed reforms were also set out in the statement and consultation ‘Transforming our justice system’ (September 2016). This proposed the extension of the powers of the High Court to make attachment of earnings orders and commence the fixed table for deductions. This was explored in the Prisons and Courts Bill. However, this Bill was abandoned due to the 2017 General Election. TRANSFER OF PROCEEDINGS BETWEEN THE HIGH COURT AND THE COUNTY COURT 1.39  The question as to the court in which the judgment creditor should issue his enforcement proceedings is dealt with in each of the relevant chapters. Although this book is concerned with High Court methods of enforcement, transfer of proceedings between the High Court and the County Court may be relevant in the context of commercial enforcement where the judgment creditor seeks to utilise the attachment of earnings order (which will necessitate transfer of a High Court judgment to the County Court) or where the judgment creditor seeks to enforce a judgment for more than £5,000 by writ of control (when the judgment can be ‘transferred up’ to the High Court for the purposes of utilising this method of enforcement). An outline of the general rules on transfer is therefore set out below.

High Court to the County Court 1.40  As has been noted, the most common reason to transfer a High Court judgment to the County Court for enforcement is to enable the judgment creditor to apply for an attachment of earnings order. 1.41  County Courts Act 1984 (CCA 1984), s 40, gives the High Court the power to transfer any proceedings before it, including enforcement proceedings, to the County Court where statute provides that such proceedings are required to be brought before the County Court. Subject to any such statutory provisions, the High Court may also order the transfer of any proceedings before it to the County Court at its discretion. The transfer shall be to the County Court hearing centre that the High Court considers appropriate having taken into account the convenience of the parties and that of any person likely to be affected and the state of business in the courts concerned.1

22  General rules about enforcement of judgments 1

CCA 1984, s 40(4). CCA 1984, s 40(6)(b) and (7) provides that, once transferred, the judgment will be treated for ‘all purposes’ as a judgment of the County Court although any rights to set aside or appeal remain unaffected.

1.42  A judgment creditor wishing to enforce a High Court judgment or order in the County Court must apply to the High Court for an order transferring the proceedings to the County Court.1 The High Court order for transfer will be in Form PF 168. 1 CPR 70.3.

1.43  Once the High Court order for transfer has been made, the judgment creditor must file the following documents in the County Court with his request for enforcement:1 (1) a copy of the judgment; (2) a certificate verifying the amount due under the judgment or order; (3) if a writ of execution has previously been issued in the High Court to enforce the judgment or order, a copy of the relevant enforcement officer’s return to the writ; and (4) a copy of the High Court order transferring the proceedings to the County Court. 1

PD 70, para 3.1.

1.44  Form N322H should be used to make the request to the County Court to register the High Court judgment for enforcement. 1.45  Upon transfer, the High Court judgment can be enforced as a judgment of the County Court.1 1

CCA 1984, s 40(6).

County Court to High Court 1.46  The procedure for transfer from the County Court to the High Court varies according to whether the transfer is to enable execution by writ of control against the judgment debtor’s goods1 or whether the purpose of the transfer is to seek other forms of enforcement. 1

The same rules also apply to a transfer for a writ of possession, although as these are outside the scope of this book they are not considered further here.

Transfer to High Court for all forms of enforcement except in respect of a writ of control 1.47  An application for transfer of a County Court judgment to the High Court to seek a method of enforcement other than a writ of control should be made under CPR Pt 23 relying on CCA 1984, s 42(2). Having issued the application, the judgment creditor should make a request in writing to the County Court for a certificate of judgment1 stating: (a) that the certificate is required for the purpose of enforcing the judgment in the High Court; and (b) confirming that an application has been made under CCA  1984, s  42, and attaching a copy of the application to the request. 1 CPR 40.14A.

Transfer of proceedings between the High Court and the County Court  23

1.48  No fee is payable for the issue of the certificate of judgment by the County Court or the registration of the judgment in the High Court (although a fee is payable for the issue of the Pt 23 application). 1.49  Once the County Court judgment has been transferred to the High Court, it will be treated as a judgment of the High Court and all the methods of enforcement available in the High Court can be used.1 1

CCA  1984, s  42(5). However, the judgment will remain a judgment of the County Court for the purposes of appeals (CCA 1984, s 42(6)).

Enforcement against the judgment debtor’s goods by writ of control – ‘transfer up’ 1.50  The most common reason to transfer a County Court judgment to the High Court for enforcement is so that the judgment creditor can issue a writ of control to take control of the judgment debtor’s goods. Judgments over £5,000 must be transferred to the High Court for execution against goods to take place.1 For this reason, a streamlined procedure exists to allow the issue a writ of control in respect of a County Court judgment which circumvents the procedure for transfer set out in CCA 1984, s 42(2). In practice, the transfer between the County Court and the High Court is often undertaken by the offices of High Court Enforcement Officers as part of the service provided when they are instructed to enforce a writ. 1

High Court and County Courts Jurisdiction Order 1991, SI 1991/724, art 8(1)(a).

1.51  The judgment creditor should make a request in writing for a certificate of judgment stating: (a) that the certificate is required for the purpose of enforcing the judgment in the High Court; and (b) confirming that it is intended to enforce the judgment by execution against goods.1 1 CPR 40.14A.

1.52  The transfer to the High Court takes effect, from the grant of the certificate of judgment, as an order to transfer the proceedings to the High Court1. Once transfer has taken place, the court will notify the judgment debtor of the transfer2 using Form N328.3 1 CPR 83.19(2). 2 CPR 83.19(3). 3 ‘Notice of transfer of proceedings to the High Court’.

1.53  Form N293A is a combined certificate of judgment and request for writ of control. The first page of the form is the certificate of judgment and must be signed by an officer of the County Court from which judgment is being transferred. The second page is effectively a simplified version of Form 53 (writ of control) and will be issued by the High Court once the first page of the form has been signed by the County Court.

24  General rules about enforcement of judgments 1.54  No fee is payable for the issue of the certificate of judgment by the County Court or the registration of the judgment in the High Court, although a fee is payable for the issue of the writ of control (see further Chapter 5). Limitations on transfer up 1.55  There are a number of situations in which a certificate of judgment will not be granted, and in which transfer up to the High Court for the purposes of execution by a writ of control is not available. These are set out in CPR 83.19(4) and include a situation where there is an application either to set aside the judgment or for a stay of execution under CCA 1984, s 88. In such circumstances the request for the certificate will not be dealt with until those proceedings are determined.1 1 CPR 83.19.

Transfer between County Court hearing centres 1.56  For completeness, an outline of the procedure for transfer between County Court hearing centres is given. An application to enforce a judgment in the County Court may be made in any County Court hearing centre, unless an enactment, rule or practice direction provides otherwise.1 If a judgment creditor is required by a rule or practice direction to enforce a judgment or order of one County Court hearing centre in a different County Court hearing centre, he must make a request in writing to the court in which the case is proceeding to transfer the proceedings to that other court.2 CPR 30.2 to 30.4 set out the procedure for transfer of proceedings between County Court hearing centres for enforcement. The court will give notice of the transfer to all the parties.3 When the proceedings have been transferred, the parties must take any further steps in the proceedings in the County Court hearing centre to which they have been transferred, unless a rule or practice direction provides otherwise.4 1 2 3 4

Charging orders will often need to be issued in the County Court Money Claims Centre (Ch 4 sets out the detail). PD 70, para 2.1. PD 70, paras 2.3. PD 70, para 2.4.

PROCEDURES IN AID OF ENFORCEMENT 1.57  As well as steps to enforce the judgment debt, a judgment creditor may also need to consider whether any ancillary measures in support of enforcement should be utilised. 1.58  As has been noted at the start of this chapter, one of the main perils facing a claimant is the prospect that following judgment he may be unable to obtain satisfaction of that judgment, either in full or at all. From the 1970s onwards, a body of case law relating to injunctions and other interim remedies has developed to prevent a defendant artificially creating such a situation by dissipating his assets so as to make himself ‘judgment proof’. Where the judgment creditor suspects that the

Procedures in aid of enforcement  25

judgment debtor may dissipate his assets to frustrate enforcement, steps to preserve those assets in the interim should be considered. In addition, where a judgment creditor believes he may be in competition with others who claim a beneficial interest in securities or funds in court against which he seeks enforcement, the use of a stop order or stop notice should be considered to prevent dealings in those assets. Freezing injunctions 1.59  The court has jurisdiction to grant an interim injunction restraining the disposal of assets over which the claimant has a proprietary claim (a ‘proprietary injunction’). However, even where the claimant asserts no proprietary claim over the defendant’s assets but after judgment those assets may be used to satisfy a money judgment, an interim remedy may be available. The court may grant the claimant an interim injunction restraining a party from removing assets located in England and Wales from the jurisdiction, or restraining a party from dealing with any assets whether located in the jurisdiction or not.1 Such injunctions are known as ‘freezing injunctions’ (formerly known as ‘Mareva injunctions’) and the court’s jurisdiction to grant freezing injunctions is recognised in Senior Courts Act 1981, s 37(3).2 The procedural regime relating to freezing injunctions is contained in CPR Pt 25. 1

2

For a recent example, see Masri v Consolidated Contractors International Co [2008] EWCA Civ 303 where the Court granted a freezing injunction in respect of a judgment debtor’s interest in an oil concession in Yemen. Senior Courts Act 1981, s 37(3) provides: ‘The power of the High Court under subsection (1) to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the High Court, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled, resident or present within that jurisdiction.’

1.60  Freezing injunctions are potentially available at all stages in the litigation and are frequently sought at a very early stage, often before the claim form has been issued. However, the courts may also grant an injunction after judgment to assist the process of enforcement.1 Although in some cases seeking a freezing injunction after judgment may amount to locking the stable door after the horse has bolted, it may be that a judgment debtor will only take steps to dissipate his assets once judgment has been given against him. 1

See eg Orwell Steel (Erection and Fabrication) Ltd v Asphalt and Tarmac (UK) Ltd [1985] 3 All ER 747, Mercantile Group (Europe) AG v Aiyela [1994] 1 All ER 110 and Kensington International Ltd v Congo [2007] EWCA Civ 1128, which involved a freezing injunction and Norwich Pharmacal relief in support of Swiss proceedings to attach debts owed by a third party to Congo, which was a judgment debtor in English proceedings.

1.61  In Orwell Steel (Erection and Fabrication) Ltd v Asphalt and Tarmac (UK) Ltd,1 the judgment debtor attempted to sell various asphalt machines and vans to another company after judgment had been awarded so as to frustrate the execution of a writ of fieri facias (the modern form of which is a writ of control). The Court granted a freezing injunction restraining the judgment debtor from dealing with assets up to the value of the judgment. 1

[1985] 3 All ER 747.

26  General rules about enforcement of judgments 1.62  The granting of a freezing injunction in aid of enforcement of a judgment is discretionary and such orders are not granted lightly1 although recently in MWP v Emmott2 the Court of Appeal observed that post-judgment ‘Mareva’ injunctions can no longer be described as rare. It has been said that an injunction will be granted more readily after judgment than before judgment and that it is sufficient for the judgment creditor to show that there is a real risk that the judgment will remain unsatisfied if the injunction is refused.3 In exercising its discretion, the court may take into account not just the effect on the judgment creditor and judgment debtor of granting the injunction, but also the consequences for third parties.4 1 See further Gee on Commercial Injunctions (6th edn, Sweet & Maxwell, 2016). 2 [2019] EWCA Civ 219. 3 See Masri v Consolidated Contractors International Co [2008]  EWCA  Civ 303. In that case, Lawrence Collins LJ observed that the freezing injunction was made for ‘a legitimate purpose’, namely to assist ‘the ultimate collection of the debt’, and that the order was subject to ‘careful and proportionate limitations’ on its scope. 4 See eg Camdex International Ltd v Bank of Zambia (No 2) [1997] 1 WLR 632, CA, where the Court found that the considerable hardship that would have been caused to the people of Zambia by an injunction relating to (worthless) Zambian bank notes held in England meant that the injunction should be varied to enable the bank to deal with the notes.

Restraining a debtor from leaving jurisdiction 1.63  Debtors Act 1869, s  6, provides that where a claimant can show that a defendant is about to leave England unless apprehended and the defendant’s absence will ‘materially prejudice’ the claimant’s prosecution of his action, the court may make an order for the defendant’s arrest. However, this section does not apply postjudgment and will not assist a judgment creditor in enforcing a judgment.1 A writ ne exeat regno is also available to prevent a person leaving the jurisdiction where it can be shown that his absence from the jurisdiction will materially prejudice the claimant in prosecution of his claim. However, again, such a writ is only available to facilitate the obtaining of a judgment.2 It is not available in aid of enforcement proceedings.3 1 2 3

Debtors Act 1869, s 6 provides that the power is available ‘at any time before final judgment’. See also Yorkshire Engine Co v Wright (1872) 21 WR 15. The availability of a writ ne exeat regno is limited by analogy with Debtors Act 1869, s 6. See Drover v Beyer (1879) 13 Ch D 242. Hume v Druyff (1873) LR 8 Exch 214. In the words of Megarry J in Felton v Callis [1968] 3 All ER 673 at 680: ‘The writ [ne exeat regno] is very far from being a form of execution.’

1.64  However, Senior Courts Act 1981, s 37(1) provides: ‘The High Court may by order (whether interlocutory or final) grant an injunction … in all cases in which it appears to the court to be just and convenient to do so.’ 1.65  The jurisdiction granted to the court under this statutory provision has been developed to provide ancillary remedies to prevent a defendant leaving the jurisdiction. The circumstances in which such an order would be made in support of enforcement proceedings were considered in B v B (injunction: restraint on leaving jurisdiction).1 In that case, a husband, who was resident abroad, had been ordered to pay his wife’s costs after a failed application under the Married Women’s Property

Procedures in aid of enforcement  27

Act 1882. He failed to comply with the order and while he was visiting London on one occasion, his wife obtained an order for an oral examination as to his means and also to restrain him from leaving the jurisdiction until the hearing and to surrender his passport. Upon examination, the husband was found to have ample assets (albeit overseas) to satisfy the costs order. The wife therefore applied for an injunction to restrain the husband from leaving England until he had satisfied the costs order. The husband contended that the court had no jurisdiction to grant the injunction. 1

[1998] 1 WLR 329.

1.66  Having observed that the court’s jurisdiction to restrain a party from leaving the jurisdiction and to make a consequential order for the surrender of his or her passport should exist in principle in aid of all the court’s procedures leading to the disposal of proceedings, Wilson J continued:1 ‘I consider that the jurisdiction is also available in some circumstances after judgment. To be specific, it can be invoked to aid the court’s established procedures for enforcement of the judgment.’ He therefore considered that the court had the power to make an order obliging the husband to remain within the jurisdiction pending the oral examination and that the power had been correctly exercised to restrain the husband in that case: ‘A judgment summons and an oral examination are both established procedures for enforcement and they should not be permitted to be frustrated by the debtor’s departure from the jurisdiction.’ 1

[1998] 1 WLR 329 at 334.

1.67  However, while the court’s powers under the Supreme Court Act 1981, s 37(1) (now the Senior Courts Act 1981) could restrain a debtor from leaving the jurisdiction in aid of enforcement proceedings, it did not amount to a freestanding enforcement procedure in its own right. Accordingly, it could not be used to restrain a judgment debtor within the jurisdiction indefinitely until a judgment debt was paid. Such an injunction was not therefore available as a means of putting pressure on a judgment debtor to pay his judgment debts. The injunction sought in such terms by the judgment creditor in B v B was therefore refused even though Wilson J ‘would have been pleased’ to have made it and was of the view that it would have induced the judgment debtor to pay the debt immediately. Wilson J observed that provision of such an order would entail a change in the law, which was properly a matter for Parliament, and that in light of the growing trend in the reciprocal enforcement of the orders of other jurisdictions, the power to restrain a judgment debtor within the jurisdiction until the judgment debt was paid seemed less necessary than in former times. Wilson J also noted that ‘ransom demands can give rise to ugly stalemates’ and that there would often be immigration complications to such orders. Interim receivers to preserve assets 1.68  Interim receivers to preserve assets fulfil a similar function to that of a freezing injunction and their appointment is granted on similar grounds. The purpose of the order is to preserve assets so that they are available to meet a judgment.

28  General rules about enforcement of judgments 1.69  The appointment will prohibit the respondent from dealing with the receivership assets. As with a freezing injunction, were a respondent to deal with assets in breach of the order then the respondent may be found in contempt of court. However, a receiver offers a greater degree of protection than a freezing injunction, at least in respect of assets within the jurisdiction of the court, because the receiver will take control1 of the respondent’s assets, thereby making it harder for assets to be dissipated. Appointing a receiver will involve the added expense of the receiver’s costs and for this reason it would have to be shown that an injunction would not suffice to preserve assets and that the added protection of a receiver is needed.2 1

Derby & Co Ltd v Weldon (Nos 3 and 4) [1990] Ch  65, CA. The Court of Appeal upheld the appointment of an interim receiver which ordered two individual defendants to do all within their power to vest assets in the receiver. See JSC BTA Bank v Ablyazov [2010] EWCA Civ 1141; [2010] 10 WLUK 429 in which Maurice Kay LJ observed at [14] that the appointment of a receiver is a very intrusive remedy which is expensive and not easily reversible and thus such an order would therefore only be appropriate in cases where an injunction is insufficient on its own. He went on to note that if a freezing order does not, of itself, provide adequate protection to a claimant because there is a measurable risk that a defendant may use the structure by which he holds his assets to deal with those assets in breach of the freezing order, then a receivership order would normally be justified. 2 See The White Book (Sweet and Maxwell, 2020), vol 2, para 15.80.2.

Interim receivers to preserve assets in aid of enforcement 1.70  An interim receiver to preserve assets in aid of enforcement should not be confused with a receiver by way of equitable execution, who is appointed to aid the enforcement of judgments. Once a receiver by way of equitable execution is appointed, one effect of the order is to prohibit the judgment debtor dealing with the assets covered by the receivership order. In Manchester and Liverpool District Banking Co v Parkinson1 the Court of Appeal held that evidence of dissipation of assets was a potential factor in the court exercising its discretion to appoint a receiver by way of equitable execution. The Court applied this in Goldschmidt v Oberrheinische Metallwerke2 where there was reason to believe that the German judgment debtor was endeavouring to collect all debts due to it in England in order to avoid enforcement. If dissipation is feared in the period between judgment and the hearing of the application to appoint a receiver by way of equitable execution, the application can be made without notice for an injunction prohibiting dissipation pending the hearing of the application. The appointment of a receiver by way of equitable execution is considered in Chapter 6. 1 2

(1888) 22 QBD 173 at 177, per Fry LJ, CA. [1906] 1 KB 373 at 375, CA.

Stop orders and stop notices 1.71  A  stop order is an order which has the effect of prohibiting dealings in securities and may also prohibit the payment of any dividend or interest relating to such securities. Stop orders may also be obtained in relation to funds in court to prohibit dealing with the funds or any income on them. The purpose of a stop order is to afford the applicant an opportunity to take whatever further steps he considers

Payment of judgment debt after enforcement commenced  29

appropriate to secure his claim to the relevant assets. In many cases, the next step is likely to be an application for a charging order over the securities or funds in court. 1.72  A  stop notice has the effect of preventing any dealings in the securities without first giving 14 days’ notice to the person who obtained the stop notice. The requirement to provide notice to the party who obtained a stop notice before dealing in securities affords the applicant the opportunity to assert his claim to the securities. 1.73  Stop orders and stop notices may be obtained on the application of a person claiming to have an interest in securities, which would include a judgment creditor whose judgment has not been satisfied. They are therefore a means whereby a judgment creditor can take steps to preserve a judgment debtor’s assets so that they are available for enforcement. The rules relating to stop orders and stop notices are considered further in Chapter 4.

PAYMENT OF JUDGMENT DEBT AFTER ENFORCEMENT COMMENCED 1.74  One important question which may arise in practice is what happens if the judgment debtor pays the judgment debt after enforcement proceedings have been issued. Double recovery will not be permitted and in the event that the judgment debt or part of it is paid after the judgment creditor has issued an application for enforcement proceedings but before the date for the hearing of the application, the judgment creditor must immediately notify the court in writing.1 In the case of a writ of control, if full or partial payment of the judgment debt is made after an application to the High Court for a writ but before the writ has been executed, the judgment creditor must instead notify the relevant enforcement officer.2 1 2

PD 70, para 7.1. PD70, para  7.2. There is generally no hearing required in the process of applying for a writ of control. See further Ch 5.

Appropriation of payments 1.75  A further question arises where a judgment debtor is indebted to a judgment creditor under two or more judgments and makes a partial payment towards the total indebtedness. Which judgment is deemed satisfied? The law of appropriation of payments was considered by the House of Lords in Cory Brothers & Co Ltd v Owners of the Turkish Steamship ‘Mecca’.1 Although their Lordships’ comments in that case were in a different context they are of general application:2 ‘Now, my Lords, there can be no doubt what the law of England is on this subject. When a debtor is making a payment to his creditor he may appropriate the money as he pleases, and the creditor must apply it accordingly. If the debtor does not make any appropriation at the time when he makes the payment the right of application devolves on the creditor. In 1816, when Clayton’s Case was decided, there seems to have been authority for saying that the creditor was bound to make his election at once according to the rule of the civil law,

30  General rules about enforcement of judgments or at any rate, within a reasonable time, whatever that expression in such a connection may be taken to mean. But it has long been held and it is now quite settled that the creditor has the right of election “up to the very last moment,” and he is not bound to declare his election in express terms. He may declare it by bringing an action or in any other way that makes his meaning and intention plain. Where the election is with the creditor, it is always his intention expressed or implied or presumed, and not any rigid rule of law that governs the application of the money. The presumed intention of the creditor may no doubt be gathered from a statement of account, or anything else which indicates an intention one way or the other and is communicated to the debtor, provided there are no circumstances pointing in an opposite direction. But so long as the election rests with the creditor, and he has not determined his choice, there is no room, as it seems to me, for the application of rules of law such as the rule of the civil law, reasonable as it is, that if the debts are equal the payment received is to be attributed to the debt first contracted.’ 1 [1897] AC 286, HL. 2 [1897] AC 286 at 293–294, per Lord MacNaughten, HL.

1.76  In other words, the general rule is that (apart from where the rules of insolvency apply) a person may pay his debts in any order he pleases.1 If the judgment debtor owes multiple judgment debts to a judgment creditor, he can appropriate a payment towards a particular judgment debt. The intention to do so can be express or implied. If the debtor fails to make an election, then the election passes to the judgment creditor who may elect which judgment debt the payment satisfies. Again, the intention can be express or it can arise by implication.2 To avoid any ambiguity, the judgment debtor should specify which judgment debt he is paying when he makes the payment and should choose to pay the debt which will most be to his advantage. For example, if the judgments carry different rates of interest, he should pay the debt bearing the highest rate first. The position in the County Court is dealt with slightly differently by statutory instrument.3 1 2 3

Although this case did not concern a judgment debt, and there is no direct authority on this point on judgment debts, the same principles should apply by analogy. See further Chitty on Contracts (33rd edn, Sweet & Maxwell, 2018) paras 21–062. County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 6(1), of provides that: ‘[w]here the debtor is indebted to the same judgment creditor under two or more judgments or orders, money paid by him shall be applied to satisfy such of the judgments as the debtor may stipulate or, where no such stipulation is made, according to their priority in time.’

Appropriation of payments – interest 1.77  The question remains of whether a partial payment satisfies the principal or interest component of the debt. In the absence of a contrary intention, the payment will discharge interest first and then the earliest items of principal.1 The position in the County Court is dealt with slightly differently by statutory instrument.2 1 2

Chitty on Contracts (33rd edn, Sweet & Maxwell, 2018), para 21–069. County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, art 6(2), provides that: ‘[m] oney paid by the debtor in respect of any judgment debt shall be appropriated first to discharge or reduce the principal debt and then towards the interest.’

Judgments that are set aside and stays of execution  31

JUDGMENTS THAT ARE SET ASIDE AND STAYS OF EXECUTION 1.78  The impact on enforcement proceedings of a judgment being set aside is considered next, together with the circumstances in which the court will halt the enforcement process by granting a stay of execution.

Judgments that are set aside 1.79  If a judgment or order is set aside, any enforcement of the judgment or order ceases to have effect unless the court orders otherwise.1 Accordingly, if a judgment is set aside enforcement steps should cease immediately. 1 CPR 70.6.

Stays of execution 1.80  Once a judgment has been obtained and has become enforceable1 the successful party can take enforcement steps at any time. There are a number of rules which deal with the circumstances in which the judgment debtor may ask the court to make an order granting a stay of execution. 1

See para 1.5.

1.81  Although the court has a general case management power to grant a stay under CPR 3.1(2)(f), this section is concerned with the specific rules which govern stays of execution. In the context of enforcement, the court can order a stay of execution in three situations: (a) where an appeal of the judgment is pending; (b) where there are either special circumstances rendering it inexpedient to enforce the judgment or where the applicant is unable to pay the money; or (c) where matters have occurred since the date of the judgment. These are considered in turn.

Appeals 1.82  Stays of execution are sometimes encountered when the original decision is subject to appeal. CPR 52.16(a) states that an appeal does not operate as a stay of any order or decision of the lower court unless the appeal court or the lower court orders otherwise. The general rule is not to grant a stay of execution pending the hearing of the appeal.1 This reflects the principle that the successful party is entitled to the fruits of the judgment. However, the court has an unfettered discretion as to whether to grant a stay pending the hearing of an appeal and also as to whether to grant a stay subject to any conditions.2 1 2

Leicester Circuits Ltd v Coates Brothers plc [2002] EWCA Civ 474 at [13], CA. Leicester Circuits Ltd v Coates Brothers plc [2002] EWCA Civ 474 at [12], CA.

32  General rules about enforcement of judgments 1.83  A useful summary of the approach of the court was given by Clarke LJ in Hammond Suddard Solicitors v Agrichem International Holdings Ltd:1 ‘By CPR r 52.7 [now CPR 52.16], unless the appeal court or the lower court orders otherwise, an appeal does not operate as a stay of execution of the orders of the lower court. It follows that the court has a discretion whether or not to grant a stay. Whether the court should exercise its discretion to grant a stay will depend upon all the circumstances of the case, but the essential question is whether there is a risk of injustice to one or other or both parties if it grants or refuses a stay. In particular, if a stay is refused what are the risks of the appeal being stifled? If a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment? On the other hand, if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being unable to recover any monies paid from the respondent?’2 1 2

[2001] EWCA Civ 2065 at [22]. The principles applicable on an application for a stay pending an appeal were summarised in Otkritie International Investment Management Limited v Urumov [2014] EWHC 755 (Comm) at [22].

1.84  Where a party claims that they will be financially unable to pursue the appeal if made to pay the judgment or order, the court will expect full, frank and candid evidence of its financial means to substantiate that claim.1 In making an assessment of the financial position of a party, the court can take into account not just the means of the party itself but whether the funding can be raised by its directors, shareholders, other backers and interested persons.2 A stay of execution may be granted subject to conditions, such as the payment of a sum of money into court.3 1 2 3

Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065 at [12]-[13]. Contract Facilities Ltd v Estate of Rees (deceased) [2003] EWCA Civ 465 at [10]. Bendon Media Ltd t/a Picture Canning Co v Nywave Ltd [2007] EWCA Civ 109 and Assetco Plc v Grant Thornton UK LLP [2019] EWHC 592 (Comm) at [62].

1.85  It may be that a stay would be more readily granted where the application relates to a non-money judgment, say to hand over an irreplaceable item as it may be easier to establish the risk of some form of irremediable harm1. Where the application for a stay relates to a money judgment, the applicant is likely to face an uphill struggle. 1

Assetco Plc v Grant Thornton UK LLP [2019] EWHC 592 (Comm) at [62]; Deutsche Bank AG v Sebastian Holdings Inc [2017] EWHC 913 (Comm) at [57]; Mahtani v Sippy [2013] EWCA Civ 1820 at [13]-[17].

Supreme Court 1.86  CPR 52.16 does not apply to civil appeals to the Supreme Court. However, there is a similar rule in Supreme Court Practice Direction 8 (para  8.14.1) which provides that the presentation of a petition of appeal, or a petition for leave to appeal, does not in itself place a stay of execution on any appealed order and that a party seeking such a stay should apply to the court appealed from, not to the Supreme Court.1 1

Supreme Court Practice Direction 8 (para 8.14.1).

Judgments that are set aside and stays of execution  33

Stay due to special circumstances or inability to pay 1.87  Stays of execution for writs of control are governed by CPR 83.7. Unlike its predecessor, RSC Ord 47 r 1, it appears that this that this power now is not limited to stays solely in relation to writs or warrants of control, but may apply to other forms of enforcement (for example by third party debt order, attachment of earnings, or charging order).1 CPR 83.7 precludes the operation of CPR 3.1(2)(f) in the case of money judgments.2 1 2

Michael Wilson & Partners Ltd v Sinclair (No.2) [2017] EWCA Civ 55 at [15] per McCombe LJ. Michael Wilson & Partners Ltd v Sinclair (No.2) [2017] EWCA Civ 55 at [16] per McCombe LJ.

1.88  A judgment debtor can apply for such a stay of execution notwithstanding that he did not acknowledge service of the claim form or serve a defence or take any previous part in the proceedings.1 1 CPR 87.7(5)(b).

1.89  It may be that orders staying execution on the ‘special circumstances’ or ‘inability to pay’ grounds set out in CPR 83.7(4)(a) and (b) may be less important given that a debtor can now apply to pay the judgment debt by instalments (CPR 40.9A gives the County Court the express power (on application in writing or on notice) to vary judgments or orders made for the payment of money. Note there is no equivalent procedural provision, in the High Court).1 Indeed, this may prove more straightforward for the judgment debtor than applying for a stay. 1

The power to order payment of a judgment debt by instalments is set out in CPR 40.9A pursuant to County Courts Act 1984, s  71. General case management powers of the High Court and the County Courts include a power to alter by supplemental order the time within which an act required by a judgment or order should be done. (The express power to this effect contained in CPR Sch 1 RSC Ord 45, r 6 was revoked by SI 2012/2208.) In Loson v Stack [2018] EWCA Civ 803 at [17] the Court stated, obiter, that ‘any variation of a High Court order for payment of the amount as a single sum must be made under the power contained in CPR 3.1(7) which in most cases will require the applicant for the variation to demonstrate a material change of circumstances.’

1.90  If the court is satisfied that there are special circumstances which render it inexpedient to enforce the judgment or order, or, the judgment debtor is unable for any reason to pay the money then, notwithstanding CPR 83.7(5)–(6), the court may by order stay the execution of the judgment or order, either absolutely or for such period and subject to such conditions as the court thinks fit.1 1 CPR 83.7(5)-(6).

1.91  If a judgment creditor is out of the jurisdiction and has failed to authorise anyone in the jurisdiction to accept payment of the money, the judgment debtor may be entitled to a stay of execution on a writ of control.1 A  judgment debtor is not automatically entitled to a stay of execution simply by virtue of the fact that it is a statutory body because execution may be levied against statutory bodies.2 1 2

Re a Debtor (No 1838 of 1911) [1912] 1 KB 53, CA. Marine and General Mutual Life Assurance Society v Feltwell Fen Second District Drainage Board [1945] KB 394 (a statutory drainage board).

34  General rules about enforcement of judgments Cross-claims by the judgment debtor 1.92  If a third party is associated with the judgment debtor1 and has made a separate claim against the judgment creditor, the court has jurisdiction to stay execution under CPR 83.72 The court also has jurisdiction to pierce the corporate veil, which it will do to find out which party is in fact controlling companies.3 Although the courts have in the past granted stays of execution by reason of these triangular ‘cross-claims’, they are nonetheless very reluctant to do so. Courts will insist that the requirement of ‘special circumstances’ be strictly shown. In Burnet v Francis Industries plc,4 Bingham LJ set out a non-exhaustive list of factors which should be considered in deciding whether special circumstances exist in such cases.5 1 2

3 4 5

For example, the third party is the parent or subsidiary of the corporate debtor. Formerly RSC  Ord 47, r 1. As a recent example see Dar Al Arkan Real Estate v Al Refai [2015] EWHC 1793 (Comm). See also Canada Enterprises Corpn Ltd v MacNab Distilleries Ltd [1987] 1 WLR  813 at 816, CA (decided under RSC  Ord 47, r 1). In that case, another relevant consideration in granting the stay was that the judgment debtor had already paid the money into court. Canada Enterprises Corpn Ltd v MacNab Distilleries Ltd [1987] 1 WLR 813 at 817, CA. Burnet v Francis Industries plc [1987] 1 WLR 802, CA. Burnet v Francis Industries plc [1987] 1 WLR 802 at 811, CA. Followed in the more recent case of Dar Al Arkan Real Estate v Al Refai [2015] EWHC 1793 (Comm).

Matters which have occurred since the date of the judgment 1.93  Without prejudice to CPR 83.7, CPR 40.8A provides for stays of execution in respect of matters that have occurred since the date of judgment1. 1

Formerly RSC Ord 45, r.11.

1.94  CPR  40.8A may only be relied on where matters have occurred since judgment1. The discretion to impose a stay under this rule should not be exercised where the stay would be permanent.2 1 2

London Permanent Benefit Building Society v de Baer [1969] 1 Ch  321 at 334 decided under CPR 40.8A’s predecessor RSC Ord 45, r 11. Raja v Van Hoogstraten [2018] EWHC 3261 (Ch), 29 November 2018, unrep. (Morgan J).

Stay of execution by operation of law 1.95  Certain events operate as a stay of execution as a matter of law. The most obvious examples which are relevant to commercial enforcement are certain insolvency steps (see paras 1.132–1.188). However, another example is the issue of third party claims in connection with goods which are the subject of writs of control. Third party claims have the effect of a stay of execution over the affected goods until the proceedings are resolved.1 1

CPR Pt 85. See further Ch 5.

General restrictions on enforcement  35

GENERAL RESTRICTIONS ON ENFORCEMENT 1.96  There are a number of statutes which provide restrictions on the availability of enforcement. These include the Limitation Act 1980, the Crown Proceedings Act 1947, the State Immunity Act 1978, the Diplomatic Privileges Act 1964, the Consular Relations Act 1968 and the International Organisations Act 1968. These are each considered in turn in paras 1.98–1.123. 1.97  The provisions of human rights and insolvency law raise more pervasive questions on possible limitations of the law on enforcement. The enactment of the Human Rights Act 1998 raises the possibility of human rights challenges to enforcement proceedings, which are considered in paras 1.125–1.130. As has been noted, a judgment debtor’s bankruptcy or winding up effectively stays enforcement proceedings. The provisions of the Insolvency Act 1986 which are relevant to enforcement are considered in paras 1.132–1.188. Limitation issues 1.98  Limitation Act 1980 (LA 1980), s 24 (1) provides: ‘An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.’ 1.99  LA 1980, s 24, was considered by the House of Lords in Lowsley v Forbes.1 In that case the plaintiffs had obtained judgment by consent for £70,000 on 2 February 1981. For reasons not relevant to the decision, the defendant then left the country. Some 11 years later, the plaintiffs sought to enforce the judgment and obtained leave to issue a writ of execution. They also obtained a charging order on the defendant’s share of the matrimonial home and a garnishee order over the defendant’s bank account. One of the questions before their Lordships was whether LA 1980, s 24(1) bars execution of a judgment after six years, or whether it only bars the bringing of a fresh action on the judgment.2 1 [1999] AC 329, HL. 2 An action on a judgment is a new claim relying upon the original judgment as a cause of action.

1.100  After extensive consideration of the confusing and sometimes contradictory earlier case law on this point, and having reviewed the relevant sections of the report of the Law Reform Committee on Limitation of Actions (1977) which foreshadowed LA 1980,1 Lord Lloyd of Berwick, who gave the leading judgment, concluded the matter succinctly:2 ‘… “[a]ction” in s 24(1) means a fresh action, and does not include proceedings by way of execution.’ 1 2

Cmnd 6923. In particular, paras 4.13 and 4.14. [1999] AC 329 at 342, HL.

1.101  However, where six years or more have elapsed since the date of the judgment or order, the court’s permission is required to enforce a writ or warrant of

36  General rules about enforcement of judgments control or execution, and the judgment creditor will be required to explain the reason for the delay.1 While there is no equivalent provision in relation to other methods of execution such as third party debt orders or charging orders, the amount of time which has elapsed since the date of the judgment may be a factor the court takes into account in exercising its discretion to grant the order – for example, if such delay has caused undue prejudice.2 Where a judgment or order which has not yet been enforced is approaching its sixth anniversary, a judgment creditor who wishes to preserve his full rights of enforcement may be well advised to being a fresh action on the judgment to preserve their options on enforcement. 1 CPR 83.2(3)(a). See further paras 5.73–5.78. 2 In Westacre Investments Inc v Yugoimpoty SDPR [2008] EWHC 801 (Comm), in the context of third party debt orders, Tomlinson J commented (at [22] that ‘the lapse of six years since judgment in this context enjoys no special significance. It is simply one factor to be taken into account in the overall exercise of discretion in relation to which there is no “general rule”.’ In that case, six years and seven months had passed since judgment was entered. Tomlinson J commented that the delay would be regarded as a factor of ‘very little weight’. He continued at [23]: ‘In the absence of some compelling evidence of prejudice to the judgment debtor accruing from the delay in enforcement, the court would regard the grant of garnishee relief as virtually axiomatic’. He observed that the starting point is that the court should assist the judgment creditor to recover the judgment debt.

Crown privilege 1.102  The Crown can use any method of enforcement available to a subject.1 However, the Crown also maintains a number of privileges and immunities in relation to enforcement. In a nutshell, the Crown is immune from all methods of enforcement. 1

Crown Proceedings Act 1947, s 26(1).

Meaning of the ‘Crown’ 1.103  Claims by and against the Crown are governed by the Crown Proceedings Act 1947 (CPA 1947). For the purposes of CPA 1947, the ‘Crown’ refers to claims brought by or against an ‘authorised Government department’.1 The Minister for the Civil Service must publish a list of authorised government departments which is admissible in evidence to establish which departments are authorised government departments.2 Included in the list is HM Revenue and Customs. The ‘Crown’ does not include enforcement by or against Her Majesty in her private capacity.3 1 2

3

CPA 1947, s 17(2)-(3). CPA 1947, s 17(1). This list is published by the Minister for the Civil Service in accordance with s 17 and can be found at www.gov.uk/government/publications/serve-the-treasury-solicitor-with-legalproceedings (last updated 18  September 2019 by the Cabinet Office and the Government Legal Department). CPA 1947, s 40(1). For the meaning of Her Majesty in her private capacity see CPA 1947, s 38(3).

Crown immunity from enforcement 1.104  The basic immunity of the Crown from enforcement is set out in CPA 1947, s 25(4). This provides:

General restrictions on enforcement  37

‘Save as aforesaid no execution or attachment or process in the nature thereof shall be issued out of any court for enforcing payment by the Crown of any such money or costs as aforesaid, and no person shall be individually liable under any order for the payment by the Crown, or any Government department, or any officer of the Crown as such of any such money or costs.’ 1.105  This statutory provision is amplified by the court rules, which provide that equitable execution, oral examination, third party debt orders, charging orders, writs of execution1 and committal cannot be exercised against the Crown.2 1 2

Including writs of control and sequestration. CPR 66.6 and 66.7. Note that where the Crown owes a debt to a judgment debtor, while the third party debt order procedure is not available, there is a limited procedure for attachment of Crown debts under a process analogous to third party debt order proceedings. This is considered at paras 3.90–3.94.

Certificate containing particulars of the judgment 1.106  However, the provisions of CPA 1947, s 25(4) do not mean that judgments or orders made against the Crown are worthless. Although court methods of enforcement are unavailable, a procedure exists in their place whereby a certificate stating the amount of the Crown’s indebtedness under the judgment or order is issued, which is then presented to the Crown for payment. 1.107  The court may issue such a certificate to a judgment creditor on his application of the Crown at any time after 21 days from the date of the judgment.1 The standard form certificate is either Form No 95 or 96 (as appropriate).2 If the judgment or order provides for the payment of any money by way of damages or otherwise, or of any costs, the certificate shall state the amount so payable.3 However, a certificate for a costs order made against the Crown will only be issued after the costs have been assessed.4 The court also has power to direct that a separate certificate shall be issued for any costs order.5 1 2 3 4 5

CPA 1947, s 25(1). Form No 95 is a Certificate of order against the Crown and Form No 96 is a Certificate of order for costs against the Crown. CPA 1947, s 25(3). CPA 1947, s 25(1). CPA 1947, s 25(1).

1.108  A copy of the certificate should be served by the judgment creditor upon the person for the time being named in the record as the solicitor, or as the person acting as solicitor, for the Crown.1 Upon receipt of the certificate, the appropriate government department will pay to the person entitled or his solicitor the amount appearing by the certificate to be due to him together with any interest.2 If an appeal is pending, the court may direct that payment of the whole or part of the amount payable shall be suspended and may insert directions to that effect in the certificate if it has not yet been issued.3 1 2

CPA 1947, s 25(2). CPA 1947, s 25(3).

38  General rules about enforcement of judgments 3

CPA 1947, s 25(3). This provision gives the court a general discretion to suspend payment whether or not an appeal is pending: see, eg. R (on the application of Ram) v Secretary of State for the Home Department [2004] EWHC 1 (Admin).

State immunity 1.109  The State Immunity Act 1978 (SIA 1978) provides that a state is immune from the jurisdiction of the courts of the United Kingdom except as is provided in SIA 1978.1 Detailed consideration of the concept of state immunity is outside the scope of this book. However, from an enforcement perspective it is important to note that one aspect of the jurisdictional immunity enjoyed by states is that, subject to a number of important exceptions considered below, the property of a state is immune from any process for the enforcement of a judgment.2 1 2

SIA 1978, s 1(1). SIA 1978, s 13(2)(b).

1.110  A ‘state’ for the purposes of SIA 1978 means any foreign or commonwealth state other than the UK1 and includes the sovereign or other head of that state in his public capacity, the government of that state and any department of that government, but does not include any entity which is distinct from the executive organs of the government of the state and capable of suing or being sued.2 However, such an entity can still be immune from enforcement if, and only if, the proceedings relate to anything done by it in the exercise of sovereign authority and the circumstances are such that a state would have been so immune.3 The state’s central bank or other monetary authority, even where it is distinct from the executive organs of the government of the state and capable of suing or being sued, is immune from execution because it is treated as a state for the purposes of immunity from execution.4 1 2 3 4

The UK Government can claim Crown immunity, see paras 1.102–1.105. SIA 1978, s 14(1). See also SIA 1978, s 14(2). SIA 1978, s 14(2). SIA 1978, s 14(4). Note that it can waive immunity by express agreement although the ‘commercial purposes’ exception in SIA 1978, s 13(4) (considered further below) does not apply.

1.111  There are two important exceptions to state immunity from execution. Agreement to enforcement by the state 1.112  The first exception is that enforcement is permitted with the written consent of the state concerned (which may be contained in a prior agreement).1 The head of a state’s diplomatic mission in the UK (or the person for the time being performing his functions) is deemed to have authority to give such consent on behalf of the state.2 These types of agreements are commonly included as part of the choice of jurisdiction clause in commercial contracts.3 However, a provision merely submitting to the jurisdiction of the courts of a country is not to be regarded as consent for the purposes of enforcement of the judgments of that court.4 Rather, an express submission to the enforcement of the judgments of that court against the state should be included.5

General restrictions on enforcement  39 1 2 3

4 5

SIA 1978, s 13(3). The state can also make an agreement by treaty – see SIA 1978, s 17(2). SIA 1978, s 13(5). A  typical clause might read: ‘The State irrevocably waives all immunity to which it may be or become entitled in relation to this Agreement, including immunity from jurisdiction, enforcement, prejudgment proceedings, injunctions and all other legal proceedings and relief, both in respect of itself and its assets, and consents to such proceedings and relief.’ Generally, a waiver should reflect the wording of s 13(2) and should cover pre-judgment as well as post-judgment execution. SIA 1978, s 13(3). See footnote 3 to this paragraph for specimen wording.

Property used for commercial purposes by the state 1.113  The second exception is that the state’s ‘property which is for the time being in use or intended for use for commercial purposes’ is not immune from execution.1 The expression ‘in use for or intended for use for commercial purposes’ does not include property of a state’s central bank or other monetary authority.2 ‘Commercial purposes’ is defined to include the following transactions or activities: (a) any contract for the supply of goods or services; (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and (c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a state enters or in which it engages otherwise than in the exercise of sovereign authority.3 1 2

3

SIA 1978, s 13(4). SIA 1978, s 14(4). In AIG Capital Partners Inc v The Republic of Kazakhstan [2005] EWHC 2239 (Comm), Aikens J held (at [61]) that the phrase ‘property of a State’s central bank or other monetary authority’ meant any asset in which the central bank had some kind of property interest, and which was allocated to or held in the name of a central bank, irrespective of the capacity in which the central bank held the asset or the purpose of which it was held. See also Thai-Lao Lignite (Thailand) Co Ltd v Laos [2013] EWHC 2466 (Comm). SIA 1978, s 3(3).

1.114  In principle, the commercial property exception was held by the House of Lords in Alcom Ltd v Republic of Columbia1 to permit a garnishee order (now a third party debt order) in respect of a bank account held by a state with a commercial bank which was earmarked solely (subject to de minimis exceptions) for the discharge of liabilities incurred in commercial transactions 2 The onus of establishing this lies with the judgment creditor.3 The head of a state’s diplomatic mission in the UK can issue a certificate confirming that certain property is not in use or intended for use by or on behalf of the state for commercial purposes and such a certificate must be accepted as sufficient evidence of that fact unless the contrary is proved.4 In Alcom Ltd v Columbia the attempt to obtain a garnishee order against the state failed because, among other reasons, the head of the mission certified that the bank account in question was not in use nor intended for use in respect of commercial purposes and was only used to meet the expenditure necessarily incurred in the day-to-day running of the diplomatic mission. L  R  Avionics Technologies Ltd v The Federal Republic of Nigeria & Another5 is another recent example of where the execution of an award against state property was refused on the basis that it did not fall within the ‘commercial purposes’ exception.

40  General rules about enforcement of judgments 1 [1984] AC 580, HL. 2 [1984] AC 580 at 604, HL. Lord Diplock stated: ‘Such expenditure will, no doubt, include some money due under contracts for the supply of goods or services to the mission… but the account will also be drawn upon to meet many other items of expenditure which fall outside even the extended definition of ‘commercial purposes”… The debt owed by the bank to the foreign sovereign state and represented by the credit balance in the current account kept by the diplomatic mission of that state as a possible subject matter of the enforcement jurisdiction of the court is, however, one and indivisible; it is not susceptible of anticipatory dissection into the various uses to which moneys drawn upon it might have been put in the future if it had not been subjected to attachment by garnishee proceedings.’ Lord Diplock referred to the issue of documentary credits in payment of the price of goods sold to the state as an example of a commercial purpose. 3 Alcom Ltd v Columbia [1984] AC 580 at 604, HL. 4 SIA 1978, s 13(5). 5 [2016] EWHC 1761 (Comm).

Diplomatic immunity 1.115  The Diplomatic Privileges Act 1964 (DPA 1964) governs issues of diplomatic immunity. It gives those articles of the Vienna Convention on Diplomatic Relations signed in 1961 (the Diplomatic Convention), which are set out in DPA 1964, Sch 1, the force of law in the UK.1 1

DPA 1964, s 2(1).

1.116  Detailed consideration of the law on diplomatic immunity is outside the scope of this book.1 However, from an enforcement perspective, the Diplomatic Convention provides that premises of a diplomatic mission are inviolable; the agents of the receiving state2 may not enter them except with the consent of the head of the mission.3 The Diplomatic Convention further provides that the premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution.4 This has the effect of prohibiting all forms of enforcement against the property of the mission. 1 2 3 4

See further Dicey & Morris on The Conflict of Laws (15th edn, Sweet & Maxwell, 2012). Defined at DPA 1964, s 2(2). Diplomatic Convention, art 22(1). Diplomatic Convention, art 22(3).

1.117  The Diplomatic Convention also grants qualified immunity from execution to diplomatic staff falling into three categories. The category attracting greatest protection are ‘diplomatic agents’, which means the head of the mission or a member of the diplomatic staff of the mission.1 The private residence of a diplomatic agent enjoys the same inviolability and protection as the premises of the mission.2 In other words, the private residence of a diplomatic agent is wholly immune from enforcement. 1

2

Diplomatic Convention, art 1. Members of administrative and technical staff of the mission and their families, the service staff of the mission and private servants of members of the mission (who are not nationals of or permanently resident in the receiving state) attract a lesser degree of immunity as set out in Diplomatic Convention, art 37. Diplomatic Convention, art 30(1).

General restrictions on enforcement  41

1.118  Enforcement proceedings may be brought against a diplomatic agent in the case of an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions.1 However, even in these circumstances, enforcement is only permitted provided that the measures concerned can be taken without infringing the inviolability of the diplomatic agent’s person or residence.2 The same immunity extends to members of the family of a diplomatic agent forming part of his household provided they are not nationals of the receiving state.3 1 2 3

Diplomatic Convention, art 31(1)(c). See Wokuri v Kassam [2012] EWHC 105 (Ch); Reyes v AlMalki [2017] UKSC 61. Diplomatic Convention, art 31(3). Diplomatic Convention, art 37(1).

1.119  The immunity of a diplomatic agent and his family from enforcement can be expressly waived by the sending state.1 However, waiver of immunity from jurisdiction in respect of civil proceedings does not impliedly waive immunity in respect of execution of the judgment, for which a separate waiver is necessary.2 1 2

Diplomatic Convention, art 32(1)–(2). Diplomatic Convention, art 32(4). See Co Ltd v Republic of X [1990] 2 Lloyd’s Rep 520.

1.120  Diplomats can be identified using the London Diplomatic List. This is an alphabetical listing compiled by the Foreign and Commonwealth Office of all the representatives of foreign states and Commonwealth countries in London, with the names and designations of their diplomatic staff.1 If a question arises in any proceedings as to whether or not any diplomat is entitled to any privilege or immunity under DPA 1964, a certificate issued by or under the authority of the Secretary of State stating any fact relating to that question shall be conclusive evidence of that fact.2 1

2

The London Diplomatic List is available on the govt.uk website: Heads of Mission and their Spouses and Representatives in London of Foreign States & Commonwealth Countries in order of Precedence. See www.gov.uk/government/publications/foreign-embassies-in-the-uk DPA 1964, s 4.

Consular immunity 1.121  Foreign consuls are not within the scope of DPA 1964. Instead, the Consular Relations Act 1968 (CRA  1968) governs issues of immunity enjoyed by foreign consuls. It gives those articles of the Vienna Convention on Consular Relations signed in 1963 (the Consular Convention) and set out in CRA 1968, Sch 1, the force of law in the UK.1 Detailed consideration of the concept of consular immunity is outside the scope of this book.2 However, from an enforcement perspective, foreign consuls enjoy similar, although somewhat reduced, immunities to those enjoyed by diplomats.3 1 2 3

CRA 1968, s 1(1). Dicey & Morris on The Conflict of Laws (15th edn, Sweet & Maxwell, 2012). For further detail reference should be made to the CRA 1968.

42  General rules about enforcement of judgments 1.122  If in any proceedings any question arises whether or not any person is entitled to any privilege or immunity under CRA  1968, a certificate issued by or under the authority of the Secretary of State stating any fact relating to that question shall be conclusive evidence of that fact.1 1

CRA 1968, s 11.

International organisations immunity 1.123  A further dimension to sovereign immunity is that a number of international organisations of which the UK and a foreign sovereign or government are members are granted various privileges under the International Organisations Act 1968 (IOA 1968). The scheme of the Act is to specify by an Order in Council the privileges and immunities that are to apply to a particular international organisation.1 A large number of such Orders in Council have been made. One of the immunities granted is immunity from suit and legal process,2 which would make the international organisation immune from enforcement proceedings. When dealing with such an organisation, the relevant Order in Council should be consulted to check the extent of any immunities from enforcement.3 Various provisions relating to the application of the IOA 1968 and some amendments to the IOA 1968 itself were made by the International Organisation Act 2005. 1 2 3

International Organisations Act 1968, s  1(2). The various Orders in Council are conveniently collected together in the notes to the International Organisations Act 1968 in Halsbury’s Statutes. International Organisations Act 1968, s 1(2)(b) and Sch 1, Part I, para 1. See further Dicey & Morris on The Conflict of Laws (15th edn, Sweet and Maxwell, 2012).

CRIMINAL OFFENCES – HARASSMENT OF DEBTORS 1.124  Under the Administration of Justice Act 1970 (AJA  1970), s  40(1)(a), it is an offence to harass a person with demands for payment which in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation, with the object of coercing that person to pay the money claimed as a debt due under a contract. However, AJA 1970, s 40(3), also provides that the offence does not apply to anything done by a person which is reasonable (and otherwise permissible in law) for the purpose of the enforcement of any liability by legal process. Accordingly, enforcement proceedings per se do not fall foul of this provision.

HUMAN RIGHTS 1.125  With the entry into force of the Human Rights Act 1998 (HRA 1998) the operation of the law relating to enforcement must be viewed in the light of the provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). HRA 1998, s 6(1) provides:

Human rights  43

‘It is unlawful for a public authority to act in a way which is incompatible with a Convention right.’ 1.126  A  court is included in the definition of a public authority by virtue of HRA 1998, s 6(3). Accordingly, there is an obligation on the courts of England and Wales to apply the law and otherwise act in accordance with the ECHR. 1.127  The particular human rights implications potentially raised by each of the methods of enforcement considered in this book are dealt with in each of the relevant chapters. A  judgment debtor may seek to argue that certain types of enforcement proceedings infringe his rights under ECHR, art 8 (the right to respect for private family life and the home) and the First Protocol, art 1 (the right to peaceful enjoyment of possessions). However, it is important to note at the outset that powerful human rights arguments also operate in favour of the judgment creditor. ECHR, art  6(1) provides: ‘In the determination of his civil rights and obligations … everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.’ 1.128  In a number of judgments, the European Court of Human Rights has recognised that the enforcement of judgments is an integral part of the right to a fair trial under ECHR, art 6(1).1 Similarly, excessive delays in enforcement might constitute a breach of a judgment creditor’s rights under art  6(1), although the reasonableness of the length of enforcement proceedings must be assessed in the light of the particular circumstances of the case, and in particular the complexity of the case, the conduct of the judgment creditor and the conduct of the relevant authorities.2 1 2

See eg Silva Pontes v Portugal (1994) 18 EHRR 156, paras 35–42. See eg Silva Pontes v Portugal (1994) 18 EHRR 156 and Zappia v Italy [1996] ECHR 43 in which the court found that a period of more than 23 years for enforcement proceedings that were still pending and were of no particular complexity could not be regarded as reasonable.

1.129  In Hornsby v Greece1 the European Court of Human Rights set out the rationale for this principle:2 ‘The Court reiterates that, according to its established case-law, Article 6(1) secures to everyone the right to have any claim relating to his civil rights and obligations brought before a court or tribunal; in this way it embodies the “right to a court”, of which the right of access, that is the right to institute proceedings before courts in civil matters, constitutes one aspect (see Philis v Greece (No 1) (1991) 13 EHRR 741, para 59). However, that right would be illusory if a Contracting State’s domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party. It would be inconceivable that Article 6 should describe in detail procedural guarantees afforded to litigants – proceedings that are fair, public and expeditious – without protecting the implementation of judicial decisions; to construe Article 6 as being concerned exclusively with access to a court and the conduct of proceedings would be likely to lead to situations incompatible

44  General rules about enforcement of judgments with the principle of the rule of law which the Contracting States undertook to respect when they ratified the Convention (see, mutatis mutandis, Golder v United Kingdom (1980) 1 EHRR 524, paras 34 36). Execution of a judgment given by any court must therefore be regarded as an integral part of the “trial” for the purposes of Article 6; moreover, the Court has already accepted this principle in cases concerning the length of proceedings (see, most recently, the Di Pede v Italy and Zappia v Italy judgments of 26th September, 1996, Reports of Judgments and Decisions 1996-IV, pp 1383–1384, paras. 20–24 and pp. 1410–1411, paras 16–20 respectively).’ 1 2

(1997) 24 EHRR 250. (1997) 24 EHRR 250, para 40.

1.130  While HRA 1998 does not make decisions of the European Court of Human Rights binding on the English courts, both its decisions and the opinions and decisions of the European Commission on Human Rights must, where relevant, be taken into account where the court is determining a question that has arisen in connection with an ECHR right.1 In AIG  Capital Partners Inc v Republic of Kazakhstan,2 Aikens J  decided that SIA  1978, s  14(4), was consistent with judgment creditors’ rights under art 6(1) of ECHR and art 1 of First Protocol to ECHR. He concluded that the provision did restrict the parties’ rights of access to the enforcement jurisdiction of the English courts. However, the restriction was both legitimate and proportionate, so there was no breach of art 6(1). There was no breach of art 1 of the First Protocol since the judgment or award was always subject to the principles of state immunity. Accordingly, there was no interference with the judgment creditor’s ‘possessions’. 1 2

HRA 1998, s 2(1). [2006] 1 Lloyd’s Rep 45.

Payments into court 1.131  The rules relating to the enforcement of judgments or orders for the payment of money include judgments or orders for the payment of costs, but they do not apply to judgments or orders for the payment of money into court.1 Accordingly, a party cannot apply to enforce an order for a payment into court through a third party debt order, a charging order or a writ of control. An order for the payment of money into court may be enforced by the appointment of a receiver,2 by a writ of sequestration or by an order of committal.3 However, the most appropriate form of sanction is likely to be an application to strike out the defaulting party’s claim or defence, as appropriate. 1 CPR 70.1(2)(d). 2 In accordance with the court’s jurisdiction under Senior Courts Act 1981, s 37. 3 CPR Pt 81.

INSOLVENCY AND ITS EFFECT ON ENFORCEMENT 1.132  As has been noted in paras 1.1–1.4 an issue of fundamental importance for all the methods of enforcement is the effect of the judgment debtor’s insolvency.

Winding up  45

The insolvency regimes for companies and individuals are considered separately. In addition to insolvency, a number of anti-avoidance rules exist to prevent assets being transferred to defeat execution.1 1

Perhaps most important are those contained in IA 1986, ss 423 424 which would allow a judgment creditor prejudiced by a transaction entered into at an undervalue by a judgment debtor to apply to set it aside. In spite of being contained in IA 1986, these provisions apply irrespective of whether the individual or company is insolvent: IA 1986, s 424(1)(c). Another anti-avoidance provision is contained in the Married Women’s Property Act 1882, s 10, which provides that a gift by a husband to his wife will not be exempt from seizure if it remains in his ‘order, disposition or reputed ownership’. This section also applies to any deposit or other investment of moneys of the husband made by or in the name of his wife in fraud of his creditors. However, personal chattels will not be deemed to fall foul of this provision simply because they continue kept in the house in which they both live after the gift: French v Gething [1922] 1 KB 236, CA.

CORPORATE JUDGMENT DEBTORS 1.133  The insolvency legislation provides for a number of types of proceedings that relate to companies in financial difficulty: winding up, administration, company voluntary arrangements, restructuring plans, schemes of arrangement, administrative receivership and a standalone moratorium procedure. These are considered in turn. WINDING UP 1.134  Winding up can either be voluntary or compulsory. Although both methods have the same basic objective of collecting and distributing the assets of the company for creditors, certain provisions that affect enforcement only apply to a compulsory winding up. Application for a stay on presentation of a winding up petition 1.135  At any time after the presentation of a petition for a compulsory winding up, and before a winding up order has been made, the company, or any creditor or contributory, may apply to the court to stay any execution on such terms as it thinks fit.1 In the absence of ‘very exceptional’ circumstances, the court will ordinarily exercise its discretion to stay execution with a view to securing equal distribution of the assets among creditors of the same class.2 1 2

IA 1986, s 126(1). Bowkett v Fuller’s United Electric Works Ltd [1923] 1 KB 160 at 163–164, per Bankes LJ, CA. The case was decided under Companies (Consolidation) Act 1908, s 140, which contained a similarly worded provision.

1.136  If no stay is obtained, the execution may be continued until a winding up order is made, at which time the leave of the court will be needed to continue it (see paras 1.46–1.47). However, given the rules on execution steps that are uncompleted by the commencement of the winding up (which are considered next), there may be no benefit to the judgment creditor in continuing the execution as the proceeds of enforcement may be required to be handed to the liquidator.

46  General rules about enforcement of judgments Execution not completed before the commencement of the winding up 1.137  IA 1986, s 183(1) provides: ‘Where a creditor has issued execution against the goods or land of a company or has attached any debt due to it, and the company is subsequently wound up, he is not entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before the commencement of the winding up.’ 1.138  Accordingly, the commencement of the winding up prevents the judgment creditor from retaining the benefit of any execution or attachment unless the execution was completed before that time.

Meaning of ‘retain the benefit of the execution or attachment’ 1.139  The reference to ‘retain the benefit of the execution or attachment’ has been held to refer to the benefit of the charge which the creditor obtains by the issue of his execution or attachment and does not include money already received by the creditor.1 This issue is considered more fully at paras 1.177–1.178 with respect to the equivalent wording that applies to bankruptcy. 1

Re Caribbean Products (Yam Importers) Ltd [1966] Ch  331, CA. This case was decided under Companies Act 1948, s 325, which contained a similarly worded provision.

Meaning of ‘commencement of the winding up’ 1.140  IA 1986, s 183(1) applies to all forms of winding up, although the meaning of ‘commencement of the winding up’ varies according to how the winding up is brought about: (a) A voluntary winding up is deemed to commence at the time of the passing of the resolution for voluntary winding up.1 However, where a creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which he had notice is substituted for the date of commencement of the winding up.2 (b) If, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company is deemed to have commenced at the time of the passing of the resolution; and unless the court, on proof of fraud or mistake, directs otherwise, all proceedings taken in the voluntary winding up are deemed to have been validly taken.3 (c) Where the court makes a winding up order by virtue of IA  1986, Sch B1, para  13(1)(e), which allows the court on an application for an administration order instead to make a winding up order, the winding up is deemed to commence on the making of such winding up order.4 (d) In any other case, the winding up of a company by the court is deemed to commence at the time of the presentation of the petition for winding up.5

Winding up  47 1 2 3 4 5

IA 1986, s 86. IA 1986, s 183(2)(a). IA 1986, s 129(1). IA 1986, s 129(1A). IA 1986, s 129(2).

1.141  It should be noted that, in contrast with the equivalent provision for bankruptcy, the date for commencement of a winding up is usually earlier than the date of the court order.

Meaning of ‘completed the execution or attachment’ 1.142  The key question is the point at which a judgment creditor has ‘completed’ the execution or attachment. The time of completion is defined in IA 1986, s 183(3), and depends upon the type of property that is subject to enforcement. IA  1986, s 183(3) provides: ‘(a) an execution against goods is completed by seizure and sale, or by the making of a charging order under section 1 of the Charging Orders Act 1979; (b) an attachment of a debt is completed by receipt of the debt; and (c) an execution against land is completed by seizure, by the appointment of a receiver, or by the making of a charging order under section 1 of the Act above-mentioned.’ 1.143  The application of these rules to third party debt orders, charging orders and writs of control is considered further in each of the relevant chapters. 1.144  Under IA 1986, s 183(2)(c), the court has a discretion to set aside the rights of the liquidator under IA 1986, s 183(1),1 in favour of an execution creditor to such extent and subject to such terms as it sees fit. It seems that the words ‘to such extent’ permit the court to allow an execution creditor a proportion of the amounts due.2 However, in practice it would be rare for the court to make such an order because it would run contrary to the pari passu principle.3 1 2 3

See para 1.137. Re Grosvenor Metal Co Ltd [1950] Ch 63 at 64. See further Bailey, Groves and Smith Corporate Insolvency: Law and Practice (5th edn, LexisNexis, 2017) para 22.34.

History of the statutory provisions relating to the completion of enforcement 1.145  IA 1986, s 183, has a long history.1 However, since the provisions which are now contained in IA 1986, s 183 have been re-enacted over time they have not been fully updated to reflect changes in enforcement law. This creates the potential for confusion and misinterpretation. For example, the reference to ‘execution against land is completed by seizure’ in IA 1986, s 183(3)(a), refers to a sheriff’s seizure of land by writ of elegit, which was abolished in 1956.2 A further oddity is that ‘goods’ are defined in an unusually wide sense to include ‘all chattels personal’,3 thereby

48  General rules about enforcement of judgments including choses in action such as debts as well as choses in possession such as money. 1 2 3

It derives from similar provisions in Companies Act 1928, ss 69–70; Companies Act 1929, ss 268– 269; Companies Act 1948, ss 325 326; and Companies Act 1985, ss 621 622. Administration of Justice Act 1956, s 34. IA 1986, s 183(4).

Enforcement after the commencement of compulsory winding up is void 1.146  IA 1986, s 128(1), provides that in the case of a compulsory winding up, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up is void. This provision does not apply to a voluntary winding up by the court and there is no equivalent provision for a voluntary winding up. Enforcement after the making of the winding up order 1.147  IA 1986, s 130(2), provides that once a winding up order has been made, or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose. Enforcement proceedings fall within the expression ‘action or proceeding’. Again, it is unlikely that leave would be granted because it would upset the pari passu principle. ADMINISTRATION 1.148  The Enterprise Act 2002 (EA 2002) introduced the modern regime for the administration of companies, which is found in IA  1986, Sch B1. This procedure applies to most administrations after 15 September 2003.1 The provisions extend to apply to insolvent partnerships2 and LLPs3 (modified in their application). 1 2 3

EA 2002, s 248 inserted a new IA 1986, Pt II (administration) with effect from 15 September 2003. Insolvent Partnerships (Amendment) Order 2005, SI 2005/1516. It took effect on 1 July 2005. The Limited Liability Partnership (Amendment) Regulations 2005, SI 2005/1989.

1.149  Administrators can be appointed in a wide variety of circumstances and without the need to petition the court in every case. As will be seen, the lynchpin of administration is an all-embracing moratorium preventing any judgment creditor from taking enforcement steps. This allows the administrator the opportunity to try and salvage the company as a going concern without creditor pressure. Appointment of administrator out-of-court 1.150  An administrator can be appointed without the need to petition the court by the holder of a qualifying floating charge (QFCH)1 or the company or its directors.2

Administration  49

However, an out-of-court appointment cannot be made under IA  1986, Sch B1, para 22 by the company or its directors: (a) if less than 12 months has passed since the cessation of a previous administration where the administrator was appointed by the company or its directors using the out-of-court route; 3 (b) where a winding-up petition has been presented but not yet disposed of (unless the petition was presented after the director or company proposing to make the appointment has filed a notice of intention to appoint an administrator); 4 (c) where an administrator or administrative receiver is in office; 5 (d) if the company is in liquidation by virtue of: (i) a resolution for voluntary winding up; or (ii) a winding-up order;6 (e) if the company has entered a moratorium under IA 1986, Pt A1.7 Where a QFCH has valid security and conditions are met fewer restrictions apply in respect of an out-of-court appointment than for a company or its directors. An indepth discussion of the procedure and conditions are outside the scope of this book and specialist works should be consulted.8 1 2 3 4 5 6 7 8

As defined in IA 1986, Sch B1, para 14. IA 1986, Sch B1, para 22. IA 1986, Sch B1, para 23. IA 1986, Sch B1, paras 25A, 25(a). IA 1986, Sch B1, paras 25(c), 7. IA 1986, Sch B1, para 8. IA 1986, Sch B1, para A20(1)(f)-(g). See further Bailey, Groves and Smith Corporate Insolvency: Law and Practice (5th edn, LexisNexis 2017), paras 10.31–10.44.

Appointment of administrator by the court 1.151  Where the out-of-court route is not available an administrator may be appointed by the court1 following an application made by the company, its directors and/or one or more of its creditors.2 Specialist works should be consulted for details of who is entitled to make such an application and the conditions for making such an order.3 1 2 3

IA 1986, Sch B1, para 10-13; Insolvency Rules 2016, SI 2016/1024, rr 3.3–3.4. Certain other persons are also permitted to apply see IA 1986, Sch B1, 12(5), 35, 37–38 and IA 1986, s 7(4)(b). See further Bailey, Groves and Smith Corporate Insolvency: Law and Practice (5th edn, LexisNexis, 2017), paras 10.15–10.30.

The administrator 1.152  An administrator is an officer of the court whether or not appointed by an order of the court.1 While a court application for an administration order is pending, or for the brief period of time before an out of court appointment takes effect, no legal process (which includes legal proceedings, execution, and distress) may be instituted or continued against the company or property of the company except with

50  General rules about enforcement of judgments the permission of the court.2 This operates as an interim moratorium against all forms of enforcement. 1 2

IA 1986, Sch B1, para 5. IA 1986, Sch B1, para 44.

1.153  Where an application is made to the court for an administration order, or where the company or its directors seek to appoint an administrator, any enforcement officer known to be charged with execution against the company or its property must be given notice of the application for an order to appoint an administrator or the intention to seek to appoint an administrator, as the case may be.1 No notice needs to be given in the case of an administrator appointed by the holder of a floating charge. 1

Insolvency Rules 2016, SI  2016/1024, r 3.9 (application for an administration order) and r 3.23 (administration by the company or its directors).

1.154  While a company is in administration, no legal process (which includes legal proceedings, execution and distress) may be instituted or continued against the company or property of the company except with the consent of the administrator or with the permission of the court.1 This provision operates as a moratorium against all forms of enforcement. It is unlikely that the administrator would consent, or the court would grant leave, to commence or continue enforcement of a judgment once a company is in administration because it would defeat the objective of administration. The administrator must advertise his appointment once in the Gazette, and once in such newspaper as he thinks most appropriate for ensuring that the appointment comes to the notice of the company’s creditors.2 Upon appointment, the administrator also has a separate duty to give notice of his appointment to any enforcement officer known to be charged with execution against the company.3 1 2 3

IA 1986, Sch B1, para 43(6). Insolvency Rules 2016, SI 2016/1024, r 3.27. Insolvency Rules 2016, SI 2016/1024, r 3.27(3)(c).

Administrator’s powers to deal with security 1.155  The moratorium which takes effect during an administration does not necessarily mean that all is lost for a judgment creditor who has taken enforcement steps. Administration allows an administrator to sell assets which are subject to security, provided that the proceeds of sale are applied towards discharging the sums due on the security.1 The meaning of security for these purposes is ‘any mortgage, charge, lien or other security’.2 This definition has the effect that certain forms of enforcement constitute ‘security’ for the purposes of an administration and therefore impose an obligation on an administrator to apply the proceeds towards the discharge of the security held by the judgment creditor. 1 2

IA 1986, Sch B1, para 71. IA 1986, s 248(b).

Administration  51

Charging order 1.156  A charging order takes effect as an equitable charge.1 A final charging order clearly constitutes security for the purposes of administration and would be valid even if the judgment debtor was subsequently wound up.2 1

2

Charging Orders Act 1979, s 3(4) states that ‘a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand’. See further Chapter 4. Clarke v Coutts & Co [2002] EWCA Civ 943 at [39].

1.157  However, it is less clear whether an interim charging order will put the judgment creditor in the position of a secured creditor for the purposes of administration. An interim charging order certainly imposes an immediate charge on the judgment debtor’s interest in the asset to which the application relates.1 While this is not sufficient to constitute making the execution ‘completed’ for the purposes of bankruptcy or winding up,2 it has to be remembered that those provisions3 have the effect of depriving the judgment creditor of security rights which he would otherwise have.4 However, while an interim charging order undoubtedly constitutes a charge, the charge is of a defeasible nature and a court may refuse to exercise its discretion to make the final charging order in the event of the judgment debtor’s intervening administration. The effect of a judgment debtor’s insolvency on the granting of a charging order is considered in Chapter 4. 1 2 3 4

Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 2 AC 192 at 209, HL; Clarke v Coutts & Co [2002] EWCA Civ 943 at [39] and CPR 73.4(2). Clarke v Coutts & Co [2002] EWCA Civ 943 at [39]. Ie IA 1986, ss 183(1) and 346(1). Peck v Craighead [1995] 1 BCLC 337 at [342].

Third party debt order 1.158  Although CPR  Pt  72 has removed the references to the proprietary consequences of a third party debt order from the procedural rules, the making of an interim third party debt order still constitutes an equitable charge on the judgment debtor’s property.1 1

Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2004] 1 AC  260 at 299, per Lord Millett, HL. Lord Millett added (at 299) that ‘RSC Ord 49 has now been replaced by Part 72 of the Civil Procedure Rules, which is cast in more modern language. It is common ground that, as the editorial introduction states, the basic purpose of the rule remains unchanged. Unfortunately all reference to attachment has been dropped, and there is no longer any indication that the order has proprietary consequences. The words which formerly created an equitable charge at the interim stage have been replaced by a power to grant an injunction, which is normally a personal remedy. The straightforward language of Part 72 is deceptive. Its true nature cannot easily be understood without a knowledge of its history and antecedents. I do not, with respect, regard this as an altogether satisfactory state of affairs.’ See further Ch 3.

1.159  As Lord Millett explained in Société Eram Shipping Co Ltd v Cie Internationale de Navigation1 a charging order operates in two stages: ‘The first stage takes the form of an order nisi (or interim order) which creates a charge on the asset to be executed against and gives the judgment creditor

52  General rules about enforcement of judgments priority over other claimants to the asset; and the second stage takes the form of an order absolute (or final order) which brings about the realisation of the asset and the payment of the proceeds to the judgment creditor.’ 1

[2004] 1 AC 260 at 292.

1.160  It would therefore seem that the interim order constitutes ‘security’ for the purposes of administration. It is, however, important to note that although an interim third party debt order operates as a charge, the charge is defeasible in nature and a court may refuse to exercise its discretion to make the final third party debt order in the event of the judgment debtor’s intervening administration. The effect of a judgment debtor’s insolvency on the granting of a third party debt order is considered further in Chapter 3. Writ of control 1.161  The exact nature of a judgment creditor’s security interest in goods once they have been seized has been a matter of some debate. In Peck v Craighead1 the Court had to construe the similarly worded definition of security for the purposes of an individual voluntary arrangement (or IVA). Under IA 1986, s 383(2), which refers to ‘a mortgage, charge, or other security’, the Court held that where goods were seized under a writ of fieri facias (the modern form of which is the writ of control) (in that case under a walking possession agreement, now a controlled goods agreement) the judgment creditor was as regards those goods in the position of a secured creditor before the goods were sold. M E Mann QC, sitting as a deputy judge of the High Court, held that:2 ‘I  infer that the security right which an execution creditor has under a fieri facias, which has been acted upon by seizure, is not unlike a lien, which is a security right expressly contemplated by s 383(2). The fact that such a security right has not been enforced is nothing to the point. It is enough that the debtor’s property in the goods is bound. It is clearly irrelevant that the property has not yet passed out of the debtor’s hands as on completion of the execution by sale.’ 1 2

[1995] 1 BCLC 337. [1995] 1 BCLC 337 at 341.

1.162  This decision is consistent with a number of other authorities pointing to the same conclusion.1 It follows that, after the judgment debtor’s goods have been seized by an enforcement officer, a judgment creditor will be a secured creditor in an administration of the company. 1

See further Ch 5 (Writs of Control).

1.163  None of these considerations are relevant in winding up proceedings because statute provides that nothing short of sale will do. Equitable execution 1.164  It is clear in the case of equitable execution that the order appointing a receiver does not constitute a ‘mortgage, charge, lien or other security’.1 Accordingly,

Administrative receivers  53

where a receiver has been appointed by way of equitable execution, the judgment creditor will not be in the position of a secured creditor on administration. 1

See eg  Re Pearce [1919] 1  KB  354, CA (construing the similarly worded Bankruptcy Act 1914, s 167).

COMPANY VOLUNTARY ARRANGEMENTS, RESTRUCTURING PLANS AND SCHEMES OF ARRANGEMENT 1.165  Company voluntary arrangements (CVAs) are available to allow proposals to be put to creditors of the company either to avoid insolvency or to complement other forms of insolvency. The original CVA regime made no provision for a moratorium. For this reason, it was common for an administration order to be obtained first (which imposed a moratorium) and then for the administrator to seek the creditors’ agreement to a CVA.1 The Insolvency Act 2000 introduced a new moratorium regime for small companies.2 However, the Corporate Insolvency and Governance Act 2020 (CIGA  2020), in force from 26  June 2020 abolished this. CIGA  2020 introduced a new restructuring mechanism. The restructuring plan also allows a compromise between a debtor and its creditors. A scheme of arrangement may also be utilised (it is often used in re-structuring) but this is a procedure under the Companies Act 2006 rather than under the insolvency legislation. These procedures do not trigger a moratorium but in certain circumstances they may be combined with a standalone moratorium. This standalone moratorium procedure is further considered at paras 1.168–1.171. 1 2

Note the limitations placed on this practice by JCAM Commercial Real Estate Property XV Limited v Davis Haulage Limited [2017] EWCA Civ 267. Subject to a number of exceptions, IA  1986, Sch A1, para  3(2) (now repealed), provided that to qualify as a small company, it must meet two or more of the qualifying criteria: (a) a turnover of not more than £10.2m; (b) a balance sheet total of not more than £5.1m; (c) not more than 50 employees.

ADMINISTRATIVE RECEIVERS 1.166  An administrative receiver is defined in IA 1986, s 29(2) as: ‘(a) a receiver or manager of the whole (or substantially the whole) of a company’s property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or (b) a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company’s property.’ Floating charges are the security of choice of banks when lending to corporates. The Enterprise Act 2002 has severely curtailed the circumstances in which a qualifying floating charge holder can appoint an administrative receiver (with the intention of promoting the administration procedure set out in paras 1.153–1.154 above). In future, an administrative receiver can only be appointed by a floating charge created prior to 15 September 2003 or in respect of specified transactions.

54  General rules about enforcement of judgments PRIORITY OF FLOATING CHARGE HOLDERS AND EXECUTION CREDITORS 1.167  There is limited authority on the question of the effect of a floating charge on a judgment creditor’s ability to enforce his judgment. Such authority that there is lacks coherence. It does, however, seem clear that if a judgment creditor completes the enforcement before the charge crystallises, he gets priority over the floating charge holder.1 However, where a charge specifies that steps to enforce a judgment will automatically crystallise the charge this may be effective to defeat an attempt by a judgment creditor to enforce his judgment.2 This is a clause that is usually included in the debenture. The priority between floating charge holders and execution creditors is considered in more detail in specialist works.3 1

Robson v Smith [1895] 2 Ch 118 (garnishee order obtained and paid before charge crystallised) and Evans v Rival Granite Quarries Ltd [1910] 2 KB 979, CA (garnishee order absolute made before charge was crystallised). 2 Davey & Co v Willamson & Sons [1898] 2  QB  194 (sheriff’s attempt to levy execution defeated because the charge had already automatically crystallised). In Evans v Rival Granite Quarries Ltd [1910] 2 KB 979, CA, the decision was doubted by Fletcher Moulton LJ (at 997) although not by Buckely LJ (at 1000) who said ‘I have no fault to find with the decision’. 3 Gough Company Charges (2nd edn, LexisNexis, 1996), 319–328 and Goode Legal Problems of Credit and Security (6th edn, Sweet & Maxwell, 2018), 205-207.

STANDALONE MORATORIUM 1.168  The Corporate Insolvency and Governance Act 2020 (CIGA  2020) came into force on 26 June 2020. CIGA 2020 bought major insolvency reforms which had been in the pipeline since 2018. The Bill was, however, expedited due to the 2020 coronavirus pandemic and a need to help companies survive. CIGA 2020, Part 1A introduced a new moratorium procedure which has been incorporated into IA 1986, Part A1. Companies (including certain overseas companies) and LLPs are eligible to apply (There are some financial services exclusions).1 The moratorium is intended to allow a company (or LLP) in financial distress breathing space to explore its rescue and restructuring options free from creditor action. A company is able to continue to trade while the moratorium is overseen by an insolvency practitioner acting as a monitor.2 The directors remain in charge of running the business on a day-today basis. It is important to note that the moratorium is free-standing and does not necessarily lead to a particular insolvency procedure (or any insolvency process at all should the entity be rescued during the moratorium). 1 2

IA 1986, s A2, Sch ZA1. In respect of LLPs see The Limited Liability Partnerships (Amendment etc.) Regulations 2020, SI 2020/643. IA 1986, Ch 5.

1.169  The initial moratorium period is 20 business days1 and this can be extended for another 20 business days by the company’s directors.2 Any further extensions to the moratorium period are subject to the consent of the company’s creditors (up to maximum of one year)3 or the permission of the courts.4 In certain circumstances a moratorium will be ordered by the court but in many situations an eligible entity simply files the required paperwork with the court.5  A directors’ statement needs to be made that the entity is or is likely to become unable to pay its debts as

Individual judgment debtors  55

they fall due and the monitor must be, and remain, of the view that a rescue will be possible.6 If the monitor is no longer of the view that rescue is possible the moratorium must end.7 1 2 3 4 5 6 7

IA 1986, s A9. IA 1986, s A10. IA 1986, s A11. IA 1986, s A10. IA 1986, Ch 2. IA 1986, s A6. IA 1986, s A38.

1.170  The moratorium is broadly similar to the administration moratorium, and includes restrictions (among others) on insolvency proceedings,1 enforcement of security,2 and forfeiture.3 Once a moratorium is in place enforcement or payment of ‘pre-moratorium debts’ is restricted and a ‘payment holiday’ is put in place.4 Generally, pre-moratorium debts are those that were due before or fall due under an existing obligation during the moratorium. There is no payment holiday in respect of certain liabilities such as the monitor’s expenses, goods and services supplied during the moratorium, rent, wages or salary, redundancy and debts or other liabilities arising under a contract or other instrument involving financial services (such as a loan agreement).5 Importantly, if the company goes into liquidation or administration within 12 weeks of the end of the moratorium certain debts incurred during the moratorium are given priority (after creditors with fixed security).6 1 2 3 4 5 6

IA 1986, s A20. IA 1986, s A21(1)(c). IA 1986, s A21(1)(a). IA 1986, s A18. IA 1986, s A18(3). IA 1986, s 174A and Sch B1, para 64A.

1.171  During a moratorium, restrictions mean that no insolvency proceedings can be bought by creditors (only the directors may initiate insolvency proceedings).1 Further, restrictions also include that no legal process (including legal proceedings, execution, distress or diligence) may be raised, carried out or continued (certain exceptions apply in respect of employment proceedings).2 Therefore, it would appear that enforcement or proceedings relating to enforcement will remain on hold until the end of the moratorium period. After the moratorium period has ended a debtor may enter into an insolvency procedure, with the effects on enforcement as outlined above, or continue, in which case enforcement action may seemingly continue as usual. Importantly for unsecured creditors the procedure is only available where a company is likely to be rescued. 1 2

IA 1986, s A20. IA 1986, s A21(1)(e).

INDIVIDUAL JUDGMENT DEBTORS 1.172  Legislation essentially provides three forms of insolvency procedures for individuals in financial difficulties that are of practical significance: bankruptcy,

56  General rules about enforcement of judgments individual voluntary arrangements and County Court administration orders.1 These are considered in turn. 1

Deeds of Arrangement under the Deeds of Arrangement Act 1914 have in practice been supplanted by Individual Voluntary Arrangements and are outside the scope of this book.

BANKRUPTCY 1.173  Where a bankruptcy petition has been presented, or an individual has been adjudged bankrupt, the court that has bankruptcy jurisdiction over the individual has a discretion to stay any ‘execution or other legal process’ against the property of the debtor or the bankrupt as the case may be.1 Similarly, any other court in which any enforcement proceedings are pending against an individual also has a power to stay them, or allow them to continue on such terms as it thinks fit, once it has been proven that a bankruptcy petition has been presented against that individual or that he is an undischarged bankrupt.2 1 2

IA 1986, s 285(1). IA 1986, s 285(2).

1.174  Once a bankruptcy order has been made, IA 1986, s 285(3), provides that no judgment creditor who could prove the judgment debt in the bankruptcy shall have any remedy against the property or person of the bankrupt except with the leave of court and on such terms as the court may impose.

Execution not completed before bankruptcy 1.175  IA 1986, s 346(1) provides that: ‘… where the creditor of any person who is made bankrupt has, before the commencement of the bankruptcy— (a) issued execution against the goods or land of that person, or (b) attached a debt due to that person from another person, that creditor is not entitled, as against the official receiver or trustee of the bankrupt’s estate, to retain the benefit of the execution or attachment, or any sums paid to avoid it, unless the execution or attachment was completed, or the sums were paid, before the commencement of the bankruptcy.’ 1.176  The ‘commencement of a bankruptcy’ is the day on which the bankruptcy order was made.1 Accordingly, this section deprives a judgment creditor of the benefit of any enforcement which was not completed before the bankruptcy order was made. This section (like IA 1986, s 183, which applies to a winding up) has a long history.2 1 2

IA 1986, s 278(a). Bankruptcy Act 1861, s 73; Bankruptcy Act 1869, s 87; Bankruptcy Act 1883, s 45; Bankruptcy Act 1914, s 40; and Insolvency Act 1985, s 179.

Bankruptcy  57

Meaning of ‘retain the benefit of the execution or attachment’ 1.177  The meaning of ‘retain the benefit of the execution or attachment’ was considered in Re Andrew1 where the Court was construing the similarly worded Bankruptcy Act 1914, s 40(1). In that case, a sheriff had seized goods under a writ of fieri facias (now known as a writ of control) and an arrangement was made whereby the sheriff withdrew from possession in return for a number of part payments by the judgment debtor. A number of payments were made before the judgment debtor became bankrupt. The trustee contended that the ‘benefit of the execution’ meant all the part payments. 1

[1937] Ch 122, CA.

1.178  The trustee’s argument failed and the Court held that ‘benefit of execution’ referred not to moneys actually received by the creditor in whole or partial satisfaction of his debt, whether under or in consequence of an execution or not, but rather to the charge which the judgment creditor obtained by the issue of the execution. The benefit of the execution could only refer to the charge still remaining after taking into account any payments which would reduce the amount of the charge.1 1

[1937] Ch 122 at 130, CA. Approved in Marley Tile Co Ltd v Burrows [1978] QB 241, CA.

1.179  It seems the same principle applies to any other form of enforcement which allows part payments without the execution being completed,1 such as charging orders, where a number of payments may be received but not enough to pay the whole amount of the judgment debt. However, it is unclear to what extent this principle is still good law in the light of the wider changes made to the insolvency legislation. 1

Re Caribbean Products (Yam Importers) Ltd [1966] 1 Ch 331 at 351, per Russell LJ, CA.

1.180  Sums paid to avoid execution are now specifically dealt with by IA 1986, s  346, which provides that they may be retained provided they were paid before the bankruptcy order was made. Any sums paid after the making of the bankruptcy order must be handed to the official receiver or trustee. (By contrast, the equivalent provision applicable to a winding up1 does not expressly mention payments made to avoid execution.) 1

IA 1986, s 183.

Completion of execution 1.181  The meaning of ‘completion’ of execution and attachment is defined in IA 1986, s 346(5): ‘(a) an execution against goods is completed by seizure and sale or by the making of a charging order under s 1 of the Charging Orders Act 1979; (b) an execution against land is completed by seizure, by the appointment of a receiver or by the making of a charging order under that section; (c) an attachment of a debt is completed by the receipt of the debt.’

58  General rules about enforcement of judgments 1.182  The application of these rules to third party debt orders, charging orders, writs of control and appointing a receiver by way of equitable execution is considered further in the relevant chapters. It should be noted that ‘goods’ are not given the artificially wide definition they are given under the equivalent provision applicable to a winding up (see paras 1.145).1 This does, however, render the reference in IA 1986, s 346(5)(a), to execution against goods being completed by the making of a charging order meaningless because a charging order cannot be made over goods.2 1 2

IA 1986, s 183(4). In Goode Legal Problems of Credit and Security (6th edn, Sweet & Maxwell, 2018) 206 it is suggested that the provision is a drafting error.

1.183  Under IA 1986, s 346(6), the court may set aside the rights of the official receiver or trustee under IA  1986, s  346(1), in favour of an execution creditor on such terms as it sees fit. However, it would be rare for the court to make such an order in favour of a judgment creditor because it would run contrary to the pari passu principle.1 1

See further Berry, Bailey and Miller Personal Insolvency: Law and Practice (3rd edn, LexisNexis, 2001) 499–500 which gives some examples under previous insolvency legislation of where the court might exercise its discretion in favour of an execution creditor.

1.184  The joint effect of IA 1986, ss 285(3) and 346(1), is that the making of a bankruptcy order prevents any further enforcement steps except with the leave of court and deprives the judgment creditor of any benefit of any enforcement unless it was completed by that time. INDIVIDUAL VOLUNTARY ARRANGEMENTS 1.185  Individual voluntary arrangements are an alternative procedure to bankruptcy for individual debtors. It allows a debtor to avoid some of the restrictions imposed on a bankrupt, such as acting as a director of a company. 1.186  If a debtor applies for an interim order to make a proposal for a voluntary arrangement, the court that has jurisdiction over the interim order may at any time stay any ‘execution or other legal process’ against the property of the debtor.1 The court in which any enforcement proceedings are pending against an individual also has a power to stay them, or to allow them to continue on such terms as it thinks fit, once it has been proven that an application for an interim order has been made.2 1 2

IA 1986, s 254(1)(b). IA 1986, s 254(2).

COUNTY COURT ADMINISTRATION ORDERS 1.187  CCA  1984, s  112, provides that where an individual judgment debtor is unable to pay a judgment obtained against him and the judgment debtor’s total indebtedness (including the judgment debt) is not more than £5,000, the County Court has power to make an order for the administration of his estate.1 If a County

Assignment of a judgment debt  59

Court administration order is in place, although execution of debts over £50 is still theoretically possible,2 from a practical perspective this is likely to prove pointless given the debtor’s perilous financial position and may end up being a further source of expense to the judgment creditor. The provisions relating to the County Court’s powers to make administration orders will be substantially amended when the relevant section of the Tribunals, Courts and Enforcement Act 2007 comes into force.3 1 2 3

CCA 1984, s 112(1). CCA 1984, ss 114–115. Tribunals, Courts and Enforcement Act 2007, s 106.

CONCLUSION: THE INTERACTION OF THE INSOLVENCY AND ENFORCEMENT REGIMES 1.188  The insolvency provisions as they apply to methods of enforcement have developed on a piecemeal basis and lack consistency. While bankruptcy and winding up effectively nullify any uncompleted enforcement steps, in an administration a judgment creditor implementing certain forms of enforcement is treated as secured creditor. The relationship between insolvency and enforcement has not been properly addressed and the fact this interface did not form part of the Civil Enforcement Review was perhaps a missed opportunity for a long overdue need to rationalise the law in this area.1 1

For a more detailed critique, see Walton ‘Execution Creditors—(almost) the Last Rights in Insolvency’ (2003) 32 CLWR 179.

ASSIGNMENT OF A JUDGMENT DEBT 1.189  A judgment debt is a chose in action and may be assigned by way of legal assignment or equitable assignment. Where a judgment creditor is able to assign the judgment debt to a third party for valuable consideration, he may consider doing so, even where the consideration received represents a considerable discount to the monetary value of the judgment debt, in order to avoid the delay, expense and uncertainty that may be associated with enforcing the judgment himself. An outline of the principles of legal and equitable assignment is provided below. Detailed reference should be made to specialist works.1 1 See Chitty on Contracts (33rd edn, Sweet & Maxwell, 2019).

Legal assignment 1.190  In order for there to be a valid legal assignment, the assignment must take place in accordance with the Law of Property Act 1925 (LPA  1925), s  136. The following conditions must therefore be met:1 (1) the assignment must be in writing under the hand of the assignor; (2) the assignment must be absolute and not purporting to be by way of charge only; and

60  General rules about enforcement of judgments (3) express notice of the assignment in writing must to be given to the judgment debtor. 1

LPA 1925, s 136.

1.191  If these conditions are met, the judgment debt transfers to the assignee, from the date of notice to the judgment debtor, the legal right to the judgment debt, all legal and other remedies for the same, and the power to give good discharge for the debt without the concurrence of the assignor.1 Consideration is not necessary for legal assignment under LPA 1925. The assignee may enforce the judgment debt by all the methods of enforcement that would have been available to the assignor (the judgment creditor). The assignee may enforce the judgment debt in his own name and he need not bring proceedings in the judgment creditor’s name.2 However, to enforce by a writ of execution or control, the assignee will need to apply to court for leave to enforce.3 This is because the assignee is not the named judgment creditor and a change has taken place in the parties. If enforcement proceedings have begun, an assignment of the benefit of a judgment will also include the benefit of any steps already taken to enforce.4 If enforcement proceedings have begun, procedurally it is likely to be necessary to ask the court to substitute the assignee for the assignor pursuant to CPR Pt 19. 1

LPA  1925, s  136. Stamp duty of £5 was chargeable on an assignment of a debt executed before 1  December 2003 as a ‘conveyance of property other than on sale’ (Finance Act 1999, s  112(3), Sch 13). Stamp duty is not chargeable on an assignment of a debt executed on or after 1 December 2003 (Finance Act 2003, s 125). 2 Goodman v Robinson (1886) 18 QBD 332. That case was only concerned with whether garnishee proceedings (now third party debt orders) were available to the legal assignee of a debt which had been assigned under the Supreme Court of Judicature Act 1873, s 25(6) (now replaced by LPA 1925, s  136). However, the Court saw no reason why writs of fi fa (now writs of control) and oral examinations should not equally be available to the legal assignee of a debt, though such comments are strictly obiter. The same principles should presumably apply to charging orders although these were not considered in the judgment. In Forster v Baker [1910] 2  KB  636, Fletcher Moulton LJ said (obiter): ‘I am not prepared to hold that the assignee of the whole of a judgment debt is in the position of a judgment creditor with regard to that debt’. He added that Goodman v Robinson would need to be ‘carefully considered’ when the point came before the Court of Appeal. 3 CPR 83.2(3). 4 Adedeji v Pathania [2015] EWHC 1434 (Ch).

Equitable assignment 1.192  An equitable assignment will transfer the equitable (though not legal) right to the judgment debt. Consideration may be given for the assignment. However, provided that the assignor has done everything required of him to make the assignment complete in equity,1 consideration is not required for the assignment. No particular form of words is necessary provided that a clear intention to assign the benefit of the judgment debt to the assignee is shown. Notice of the equitable assignment to the judgment debtor is not necessary for an equitable assignment to take effect, but it is preferable that such notice should be given. The assignor should be joined to any proceedings brought by the assignee to enforce payment of the judgment debt. 1

Eg where a holder of a judgment debt declares that he holds it on trust for another.

Enforcement of monetary awards made by bodies other than the High Court  61

1.193  Glegg v Bromley1 is illustrative of an equitable assignment of a judgment debt. A wife had assigned to her husband as security for a debt she owed to him any interest, money or premises to which she may become entitled as a consequence of an action she was bringing against a third party.2 The action was successful and she was awarded damages. Separately, a judgment creditor of the wife sought to garnish the judgment debt owed to her as a result of the action. The Court of Appeal held that there had been a valid assignment of the judgment debt in equity since the husband had given good consideration for the judgment debt in forbearing to take action on the debt on the strength of the security given by his wife. Accordingly, the judgment creditor could not garnish the judgment debt. 1 2

[1912] 3 KB 474, CA. The assignment could not therefore operate as a legal assignment, see para 1.190.

Assignment of judgment debts – maintenance and champerty 1.194  The courts have considered the question of whether the assignment of judgment debt is void for illegality because it involves maintenance or champerty. Maintenance is the giving of assistance to a party to litigation by a person who has no interest in the litigation or other motive recognised by the law as justifying his interference. Champerty is an aggravated form of maintenance in which the assistance is given in return for the promise of a share in the proceeds of the action. A contract involving maintenance or champerty is contrary to public policy and void for illegality. 1.195  However, the rule against maintenance or champerty does not prevent the assignment of a judgment debt, even prior to judgment, provided the assignee has no right to control or influence the conduct of the proceedings. In Glegg v Bromley1 the facts of which have been described above, the Court held: ‘I think that all that was assigned was the fruits of an action. I know no rule of law which prevents the assignment of the fruits of an action. Such an assignment does not give the assignee any right to interfere in the proceedings in the action. The assignee has no right to insist on the action being carried on; in fact, the result of a compromise is actually included as a subject of the assignment. There is in my opinion nothing resembling maintenance or champerty in the deed of assignment.’ 1

[1912] 3 KB 474 at 484.

ENFORCEMENT OF MONETARY AWARDS MADE BY BODIES OTHER THAN THE HIGH COURT AND COUNTY COURTS 1.196  This chapter has so far considered the enforcement of judgments and orders of the court. However, a number of statutes provide that decisions by tribunals (or other bodies) may be enforced by the court as if they were orders of the court.1 Where such a tribunal has made an award for a sum of money, an application to enforce the award should be made in accordance with CPR 70.5.2 This rule does not apply to

62  General rules about enforcement of judgments arbitral awards (see para 1.202) or to foreign judgments (which are registrable for enforcement in England and Wales under the provisions of CPR  Pt  74: see paras 1.215–1.240).3 1

2 3

See, eg, Value Added Tax Act 1994, s  87 in relation to registered decisions of VAT and Duties Tribunal. Decisions of Employment Tribunals are automatically enforceable in the County Court without the need for an order of the County Court to this effect (Employment Tribunals Act 1996, s 15, following the Tribunals, Courts and Enforcement Act 2007). Such an application can also be made to enforce decisions of tribunals etc other than monetary awards. CPR 70.5(2). Neither does the rule apply to orders made in connection with criminal investigations and proceedings, which can be registered in the High Court pursuant to RSC Ord 115.

1.197  The application should be made by filing an application using Form N322A1 in the court for the district where the person against whom the award was made resides or carries on business unless a practice direction or enactment or rule provides otherwise (or unless the court orders otherwise).2 It may be made without notice3 and should state the name and address of the person against whom enforcement is sought, together with a statement of how much of the award remains unpaid.4 The costs of making the application for an order to enforce an award may also be recovered and these should be stated in the application notice. 1 PD 70, para 4.2. 2 CPR 70.5(4)(b). 3 CPR 70.5(4)(a). 4 PD 70, para 4.3.

1.198  A copy of the award should be filed with the application notice.1 The fee for issuing the application is £442 and the application may be dealt with by a court officer without a hearing.3 1 CPR 70.5(6). 2 Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, para 8.9. 3 CPR 70.5(7).

Judgments of the Supreme Court/House of Lords 1.199  The enforcement of orders made by the Supreme Court (and past judgments of the House of Lords) in England and Wales is dealt with in paragraph 13 of Practice Direction 40B which supplements Part 40 of the Civil Procedure Rules.1 Where a judgment creditor seeks to enforce a judgment of the Supreme Court/House of Lords he should apply under CPR Pt 23 for an order that the judgment be made an order of the High Court. The application should be made to the procedural judge of the Division, District Registry or court in which the proceedings are taking place and may be made without notice unless the court directs otherwise.2 1 2

Also see The Supreme Court Practice Direction – Miscellaneous matters – 8. See para 8.18.1. PD 40B, para 13.1.

1.200  The application must be supported by the following evidence:1 (a) details of the order which was the subject of the appeal to the Supreme Court or House of Lords;

Law reform  63

(b) details of the order of the Supreme Court or House of Lords, with a copy annexed; and (c) a copy annexed of the certificate of the Registrar of the Supreme Court or the Clerk of Parliaments of the assessment of the costs of the appeal to the Supreme Court or House of Lords. 1

PD  40B, para  13.2. The Supreme Court Practice Direction – Miscellaneous matters – 8. See para 8.18.1.

1.201  The order that the Supreme Court/House of Lords judgment be made an order of the High Court should be in form number PF68. Arbitration awards 1.202  Detailed consideration of the statutory provisions and procedural rules relating to enforcement of arbitration awards is outside the scope of a book on the enforcement of English judgments in the High Court. However, for present purposes it is worth nothing that under the provisions of the Arbitration Act 1996, an award made by an arbitration tribunal pursuant to an arbitration agreement may, by leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect.1 Where leave is so given, judgment may be entered in terms of the award.2 The procedural rules relating to arbitration claims3 are set out in CPR Pt 62. An application for permission to enforce an arbitration award as an order of the court should be made in accordance with CPR 62.18. It may be made without notice and a Pt 8 claim form should be issued. 1 2 3

Arbitration Act 1996, s 66(1). Arbitration Act 1996, s 66(2). Ie applications to the court under the Arbitration Act 1996 or other claims connected to arbitration proceedings: see CPR 62.2(1).

LAW REFORM 1.203  Many of the methods of enforcement covered in this book have historical antecedents dating back to the Middle Ages and in some cases beyond. The editorial introduction to Pt 70 of the 2008 edition of The White Book stated:1 ‘The law on enforcement of judgments is out of date, unsatisfactory and in need of reform. Rather more than rule changes will be required (legislation has been promised).’ 1

The White Book (Sweet and Maxwell, 2008), vol 1, para 70.0.2.

The Civil Enforcement Review 1.204  In March 1998 the Government launched the Civil Enforcement Review as part of its ‘access to justice’ initiative. The Review’s terms of reference included an examination of the present methods of enforcement available in the County Court and

64  General rules about enforcement of judgments High Court to assess their effectiveness and identify means through which this could be improved. The first phase of the Enforcement Review concluded in July 2000, with the publication of a number of proposals for primary and secondary legislation.1 1

Report of the First Phase of the Enforcement Review, July 2000.

1.205  A  number of substantial changes to the procedural rules relating to enforcement have since been effected. The Civil Procedure (Amendment No 4) Rules 20011 inserted Pts 70 to 73 into the CPR. These Parts came into force on 25 March 2002,2 and apply to enforcement proceedings commenced after that date. Part 70 contains general rules about the enforcement of judgments and orders. At this stage it did not replace the whole of RSC Ord 45, which formerly contained the general rules relating to the enforcement of judgments. 1 SI 2001/2792. 2 SI 2001/2792, r 1(c). Some further amendments were effected by SI 2001/4015.

1.206  CPR Pts 71 to 73 contain the procedural rules relating to orders to obtain information from judgment debtors, third party debt orders and charging orders. They replaced RSC Ords 48 to 50 respectively. Similarly, Pt 69 updated the rules relating to the court’s powers to appoint a receiver and was introduced by the Civil Procedure (Amendment) Rules 2002.1 1

SI 2002/2058. Part 69 replaced RSC Ord 30 and RSC Ord 51.

1.207  The second phase of the Enforcement Review focused on proposals for primary legislation. This effectively concluded with the publication of the White Paper on Effective Enforcement in March 2003.1 A  number of the White Paper’s proposals relating to a new class of enforcement agents to replace High Court sheriffs were enacted in the Courts Act 2003. The White Paper also included proposals for a single piece of legislation to codify the law relating to enforcement agents and provide a unified regulatory regime and fee structure. The White Paper’s proposals led to the enactment of the Tribunals, Courts and Enforcement Act 2007. 1 Cmnd 5744.

1.208  The White Paper also proposed a unified register of County Court and High Court judgments, which was also enacted under the Courts Act 2003.1 This was followed by the Register of Judgments, Orders and Fines Regulations 2005.2 1 Courts Act 2003, s 98(1). 2 SI 2005/3595.

1.209  Broad changes were made to provisions dealing with enforcement by the Tribunals, Courts and Enforcement Act 2007. The reform modernised and unified terminology and sought to clarify the law concerning enforcement agents when taking control of and selling goods. Significant proportions of this Act came into force in April 2014 and the Civil Procedure (Amendment No 1) Rules 20141 amended the CPR to reflect this. The main change to the CPR was the introduction of four new parts2 which are to be read alongside the relevant legislation. The reform also amended existing CPR provisions to consolidate enforcement provisions. These had

Law reform  65

been contained previously in RSC Orders and practice directions and CCR orders. Some RSC Orders and practice directions, together with CCR orders have therefore been removed as a result of this reform. Other statutory instruments have also enacted additional reform.3 1 SI 2014/407. 2 Pt 83: writs and warrants – general provisions; Pt 84: enforcement by taking control of goods; Pt 85: claims in controlled goods and executed goods and Pt 86: stakeholder claims and applications. 3 The Civil Procedure (Amendment No  2) Rules 2014, SI  2014/482 implemented changes due to Tribunals Courts and Enforcement Act 2007, s  64 that requires all enforcement agents to be certificated unless exempt under s  63. The Civil Procedure (Amendment No  4) Rules 2014, SI 2014/867 dealt with requirements for applications for permission to issue a writ of sequestration.

1.210  The changes brought about by this major reform are considered in more detail elsewhere in this book. In summary: CPR  70.2A replaced RSC  45, r 8 and deals with the court being able to order that an act be done at the expense of a disobedient party. PD  70 saw changes to terminology as a consequence of a new part and practice direction at Pt  83 dealing with writs and warrants. A  new Pt  84 and PD 84 was introduced relating to enforcement by taking control of goods. The Civil Procedure (Amendment No 2) Rules 20141 made provision for the amendment of Pt 84 concerning the certification of enforcement agents. A new CPR Pt 85 and PD  85 consolidated High Court and County Court rules for third party claims in relation to goods taken into control, those subject to a writ of execution and exempt goods. As a consequence, RSC Ord 117 and CCR Ord 33 were rendered obsolete and removed from the CPR. 2 1 SI 2014/482. 2 Obsolete and removed provisions include: RSC  Ords 17, 45, 46, 47 and 113, Practice Direction RSC 46 and CCR Ords 22, 24, 25, 26 and 33, Practice Direction CCR 26. Amendments were made to CCR Ord 27 and CCR Ord 28.

1.211  The White Paper’s proposals for Data Disclosure Orders (DDOs) arguably represented the most far reaching of the proposed changes to enforcement law. The statutory provisions which are intended to implement these proposals are contained in the Tribunals, Courts and Enforcement Act 2007, ss  95–105 (not in force – In March 2009 the Government announced its intention not to generally implement Part 4 of TCEA 2007). These provisions set out a new procedure by which the court would be able to obtain access to information from third parties which might assist with the enforcement of judgments. Broadly, a judgment creditor may apply to the court for information as to the appropriate and available enforcement procedures for a particular judgment debt. The court may then make a ‘departmental information request’ or an ‘information order’ in respect of the judgment debtor with a view to obtaining the necessary information for the court to advise the judgment creditor how best to go about enforcing the judgment debt. This procedure marks a first, if small, departure from the principle that the judgment debtor is left to ascertain the most appropriate means by which to enforce his judgment without the court’s involvement. 1.212  However, leaving aside ‘departmental information requests’ and ‘information orders’, which no longer appear to be a reform which is being taken forward, one continuing criticism which could be made of the Civil Enforcement Review and the reform bought about by the Tribunals, Courts and Enforcement Act 2007 is that it did

66  General rules about enforcement of judgments not seek to reform some of the bedrock foundations of English enforcement law, such as considering whether the court could play a more proactive role in the enforcement of its judgments. Similarly, the interaction between the law on enforcement and the insolvency regime, particularly outside the realm of the onset of formal insolvency proceedings, appears to lack rationale and coherence in a number of respects. Some aspects of the law in this regard remain ripe for reform. The authors rather anticipate that come the 4th edition of this work these aspects will be over-ripe for reform.

PRE-CPR AUTHORITIES 1.213  One final point should be made in the context of reform of the law on enforcement as to the continuing relevance of pre-CPR authorities. The CPR introduced a new procedural code with the overriding objective of enabling the court to deal with cases justly.1 In a number of judgments given by the Court of Appeal shortly after the CPR entered into force, the Court held that authorities under the former rules are generally no longer relevant; rather it is necessary to concentrate on the intrinsic justice of the case by reference to the overriding objective.2 1 CPR 1.1(1). 2 See Biguzzi v Rank Leisure plc [1999] 1 WLR 1926, CA; Purdy v Cambran [1999] All ER (D) 1518, CA and Walsh v Misseldine [2000] All ER (D) 261, CA.

1.214  However, these Court of Appeal judgments all concerned the approach the court should take in applying the test to strike out proceedings: that is, they were concerned with entirely procedural matters. On questions of substantive law preCPR authorities generally remain valid. The point is of some importance because in the law relating to enforcement, perhaps more so than any other area, the distinction between procedural and substantive law is often a fine one at best. Thus, where a preCPR authority is confined to procedural matters alone, it should rightly be treated with due scepticism, if not ignored, in the context of considering the operation of the modern rules. However, the extensive consideration and discussion given to a wealth of pre-CPR authorities in the 2003 judgment of the House of Lords in Société Eram Shipping Co Ltd v Cie Internationale de Navigation1 is illustrative of the fact that consideration of earlier cases on the substantive law may often be necessary or helpful in arriving at the correct interpretation of the operation of the modern rules. As Lord Millet observed in Société Eram:2 ‘I wish to add one thing more. RSC, Order 493 has now been replaced by Part 724 of the Civil Procedure Rules, which is cast in more modern language. It is common ground that, as the editorial introduction states, the basic purpose of the rule remains unchanged. Unfortunately all reference to attachment has been dropped, and there is no longer any indication that the order has proprietary consequences. The words which formerly created an equitable charge at the interim stage have been replaced by a power to grant an injunction, which is normally a personal remedy. The straightforward language of Part 72 is deceptive. Its true nature cannot easily be understood without a knowledge of its history and antecedents. I do not, with respect, regard this as an altogether satisfactory state of affairs.’

Enforcement of an English judgment overseas  67 1 2 3 4

[2004] 1 AC 260, HL. [2004] 1 AC 260 at 298, HL. The rule formerly governing garnishee orders. The rules now governing third party debt orders, which have replaced garnishee orders.

LOCATION OF THE JUDGMENT DEBTOR’S ASSETS 1.215  This chapter has attempted to survey the general rules which apply to the enforcement of English judgments in the High Court. However, it is worth saying a few words about the enforcement of foreign judgments. As has been noted in the introduction to this chapter, the location of a judgment debtor’s assets should be considered even before proceedings are issued since it is here that a claimant will wish to bring proceedings in order for the judgment to be effective. The location of assets may also affect the choice of jurisdiction in which to commence proceedings. 1.216  The principle of reciprocal enforcement of judgments is intended to provide claimants with a streamlined mechanism for the enforcement of a judgment obtained in one country in the courts of another country. Detailed consideration of the law relating to the reciprocal enforcement of judgments is the subject of specialist works1 and is outside the scope of this book. However, an outline of the various regimes and key considerations relating to both the enforcement of English judgments overseas and the enforcement of foreign judgments in England and Wales is provided below.2 The following commentary is intended by way of summary only and detailed reference should be made to the relevant Regulations, Conventions, statutes and procedural rules. 1 See Dicey and Morris on the Conflict of Laws (15th edn, Sweet & Maxwell, 2012). 2 There is an entirely separate regime for the international enforcement of arbitration awards from that applicable to court judgments. International Conventions (such as the New York Convention) mean that in many instances an arbitral award is more widely enforceable than an English court judgment.

ENFORCEMENT OF AN ENGLISH JUDGMENT OVERSEAS 1.217  Where enforcement of an English judgment in another jurisdiction is contemplated local law advice on the enforceability of an English judgment in that jurisdiction should be sought at the outset. Failure to do so may result in a judgment creditor pointlessly incurring time and expense in obtaining judgment to no end because the judgment is unenforceable in the jurisdiction where the defendant’s assets are located. 1.218  There are presently three broad regimes which govern whether an English judgment will be recognised and enforced in another jurisdiction: (a) where the Brussels I (Recast) Regulation,1 Brussels I Regulation,2 or the Lugano Convention3 apply (the Regulation Regime); (b) where the Regulation Regime does not apply, but there is a bilateral treaty or arrangement between the UK and the state in which enforcement is sought; or (c) where the law of the state in which enforcement is sought otherwise permits enforcement.

68  General rules about enforcement of judgments 1 2

3

Regulation (EU) No  1215/2012 of 12  December 2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. Regulation (EC) 44/2001 of 22 December 2000 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. On 10  January 2015, the Brussels I  Regulation was repealed and was replaced by the Brussels I (Recast) Regulation. However, transitional arrangements are in place. Article 66 of Brussels I (Recast) Regulation provides that the regulation applies only to legal proceedings instituted on or after 10 January 2015. The Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988.

1.219  The enforcement of judgments in the EU is however changing as the UK has departed the European Union. Following the UK’s departure from the European Union, on 31 January 2020 at 11pm, an implementation period began. This is due to end on 31 December 2020 (exit day).1 This period is also commonly referred to, and is referred to by the EU, as the ‘transitional period’. During this period the Brussels I (Recast) Regulation continues to apply by virtue of the Withdrawal Agreement.2 There is no provision for Brussels I Regulation despite this still being of potential relevance when enforcing judgments in the EU.3 1

2 3

The Withdrawal Agreement, art 126. The Withdrawal Agreement is defined in the EU (Withdrawal Agreement) Act 2020, s 39(1) as the agreement under art 50(2) of the Treaty on European Union between the UK and the EU (agreed between the UK and the EU on 17 October 2019). The Withdrawal Agreement, arts 67(2)(a) and 69(2) deal with enforcement. The provisions have been inserted into UK law through EU (Withdrawal Agreement) Act 2020, s 5. Transitional provisions the Brussels I  (Recast) Regulations (art  66) provide that the Brussels I Regulations will apply where proceedings were commenced prior to 10 January 2015.

1.220  After the end of the implementation (or transitional) period much presently remains uncertain. Subject to some transitional provisions (see para 1.231) the Brussels I (Recast) Regulations will be revoked in the UK, as will the Lugano Convention (the UK is a party to the Lugano Convention by virtue of its EU membership).1 In the absence of a new negotiated regime cross-border matters involving EU and EFTA state parties will fall to be determined by the rules which are already applicable to non-EU, non-EFTA cases (see para 1.229). 1

The Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019, SI 2019/479.

The Regulation Regime 1.221  The enforcement regime under the Brussels Regulations is a simplified and streamlined version of the enforcement regime under the Brussels1 and Lugano Conventions, which are similar. The Brussels Regulations govern issues of enforceability as between all EU Member States.2 The Lugano Convention applies as between EU Member States and EFTA countries (excluding Lichtenstein).3 The UK is a party to the Lugano Convention by reason of its membership of the EU. The UK Government has suggested that the UK’s involvement in the Lugano Convention might be a potential long-term solution in lieu of the Brussels regime, once the UK is no longer a member of the EU.4 1

Ie, the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968. With effect from 1 July 2007, Denmark became subject to the Brussels Regulation rather than the Brussels Convention. As a result the Brussels Convention is now redundant.

Enforcement of an English judgment overseas  69 2

3 4

That is, between Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus (not including Turkish Cyprus), Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. That is, between Iceland, Switzerland and Norway and all EU member states. White Paper: The Future Relationship Between The United Kingdom And The European Union published in July 2018 athttps://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/725288/The_future_relationship_between_the_United_Kingdom_ and_the_European_Union.pdf and Technical paper: Handling civil legal cases that involve EU countries if there’s no Brexit Deal published in September 2018 at www.gov.uk/government/ publications/handling-civil-legal-cases-that-involve-eu-countries-if-theres-no-brexit-deal/handlingcivil-legal-cases-that-involve-eu-countries-if-theres-no-brexit-deal.

1.222  The aim of the Regulation Regime is to provide a system whereby a claimant who has obtained a judgment from the courts of a member state may readily enforce that judgment in all other member states. The judgment must relate to a ‘civil or commercial matter’ and there are further restrictions as to the types of claim that can be enforced within the Regulation Regime.1 1

The Regulation Regime does not apply to bankruptcy or insolvency proceedings, claims relating to the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship, maintenance arising out of family matters, wills and succession, social security matters or arbitration. Further reference should be made to the detail of the Brussels Regulations and the Lugano Convention in this regard.

1.223  The procedure for enforcing an English judgment in a Member State will be governed by local law and local law advice should be sought in this regard. The Brussels I Regulation and the Lugano Convention also set out certain requirements on an application for recognition or declaration of enforcement of a judgment in a foreign jurisdiction.1 Under the Brussels I (Recast) Regulation a judgment given in one EU Member State is automatically enforced in other EU Member States without any special procedure being required.2 1 2

See arts 53–54 of Brussels I Regulation and arts 46–48 of the Lugano Convention. See art 39 of Brussels I (Recast) Regulation.

1.224  Theoretically, the process of recognition is straightforward. However, in practice it may take some time and interim measures in the foreign court to prevent the dissipation of assets may need to be considered. A refusal by the courts of the state in which enforcement is sought to recognise or enforce the English judgment can be appealed under the Regulation Regime.1 However, the judgment debtor cannot make an appeal on the merits to the court in which enforcement is sought against the decision of the English court. Similarly, the courts of the enforcing state may not review the jurisdiction of the English court in reaching the judgment.2 1 2

See arts 33 and 34 of the Brussels I Regulation, arts 49(1) and 50 of the Brussels I (Recast) Regulation or arts 27 and 28 of the Lugano Convention. Other than satisfying themselves that the matter was within the scope of the Brussels Regulations or Lugano Convention.

1.225  If the recognition procedure is successful, separate enforcement proceedings will then need to be brought in the member state in question, which may entail further delay and expense.

70  General rules about enforcement of judgments 1.226  The potential solutions to replace the Regulation Regime following the EU ‘transitional period’ is considered at paras 1.237–1.240. European Enforcement Order 1.227  From 21 October 2005, a streamlined procedure has existed for enforcement of uncontested judgments by virtue of EC  Regulation 805/2004 (the European Enforcement Order Regulation).1 The European Enforcement Order Regulation allows uncontested claims2 for a specific sum of money to be enforced automatically in another member state without the need for a declaration of enforceability and without any possibility of opposing its recognition once the order has been certificated as a European Enforcement Order by the court of origin.3 However, following the UK’s exit from the European Union, subject to transitional provisions, Regulation (EC) 805/2004 is revoked by the European Enforcement Order, European Order for Payment and European Small Claims Procedure (Amendment etc) (EU  Exit) Regulations 2018.4 This comes into force on exit day (see para 1.219). 1 2

European Enforcement Order Regulation, art 33. Defined in European Enforcement Order Regulation, art  3, as claims which have been expressly admitted or the subject of a settlement approved by the court, claims to which the debtor never objected, and claims where the debtor did not appear and was not represented despite having objected to the claim initially. 3 European Enforcement Order Regulation, art 5. European Enforcement Order Regulation, art 6, sets out the requirements for certification as a European Enforcement Order. 4 SI 2018/1311.

Bilateral treaty on enforcement of judgments 1.228  If the UK and the state in which enforcement is sought are signatories to a bilateral treaty on enforcement of judgments, the terms of that treaty should be considered in order to determine the enforceability of the English judgment in that country. Local law advice should be sought on both enforceability and procedure. If under the terms of a bilateral treaty the judgment of the courts of a foreign country are enforceable in England, it is more likely that enforcing an English judgment in that country will be straightforward under the principle of reciprocity. Law of the state in which enforcement is sought 1.229  Where no reciprocal arrangements are in place enforcement will be a matter of local law in the foreign state. Local law advice on the enforceability of English judgments and the procedure for enforcement should be sought. ENFORCEMENT OF FOREIGN JUDGMENTS IN ENGLAND 1.230  The common law rule is that fresh proceedings must be issued in England to enforce a foreign judgment. However, there are a number of important exceptions to this rule which will in practice apply to the majority of countries from which

Enforcement of foreign judgments in England  71

enforcement a foreign judgment is sought. Where an exception does apply, the foreign judgment simply needs to be registered in England, following which it is possible to proceed to enforce the judgment as if it were an English judgment. However, notably, the common law procedure still governs the enforceability of US judgments in England and thus fresh proceedings must be issued to enforce a US judgment. The Regulation Regime 1.231  The first major exception to the common law rule applies to judgments from the courts of countries falling under the Regulation Regime. However, this exception has been greatly eroded by the UK’s withdrawal from the European Union. Following the UK exiting the European Union (para  1.219), where transitional arrangements apply, the question of whether a foreign judgment issued by the courts of an EU  Member State will be enforceable in England will be governed by the Brussels regime and the Civil Jurisdiction and Judgments Act 1982 (CJJA), s  4. Similarly, where transitional arrangements apply, the enforceability of judgments of the courts of Lugano Convention countries will be governed by the Lugano Convention and CJJA  1982, s  4. Broadly speaking, recognition and enforcement of judgments in proceedings that have been commenced but not concluded in EU or relevant EFTA  Member States before exit day can take place under the same procedure as before exit. In such circumstances CPR 74 will apply after exit day as if the changes made by the regulations had not been made.1 See paras 1.237–1.240 for some alternative possible regimes following the UK’s exit from the European Union and the end of the transition period. 1

See the Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019, SI 2019/479, reg 92 and the Civil Procedure Rules 1998 (Amendment) (EU Exit) Regulations 2019, SI 2019/521, reg 26.

The 1920 and 1933 Acts 1.232  In the case of Commonwealth (and some other) countries, the enforceability of judgments given by the courts of the foreign state in England will be governed by either the Administration of Justice Act 1920 (AJA 1920) or the Foreign Judgments (Reciprocal Enforcement) Act 1933 (FJ(RE)A 1933). 1.233  Application for recognition and enforcement of a judgment of a country to which the AJA 1920 or FJ(RE)A 1933 apply should be made to the High Court and may be made without notice. The applications should be made under AJA 1920, s 9 or FJ(RE)A 1933, s 2 (respectively) and the procedure is governed by CPR 74.2– 74.11. The grounds for non-registration are set out in AJA 1920, s 9(2) and FJ(RE) A 1933, s 4. Common law 1.234  In the case of judgments which do not fall under an enforcement regime enforcement is governed by the English common law rules. A  foreign judgment

72  General rules about enforcement of judgments which is enforceable at common law creates an obligation that is actionable in England. However, it cannot be enforced here except by the institution of fresh legal proceedings. 1.235  The foreign judgment should be sued upon as a debt. Permission to serve out may be required. Once proceedings have been commenced, the judgment creditor should make an application for summary judgment on the basis that there is no defence to the claim. A number of defences are available at common law (for example, on the grounds that enforcement is contrary to public policy, that the judgment was obtained by fraud or that the proceedings were not sufficiently served and reference should be made to the relevant authorities in this regard). The UK internal convention 1.236  The enforcement of UK judgments in other parts of the UK is governed by CJJA 1982, s 18, and Schs 6 and 7. The procedural rules are contained in Pt 74.14– 74.18. FUTURE POTENTIAL REGIMES 1.237  Following the UK’s departure from the European Union and the revocation of the Regulation Regime a replacement mechanism for the enforcement of cross border judgments may be implemented. 1.238  The 2005 Hague Convention on Choice of Court Agreements may be of increasing importance. The UK ratified the convention in its own right on 28  December 2018 but at present the UK has not re-acceded to the convention. Should this convention apply judgments will be enforceable around the EU (as well as in other Hague contracting states). The 2005 Hague Convention on Choice of Courts only applies, however, where there is an exclusive jurisdiction clause which has been entered into after the convention was in force for the chosen state. 1.239  The UK  Government has also signalled that participating in the Lugano Convention 2007 in its own right might be a solution for the UK once the UK is no longer able to take advantage of the existing Regulation Regime after the end of the transition period. 1.240  Further, the 2019 Hague Judgments Convention (The 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters) has now been signed and adopted and is open for signature. It is intended to be a single global framework for the free circulation of judgments on cross-border civil or commercial matters. This convention is a step forward from the 2005 Hague Convention on Choice of Court Agreements as it applies to a broader category of judgments. Uruguay was the first country to sign it. As a member of the Hague Conference on Private International Law the UK might ratify any such convention with relative ease.

CHAPTER 2

Obtaining information about a judgment debtor’s assets

INTRODUCTION 2.1  As has been noted in the Introduction, it is for the judgment creditor, not the court, to enforce her judgment. The civil justice system provides various procedures to assist the judgment creditor in this process, which form the subject of this book. However, enforcement can be an expensive and time-consuming process and ineffective or abortive enforcement amounts to nothing more than an additional source of loss for the judgment creditor. 2.2  Where a judgment creditor is faced with a judgment debtor who will not pay it will often be prudent to take steps to obtain information about the judgment debtor’s assets before commencing proceedings for enforcement. The ability to select an effective method of enforcement depends fundamentally on the information the judgment creditor possesses on the assets held by the judgment debtor. Taking steps to obtain such information will allow the judgment creditor to make an informed decision as to whether to pursue enforcement, and if so, which method or methods of enforcement are likely to prove most fruitful. 2.3  For the reasons discussed in Chapter  1, the claimant should consider the availability of assets for enforcement at the outset of any litigation. Steps to preserve assets1 may have been necessary before or during proceedings in the event that the claimant suspects the defendant may attempt to dissipate her assets in order to render herself ‘judgment-proof’. Disclosure during the course of litigation by the defendant or third parties may also have provided the judgment creditor with valuable information relating to the judgment debtor’s assets. 1

Such as freezing injunctions or other without notice injunctions.

2.4  As well as direct investigations into the judgment debtor’s means, it may also be worth considering whether there are any assets belonging to the judgment debtor that are being held in another person’s name, particularly where the judgment creditor knows or suspects that the judgment debtor has concealed assets in an attempt to evade payment. For example, it may be possible to establish that money held in a

74  Obtaining information about a judgment debtor’s assets bank account in the name of the judgment debtor’s spouse is actually beneficially owned by the judgment debtor, and thus held on trust for the judgment debtor by the spouse. Alternatively, it may be the case that a company is so closely associated with the judgment debtor that there is a complete merger of interests or unfettered control of the company by the judgment debtor so as to enable the court to treat the company as the judgment debtor’s alter ego. If so, the company’s assets may be liable to execution.1 1

The test for whether the court will ‘lift the corporate veil’ is a high one and will be a question of fact in every case. See further Lonrho Ltd v Shell Petroleum Co Ltd [1980] QB 358 and Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177.

2.5  This chapter describes various methods a claimant can use to obtain information about a defendant’s assets once judgment has been obtained. While the judicial machinery of Pt 71 of the Civil Procedure Rules 1998 (CPR) (which provides for orders for a court examination of a judgment debtor to obtain information about her assets) is only available after judgment, there are a variety of public sources of information that may reveal important information about a judgment debtor’s means even prior to judgment. In certain circumstances, it may also be worth considering instructing an inquiry agent to carry out more detailed investigations. Each of these three routes of inquiry is dealt with in this chapter. 2.6  The procedure for a court examination of judgment debtors has been the subject of considerable discussion in the context of reform. Reforms set out in Pt 4 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) would have involved meaningful changes to the way in which judgment creditors might obtain information. However, in March 2009 the Government announced its intention not to generally implement Pt 4 of TCEA 2007. While the procedure set out in Pt 71 can form the cornerstone to a successful enforcement process, it has itself been the subject of some criticism. Some of the criticisms which have been made of the oral examination process and some of the proposals for its reform are considered at the end of this chapter.

PUBLIC SOURCES OF INFORMATION 2.7  Before incurring the expense of instructing inquiry agents or commencing Pt  71 proceedings, it is worth noting that considerable information relating to a judgment debtor’s assets is potentially available through public sources. Much of the information available through public sources is either free or relatively inexpensive to obtain. The use of such sources is likely to be a relatively painless and prudent first step that should avoid wasting costs in fruitless enforcement proceedings. It should also be noted that an increased amount of information held by public authorities has been made available under the Freedom of Information Act 2000 (FIA 2000). Under the terms of the FIA 2000, any person making a request for information to a public authority1 is entitled (subject to the exemptions set out in the FIA 2000) to be informed in writing by the authority whether it holds information of the description specified in the request and, if that is the case, to be provided with that information.2 This may create further opportunities for judgment creditors to access information about a judgment debtor that is held by a public authority.

Public sources of information  75 1 2

Defined in FIA 2000, s 3(1) and Sch 1. FIA 2000, s 1(1).

2.8  The internet may provide general information about a judgment debtor. Using Google or other online search engines such as Bing and Yahoo can reveal a wealth of information about a subject with great ease and some search engines allow for content change alerts to be set up.1 Where a broad search is not helpful many individuals and businesses will have social network accounts with platforms such as Facebook, MySpace, LinkedIn, Twitter and Instagram. These can be an excellent source of information about activities being undertaken, assets which are held and the location of a judgment debtor. Popular social networking sites allow account holders to create profile pages with personal details. A  user may then regularly upload content which can include photographs and videos and written descriptions. A user may also interact with other content created by other users which also creates a digital footprint. While a user can sometimes control who has the ability to view their content, privacy settings vary. However, social networking content produced by businesses is likely to be public and accessible and individuals may not have changed default public privacy settings. Joining social networking sites is usually free and simple and more content is usually viewable to a member. Where open source investigations do not reveal useful information specialist investigators2 can recover a wide variety of information from social networking accounts including social media posts, photographs, messages, IP addresses and frequently visited locations. Specialist expert investigators can generate a subject profile which can include assets as well as frequently visited places, activities of interest and associates (see paras 2.66–2.166 concerning inquiry agents). 1 2

Such as Google Alerts. Such as Cyfor (www.cyfor.co.uk).

2.9  Recourse to public sources of information may also have been made prior to the commencement of litigation, particularly where there are doubts about a potential defendant’s solvency or worth. It may be the case that the information available from some of the sources outlined in this chapter can be employed much more usefully at an earlier stage in the litigation. However, for completeness, those sources which are most likely to be useful in the context of commercial enforcement are included here. Insolvency 2.10  Before taking any enforcement steps it is worth considering whether the judgment debtor is solvent. If not, enforcement proceedings are unlikely to be worth pursuing.1 1

In such circumstances, it may be worth considering whether to initiate bankruptcy or winding up proceedings, or to file a proof of debt where such proceedings are already under way. See further Chapter 1.

2.11  The interplay between the insolvency regime and enforcement proceedings is considered generally in Chapter 1 and in each of Chapters 3 to 6 which deal with the various methods of enforcement. However, for present purposes, it is worth noting

76  Obtaining information about a judgment debtor’s assets that a judgment creditor who has issued execution against the property of a judgment debtor or attached any debt due to the judgment debtor who is subsequently wound up (in the case of a company) or made bankrupt (in the case of an individual) is not entitled to retain the benefit of the execution or attachment against the liquidator or trustee in bankruptcy she has completed the execution or attachment before the commencement of the winding up or bankruptcy.1 1

IA 1986, ss 183(1) and 346(1).

2.12  As a consequence, if there are any doubts as to the judgment debtor’s solvency, the judgment creditor should check whether a petition for bankruptcy or winding up has been presented before enforcement proceedings are commenced. Where the judgment debtor is an individual, a bankruptcy search should be carried out. In the case of a company, a winding up search should be made. A  range of insolvency notices are required to be published in the London Gazette. A great deal of historical information is also freely available from the London Gazette website, although the most recent information requires a subscription.1 1

Full details are available from the London Gazette website: www.gazettes-online.co.uk

Bankruptcy searches 2.13  Bankruptcy searches can be undertaken using the Land Charges Register or the Individual Insolvency Register. Land Charges Register 2.14  All bankruptcy petitions1 and bankruptcy orders2 filed in England and Wales are automatically notified to the Chief Land Registrar to be registered in the register of pending actions3 and the register of writs and orders affecting land4 respectively. Both of these registers are held at the Land Charges Department. 1 2 3 4

Insolvency Rules 2016, SI 2016/1024, r 10.13 (creditor’s petitions) and r 10.37 (debtor’s bankruptcy application). Insolvency Rules 2016, SI  2016/1024, r 10.32(3)(a)(i) and r 10.33 (creditor’s petitions) and r 10.45(3)(a)(i) and r 10.46 (debtor’s bankruptcy application). Land Charges Act 1972, s 5(1)(b). Land Charges Act 1972, s 6(1). The register is something of a misnomer given that the Land Charges Act 1972, s 6(1)(c) provides that a bankruptcy order may be registered ‘whether or not the bankrupt’s estate is known to include land’.

2.15  A bankruptcy search can be made in writing by post or DX by using Form K161. You can also search against any known trading names. Fees are £1 per name for submission via post or DX. 1

Land Registry Practice Guide 63 (April 2020): Land Charges – applications for registration, official search, office copy and cancellation.

2.16  Alternatively, the search can be made by registered Business e-service users through HM Land Registry Portal (called a bankruptcy search) or through National Land Information Service (NLIS) or even by personal attendance at the Plymouth

Public sources of information  77

Office Customer Information Centre (by appointment only – 72 hours’ notice required). Fees for these methods are £2 per name. Search certificates are issued by post or DX save for Portal users where the result is sent electronically. Contact details for the Land Charges Department are given in Appendix 1. Individual Insolvency Register 2.17  Searches for both bankruptcy orders and individual voluntary arrangements in England and Wales can be made by searching the Individual Insolvency Register.1 Unlike the Land Charges Register, this search will not reveal bankruptcy petitions2 and thus gives no warning of an impending bankruptcy. However, it does reveal individual voluntary arrangements3 and therefore indicates when a judgment debtor is in financial difficulties. The register is updated daily. 1 2 3

Insolvency Rules 2016, SI 2016/1024, r 11.13(3). Insolvency Rules 2016, SI 2016/1024, Pt 11, Ch 6. Insolvency Rules 2016, SI 2016/1024, rr 11.14-11.15.

2.18  The search can be made free of charge online1. An online search can be performed against just a surname (or part of a surname) or for a trading name. If the search does not produce the expected results name(s) may have been entered incorrectly. Therefore, you should try variations in the spelling or only enter part of the surname. 1 www.insolvencydirect.bis.gov.uk/eiir/

2.19  Any person may request the official receiver to make a search of the registers1 on any business day between 9am and 5pm by visiting the local official receiver’s office.2 Contact details for the Insolvency Service are given in Appendix 1. 1 2

Insolvency Rules 2016, SI 2016/1024, r 11.13(4). Details of the nearest Official Receiver’s Office can be obtained by calling the Insolvency Service’s Central Enquiry Line. Contact details for the Insolvency Service appear in Appendix 1.

2.20  The report can be printed from the online search. Further enquiries may be made by telephoning the relevant court.1 1

Inspection of court records for insolvency proceedings is dealt with by Insolvency Rules 2016, SI 2016/1024, r 12.39.

Insolvency searches 2.21  Where the judgment debtor is a company, an insolvency search can be carried out at the Central Registry of Administration and Winding Up Petitions at the Companies Court in London. Such a search may expose a petition or order for the winding-up of the company which has been made in England and Wales. It may also reveal any administration application, order or appointment (including out-of-court appointments and intentions to appoint) filed in England and Wales. However, the Central Registry depends on the District Registries and County Court hearing centres informing it that documents have been filed. Therefore, the search is not guaranteed.

78  Obtaining information about a judgment debtor’s assets Therefore, it may be wise to also to conduct a search at the District Registries and County Court hearing centres where the company of interest has its registered office and/or place of business. 2.22  The Central Registry can be searched by either personal attendance at Companies Court Central Office, by telephone, by way of the online CE filing service1 (account required) or through a third-party search provider. Telephone searches (premium rate) are limited to three company names – although you can call back. Searches via CE filing are £11 for 15 minutes. Any unused minutes can be carried forward. Contact details for the Companies Court Central Registry are provided in Appendix 1. 1 https://efile.cefile-app.com/login

2.23  The Central Registry only maintains records of compulsory winding up petitions or orders. To find out whether a company has commenced a voluntary winding up, a search should be made at Companies House (see para 2.31).

Register of Judgments, Fines and Orders 2.24  Where there are doubts about a judgment debtor’s solvency, it may also be worth making a search of the Register of Judgments, Fines and Orders. This contains details of all High Court and County Court judgments1 in England and Wales. It will therefore provide information about other creditors of the judgment debtor and may serve as an early warning signal that further pursuit of a judgment debtor is unlikely to be worthwhile. The Register of Judgments, Fines and Orders is maintained by Registry Trust Ltd.2 The information held in the register is public.3 1 2

3

Also included are administration orders made under the County Courts Act 1984, s 112 and orders restricting enforcement under County Courts Act 1984, s 112A. Courts Act 2003, s  98 and the Register of Judgments, Orders and Fines Regulations 2005, SI  2005/3095, as amended by the Register of Judgments, Orders and Fines (Amendments) Regulations 2009. Certain information is also available from Scotland, Ireland, Northern Ireland, the Isle of Man and Jersey. See further the Registry Trust Ltd’s website: www.registry-trust.org.uk. Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 27.

2.25  The information held on the register comprises the judgment debtor’s name and address, the amount of the judgment (including costs), the court which entered the judgment, and the case number.1 Entries are kept on the register for a period of six years from the date of the judgment before they are cancelled.2 Claims satisfied within one calendar month of the judgment being entered can be removed from the register. If the judgment debtor satisfies the judgment after one calendar month, the entry will remain on the register for six years (although the judgment debtor can apply for a note to be made on the register denoting the satisfaction of the judgment).3 1 2 3

Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 10. Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 26. Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 11.

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2.26  Certain judgments or orders are exempt from registration.1 Where a judgment or order was made after a contested hearing, the judgment or order will not be entered on the register until the judgment creditor takes any step to enforce the judgment or to obtain information from the judgment debtor in accordance with CPR Pt 71.2 Other judgments and orders exempt from registration include those where there is an appeal pending3. As the nature of the exemptions illustrates, the purpose behind the register is to identify persons who are uncreditworthy, not to identify parties who legitimately dispute liability. 1 2 3

Courts Act 2003, s  98(3)(a) and Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 9. Register of Judgments, Orders and Fines Regulations 2005, reg  9(c). Note that an application or order for the payment of a money judgment by instalments also triggers registration. Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 9(b).

2.27  The register may be searched online1 (after registration) or by post. It is possible to conduct searches against a named person, company, firm or a stated address, or to perform periodical searches relating to named courts or courts in a particular county. The Registrar may also agree to carry out other kinds of search.2 A certified copy of any entry on the register will be provided (fee of £10.00).3 Contact details for the Registry Trust Ltd are provided in Appendix 1. Attachment of earnings orders are not included in the Register of Judgments, Fines and Orders. However, a search of the court records for attachment of earnings orders in force against the judgment debtor can be undertaken by any person having a judgment or order against a person.4 The court will issue a certificate of the result of the search.5 1 www.trustonline.org.uk/ 2 Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 27. 3 Register of Judgments, Orders and Fines Regulations 2005, SI 2005/3595, reg 28. 4 CPR 89.2. 5 On form N336 which is also used to make the application.

Companies 2.28  Where the judgment debtor is a company, considerable information as to its assets may be available through public sources of information. Companies House 2.29  All companies formed and registered under the Companies Acts are required to deliver certain documentation to the Registrar of Companies.1 In addition, overseas companies which have an established place of business in the UK are required to deliver certain documents.2 Some of this information may provide an indication of the financial health or assets of a company. An outline of that which is likely to prove most useful to a judgment creditor is given in paras 2.31–2.36. Companies House Information Centres are located in Cardiff, Edinburgh, London and Belfast and maintain records of every registered company’s documents. The public has a right to inspect and obtain copies of documents held by the Registrar.3 Information

80  Obtaining information about a judgment debtor’s assets can be requested and accessed by personal visit to one of the Information Centres, by telephone to the contact centre, or online (via Companies House or WebCheck). The Companies House website4 provides free access to certain basic company information and also provides a full list of fees for providing copies of other documents filed with the Registrar of Companies. Contact details for Companies House are provided in Appendix 1 to this chapter. 1

A more comprehensive summary of the documents required to be sent to the Registrar of Companies can be found in Appendix 6 to Tolley’s Company Law Service. 2 Companies Act 2006, ss  1044–1059 (CA  2006) and the Overseas Companies Regulations 2009, SI 2009/1801. 3 CA 2006, s 1085. 4 https://beta.companieshouse.gov.uk

2.30  A summary of the information available from Companies House is set out in Appendix 2 to this chapter. The information of most interest to a judgment creditor is likely to be contained in the company accounts, which every limited company is required to deliver to the Registrar of Companies under CA 2006, s 441. The accounts comprise the company’s audited balance sheet and profit and loss account, together with the directors’ and auditors’ reports and, in the case of quoted companies, the directors’ remuneration report. Where appropriate, the accounts will include group accounts.1 1

It should be noted that the accounts held at Companies House may not be fully up to date. Under CA 2006, s 441, public limited companies are required to file their accounts within six months after the end of the accounting reference period and private limited companies within nine months. The late filing of accounts may sometimes suggest that a company is in financial difficulties and the company’s accounting reference date (which can be found on the Companies House website) should be checked to ascertain how current the accounts are. There are certain exceptions and the exact requirements vary in terms of filing requirements for small to medium-sized companies, unlimited companies and dormant companies.

Company insolvency information available from Companies House 2.31  Companies House also holds certain information which may be useful where the solvency of a company is of concern. All companies are required to file notice of appointment of a receiver or manager 1 and the appointment of an administrative receiver.2 Details of any voluntary resolutions3 or orders4 for the winding up of the company and notice of the appointment of a liquidator5 must also be filed. Further, if a company obtains a moratorium, as introduced by the Corporate Governance and Insolvency Act 2020, the monitor must also notify Companies House.6 1 2 3 4 5 6

CA 2006, s 859K (as amended by the Companies Act 2006 (Amendment of Part 25) Regulations 2013, SI 2013/600). IA 1986, s 43(5). CA 2006, s 30(1) and IA 1986, s 84(3). IA 1986, s 130(1) and Insolvency Rules 2016, SI 2005/1024, r 7.22. IA 1986, s 109(1). IA 1986, s A8(2)(a).

Company charges 2.32  Some information can be obtained from Companies House as to the registered charges of a company. This will be relevant where there is a risk that the company

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may become insolvent since a judgment creditor will generally rank behind secured creditors in any claim to the company’s assets. 2.33  The Companies Act 2006 (Amendment of Part 25) Regulations 20131 expanded the information available at Companies House relating to charges. Previously although the instrument creating a company charge was required to be sent to the Registrar of Companies as part of the process of registration, the instrument itself was returned to the company and only Form 395, which set out the particulars of the charge, was retained. Often this form would not contain vital information – in particular the amount of the charge. The Companies Act 2006 (Amendment of Part 25) Regulations introduced s 859I to CA 2006 to increase transparency. CA 2006 now requires the Registrar of Companies to include in the register any documents delivered under the registration provisions (such as the certified copy of the charging instrument itself). The register is available for public inspection. Redaction is only permitted in respect of certain personal information.2 1

The Companies Act 2006 (Amendment of Part 25) Regulations 2013, SI 2013/600.

2

CA 2006, s 859G.

2.34  Whether the charge instrument itself will reveal the actual amount secured will depend on the type of security. If it secures ‘all monies’, the judgment creditor will be none the wiser. It may, however, secure a loan of a fixed amount which will prove more useful if that amount is set out in the charge (although the charge may simply refer to amounts owed under a separate loan agreement). Statutory records 2.35  In addition to filing various documents with the Registrar of Companies, CA 2006 also requires a company to keep certain information in the form of registers. These are usually required to be kept at the registered office of the company. Some of this information is open to inspection by the public.1 1

Other information is only available to a company’s members, creditors or debenture holders. For a summary of the statutory records required to be kept by a company and rights of inspection, see Ch 3 of Tolley’s Company Secretary’s Handbook 29th edn and Appendix 6 of Tolley’s Company Law Service.

2.36  CA 2006 makes provision for additional rights to inspect company documents in the case of a company’s members, creditors and debenture holders (as provided in the relevant sections of the Act, and that directors have a common law right to inspect a company’s books (subject to the court’s discretion). Where the judgment creditor falls into one of these categories, these additional rights to inspect documents may be useful when it comes to enforcement (to the extent that they have not already been utilised during the course of litigation). Common law rights of inspection of company books and records 2.37  At common law the shareholders of a company have a right to inspect the documents of the company, including legal advice paid for using company funds.1

82  Obtaining information about a judgment debtor’s assets This principle applies to all companies irrespective of size or importance2 although it is subject to any contrary provision in the company’s articles of association.3 1

2 3

Unless that legal advice was prepared to advise the company on hostile litigation between the company and the shareholder), Woodhouse and Co Ltd v Woodhouse (1914) 30 TLR 559, CA. See also Hollander Documentary Evidence (13th edn, Sweet & Maxwell, 2018), para 5-02. CAS (Nominees) Ltd v Nottingham Forest plc [2001] 1 All ER 954 at 958–959. Gouraud v Edison Gower Bell Telephone Co of Europe Ltd (1888) 59  LT  813. If a company has CA 1985 or CA 2006 Table A articles of association, the articles will contain the following: ‘No member shall (as such) have any right of inspecting any accounting records or other book or document of the company except as conferred by statute or authorised by the directors or by ordinary resolution of the company.’ The Companies (Tables A  to F) (Amendment) Regulations 2007, SI 2007/2541(as amended by the Companies (Tables A to F) (Amendment) (No 2) Regulations 2007, SI 2007/2826) amended Tables A in the Companies (Tables A to F) Regulations 1985. The amended Table A applies to companies incorporated on or after 1 October 2007 and before 1 October 2009. This provision is similar to a provision considered in Gouraud and which the Court held was insufficient to resist disclosure of legal advice on the basis it was not framed with litigation in mind. Note that from 1 October 2009, Table A is superseded by the model articles set out in the Schedules to the Companies (Model Articles) Regulations 2008, SI 2008/3229 which similarly states: ‘Except as provided by law or authorised by the directors or an ordinary resolution of the company, no person is entitled to inspect any of the company’s accounting or other records or documents merely by virtue of being a shareholder’. Table A  continues to apply to companies limited by shares incorporated before 1  October 2009 (unless and until those companies specifically adopt the model, or other, articles).

2.38  At common law the directors of a company have the right to inspect the company’s books of account and other records so as to enable them to carry out their duties as a director1. This right ceases upon the director’s removal from office. The court retains a residual discretion whether or not to order inspection to be allowed. However, where there is no reason to suppose that a director is likely to be removed from office, the court will assume that a director is exercising her right in the interests of the company unless the court is satisfied that the director’s intention is to abuse the confidence reposed in her as a director and to injure the company. 2 1 2

See, eg, McCusker v McRae 1966  SC  253 and Burn v London and South Wales Coal Co [1890] WN 209. Conway v Petronius Clothing Co Ltd [1978] 1 WLR 72 at 89–90.

Other public sources 2.39  Finally, it is worth remembering that Bloomberg, Reuters and the London Stock Exchange may also be a source of information relating to transactions a company has entered into or its likely financial health. The internet may provide general information about a company including, potentially, its own website or activity on social networking sites (see para 2.8).

Limited Liability Partnerships 2.40  Limited Liability Partnerships (LLPs) were introduced by the Limited Liability Partnerships Act 2000 (LLPA 2000) and the Limited Liability Partnerships Regulations 2001,1 which both came into force on 6  April 2001. LLPs are an alternative corporate business vehicle that can be seen as a hybrid between a company

Public sources of information  83

and a partnership. LLPs and companies have broadly similar accounting and filing requirements. However, LLPs are organised internally like partnerships and have no shareholders. 1 SI 2001/1090.

2.41  The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009, apply many parts of the CA 2006, with appropriate modifications, to LLPs.1 Under this modified legislation, LLPs are required to file certain documents at Companies House which are available to the public in the same way as are certain company documents. The key filing requirements are similar to those applicable to companies and are set out in Appendix 3. 1

SI  2009/1804. See also Limited Liability Partnerships (Amendment etc.) Regulations 2020, SI 2020/643 which apply the insolvency related changes in Corporate Insolvency and Governance Act 2020 to limited liability partnerships.

2.42  As with companies, certain basic information relating to LLPs can be freely accessed from the Companies House website. Other documents can be ordered in the same way as documents for companies. The relevant fees for copies of documents filed with the Registrar of Companies are available on the Companies House website. Contact details for Companies House and details of the contact centre are provided in Appendix 1.

Dun & Bradstreet 2.43  Dun & Bradstreet is a commercial source of company information designed to be used for credit, marketing, purchasing and management decision purposes. Companies are given a number of ratings including payment performance and likelihood of success or failure. The ratings are used as predictive indicators for assessing company risk and business failure. The Dun & Bradstreet report may therefore provide some useful information to a judgment creditor who is considering whether the pursuit of enforcement proceedings against a judgment debtor company is likely to be worthwhile. There are various forms of report which often conveniently collect together public information and which may be purchased from their website.1 Contact details for Dun & Bradstreet are set out in Appendix 1. 1 www.dnb.co.uk

Land 2.44  The land and buildings owned by a judgment debtor may be one of its most substantial assets and the availability of charging orders over land (see further Chapter  4) means that such assets are potentially available for enforcement by a judgment creditor. The judgment creditor will need to check that the land is in fact owned by the judgment debtor and it will also be prudent to check the extent of any prior charges over the land. This will enable the judgment creditor to ascertain the extent of the remaining equity in the property so as to form a view whether execution

84  Obtaining information about a judgment debtor’s assets against land is worthwhile since a charging order will take effect subject to any prior charges over the property. 2.45  The means by which ownership is ascertained will depend on whether the land is registered or unregistered. To determine whether land is registered, any person may apply for a search of the index map.1 The Land Registry form for a search of the index map is form SIM.2 Account holders can apply for a search of the index map through Business e-services or Business Gateway.3 Non-business customers must submit a postal SIM application to HM Land Registry. The certificate of result will reveal whether or not title to the land is registered and, if it is so registered, the title number(s).4 In 2014 The Land Registry also introduced MapSearch – a free facility for business customers. This is essentially an online searchable version of the Index Map (without indemnity provisions). Using this it can be established whether a property is registered, view the location and obtain title numbers – a PDF copy can be saved by the user. If the land is known to be registered but the title number is unknown, a different procedure applies.5 1

2 3 4 5

The index map is a computerised map based on the Ordnance Survey Map providing an index of the land comprised in every registered title and pending application for first registration: Land Registration Rules 2003, SI  2003/1417, r 145.  See further Land Registry Practice Guide 10 (November 2017): Official searches of the index map. Land Registration Rules 2003, r 145(2). The form can be accessed from www.gov.uk/government/ publications/index-map-application-for-an-official-search-sim Land Registry Practice Guide 10 (November 2017): Official searches of the index map, para 4. Land Registry Practice Guide 10 (November 2017): Official searches of the index map, paras 1.2 and 8. An application for official copies can be made as normal using Land Registry Form OC1 with the words ‘please supply the title number’ written boldly at the head of the form: Land Registry Practice Guide 10 (November 2017): Official searches of the index map, para 4.

Registered land: HM Land Registry 2.46  Where land is registered copies of the register of title for an individual property may be obtained from HM  Land Registry. This may be helpful where the judgment creditor knows or suspects a property to be owned by the judgment debtor. Any person may inspect and take copies of any register of title of an individual property and any document referred to in the register of title.1 It is not possible for a judgment creditor to search for all land registered in the name of a particular person.2 1 2

Land Registration Act 2002, s 66. Although there is an index of proprietors’ names maintained by the Land Registrar which would potentially allow a search of all land registered in the name of a particular judgment debtor, this is not a public index.  Land Registration Rules 2003, r 11(3) provides that a person may apply to search the index of proprietors’ names in respect of: (a) their own name; (b) the name of a corporate body such as a registered company; and (c) the name of some other person in whose property they can satisfy the registrar that they are interested generally (for example the Official Receiver or a trustee in bankruptcy). A search may also be undertaken where there is a court order granting permission to the applicant to undertake a search. The practice of HM  Land Registry is not to recognise a judgment creditor as a person ‘interested generally’ in the property of a judgment debtor and to refuse to allow a search of the index without a court order specifically authorising a search of the index of proprietors’ names and detailing the names to be searched.

Public sources of information  85 However, where the judgment debtor is a corporate body this search may assist. The result of the search will show all titles where the name searched is either the proprietor of a registered estate in land or the proprietor of a registered charge. If any titles are owned jointly these titles will also be in the search results. An application is made by completing form PN1 and sent to the address on the form. Usually one separate form is completed for each name. However, where a search is being made against a company that has had various changes of name one PN1 may be lodged with a schedule of names. The fee is £11 for each name searched. For searches against an organisation, the results will be sent by email (unless no email address is included in the application or it is specified otherwise). See Land Registry Practice Guide 74 names (December 2018): searches of the index of proprietors.

2.47  Searches to obtain the register of title can be performed in person, by post, telephone1 and online.2 The register will identify the registered proprietor(s), any leasehold interests registered against that property and any registered charges over the property. The fee varies from £3 to £7 per individual register of title depending on how the request is made.3 1

However, in order to use the telephone service a key number is needed which can only be obtained by opening a credit account.

2

By using the online HM Land Registry systems (Business e-services portal or Business Gateway).

3

Land Registration Fee Order 2013, SI 2013/3174.

2.48  Where the charges register refers to a charge on the property the judgment creditor may wish to inspect the charge document to ascertain whether there is sufficient equity in the property to satisfy the judgment debt, either in whole or in part, after that charge has been paid off. A charge document received by HM Land Registry after 13 October 2003 may be inspected as of right.1 An application to view a charge document is made using Form OC2.2 1

Land Registration Rules 2003, r 135(1).

2

Land Registration Rules 2003, r 135(4). The manner in which the application should be made is explained in Land Registry Practice Guide 11 (June 2019): Inspection and applications for official copies. Details of the fees payable in respect of such applications are set out in the Land Registration Fee Order 2013, SI 2013/3174.

2.49  Any person filing documents with the Land Registrar who claims that a document contains ‘prejudicial information’ can ask that it is designated as an ‘exempt information document’ and thus not made publicly available.1 It may be the case that the party who registered the charge document applied for it to be an exempt information document. In such case the judgment creditor should apply to the Land Registrar to obtain a full copy of the document using Form EX2.2 The Land Registrar will consider the application and will serve a notice on the person who initially applied to designate the document as an Exempt Information Document allowing them to make representations.3 1

Land Registration Rules 2003, r 136.

2

Land Registration Rules 2003, r 137(2). The application should explain why the edited version of the document is ‘insufficient for their purposes’ and why ‘none of the information omitted is prejudicial commercial or personal information, or why the public interest in allowing a full copy to be issued outweighs the public interest in not doing so’ (Land Registry Practice Guide 57 (November 2019): Exempting documents from the general right to inspect and copy).

3

Land Registration Rules 2003, r 137(3).

86  Obtaining information about a judgment debtor’s assets Unregistered land 2.50  Where the index map search reveals that the land is unregistered, the only means whereby a judgment creditor may be able to confirm that the judgment debtor owns the land is through requiring her to attend court with the relevant title documents using the Pt 71 procedure described in paras 2.125–2.261.

High value goods 2.51  High value goods, such as ships, yachts, motor boats, aeroplanes, paintings or motor vehicles, may go some way to payment of a judgment debt and can be subject to execution through writs of control. It may therefore be worth investigating whether the judgment debtor owns any such items. While an inquiry agent or an oral examination may be needed to elicit this information, there are also a number of public and commercial registers available for inspection. 2.52  One preliminary point that should be noted as regards execution against goods is that an injunction can be obtained to restrain an enforcement agent from remaining in possession of, and from selling, goods which do not belong to the judgment debtor.1 During the tenure of a hire purchase agreement, the legal title to the goods remains with the owner, with title only being transferred to the hirer at the end of the hire purchase period. Thus where it is intended to levy execution against a class of goods which are commonly subject to a hire purchase agreement, it is advisable first to check that the asset is not subject to a hire purchase agreement. This may be done through inquiries of the judgment debtor2 or, in the case of motor vehicles, through checking with HPI Limited (see para 2.61). 1 2

See further Ch 5. If necessary, through Pt 71 proceedings. See paras 2.125 to 2.261.

Ships – UK Ship Register 2.53  The Maritime and Coastguard Agency (MCA) maintains the UK ship register, which is a central register of UK merchant ships, fishing vessels and pleasure vessels. The Register is divided into four parts: Part 1 for merchant ships and pleasure vessels; Part 2 for fishing vessels; Part 3 for small ships; and Part 4 for bareboat charter ships.1 1

Merchant Shipping (Registration of Ships) Regulations 1993, SI 1993/3138, reg 2.

2.54  The register is a public record1 and any person is entitled on application to the MCA to obtain a certified transcript of the entries in the Register or to inspect entries in the Register during the official opening hours of the General Registry of Shipping and Seamen.2 The certified transcript of the entries in the Register sets out details of the ship and the owner.3 Ships may also be subject to mortgages and details of any registered mortgages will also be provided in the certified transcript of entries in the Register. However, the details of the mortgage are fairly brief and reveal little more

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than the identity of the mortgagor and mortgagee, the date of its execution and the number of shares in the ship that are mortgaged. 1 2 3

Merchant Shipping Act 1995, s 8(7). Merchant Shipping (Registration of Ships) Regulations 1993, SI 1993/3138. See www.ukshipregister. co.uk/ Issued within data protection guidelines.

2.55  There is no online search facility for the Register of British Ships (although it is understood this is being developed). However, enquiries can be made to determine whether any ships are owned by an individual or company. If any matches are revealed a request for a certified transcript of the entries in the Register can then be made. There is no official form for the search. The fee varies depending on the part of the Registry and the type of transcript required. Contact details for the UK Ship Register are set out in Appendix 1. Lloyd’s Register 2.56  IHS  Markit1 maintains a register of ships (Lloyd’s Register). The register includes ownership details. This is a commercial register and, although there is no statutory requirement for registration of a vessel in the Register this may be required by a bank or insurance company. Trading vessels will usually appear on this register as a consequence. Unlike the Register of British Ships, it is not confined to British registered ships and covers ships wherever registered in the world. A large volume of shipping data can be accessed from a variety of maritime organisations such as IHS Markit, Lloyd’s Register Group Limited2 Lloyd’s List Intelligence,3 Clarksons4 and VesselValues.5 While subscriptions are required for more advanced material Equasis6 is a free public site which (following registration) allows vessel searches under various categories. 1 https://ihsmarkit.com/Info/0516/maritime-trade-solutions.html 2 www.lr.org/en-gb/who-we-are/ 3 www.lloydslistintelligence.com/ 4 www.clarksons.com/services/research/shipping-and-trade/ 5 www.vesselsvalue.com/services/value/ 6 www.equasis.org/EquasisWeb/public/HomePage – www.lr.org/en/lrofships is also a free online search hosted by Lloyd’s Register Group Limited which can be undertaken by ship name, flag or IMO number.

2.57  If a ship is identified, organisations such as those set out at para 2.56 are able to offer a variety of information including vessel tracking services, live and historical movement and ownership information. Aircraft 2.58  The Aircraft Registration Section of the Civil Aviation Authority (CAA) maintains a register of UK registered aircraft.1 Searches can be carried out against a person’s name to identify any aircraft owned by an individual or company and can be made free of charge using the CAA’s website, by post, fax, telephone or inspection of the register. 1

UK registration of aircraft is governed by the Air Navigation Order 2016, SI 2016/765. See generally Halsbury’s Laws of England, vol 2 (LexisNexis, 2017), paras 1105–1111.

88  Obtaining information about a judgment debtor’s assets 2.59  It is also likely to be worth enquiring whether there is a mortgage over the aircraft. The CAA also maintains a register of mortgages over aircraft registered in the UK,1 known as the UK Register of Aircraft Mortgages. A search of the UK Register of Aircraft Mortgages can be requested by fax, letter or email. The form to be used is CA350 and the current fee for the service is £31 per aircraft. Contact details for the CAA are provided in Appendix 1. 1

Mortgaging of Aircraft Order 1972, SI 1972/1268.

Vehicles 2.60  The Driver and Vehicle Licensing Agency (DVLA) maintains registers of drivers and vehicles. It does not provide a search facility against the names of registered keepers but does have a facility to allow vehicle registration numbers to be searched by any person who can show ‘reasonable cause’ for wanting the particulars.1 Any request should be made by using the correct form (V888 when requesting as an individual or V888/2A when requesting as a company (for name and address of keeper) and V888/2B (for other information such as insurance)) and enclosing a cheque of £5 per registration number to be searched. The DVLA will then make a decision as to whether the information is to be released. The relevant forms have a tick box to indicate that a party is a ‘judgment creditor’ indicating that the DVLA will consider such a creditor to have ‘reasonable cause’ although it requires a copy of the judgment before releasing any information. Contact details for the DVLA are provided in Appendix 1. It is to be noted however that the ‘registered keeper’ of a vehicle is merely that, ie registered as being the keeper and is not (direct) evidence of title. 1

Road Vehicles (Registration and Licensing) Regulations 2002, SI 2002/2742, reg 27(1)(e). See also www.gov.uk/request-information-from-dvla

Vehicles subject to finance 2.61  As noted in para 2.52, it is important to ascertain whether a vehicle is subject to hire purchase or a leasing agreement. HPI  Limited provides a service to check whether a vehicle is subject to a credit or leasing agreement.1 Details for HPI Limited are provided in Appendix 1. 1

The vehicle registration and chassis numbers are required for maximum accuracy, although a search can be carried out against just the vehicle registration.

Other judgment debtors Mutual societies 2.62  Unincorporated mutual societies commonly include building societies, friendly societies,1 industrial and provident societies and housing associations, but also include credit unions, benevolent societies and working men’s clubs. 1

Friendly societies and building societies also exist in incorporated form.

2.63  Friendly societies and certain other mutual societies are required to file certain documents at the Mutual Societies Registry.1 Since 1 December 2001, the Financial

Inquiry agents  89

Services Authority (FSA) has taken over the functions of the Central Office of the Registry of Friendly Societies.2 1 2

Formerly the Friendly Societies Registry. Financial Services and Markets Act 2000, s 335.

2.64  A search of the Mutual Public Register is available freely online. Copies of documents held on a Society’s public record file can be downloaded.1 The records which can be obtained can include the latest annual return, latest accounts, mortgages and charges, society rules and any winding up documents. Contact details for the FSA who operate the Mutual Register are included in Appendix 1. 1 https://mutuals.fca.org.uk/

Partnerships 2.65  Subject to an express or implied agreement to the contrary, partnership books are to be kept at the partnership’s place of business and every partner may have access to and inspect and copy them.1 However, partnerships (other than limited liability partnerships – see paras 2.40–2.42)2 are not required to make their accounts or partnership documents public.3 As a consequence it may be difficult to ascertain the assets of a partnership. However, individual partners remain jointly liable for the contractual debts and obligations of the partnership where the partnership has insufficient assets.4 A judgment creditor can therefore seek to obtain payment from the private estates of individual partners where the partnership has insufficient assets to satisfy a judgment debt. 1 2 3

4

Partnership Act 1890, s 24. See paras 2.40–2.42 and Appendix 3. Certain disclosures must however be made by a partnership carrying on business in the UK. Where a partnership has a business name (a business name is a name that is a name other than the surnames of all the partners who are individuals (without any addition other than a permitted addition) or the corporate names of all the partners who are bodies corporate (without any addition other than a permitted addition) (CA 2006, s 1200)), it must state on certain business documents the name of each partner and an address for service (CA 2006, ss 1201(b); 1202(1)). Partnerships of over 20 persons may benefit from certain exemptions in relation to the disclosure required in business documents (CA  2006, s  1203). A  partnership with a business name must also immediately give, by written notice, the names and address for service for its partners to any person who asks (or with whom anything is done or discussed in the course of the partnership’s business) (CA  2006, s  1202(2)). Where a partnership carries on business in the UK under a business name it must also display, in any premises where the business is carried on, to which customers of the business or suppliers of goods or services to the business have access, the name of each of its partners and an address for service for each partner. The information must be displayed in a prominent position so that it may easily be read by customers or suppliers (CA 2006, s 1204). Note that accounting obligations do exist where a partnership is a ‘qualifying partnership’ (as defined but generally where the members of a partnership are ultimately a limited company) (Partnerships (Accounts) Regulations 2008, SI 2008/569). Partnership Act 1890, s 9.

INQUIRY AGENTS 2.66  Where investigation of the public sources of information outlined above has not revealed significant assets for the purposes of enforcement, a judgment creditor

90  Obtaining information about a judgment debtor’s assets may wish to consider using an inquiry agent to elicit further information about a judgment debtor’s assets. 2.67  In practice, inquiry agents are frequently instructed in commercial litigation to attempt to identify the ownership of assets as part of the process of both obtaining judgment and its subsequent enforcement. If used properly, inquiry agents can be an invaluable resource for the location of assets both in the UK and abroad, particularly in the case of assets which the judgment debtor has attempted to conceal. 2.68  In the popular imagination inquiry agents often conjure up seedy images of men in macs investigating allegations of marital infidelity. The modern reality is very different. There are now a number of large international firms of inquiry agents who specialise almost exclusively in conducting inquiries of a commercial nature. They are made up of people from a wide range of backgrounds, from accountants to policemen, military and intelligence personnel. Instructing inquiry agents raises a number of legal and professional conduct issues, both for the judgment creditor and her legal representatives. It is, therefore, imperative that considerable care is taken when instructing inquiry agents.

Means used by inquiry agents 2.69  There are a large number of reported cases which refer to the use of inquiry agents in both a civil1 and criminal2 context.  The disreputable and unlawful means adopted by some inquiry agents have been the subject of trenchant judicial criticism.  In Dubai Aluminium Co Ltd v Al Alawi,3 a case in which the Court considered at length the role of inquiry agents in the conduct of litigation and the impact their actions can have on proceedings, the defendant alleged that detailed information had been obtained from his bank, credit card and telephone accounts by the use of ‘pretext calls’ to the companies concerned. The Court proceeded on the basis that there was strong prima facie evidence of criminal or fraudulent conduct in obtaining the information.  In another case, an inquiry agent, accompanied by the plaintiff’s wife, forced entry to the plaintiff’s flat for the purpose of obtaining evidence of the plaintiff’s alleged adultery and was found liable for both trespass and assault.4 1 2 3 4

See, eg, Tomlinson v Tomlinson [1980] 1 WLR 322 at 325. See, eg, R v Nugent [1977] 1 WLR 789 at 791. [1999] 1 WLR 1964. This case is considered in detail in paras 2.117–2.123. Jolliffe v Willmett & Co [1971] 1 All ER 478. See further paras 2.78–2.82

2.70  Many inquiry agents, however, rely on entirely legitimate means of acquiring information, using both public sources of information and traditional methods such as interviewing potential witnesses. Although such methods could also be used by a solicitor, it will often be much cheaper and more cost effective for the work to be performed by an inquiry agent in the first instance. This is particularly the case where information or witnesses are located overseas, since many of the larger firms of inquiry agents have offices or contacts abroad.

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2.71  Judicial attitudes to inquiry agents are not invariably hostile and they have been referred to in reported cases without comment, or occasionally even suggested by the judge as a means of ascertaining information.1 In Rank Film Distributors Ltd v Video Information Centre (a firm)2 Lord Denning MR referred, apparently without comment, to entrapment methods being used by inquiry agents to catch persons making pirate videos.3 1

2 3

See, eg, Re St Michael and All Angels, Tettenhall Regis [1995] Fam 179 at 197, an ecclesiastical case where Judge John Shand Ch suggested instructing an inquiry agent to trace relatives of those buried in the last 50 years in a churchyard that was due to be redeveloped. [1980] 3 WLR 487, CA. [1980] 3 WLR 487 at 503, CA.

2.72  However, it is far from the case that a judge will assume, without more, that the ends justify the means when it comes to the use of inquiry agents. In one case concerning an appeal relating to judicial bias, an inquiry agent posed as a judge’s accountant to obtain information from the judge’s solicitors as to whether he had paid for an amendment to his will. Lord Woolf CJ summed up the Court of Appeal’s attitude to this method of obtaining information as ‘disgraceful’.1 1

Taylor v Lawrence [2002] 3 WLR  640 at 644.  The Court decided ‘to overlook the discreditable manner in which that information was … obtained’ and hear the appeal on its merits.

2.73  The trend of recent case law has highlighted the importance of ensuring that inquiry agents only employ legitimate means to obtain information.  In the Dubai Aluminium case, Rix J made the following telling comment:1 ‘It seems to me that if investigative agents employed by solicitors for the purpose of litigation were permitted to breach the provisions of such statutes [the Data Protection Act 1984] or to indulge in fraud or impersonation without any consequence at all for the conduct of the litigation, then the courts would be going far to sanction such conduct.’ 1

[1999] 1 WLR 1964 at 1969.

2.74  Recent years have seen the enactment of legislation such as the Data Protection Act 2018 (implementing the General Data Protection Regulation (GDPR) (EU) 2016/679),1 the Human Rights Act 1998, the Regulation of Investigatory Powers Act 2000 (and the subsequent coming into force of the Investigatory Powers Act 2016), all of which have a potential impact on the means used by inquiry agents. The changing legal landscape has therefore increased the importance of the proper use of inquiry agents. 1

Following the UK’s withdrawal from the European Union the Information Commissioner has indicated that the GDPR will remain in force in the transition period (due to end 31 December 2020) but details about its successor are not, at time of writing, known.

Legal risk 2.75  It is often the case that the solicitor acting for the judgment creditor will instruct the inquiry agent on behalf of her client. Some of the more dubious means

92  Obtaining information about a judgment debtor’s assets used by inquiry agents therefore potentially expose the solicitor and client alike to both legal and regulatory risk. There is also a serious risk of adverse publicity for the solicitor’s firm1. The solicitor will therefore need to ensure that improper means are not used by the inquiry agent. If the client chooses to instruct the inquiry agent direct, the solicitor should advise her of the potential consequences of illegal means being used by inquiry agents. An overview of some of the legal risks and pitfalls is set out below. 1

See, eg, James Lewis ‘Watching the detectives’ Legal Business (July/August 2007) 64 in respect of the Fiona Trust case. The Fiona Trust litigation led to several allegations in open court that solicitors had used evidence obtained by improper means. See, for instance, the comments of Andrew Smith J in Fiona Trust Holdings Corpn v Yuri Privalov [2008] EWHC 1748(Comm), when deciding that a complaint that evidence obtained by improper means was not sufficient to amount to a defence to a claim for equitable relief (under the doctrine that she who comes to equity must have clean hands).

Civil liability 2.76  Where a solicitor or her client instructs an inquiry agent they may become exposed to civil liability for the acts and omissions of the inquiry agent through the law of agency.1 1

Detailed consideration of the law of agency is outside the scope of this book – see generally Bowstead and Reynolds on Agency (21st edn, Sweet & Maxwell, 2019).

Trespass 2.77  Inquiry agents will commonly put the judgment debtor and her home and business under surveillance. If they enter onto the land of the judgment debtor to carry out such surveillance or to search through the judgment debtor’s rubbish, this may amount to the tort of trespass and form the basis of an action for damages. Surveillance conducted on the judgment debtor’s land, even from a highway crossing the land, may also amount to trespass.1 1

See, eg, Hickman v Maisey [1900] 1 QB 752, CA, where a racing tout was found liable for trespass for standing on a highway running across the plaintiff’s land to observe horse-training taking place on the land. See also Jones v University of Warwick [2003] EWCA Civ 151 where the claimant’s home was secretly filmed for a personal injury claim and which was considered an act of trespass (see para 2.104).

2.78  In Jolliffe v Willmett & Co1 a husband and wife who lived apart were seeking a divorce. The wife believed that the husband was committing adultery with a Miss Henderson, the husband’s part-time secretary.  The wife’s solicitors instructed an inquiry agent, an ex-policeman, to gather evidence of the alleged adultery.  The matrimonial proceedings had been going on for a number of years and the husband had previously complained to the wife’s solicitors of trespass by other inquiry agents. The letter of instruction from the wife’s solicitors to the inquiry agent stated: ‘We must stress that the [husband] has instructed solicitors, and therefore no direct approach must be made. In any event a direct approach would be useless as only stealth and cunning are likely to serve in this case.’ 1

[1971] 1 All ER 478.

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2.79  The husband was living in a flat which the wife had not lived in for many years and to which she had never possessed a key.  In the course of his inquiries, the inquiry agent knocked on the door of the flat which was answered by Miss Henderson. (It was disputed whether the inquiry agent had posed as a policeman for this purpose.) Following this incident, the inquiry agent reported back to the wife’s solicitor and it was agreed that the wife would accompany the inquiry agent on the next visit.  The solicitor at no point instructed or gave permission for the inquiry agent to enter the husband’s flat. A  few days later, the inquiry agent and the wife returned to the husband’s flat and, after posing as the postman, the inquiry agent forced entry when Miss Henderson answered the door. The wife and inquiry agent then proceeded to inspect the flat in spite of Miss Henderson’s protests that they were trespassing. The husband, who was in bed upstairs, awoke to find the inquiry agent in his bedroom. Having indicated that the inquiry agent was trespassing and asking him to leave several times, a scuffle then broke out during which the inquiry agent struck the husband on the head. 2.80  The husband sued both the inquiry agent and the wife’s solicitors seeking damages for trespass and assault. Geoffrey Lane J found the inquiry agent liable for trespass and assault, having held that the wife had no authority to grant the inquiry agent a licence to enter the flat. 2.81  As to the claim against the solicitor, Geoffrey Lane J held: ‘Now I turn to the question of the [solicitors’] responsibility for these matters. The [inquiry agent] was, vis-à-vis the [solicitors], an independent contractor and not a servant. Consequently, looked at strictly, there is no question of any vicarious liability on the part of the [solicitors]. Were they then equally responsible with the [inquiry agent] for the trespass that took place? There are, in my judgment, only two ways in which the [solicitors] can be made liable to the plaintiff. The first way is if they were negligent in their selection of the [inquiry agent] as an independent contractor, and if that negligence was the cause of the trespass. The second way in which they could be made liable would be if they expressly ordered or authorised or ratified the unlawful trespass of the [inquiry agent]. So far as negligence is concerned … there is no evidence that [the solicitor], or anyone else in the [solicitors’] firm, was negligent in selecting the [inquiry agent].  They had recommendations from [a reputable firm of inquiry agents they had previously used], and indeed if they had gone further and listened to the catalogue of the [inquiry agent’s] excellencies which he gave me in evidence, they would have had no hesitation in engaging him. There is no question of negligence. Secondly, did they authorise, order or ratify his conduct?  I  have said sufficient about the facts and sufficient about the way in which I treat the subsidiary dispute between the [inquiry agent] and [the solicitor] to show that, in my judgment, [the solicitor] did not know that the second defendant was going to the flat in the first place and, even if he did know that he was going there, he never authorised nor ordered the [inquiry agent] to enter the flat and would not, in any circumstances, have done so. Accordingly, so far as this action against the [solicitors] is concerned, that fails.’1 1

[1971] 1 All ER 478 at 484.

94  Obtaining information about a judgment debtor’s assets 2.82  This case illustrates the importance of both taking care in the selection of an inquiry agent1 and providing the inquiry agent with instructions in writing, making clear that only legal means must be employed by the inquiry agent in the pursuit of her enquiries. In addition, such instructions should expressly prohibit the inquiry agent from sub-contracting work to other, potentially less reputable, organisations or purchasing material obtained by questionable means. Further protections that might be considered include a prohibition on acting without the solicitor’s instructions and the provision of guarantees from the inquiry agent as to minimum levels of compliance and for security measures.2 Where oral instructions are given, it is essential for the solicitor to confirm these in writing or make an attendance note of the call in order to be able to demonstrate subsequently, where necessary, that nothing was done or said by the solicitor to suggest or encourage the use of illegal means. 1

2

The inquiry agent should be a member of the Association of British Investigators (www.theabi.org. uk/) (as endorsed by the Law Society). Contact details are at Appendix 1. You may wish to confirm that the agent is not subject to any current investigation by the Information Commissioner. For example, the inquiry agent might be asked to confirm that all of its staff have received appropriate training on legal issues arising out of the activities of inquiry agents.

Private nuisance 2.83  It is possible that certain sorts of surveillance might amount to private nuisance. In Baron Bernstein of Leigh v Skyviews,1 flying over the plaintiff’s property at a reasonable height for the purpose of commercial photography was held to be neither trespass nor private nuisance. However, the obligation of the court under the Human Rights Act 1998 to apply art 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) (right to respect for private and family life) could possibly lead to a different result where the purpose of the flight was covert surveillance of a judgment debtor. 1 [1978] QB 479.

Copyright 2.84  If an inquiry agent copies documents to which another person owns the copyright, she may be liable for breach of copyright to the copyright holder. This could lead to damages being awarded and/or an injunction for delivery up and destruction of the material subject to copyright. Breach of confidence 2.85  A duty of confidence can arise in a variety of different circumstances. The leading case in this regard is Coco v AN Clark (Engineers) Ltd.1 Megarry J held that there are three elements essential to a cause of action for breach of an implied duty of confidence, namely: (a) that the information was of a confidential nature; (b) that it was communicated in circumstances importing an obligation of confidence; and (c) that there was an unauthorised use of the information. 1 [1969] RPC 41.

Inquiry agents  95

2.86  Where a third party receives information knowing it to have been obtained in breach of confidence to another she will owe a duty of confidence to the confider.1  Unauthorised use of such information may render the third party liable for breach of confidence, which carries the risk of an order for compensation or an account of profits. The court might also grant an injunction restraining the use of the confidential information and/or an order for delivery up and destruction of the material containing the confidential information. 1

A-G v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 261, per Lord Keith of Kinkel and at 281, CA, per Lord Goff.

Breach of confidence to protect privacy? 2.87  The House of Lords decision in Campbell v Mirror Group Newspapers Ltd,1 and that of the European Court of Human Rights in von Hannover v Germany,2 have increased the risk for private investigators that an action may be brought based on disclosure of information about a person’s private life. In Campbell the Court awarded damages for the disclosure of certain information about Naomi Campbell’s private life on the basis of breach of confidence, while in von Hannover it was held that the applicant’s rights under Article  8 of the European Convention had been infringed by the publication of photographs and articles relating to a member of the Monacan royal family’s private life. According to the Court of Appeal in Ash v McKennitt,3 ‘[I]n order to find the rules of the English law of breach of confidence we now have to look in the jurisprudence of articles 8 and 10.’ 1 [2004] 2 WLR 1232, HL. 2 [2004] EMLR 21. 3 [2006]  EWCA  Civ 1714 at [11]; see also Max Mosley v News Group Newspapers Ltd [2008] EWHC 1777 (QB).

Criminal liability 2.88  In addition to civil liability, an inquiry agent’s activities could potentially expose the solicitor or her client to criminal liability. While the criminal offences within the Proceeds of Crime Act 2002 (PCA 2002) seek to criminalise the activities of money launderers, PCA 2002 is very widely drafted. Under PCA 2002, s 329 it is an offence to acquire, use or possess criminal property. Criminal property is defined in PCA 2002, s 340(3) and could include documents or information obtained through illegal means if the information or documents represented a person’s benefit from criminal conduct. Thus, aside from any reputational or professional considerations, where a judgment creditor seeks to use information that has been obtained as a consequence of criminal conduct, the judgment creditor (or her solicitor) could, in theory, be criminally liable under PCA 2002. Data protection regime 2.89  The General Data Protection Regulation (the GDPR)1 introduced substantial amendments to data protection law in the UK. It replaced the Data Protection Act 1998 and Data Protection Directive2. The Data Protection Act 2018 (DPA 2018) sets

96  Obtaining information about a judgment debtor’s assets out how the GDPR will apply in the UK. The data protection regime provides certain safeguards to individuals relating to the use which can be made by others of personal data3 relating to that individual. Chapter 3 of the GDPR sets out the rights provided to individuals (defined as an ‘identified or identifiable natural person’4), known as data subjects. The GDPR does not extend to information about legal persons such as companies. While an organisation might be a legal person it is not a living individual and therefore cannot be a data subject.5 Breaches of certain provisions in the data protection regime are an offence and, in light of the wide-ranging provisions regarding the processing6 of personal data under the data protection regime it is advisable to include a clear statement that the inquiry agent should pay due regard to the provisions of the GDPR and the DPA 2018 in the written instructions given. 1

2 3 4 5 6

(EU) 2016/679. Note that following the UK’s withdrawal from the European Union the Information Commissioner has indicated that the GDPR will remain in force in the transition period (due to end 31 December 2020). Details about its successor are not, at time of writing, known. Directive 95/46/EC. As defined in GDPR, Art 4(1). GDPR, Art 4(1). GDPR, Recital 14. ‘Processing’ is defined in GDPR, Art 4(3). ‘Processing’ ‘means any operation or set of operations which is performed on personal data or on sets of personal data, whether or not by automated means, such as collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction’.

2.90  Detailed consideration of the provisions of the data protection regime is outside the scope of this book.  However, it is worth noting that an inquiry agent will invariably obtain personal data as a consequence of her investigations into an individual judgment debtor’s assets. One of the key principles of the GDPR is that data may only be processed ‘lawfully, fairly and in a transparent manner in relation to the data subject’.1 An inquiry agent should therefore give details of her identity, the uses to which the personal data may be put and any proposed disclosures of personal data to the provider of the information when required to do so.  It should also be noted that DPA 2018, s 170 makes it an offence knowingly or recklessly to obtain disclosure, or procure the disclosure of, or to retain personal data without the consent of the data controller.2 1 2

GDPR, Art 5. GDPR, Art 83 sets out the two tiers for the penalties under the data protection regime. The higher tier carries potential fines of up to 20m Euros, or 4% of global annual turnover, whichever is higher. The lower tier carries a maximum fine of 10m Euros, or 2% of annual turnover, whichever is higher.

Protection from Harassment Act 1997 2.91  Surveillance of a judgment debtor could, if badly managed, not only result in a civil liability (see paras 2.76–2.86) but fall foul of the harassment legislation. The Protection from Harassment Act 19971 (PHA 1997) makes it both an offence2 and a civil wrong3 for a person to pursue a course of conduct which amounts to the harassment of another and which she knows or ought to know would amount to such harassment.4 Harassing a person includes alarming the person or causing the person distress.5 A course of conduct must involve conduct on at least two occasions6 and conduct includes speech.7

Inquiry agents  97 1 2 3

4

5 6 7

For more detail see Archbold Criminal Pleading Evidence and Practice (Sweet & Maxwell, 2020). PHA 1997, s 2. A conviction for an offence under PHA 1998, s 2 carries a maximum penalty of six months’ imprisonment. PHA 1997, s 3. Section 3(2) gives the court a power to award damages for ‘(among other things) any anxiety caused by the harassment and any financial loss resulting from the harassment’.  By virtue of s 3(3) the court has a power to grant an injunction to restrain any conduct which amounts to harassment. Any breach of the injunction is an offence under PHA 1997, s 3(5) and the court can grant a warrant for the arrest of the defendant for a breach of the injunction. PHA 1997, s 1(2) provides that ‘the person whose course of conduct is in question ought to know that it amounts to harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to harassment of the other’. PHA 1997, s 7(2). PHA 1997, s 7(3). PHA 1997, s 7(4).

Computer Misuse Act 1990 2.92  Seeking to obtain unauthorised access to computer material is an offence under the Computer Misuse Act 1990 (CMA 1990).1 It is an offence intentionally to cause a computer to perform any function to secure unauthorised access2 to any program or data held in any computer.3 The intent does not need to be directed at securing access to any particular program or data, a program or data of any particular kind, or a program or data held in any particular computer.4 1 2 3 4

For more detail see Archbold Criminal Pleading, Evidence and Practice (Sweet & Maxwell, 2020). ‘Secure access’ is given a wide meaning under CMA 1990, s 17(2). CMA 1990, s 1(1). CMA 1990, s 1(2).

Investigatory Powers Act 2016 2.93  Under the Investigatory Powers Act 2016 (IPA  2016), s  3, it is an offence intentionally and without lawful authority to intercept in the course of its transmission post, telephone calls and emails (although this is subject to a number of exceptions).1 1

For more detail see Archbold Criminal Pleading, Evidence and Practice (Sweet & Maxwell, 2020). An offence under IPA  2016, s  3 carries a maximum penalty, on conviction an indictment of two years’ imprisonment. The courts have not hesitated to impose a custodial sentence in appropriate circumstances: News of The World royal editor Clive Goodman was sentenced to four months in jail after pleading guilty to such offences in 2007 (previously the offence was contained in the Regulation of Investigatory Powers Act 2000, s 1).

Theft 2.94  The fact that individuals often throw away items such as bank statements may tempt an inquiry agent to inspect a judgment debtor’s rubbish in the search for information about her assets or finances. The taking of rubbish can amount to theft. In Williams v Phillips1 a number of dustmen were convicted of theft for taking items from rubbish bins. The Divisional Court held that the rubbish had not been abandoned as it had been left for the purpose of allowing the local authority to collect it, not for anybody to take it away. The rubbish therefore remained the householders’ property until collected, at which point ownership passed to the local authority. The dustmen were therefore convicted of theft.2

98  Obtaining information about a judgment debtor’s assets 1 2

(1957) 41 Cr App Rep 5 at 8–9. The judgment in Williams may explain why the inquiry agents in Dubai Aluminium took documents obtained from the plaintiff’s dustbins, copied them, and then returned them. However, such conduct is not without its own potential pitfalls: see paras 2.100–2.124.

Proceeds of Crime Act 2002 2.95  See paragraph 2.88. Professional conduct 2.96  The potential civil and criminal liability which may arise as a consequence of using an inquiry agent means that careful consideration must be given to both their instruction and management. A further consideration for the solicitor is that the improper use of inquiry agents is likely to be a breach of professional conduct. 2.97  There is no specific guidance in the Solicitors Regulation Authority Standards and Regulations (2019) as to how to approach the instruction of inquiry agents. However, in certain circumstances, the Law Society has a statutory power to prevent a solicitor from employing or remunerating a person guilty of a crime or misconduct. Under the Solicitors Act 1974, s 43, where the Law Society considers that a person has been convicted of a criminal offence which discloses such dishonesty that, in the opinion of the Society, it would be undesirable for her to be employed or remunerated by a solicitor in connection with her practice, it can impose a ban on that person being employed or remunerated by a solicitor in future. This power would extend to the use of inquiry agents. 2.98  Once such a banning order has been made by the Law Society or the Solicitors’ Disciplinary Tribunal, it is an offence for a person subject to the order to seek or accept employment by a solicitor without first informing the solicitor.1 A  solicitor who knowingly employs a person in contravention of an order may be disciplined.2 1 2

Solicitors Act 1974, s 44(1). Solicitors Act 1974, s 44(2). A solicitor may employ such a person with the prior consent of the Law Society.

Bar Council guidance 2.99  While the Solicitors Regulation Authority Standards and Regulations lack specific guidance on these matters the Bar Council has guidance on the use of illegally obtained evidence in civil and family proceedings which is available from the Bar Council website.1 1

Bar Council Guidance on Illegally Obtained Evidence in Civil and Family Proceedings – www. barcouncilethics.co.uk/documents/evidence-obtained-illegally-civil-family-proceedings/

Admissibility of illegally obtained evidence 2.100  Aside from legal and professional conduct risks, the further question arises as to whether the fact that information has been obtained illegally will prevent it from

Inquiry agents  99

being used in evidence in civil proceedings. Evidence will inevitably be required in support of any court based method of enforcement. As will be seen, there seems to be an increasing judicial recognition that the chances of civil or criminal sanction where inquiry agents have obtained evidence illegally are remote, and that the court therefore needs to exercise greater vigilance in the use which may be made of illegally obtained evidence to deter such conduct. This trend further highlights the need to ensure that inquiry agents use only legitimate means of investigation. Admissibility – pre-CPR 2.101  Prior to the introduction of the CPR, it had long been the rule that illegally obtained evidence was admissible provided it was relevant. Kuruma, Son of Kaniu v R1 contains one of the more robust judicial statements of this rule:2 ‘In their Lordships’ opinion the test to be applied in considering whether evidence is admissible is whether it is relevant to the matters in issue. If it is, it is admissible and the court is not concerned with how the evidence was obtained.’ 1 [1955] AC 197, PC. 2 [1955] AC 197 at 203, per Lord Goddard.

2.102   In one of the cases cited by their Lordships in Kuruma one judge even went so far as to say:1 ‘It matters not how you get it; if you steal it even, it would be admissible.’ 1 R v Leatham (1861) 8 Cox CC 498, per Crompton J.

Admissibility – under the CPR 2.103  Under CPR  Pt  32 the court now has an express power granting it a wide discretion to exclude evidence. CPR 32.1 provides: ‘(1) The court may control the evidence by giving directions as to (a) the issues on which it requires evidence; (b) the nature of the evidence which it requires to decide those issues; and (c) the way in which the evidence is to be placed before the court. (2) The court may use its power under this rule to exclude evidence that would otherwise be admissible. (3) The court may limit cross examination.’ Jones v University of Warwick 2.104  The leading case on how the court will use this discretion to exclude evidence that has been illegally obtained by inquiry agents is the Court of Appeal decision in Jones v University of Warwick.1  The facts of the case were that the claimant had injured her hand in an accident at work. The defendant admitted liability but it was disputed whether the injury had the continuing debilitating effects alleged by the claimant. On two occasions inquiry agents acting for the defendant’s insurers gained access to the claimant’s home by posing as market researchers and used a hidden camera covertly to film the defendant in her own home.  Having been shown the

100  Obtaining information about a judgment debtor’s assets covertly recorded footage, the defendant’s medical expert formed the view that the claimant’s hand functioned entirely satisfactorily. 1

[2003] 1 WLR 954, CA.

2.105  When the defendant attempted to rely on the evidence, the claimant applied to exclude it on the basis that the inquiry agent had obtained entry to her home by trespass and her right to privacy had been infringed under ECHR, art  8, which provides for the right to respect for private and family life.  The right provided in art  8 is a qualified right such that it can only be interfered with by a public authority where such interference is in accordance with the law and necessary in a democratic society for certain specified purposes.  Counsel for the claimant argued that since the court was a public authority1 it must exercise its discretion to exclude the evidence obtained by the insurer’s inquiry agents in order to comply with ECHR, art 8. 1

Human Rights Act 1998, s 6(3)(a).

2.106  The unanimous judgment of the Court of Appeal was given by Lord Woolf CJ, who summed up the balancing exercise the court had to perform:1 ‘… the issue on the appeal requires this court to consider two competing public interests: the interests of the public that in litigation the truth should be revealed and the interests of the public that the courts should not acquiesce in, let alone encourage, a party to use unlawful means to obtain evidence.’ 1

[2003] 1 WLR 954 at 956.

2.107  On this occasion the Court of Appeal decided not to exclude the evidence. Lord Woolf CJ observed:1 ‘The significance of the evidence will differ as will the gravity of the breach of art 8, according to the facts of the particular case. The decision will depend on all the circumstances. Here, the court cannot ignore the reality of the situation. This is not a case where the conduct of the defendant’s insurers is so outrageous that the defence should be struck out. The case, therefore, has to be tried. It would be artificial and undesirable for the actual evidence, which is relevant and admissible, not to be placed before the judge who has the task of trying the case. We accept [counsel for the defendant’s] submission that to exclude the use of the evidence would create a wholly undesirable situation. Fresh medical experts would have to be instructed on both sides. Evidence which is relevant would have to be concealed from them, perhaps resulting in a misdiagnosis; and it would not be possible to cross-examine the claimant appropriately. For these reasons we do not consider it would be right to interfere with the judge’s decision not to exclude the evidence.’ 1

[2003] 1 WLR 954 at 962.

2.108  However, the Court of Appeal did not leave the matter there. In what must be read as a warning to future litigants seeking to rely upon evidence which has been illegally obtained by inquiry agents Lord Woolf CJ went on to say:

Inquiry agents  101

‘While not excluding the evidence it is appropriate to make clear that the conduct of the insurers was improper and not justified. … The fact that the insurers may have been motivated by a desire to achieve what they considered would be a just result does not justify either the commission of trespass or the contravention of the claimant’s privacy which took place. We come to this conclusion irrespective of whether [counsel for the claimant] is right in contending that in this particular case the evidence could be obtained by other means.’1 1

[2003] 1 WLR 954 at 962–963.

2.109  Lord Woolf CJ then observed that excluding the evidence is not the only weapon in the court’s armoury. In particular, the court can reflect its disapproval of such conduct in the orders for costs which it makes in order to discourage future litigants from contemplating such steps.  The Court of Appeal held that because the conduct of the insurers had given rise to litigation over the admissibility of the evidence, they should have to pay the costs of the proceedings to resolve that issue at first instance and on appeal, even though the appeal was otherwise dismissed. The Court also indicated to the trial judge that when he came to dealing with the question of costs he should take into account the defendant’s conduct, and may consider that the costs of the inquiry agent should not be recovered. Further, if the trial judge found in favour of the claimant costs may be awarded on an indemnity basis. 2.110  Lord Woolf CJ concluded:1 ‘In giving effect to the overriding objective, and taking into account the wider interests of the administration of justice, the court must, while doing justice between the parties, also deter improper conduct of a party while conducting litigation. We do not pretend that this is a perfect reconciliation of the conflicting public interests. It is not; but at least the solution does not ignore the insurers’ conduct.’ 1

[2003] 1 WLR 954 at 963.

2.111  A litigant who obtains evidence illegally therefore runs the risk not only of the evidence being held inadmissible1 but, even when the court will hear the evidence, facing severe cost sanctions. 1

Recent examples of covert recordings being admissible include Mustard v Flower & Ors [2019] EWHC 2623 (QB) where Master Davison admitted evidence which had been recorded of doctors’ medicals despite the experts not knowing they were being recorded. Whilst the actions of the claimant ‘lacked courtesy and transparency’ the Master notably said that covert recording had ‘become a fact of professional life’. See also Singh v Singh [2016] EWHC 1432 (Ch). In Tchenguiz v Imerman [2010] EWCA Civ 908, in the context of ancillary relief proceedings (where judges ‘have a far greater control than they have under the CPR in normal civil proceedings, over which documents should or should not be produced in evidence’ [2010] EWCA Civ 908 at [173]), the Court ruled in favour of the husband and excluded documentation that had been obtained by his wife irregularly which she intended to use in their divorce proceedings.

Improper and unjustified conduct 2.112  Whether the conduct is so ‘improper and unjustified’ that a costs sanction should be imposed will be a question of fact in each case. In the Scottish case of

102  Obtaining information about a judgment debtor’s assets Martin v McGuiness1 (where the relevant evidence had been held admissible by the lower court), the Scottish Outer House found that even if an inquiry agent had committed trespass by entering the claimant’s house, it did not warrant the description of ‘improper and unjustified conduct’.  Similarly, engaging the claimant’s wife in conversation did not amount to breach of the peace, not least since she did not ask the inquiry agent to leave.  In the circumstances, there was no reason therefore to depart from the usual rule that costs follow the case. While the case could therefore be distinguished from Jones, Lord Bonomy stated: ‘My decision following debate and my decision on this motion, are based entirely on the circumstances of the present case. Neither should be regarded, as was feared by the counsel for [the claimant], as an indication that “anything goes” in carrying out inquiries in the course of adversarial litigation.’ 1 2003 SLT 1136.

Loss of privilege 2.113  In addition to questions of admissibility, the fact that evidence has been obtained illegally may cause a loss of legal professional privilege1 over reports and other documents relating to the investigations carried out by inquiry agents. 1

Both legal advice and litigation privilege: see Kuwait Airways Corporation v Iraqi Airways Company [2005] EWCA Civ 286.

2.114  The well-established exception to legal professional privilege where there is fraud was summed up by Lord Sumner in O’Rourke v Darbishire:1 ‘No one doubts that the claim for [legal] professional privilege does not apply to documents which have been brought into existence in the course of or in furtherance of a fraud to which both solicitor and client are parties. To consult a solicitor about an intended course of action, in order to be advised whether it is legitimate or not, or to lay before a solicitor the facts relating to a charge of fraud, actually made or anticipated, and make a clean breast of it with the object of being advised about the best way in which to meet it, is a very different thing from consulting him in order to learn how to plan, execute, or stifle an actual fraud.’ 1

[1920] AC 581 at 613, HL.

2.115  In Ventouris v Mountain, The Italia Express1 Bingham LJ referred to legal professional privilege existing ‘in the absence of iniquity’.2 The iniquity which may lead to a loss of legal professional privilege has been held to cover ‘crime or fraud’,3 ‘other equivalent underhand conduct which is in breach of a duty of good faith or contrary to public policy or the interests of justice’, 4 the ‘criminal or unlawful’,5 and ‘all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery and sham contrivances’6 and the effecting of transactions at an undervalue for the purpose of prejudicing the interests of a creditor.7 1 2

[1991] 1 WLR 607, CA. [1991] 1 WLR 607 at 611.

Inquiry agents  103 3 4 5 6 7

R v Cox and Railton (1884) 14 QBD 153 at 165. JSC BTA Bank v Ablyazov [2014] EWHC 2788 (Comm) at [68]. Bullivant v A-G for Victoria [1901] AC 196 at 201, HL. Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. Barclays Bank plc v Eustice [1995] 1 WLR 1238, CA.

2.116  Whether the iniquity involved will cause the privilege to be lost will be determined on a case by case basis. As Goff LJ explained in Gamlen Chemical Co (UK) Ltd v Rochem Ltd:1 ‘[T]he court must in every case, of course, be satisfied that what is prima facie proved really is dishonest, and not merely disreputable or a failure to maintain good ethical standards and must bear in mind that legal professional privilege is a very necessary thing and is not lightly to be overthrown, but on the other hand, the interests of victims of fraud must not be overlooked.  Each case depends on its own facts.’ 1

(Unreported, 7 December 1979), CA.

Dubai Aluminium Co Ltd v Al Alawi 2.117  The leading case on whether the iniquity exception will lead to a loss of legal professional privilege where evidence has been illegally obtained by inquiry agents is the decision of Rix J in Dubai Aluminium Co Ltd v Al Alawi.1 The plaintiffs had brought a fraud claim against Mr Al Alawi and others and had obtained a freezing injunction against Mr Al Alawi. Mr Al Alawi applied to discharge the freezing injunction. 1

[1999] 1 WLR 1964.

2.118  One of the grounds relied upon by Mr Al Alawi to discharge the freezing injunction was that: ‘… in investigating his finances and assets, [the plaintiff] has employed agents who have acted in contravention of the Data Protection Act 19841 or Swiss banking laws, or have trespassed on Mr Al Alawi’s property and converted documents fetched out of his dustbins.’2 1 2

Being the predecessor to the Data Protection Act 1998 (which has since been repealed by the Data Protection Act 2018). [1999] 1 WLR 1964 at 1966.

2.119  In support of this ground for discharging the freezing injunction, Mr Al Alawi sought disclosure of the reports and other documents relating to the investigations of his financial affairs by the plaintiff’s inquiry agents. It was accepted by the plaintiff that these documents were relevant and discloseable but it was contended that legal professional privilege attached to them. Mr Al Alawi accepted that on the face of it legal professional privilege would attach to the documents but contended that it did not apply in these circumstances because they were part of or relevant to criminal or fraudulent or otherwise iniquitous acts or purposes. The acts complained of were first, that detailed information had been obtained about the defendant’s bank, credit card and telephone accounts by the use of ‘pretext calls’

104  Obtaining information about a judgment debtor’s assets to the companies concerned and, secondly, that documents had been removed from Mr Al Alawi’s dustbins and copied before being replaced.  Mr Al Alawi alleged that the evidence had been obtained in contravention of the Data Protection Act 1984 or Swiss banking laws, or through trespass and conversion. The plaintiff put no evidence in opposition and indeed previous evidence from the plaintiff had admitted the use of ‘pretext calls’. 2.120  The plaintiff submitted that no authority had extended the exception to privilege this far and that all the cases involving the exception concerned instances where solicitors had become involved, innocently or otherwise, with the planning or carrying out of iniquitous acts which were the subject matter of litigation. 2.121  The plaintiff’s submission was rejected and the Court ordered disclosure of the documents. Rix J first recognised that deciding this question involved balancing a number of competing public interests – the public interest in legal professional privilege, in combating crime and fraud, and in trying cases on all the relevant evidence. His observations that an approach where statutes were breached without any consequence for the conduct of the litigation could not be sanctioned have been noted in para 2.73. He continued:1 ‘Of course, there is always the sanction of prosecutions or civil suits, and those must always remain the primary sanction for any breach of the criminal or civil law. But it seems to me that criminal or fraudulent conduct for the purposes of acquiring evidence in or for litigation cannot properly escape the consequence that any documents generated by or reporting on such conduct and which are relevant to the issues in the case are discoverable and fall outside the legitimate area of legal professional privilege. It is not as though there are not legitimate avenues which can be sought with the aid of the court to investigate (for instance) banking documents. That apparently is true in Switzerland as well. In any event, the material being investigated is usually material which falls within the other party’s possession or control, and which in all probability he will in due course be obliged to disclose himself.  In such circumstances, it does not seem to me to be too great an intrusion on legal professional privilege to require that documentation such as is in question in this case should be disclosed. Otherwise the position would be that the party employing the criminal or fraudulent agent would have it entirely within his own power to decide which of the criminally or fraudulently acquired information he was willing to rely on and disclose and which he was not. Where such a party will be asking the court to make inferences from such material, it is only fair that such material should be seen as a whole.’ 1

[1999] 1 WLR 1964 at 1969.

2.122  However, as regards the information obtained from a search of Mr Al Alawi’s dustbins, the Court found that although it had been obtained through activities which constituted the torts of conversion and trespass, such civil wrongs do not fall within the crime, fraud or iniquity exception and thus the documents remained privileged.

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2.123  The clear message from this case is that reports or documents relating to the investigations carried out by inquiry agents which have been obtained through crime, fraud or iniquity are unlikely to be protected by legal professional privilege. Inquiries abroad 2.124  Dubai Aluminium illustrates that practitioners should also be alert to the possibility of unlawful means being used by inquiry agents in making investigations abroad. The law of the country where the inquiries are being made may impose severe criminal penalties for breach of data protection, banking secrecy or other laws. In Dubai Aluminium there were allegations that information had been obtained in breach of Swiss laws of banking secrecy. This was central in the Court’s finding that legal professional privilege would not apply to documents generated as a result.

PART 71 ORAL EXAMINATION 2.125  In addition to publicly available information or the use of inquiry agents, the judgment creditor may wish to consider making an application for a court examination of the judgment debtor under the procedure set out in CPR Pt 71.

Introduction 2.126  The purpose of Pt 71 is to provide a procedure ‘for a judgment debtor to be required to attend court to provide information, for the purpose of enabling a judgment creditor to enforce a judgment or order against him’.1 1 CPR 71.1.

2.127  Part 71 therefore is not in itself a method of enforcement.  Rather, it is a tool available to the judgment creditor to enable her to obtain information about the judgment debtor’s assets so that she can best decide which enforcement procedure(s) to use. However, the threat of an oral examination may in some cases prove sufficient for the judgment debtor to pay the sums owed. The procedure is only available post-judgment and, in contrast with the methods described earlier in this chapter, the information gathered under Pt  71 is obtained directly from the judgment debtor. The rules provide for questioning of the judgment debtor in the forum of a courtroom1. The procedure demands a relatively high degree of co-operation from the judgment debtor. However, a judgment debtor who refuses to co-operate may find herself liable for contempt of court. 1

Although note that the Court of Appeal in Masri v Consolidated Contractors International Co SAL [2008] EWCA Civ 876 did not accept that the CPR Pt 71 process amounted to the taking of evidence and therefore the Court considered that Council Regulation (EC) No 1206/2001 of 28 May 2001 (the Evidence Regulation) did not apply to CPR Pt 71. This issue did not arise as part of the appeal to the House of Lords (Masri v Consolidated Contractors [2009] UKHL 43).

106  Obtaining information about a judgment debtor’s assets 2.128  Part 71 was enacted with the 26th set of amendments to the CPR under the Civil Procedure (Amendment No 4) Rules 2001,1 which came into force on 25 March 2002. These provisions repealed and replaced RSC Ord 48. 1 SI 2001/2792.

2.129  RSC  Ord 48 originated from Common Law Procedure Act 1854, s  60, which was later re-enacted in amended form as Rules of Court of 1875, Ord XLV, r 1. However, while the modern form of the procedure has simplified the rules, the basic purpose of the procedure is unchanged. This is evident from the terms of s 60 of the 1854 Act, which provided: ‘It shall be lawful for any Creditor who has obtained a Judgment in any of the Superior Courts to apply to the Court or a Judge for a Rule or Order that the Judgment Debtor should be orally examined as to any and what Debts are owing to him … and the Court or Judge may make such Rule or Order for the Examination of such Judgment Debtor, and for the Production of any Books or Documents …’ Part 71 substantially reproduces this section. PROCEDURE 2.130  As has been noted, it is necessary that a judgment or order has been made against the judgment debtor for the CPR  Pt  71 procedure to be available.1  The procedure is not available before judgment has been given. 1

CPR 71.1 states that the procedure is available ‘for the purpose of enabling a judgment creditor to enforce a judgment or order’.

2.131  However, following judgment, the judgment creditor can utilise the procedure at any time. An order for a judgment debtor to attend court to provide information is not contrary to an order staying enforcement of the judgment debt1. CPR Pt 71 allows a person to be compelled for examination as a ‘judgment debtor’ even when the only outstanding parts of the judgment against the debtor are costs orders for sums which have yet to be agreed or determined by assessment2. There is nothing in the rules which require that, for example, where an order has been made for payments by instalments the judgment debtor should be behind with payments, or have refused to pay, or otherwise be behaving in an obstructive manner for the procedure to be available.3 1 2 3

Sucden Financial Ltd v Fluxo-Cane Overseas Ltd [2009] EWHC 3555 (QB). Pluczenik Diamond Co NV v W Nagel (A Firm) [2019] EWHC 3126 (QB). However, see para 2.252 for a discussion of human rights considerations in this regard.

Application by the judgment creditor Which court? 2.132  The application must be issued in the court which made the judgment or order which the judgment creditor seeks to enforce (unless the proceedings have since been

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transferred to a different court, in which case the application must be made in that court).1 The order will ordinarily require the judgment debtor to attend the County Court hearing centre for the district in which she resides or carries on business,2 although there is no requirement to transfer the proceedings to the judgment debtor’s home court before the application is issued. 1

2

CPR 71.2(2)(b). See also provisions at CPR 71.2(2) inserted with effect from 19 March 2012 by the Civil Procedure (Amendment) Rules 2012, SI 2012/505, for the purpose of making provision for the enforcement of a judgment in a money claim issued by the County Court Money Claims Centre (at Salford). Unless the court orders otherwise: PD 71, para 2.1.

Application notice 2.133  An application for an order under Pt 71 may be made without notice.1 The application must be made using Form N316 if the judgment debtor is an individual, or Form N316A if the judgment debtor is an officer of a company or other corporation.2 1

2

CPR 71.2(2). Further, see Vale SA v BSG Resources Ltd (in administration) [2020] EWHC 2021 (Comm) for a detailed consideration of a number of points of procedure in relation to Pt  71 applications. CPR 71.2(3) and PD 71, para 1.1.

2.134  CPR  71.2(3) and Practice Direction to Pt  71, para  1.2 stipulate certain information which the application notice must contain. This consists of: (a) the judgment debtor’s name and address; (b) the judgment or order of which enforcement is sought; (c) in the case of money judgments,1 the amount presently owed by the judgment debtor (including any costs and interest); (d) where the judgment debtor is a company or corporation, providing details of the company officer who the judgment creditor wishes to attend court including her position in the company (see further para 2.144); (e) where the judgment creditor wishes the questioning to be conducted before a judge, providing reasons why this is necessary (see further paras 2.137–2.139); and (f) the identification of any specific documents the judgment creditor wishes the judgment debtor to produce at court.2 1 2

In the case of non-money judgments the application should stipulate what the order required the judgment debtor to do. In the case of non-money judgments the application should also identify the matters about which the judgment creditor wishes the judgment debtor to be questioned.

Additional questions from the judgment creditor 2.135  The standard form records of examination, Form EX140 (in the case of an individual judgment debtor) and Form EX141 (in the case of an officer of a company or corporation), list the standard questions which will be asked where an officer of the court conducts the examination. In the case of an individual, these relate to matters such as employment details, income, property, investments and other debts. Where the judgment debtor is a corporation, the officer will be asked about the company’s operational and financial status and questioned about the company’s assets and

108  Obtaining information about a judgment debtor’s assets relationships with other group companies. The judgment debtor or company officer will also be required to produce certain documents at the hearing and the application Forms N316 and N316A list the types of document the order to attend court will include. 2.136  The standard questions asked and documents required at the hearing are discussed further in paras 2.167–2.170. However, in high value or complex litigation where the nature and holding of the judgment debtor’s assets may well be more complex, the judgment creditor may not consider the standard form questions and document requests sufficient to extract useful information from the judgment debtor. She may therefore wish to file additional questions or requests for documents to be asked or made by the court officer when making her application, or alternatively attend the actual hearing to ask questions herself.1 Such questions should relate to the judgment debtor’s ability to pay the judgment debt and questions which do not relate to this may be disallowed by the court. The scope of the questions which may be asked of the judgment debtor is considered further in paras 2.174–2.222. 1

CPR  71.6(3)(a) provides that a judgment creditor may ask questions when the questioning takes place before a court officer.

Seeking a hearing before a judge 2.137  A further consideration for the judgment creditor is the issue of who should carry out the questioning. The judgment debtor will be questioned by a court officer unless the court has ordered that the questioning shall be before a judge.1  The order will provide for the questioning to take place before a judge only if there are ‘compelling reasons’ to do so.2 Where the judgment creditor wishes to conduct the questioning herself (or through her counsel) before a judge, she must set out her reasons for this request in the application notice.3 1 CPR 71.6(2). 2 PD 71, para 2.2. 3 See para 2.134.

2.138  No guidance is provided on what constitutes ‘compelling reasons’. However, in high value or complex litigation where the nature and holding of the judgment debtor’s assets may be complex, the judgment creditor is likely to want to obtain an order that the questioning is conducted before a judge.  This will allow the judgment creditor to retain control of the questioning process and utilise her full knowledge of the facts of the case to tailor specific questions to the judgment debtor’s circumstances. A court officer, who will not have this detailed knowledge and who is working from a list of standard questions will not be able to conduct the examination with the same vigour.  The reasons why the order is sought should therefore be carefully explained. However, it is important to note that while the examination may be carried out by counsel for the judgment creditor, the judge ultimately determines what questions can be put to the judgment debtor. As Hughes J observed in Mubarak v Mubarak:1 ‘Although in the present case the examination was carried out by counsel for the judgment creditor, and the district judge no doubt exercised a proper

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judicial restraint himself, the oral examination is conducted by the district judge. It is for him to say what questions need answering and for him to say when it is over.’ 1

[2002] EWHC 2171 (Fam), a case which related to RSC Ord 48.

Fee 2.139  The fee for applying for an information hearing requiring a judgment debtor or other person to attend court and provide information in connection with enforcement of a judgment or order under Pt  71 is £55 in the High Court or the County Court. Note that if a bailiff serves the order to attend court for questioning (see para 2.155), a further £110 fee is payable. 1 1

The Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, paras 7.2, 8.3, 8A.

Order to attend court 2.140  The application for an oral examination may be dealt with by a court officer without a hearing.1 However, the court officer considering the application notice may refer it to a judge for consideration and will do so where the judgment creditor requests the judgment debtor to be questioned before a judge.2 1 CPR 71.2(4). 2 PD 71, para 1.3.

2.141  The wording of CPR  71.2(5) indicates that provided that the application notice satisfies the requirements set out in PD 71, an order requiring the judgment debtor to attend court to provide information will be issued. It was unsuccessfully argued in Masri v Consolidated Contractors International Co SAL1 that the wording of CPR 71.2(5) gives the judgment creditor a right to an order provided the application complies with the formal requirements. This would have marked a change from the former rule under RSC Ord 48 which provided the court with a discretion to make the order. The Court of Appeal did not accept this argument (which was not considered on appeal). It held that the explanation for the terms of CPR  71.2(5) is that, by CPR 71.2(4) an order under CPR 71.2(1) may be made by a court officer without a hearing. Such an order would be an administrative act. The addressee can then challenge an order made without notice. It was not intended that on an application to set aside the order, the court should not have a discretion whether or not, in all the circumstances of the case to uphold the order or to set it aside. 1 [2008] EWCA Civ 876.

2.142  The order requiring the judgment debtor to attend court for questioning will be in Form N39. The application must be issued in the court or County Court hearing centre which made the judgment or order.1 The examination will take place in the County Court hearing centre for the district in which the judgment debtor resides or carries on business, unless the judge decides otherwise.2 The order will provide for questioning to take place before a judge only if the judge considering the request

110  Obtaining information about a judgment debtor’s assets decides that there are compelling reasons to make such an order.3 The questioning will be carried out by a court officer unless the court has ordered that the hearing shall be before a judge.4 The order will provide that a person served with the order must: (a) attend court at the time and place specified in the order; (b) produce the documents in her control which are described in the order; and (c) answer on oath such questions as the court may require.5 1

CPR  71.2(2)(b). Unless a) the proceedings have been transferred to a different court or hearing centre, it must be issued in that court or, b) if it is to enforce a CCMCC judgment it must be issued in accordance with PD 70, para 2. 2 PD 71, para 2.1. 3 PD 71, para 2.2. 4 CPR 71.6(2). 5 CPR 71.2(6).

2.143  An order made under CPR Pt 71 will also contain a notice in the following terms (or to substantially the same effect):1 ‘If you the within-named [ ] do not comply with this order you may be held to be in contempt of court and imprisoned or fined, or your assets may be seized.’ This wording is usually termed the ‘penal notice’ and its inclusion is critical if the order subsequently needs to be enforced by committal for contempt of court (see further paras 2.227–2.239). The standard order to attend court for questioning, Form N39, states in bold towards the bottom of the front page ‘You must obey this order. If you do not, you may be sent to prison for contempt of court’. 1 CPR 71.2(7).

Who can be examined? 2.144  Where the judgment debtor is an individual, the question of who can be examined under Pt 71 is straightforward. In the case of a company or corporation, the rule provides that ‘an officer’ may be required to attend court for questioning.1 In Masri v Consolidated Contractors International Co SAL  2 the Court of Appeal held that ‘an officer’ did not extend to include a director of a corporate director of the judgment debtor (a point not overturned on appeal). Before making the application, the judgment creditor should consider which officer of the company is most likely to be able to answer questions on the company’s operational and financial status and assets. The company secretary or finance director may prove a more useful source of information than a non-executive director. A search at Companies House will provide a full list of the company directors and the secretary. 1 CPR 71.2(1)(b). 2 [2008] EWCA Civ 876.

Former officers of a company 2.145  In Société Générale du Commerce et de l’Industrie en France v Johann Maria Farina & Co1 it was held that the words ‘an officer’ of a body corporate included former officers of the company. In that case, judgment had been obtained against a company and an order had been made under one of the predecessor rules to

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Pt 712 directing the examination of a named director of the company as to what debts were owing to it and whether the company had the means to satisfy the judgment debt.  Upon examination, the director named in the order admitted that he was a director of the company at the time the judgment was made but refused to answer any further questions as to the debts due to and property of the company on the ground that he had ceased to be a director after the date of the judgment. The matter came before a judge who made an order that the director should attend to be examined. The director appealed against that order on the grounds that since the words of the rule were in the present tense, there was no power to order the examination of anyone who at that time was not an officer of the judgment debtor company. 1 2

[1904] 1 KB 794, CA. Rules of the Supreme Court 1887, Order XLII, r 32 (the immediate predecessor to RSC Ord 48).

2.146  The Court of Appeal dismissed the director’s appeal. Lord Collins MR held:1 ‘I am of [the] opinion that this construction which is sought to be put upon the rule is too narrow.  There is nothing in the rule which restricts it to an existing officer of the corporation, and there is nothing in the wording of the rule incompatible with its application to a person who has been an officer of the corporation. The construction of the rule that is contended for might work serious injustice if an officer of a corporation merely by resigning his position could get rid of the responsibility of giving the information that is sought by a plaintiff.’ 1

[1904] 1 KB 794 at 797.

2.147  Matthew LJ agreed:1 ‘The object of Order XLII., R 32 [a predecessor rule to Pt 71], is to permit the examination of officers connected with a corporation as to its property and assets. I cannot see any reason why a company should escape liability to disclosure by accepting the resignation of a director, who might be the sole manager and the only person acquainted with details.  I  find nothing in the language of the rule which compels us to place on the rule an interpretation which would have that effect, and I see no reason why this order should not be enforced.’ 1

[1904] 1 KB 794 at 797798.

2.148  However, the modern day language of CPR Pt 71 was considered in Vitol S.A. v Capri Marine Limited1 where The Hon. Mr Justice Tomlinson held that given the wording of CPR 71.2(1)(b), the Practice Direction and the prescribed forms it was ‘impossible’ to conclude that an order can be made against someone who is not at the time when the order is made an existing officer of the judgment debtor company. While this was an ‘inconvenient conclusion’ it was unlikely that it was intended ‘that a court entertaining an application under CPR 71.2(1)(b) should be required to consider the closeness of the ‘officer’s’ current connection with the running of the company.’ 1

[2008] EWHC 378 (Comm).

112  Obtaining information about a judgment debtor’s assets Unincorporated associations 2.149  In Maclaine Watson & Co Ltd v International Tin Council (No  2)1 the Court of Appeal had to consider whether the RSC  Ord 48 procedure applied to unincorporated associations.  Order 48, r 1 provided for the examination of ‘the judgment debtor or, if the judgment debtor is a body corporate, an officer thereo’. At first instance2 Millett J had (regretfully) upheld the Master’s decision that the International Tin Council (ITC) could not be examined under RSC Ord 48 since the wording of the Order did not give the court the power to order this.3 This was notwithstanding the fact that the ITC had been granted the legal capacities of a body corporate by statutory instrument because the statutory instrument fell short of deeming that the ITC was, or should be treated as, a body corporate. However, he ordered that the court had an inherent jurisdiction under Senior Courts Act 1981, s 37(1) to order the ITC to make full disclosure of its assets to the judgment creditors and that it was in accordance with the policy of the law to assist judgment creditors to do so. 1 2 3

[1989] Ch 286, CA. [1987] 1 WLR 1711. At [1987] 1 WLR 1711 at 1714, Millett J also rejected an argument by the judgment creditor that the proper construction of the word ‘person’ in accordance with the Interpretation Act 1978 should mean that ‘judgment debtor’ in RSC Ord 48 should include an unincorporated association as a forced and unnatural construction of the Order rendering one of its express provisions meaningless.

2.150  On appeal, the correctness of Millett J’s construction of RSC  Ord 48 (as not applicable to unincorporated associations) was not challenged and the Court of Appeal upheld his decision to order the disclosure of ITC’s assets under the inherent jurisdiction of the court.  Both Millett J  and the Court of Appeal appeared to be heavily influenced by the behaviour of the ITC, which Millett J noted:1 ‘… has behaved more like a disreputable private debtor concerned only to hinder and delay his creditors than the responsible international organisation it claims to be.’ 1

[1987] 1 WLR 1711 at 1713.

2.151  The wording of Pt 71 refers to ‘a judgment debtor or if a judgment debtor is a company or other corporation, an officer of that body’.1 It therefore seems that this ‘lacuna’ in the rules has been preserved and, although Pt 71 is no more concerned with the judgment debtor’s legal status than was its predecessor RSC Ord 48, the correct means by which to seek to elicit information as to the assets of an unincorporated association is to ask the court to make an order requiring disclosure of its assets under the Senior Courts Act 1981 (SCA 1981), s 37(1). 1 CPR 71.2(1).

Partnerships 2.152  While there is no case law on the availability of the oral examination procedure where the judgment debtor is a partnership, in light of the wording of Pt 71 and the judgment in Maclaine Watson, a judgment creditor who seeks to examine a

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partner as to the partnership assets would be well advised to make an application under Pt 71 and SCA 1981, s 37(1) in the alternative. The Crown 2.153  The procedure in Pt 71 cannot be used in respect of any order against the Crown.1 As already noted in Chapter  1, under CPA  1947, s  25(4) ‘no execution or attachment or process in the nature thereof shall be issued out of any court for enforcing payment by the Crown of any such money or costs’.  1

Franklin v R (No 2) [1974] QB 205, CA.

Service of the order 2.154  It is vital that proper service of the order is effected.1 This is because, if proper service cannot be shown, the court will not impose the sanction of committal on a judgment debtor who fails to attend court.2 1 2

Equally important is the payment of the judgment debtor’s travelling expenses when requested: see paras 2.161–2.162. CPR  71.8(3).  See also Beeston Shipping Ltd v Babanaft International SA (The Eastern Venture) [1985] 1 All ER 923, CA.

2.155  Once the order to attend court has been issued, it must be served personally on the judgment debtor not less than 14 days before the hearing, unless the court orders otherwise.1 Service of the order must be carried out by the judgment creditor or someone acting on her behalf.2 A judgment creditor may wish to instruct a process server to effect service of the order, though it should be noted that only limited costs will be recoverable in this regard (see further paras 2.259–2.261). 1 2

CPR 71.3(1). For the fixed costs of personal service in these circumstances see CPR 45.7 which prescribes a disproportionately low fee of £15 for effecting personal service. PD 71, para 3. The only exception is where the judgment creditor is an individual litigant in person in County Court proceedings, when the County Court bailiff will serve the order on the judgment debtor.

2.156  In Masri v Consolidated Contractors International Co SA,1 reversing the decision in the Court of Appeal, the House of Lords held that the court does not have the power to entertain an application under CPR Pt 71 to require the attendance for the examination of a company officer who is out of the jurisdiction. CPR Pt 6 provided no basis for service out of the jurisdiction of any such order (had it been possible to make one). In CIMC Raffles Offshore (Singapore) Pte Ltd v Schahin Holdings2 SA, Field J, setting aside orders made against Brazilian citizens living in Brazil said: ‘In my judgment it is clear that the House of Lords held in Masri that the court has no power to entertain an application or to make an order in respect of an individual who was outside the jurisdiction. In my view that means that if the individual is not within the jurisdiction at the time the application was made and at the time the order is made there is no power in the court to make an order against him.’ 1 2

[2009] UKHL 43. See also Vitol S.A. v Capri Marine Limited [2008] EWHC 378 (Comm). [2014] EWHC 1742 (Comm). Note commentary in this judgment that although in Kuwait Airways

114  Obtaining information about a judgment debtor’s assets Corp v Iraq Airways Co [2010]  EWCA  Civ 741 the Court of Appeal upheld an order to detain a defendant’s non-resident, non-party director within the jurisdiction where CPR  71 attendance was an issue this is highly likely to be fact specific and should not be seen as an extension of the jurisdictional limits of CPR Pt 71.

2.157  The Court has however held it has jurisdiction where there is a fleeting presence in the jurisdiction at the time the application is made and served. 1 1

Deutsche Bank AG v Sebastian Holdings Inc and Alexander Vik [2015] EWHC 2773 (QB). See also Alexander Vik v Deutsche Bank AG [2018] EWCA Civ 2011 in which the Court of Appeal held that contempt proceedings could, in principle, be bought against an officer out of the jurisdiction for a breach of an order under CPR 71.

2.158  The decision in Masri was considering the position of an officer of a judgment debtor resident abroad, not an individual judgment debtor. In their judgment, their Lordships also considered the position of the individual judgment debtor and Lord Mance noted:1 ‘Mr Laurence Rabinowitz QC for Mr Masri points out that CPR 71 covers first and foremost judgment debtors who may be anywhere in the world. It must be possible to obtain an order for examination of an individual when he or she is the judgment debtor.’ He continued and said: ‘Service out of the jurisdiction on such an individual [ie a judgment debtor] will be possible with leave under, or without leave by implication from, the terms of CPR 6.30(2)2, stating: “where the permission of the court is required for a claim form to be served out of the jurisdiction the permission of the court must also be obtained for service out of the jurisdiction of any other document to be served in the proceedings.” RSC Ord 11, r 9(4) (the differently worded predecessor to CPR 6.30(2)) was, rightly, held to authorise service out with leave in such a situation in Union Bank of Finland Ltd v Lelakis [1996] 4 All ER 305, [1997] 1 WLR 590. Further, I would accept Mr Rabinowitz’s submission that there is nothing in CPR 71 to limit its scope to domestic assets. The Court of Appeal was right to reject a contrary submission in Interpool Ltd. v Galani [1988] QB 738.’ Thus, an individual judgment debtor can potentially be served out of the jurisdiction. Permission will potentially be needed to serve out of the jurisdiction depending on the location in which the service is intended to take place.3 1 2 3

[2009] UKHL 43 at [16]. The relevant provision is now CPR 6.38. See the decision in Slade v Abbhi [2020] EWHC 935 (QB) concerning failed service on a US based defendant.

2.159  If the judgment creditor has been unable to serve the judgment debtor personally with the order, the judgment creditor must inform the court of this no less than seven days before the date of the hearing.1 The words ‘unless the court orders otherwise’ in CPR 71.3(1) make provision for service by an alternative method under CPR 6.8 where personal service is not possible. Service by an alternative method is dealt with in CPR 6.27 applying CPR 6.15. Where it appears to the court that there is

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a good reason to authorise service by a method not permitted by the CPR, the court may make an order permitting service by an alternative method. An application for an order under CPR 6.27 applying CPR 6.15 must be supported by evidence (usually in the form of a witness statement or affidavit) clearly stating the problems that have been encountered in trying to effect personal service.2 This evidence will then be put on the court file to provide a record of the facts upon which the court relied in making the order for substituted service. The order which permits service by an alternative method must specify the method of service and the date when the document will be deemed to be served.3 1 CPR 71.3(2). 2 For a discussion concerning failed personal service and alternative service on a defendant located outside of the jurisdiction see Slade v Abbhi [2020] EWHC 935 (QB). 3 CPR 6.15(3).

2.160  However, although CPR 71.3(1) and CPR 6.27 applying CPR 6.15 provide a possible solution for a judgment creditor who is unable to effect personal service of the order on the judgment debtor, depending on the reasons why personal service has not been possible, the judgment creditor may wish to consider carefully at this point whether to proceed with the oral examination. Although the order for substituted service will allow the process to continue, if the judgment debtor is deliberately evading service, this may indicate that the procedure under Pt  71 will not be successful since it requires a significant degree of co-operation from the judgment debtor. While continued non-co-operation may result in a committal order against the judgment debtor, this may prove cold comfort to the judgment creditor seeking financial redress. The cost of continuing what may turn out to be a fruitless procedure may ultimately be a further source of financial loss. Requirement to pay reasonable travelling costs 2.161  Once the judgment debtor has been served with the order, she may, within seven days, ask the judgment creditor to pay a sum reasonably sufficient to cover her travelling expenses to and from court. The judgment creditor must pay such a sum if requested.1 1

CPR 71.4. Absent such request, there is no requirement to pay conduct money.

2.162  The provision to provide the judgment debtor with reasonable travelling expenses when requested should be taken seriously.  This is because an order for committal will not be made where they have not been tendered.1 1

CPR  71.8(3).  See also Beeston Shipping Ltd v Babanaft International SA (The Eastern Venture) [1985] 1 All ER  923, CA, in which the Court of Appeal considered (in the context of RSC  Ord 48) but ultimately did not need to decide this issue. See also Pelling v Bow County Court [2005] EWCA Civ 384.

Judgment creditor’s affidavit(s) 2.163  At least two days before the hearing, the judgment creditor must file at court an affidavit or affidavits dealing with service of the order, the provision of travelling

116  Obtaining information about a judgment debtor’s assets expenses to the judgment debtor and how much of the judgment debt remains unpaid.1 Alternatively, the affidavit or affidavits may be produced at the hearing.2 1 CPR 71.5(1)-(2). 2 CPR 71.5(2)(b).

Affidavit evidence dealing with service 2.164  The affidavit evidence of service must be sworn by the person who served the order – either the judgment creditor herself or her process server.1 The affidavit must provide details of how and when the order was served and should attach a copy of the order served. 1

CPR 71.5(1)(a), unless the order was served by the court in the case of a County Court litigant in person: see para 2.155, n 2.

Affidavit evidence dealing with travelling expenses 2.165  Where service was effected through a process server, the judgment creditor must also file affidavit evidence stating either that the judgment debtor has not requested payment of her travelling expenses, or alternatively that the judgment creditor has paid a sum in accordance with such a request.1 Given that CPR 71.4(1) provides that the judgment debtor has seven days from service of the order in which to request a sum in payment of her travelling expenses, this affidavit evidence cannot be sworn before that time. The affidavit evidence should also confirm either that all the money owing to the judgment creditor when the application was issued remains unpaid or, alternatively, provide details of the balance owing if any payments have been received in the meantime.2 This evidence can either be in a separate affidavit to the affidavit on service or included in the process server’s affidavit on the basis of information and belief. The affidavit for use in the County Court (EX550) is a single affidavit in this form and could be used as a precedent for these purposes. 1 CPR 71.5(1)(b). 2 CPR 71.5(1)(c).

The hearing 2.166  At the start of the hearing the judgment debtor will be asked to swear on oath or to affirm before the questioning begins.1 A court officer will explain the purpose of the oath and the questions. 1 CPR 71.6(1).

Questions asked by a court officer 2.167  Where the questioning is conducted by a court officer she will ask a standard set of questions set out in Forms EX140 or EX141.1 1

PD 71, para 4.1.

2.168  Where the judgment debtor is an individual (Form EX140) the questions cover matters such as her employment details, salary, benefits, other income,

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property, investments, other debts and any offer of payment the judgment debtor is prepared to make. In addition, the order to attend court for questioning will require the judgment debtor to produce certain documents at the hearing, including: pay slips, bank statements, building society books, share certificates and rent books, together with documents evidencing the judgment debtor’s out-goings (such as her mortgage statement and utilities bills). She will also be required to bring documents relating to her business where she is operating as a sole trader (for example, bills owed to the business and its accounts). 2.169  Where the judgment debtor is a company or corporation (Form EX141) the company officer will be asked about the company’s current operational status, its current financial status, its assets, its property, the company’s liabilities and other matters such as details of other group companies and loans to employees.  The officer will also be asked what, if any, offer of payment the company is prepared to make. The order to attend court will require the company officer to produce certain of the company’s documents at the hearing, including bank statements, accounts, bills owed to the company, outstanding bills and other documents evidencing other liabilities owed by the company. 2.170  The judgment creditor or her representative may attend the hearing (although there is no requirement to do so) and may ask additional questions if she wishes to do so.1 Alternatively, she may ask the court officer to ask additional questions by attaching a list of proposed additional questions when filing the application.2 1 CPR 71.6(3)(a). 2 PD 71, para 4.2(2).

2.171  The court officer will make a written record of the answers given on Form EX140/EX141 (unless the hearing is tape recorded). At the end of the questioning the court officer will read the record of the evidence given and ask the judgment debtor to sign it. If the judgment debtor refuses, the court officer will note the refusal on the record of evidence.1 1

PD 71, para 4.3.

Questions where the hearing is before a judge 2.172  Where the hearing is before a judge the judgment creditor (or her representative) must attend and conduct the questioning.1 The standard questions in forms EX140 and EX141 will not be used.2 The proceedings will be tape recorded and the court will not make a written record of the evidence.3 1 2 3

CPR 71.6(3)(b). In this context ‘judge’ includes masters and district judges: CPR 2.3(1). PD 71, para 5.1. PD 71, para 5.2.

2.173  Where the questioning is conducted by the judgment creditor’s representative there is greater scope for the questioning to take the form of a vigorous crossexamination with questions tailored to the specific facts or circumstances of the judgment debtor.  In high value or complex litigation, particularly where fraud is

118  Obtaining information about a judgment debtor’s assets involved, this more testing form of examination may be necessary if the judgment creditor is to elicit useful information. What questions may be put to the judgment debtor? 2.174  The scope of the questions which can be put to the judgment debtor has been the subject of some debate. It is for the court to determine the scope of the questions the judgment debtor must answer.1 1

See para 2.135.

2.175  In the 1880 case of Republic of Costa Rica v Strousberg,1 the Court of Appeal had to consider whether the questions which could be asked of a judgment debtor under one of the predecessor rules to Pt 712 should be confined to asking the judgment debtor ‘whether any and what debts are due to him’. The judgment debtor had attended before the court examiner but had refused to answer, among others, questions as to whether he had any other bank account than the one named, whether he was carrying on business, whether he had any contracts pending, whether any money was due to him for rent, or in fact any question other than what debts were due to him. The judgment creditor brought an application before the Vice-Chancellor for an order that the judgment debtor should be further examined and should answer those questions he had previously refused to answer. 1 2

(1880) 16 Ch D 8, CA. Rules of Court of 1875, Ord XLV, r 1.

2.176  The Vice-Chancellor observed:1 ‘The object of this examination evidently is for the purpose of ascertaining from the judgment debtor what debts are owing to him, in order that the judgment creditor may attach those debts. It is in the nature of a discovery; and it appears to me very much like the discovery of documents where a defendant is asked what documents he has, and he sets out what documents he has: but you cannot cross-examine him upon that.’ 1

(1880) 16 Ch D 8 at 10.

2.177  He went on:1 ‘However, my construction of the Act is that [the judgment creditors] were not at liberty to make a general examination … Therefore I think the examination went beyond its just bounds.’ 1

(1880) 16 Ch D 8 at 11.

2.178  The judgment creditor appealed the Vice-Chancellor’s decision on the basis that if the judgment debtor were entitled to restrict the examination to the simple question of whether any debts are due to him, the order would be a nullity. The Court of Appeal agreed. Lord Jessel MR observed:1 ‘Any question, therefore, fairly pertinent to the subject-matter of the inquiry, which means put with a view to ascertain so far as possible, by discovery from

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a reluctant defendant, what debts are owing to him, ought to be answered by the defendant.’ 1

(1880) 16 Ch D 8 at 12.

2.179  He continued:1 ‘He must answer all questions fairly directed to ascertain from him what amount of debts is due, from whom due, and to give all necessary particulars to enable the Plaintiffs to recover under a garnishee order.’ 1

(1880) 16 Ch D 8 at 12.

2.180  James LJ and Cotton LJ agreed, the former adding:1 ‘The examination is not only intended to be an examination, but to be a crossexamination, and that of the severest kind.’ 1

(1880) 16 Ch D 8 at 12.

2.181  Strousberg was cited with approval in Mubarak v Mubarak,1 where Hughes J observed that under RSC Ord 48: ‘The process is intended to be a severe and testing one.’ Strousberg was also cited in Pluczenik Diamond Co NV v W Nagel (A Firm)2 where it was observed that the process is ‘a searching process because it is a valuable and important one, and unless it is searching it will not achieve its aims … were it to be arguable that the nature of the questioning was inappropriate, or that the process being applied was oppressive, or disproportionate, that would be a matter for the court to consider in its discretion to regulate, stop, or defer proceedings’. 1 2

[2002] EWHC 2171 (Fam). [2019] EWHC 3126 (QB).

2.182  CPR 71.2(1) provides that the order will require a judgment debtor to attend court to provide information about ‘the judgment debtor’s means or any other matter about which information is needed to enforce a judgment or order.’ The wider form of the modern wording would therefore in any event appear to preclude a judgment debtor from arguing that she is not obliged to answer a question on a technical interpretation of the rules. 2.183  A  judgment creditor who intends to carry out an oral examination of a judgment debtor should tailor the questions asked with a view to eliciting information as to the assets of the defendant which may be available for enforcement. Reference to the types of assets amenable to third party debt orders, charging orders, writs of control and equitable execution as described in Chapters 3 to 6 of this book should inform the examination.1 1

The assets amenable to the various methods of enforcement covered in this book are summarised in tabular form in the introduction.

What documents must the judgment debtor produce? 2.184  Mubarak also considered the power of the court to order a judgment debtor to produce documents under RSC  Ord 48, which are now contained in

120  Obtaining information about a judgment debtor’s assets CPR  71.2(6  (b). It is worth quoting from the judgment at length since Hughes J  neatly summarises both the purpose of the oral examination procedure and the ancillary nature of the power to require the judgment debtor to produce documents as part of that process. 2.185  In considering the court’s power to order the production of documents, Hughes J first observed the integral nature of the power to require the production of documents to the oral examination process: ‘I accept the submission of … [counsel for the judgment debtor], that Order 48 does not authorise a freestanding process of specific discovery. The oral examination is, however, a process of considerable potential utility to a judgment creditor in a case where the judgment debtor is deliberately evading his obligation to pay. Whilst the obligation on the judgment debtor to produce books or documents is necessarily ancillary to the process of examination and not independent of it, that does not mean that it is anything other than an important and often vital part of the process.  It is a significant tool in the enforcement of the court’s order in relation to which, ex hypothesi, the judgment debtor is in default.’ 2.186  He then went on to observe the flexible nature of the process: ‘I  do not accept [the judgment debtor’s] further submission that the only time when the court can order production of documents is on first ordering attendance for oral examination, nor that that order can only be a generalised one in the terms of Ord 48, that is to say, to produce anything relevant to any debts owing or other assets. It is no doubt the case that the great majority of Ord 48 oral examinations are quite brief and the documents relating to them comparatively few. … That, however, is not to say that the process is not available in and adaptable to the very complex case, such as the present, where the debt and the assets are counted in millions and the potential relevant documents require a trolley rather than an envelope to bring them to court. Indeed, it may be all the more important a process in a case of that kind.’ 2.187  He further observed that orders for the production of documents can be adjourned and can be both general and specific: ‘I am quite satisfied that the rules permit the examination to be adjourned from time to time, if that is necessary, and that orders for the production of relevant documents may also be made from time to time. Such orders may be specific as well as general, providing of course that what is specified for production is relevant to the two questions to which the examination is directed, that is to say, debts owing to the judgment debtor and his property or other means of paying what he owes. If it were not so, a judgment debtor in a complex case such as the husband here, and even if benefiting from skilled advice, which is often not the case, would be faced with real doubt about what documents to bring.’

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2.188  The Court went on to examine the ambit of the expression relating to documents ‘in the possession’ of the judgment debtor in RSC Ord 48. CPR 71.2(6) (b) refers to documents in the judgment debtor’s ‘control’. Hughes J observed that since the present case concerned family proceedings it was not yet governed by Pt 71, but noted the different wording between the two rules and observed that the new rule in Pt  71 was consistent with the requirement for the judgment debtor to produce documents in his possession or power. His judgment stated: ‘It is of course true that the range of documents which are relevant to oral examination under Order 48 will often be narrower than the range of documents relevant to pre-trial discovery, for the former must be relevant to enforcement and to the ability to pay.’ And concluded: ‘What is, however, clear is that to be in the possession or power of a judgment debtor the document must be one which he has the necessary enforceable right to call for, and in his personal capacity not merely qua director or agent. This is further consistent with the actual decision in B v B,1 where Dunn J held that, absent the case of a one-man company, which is the alter ego of the party, a party who has the physical holding of documents or a right to inspect them simply as a director, will, although obliged to disclose their existence at the discovery stage, not be ordered to produce them for inspection.’ 1

[1978] 3 WLR 624.

2.189  In the present case, although the judgment debtor had great influence over the companies concerned and an apparent ability to manipulate their affairs in many ways, there was not such a complete merger of interests or unfettered control to enable the court to treat the companies as his alter ego and require production of the company accounts. This was the case notwithstanding the fact that he found the judgment debtor to have been on occasion evasive and untruthful since: ‘the [the judgment debtor’s] behaviour, however disgraceful, is not a reason to justify going beyond what can legitimately be achieved in the particular process before the court.’ 2.190  Finally, Hughes J observed two limitations to the procedure: (a) there was no power under RSC Ord 48 (and thus presumably under Pt 71) to direct that a new document be brought into existence (in that case a list of the judgment debtor’s expenditure). The court can only order the judgment debtor to produce an existing document which is in her possession; and (b) there is no power to order the judgment debtor to use all necessary endeavours to obtain documents which are not in her possession (although note the dicta since in North Shore Ventures concerning the meaning of ‘control’ at para 2.191). 2.191  Further analysis of the meaning of ‘control’ pursuant to CPR 71.2(6)(b) was more recently explored in North Shore Ventures Ltd v Anstead Holdings Ltd.1 In this case it appeared that the judgment debtors had transferred their assets to trusts where their families were the beneficiaries. The judgment creditor sought an order under

122  Obtaining information about a judgment debtor’s assets CPR 71.2(6) for the debtors to produce documents in their control including documents relating to the administration of the trusts. The debtors’ position was that they were no longer beneficiaries under the trusts and did not have the relevant documents in their possession and control. The Court of Appeal observed that there was no definition of ‘control’ in CPR 71.2. However, the same term is used in CPR 31 (disclosure). Considering the obligations in CPR 31.8(1) and CPR 31.8(2) Lord Justice Toulson concluded that whether the court had the jurisdiction to make such an order depended on the proper conclusion that could be reached as to the true nature of the relationship between the debtor and the trustees. Here it could be inferred from the evidence that there was some understanding or arrangement between the debtors and the trustees to shelter the assets and that the nature of that understanding and arrangement was such that the trustees would take whatever steps the debtors wished in the administration of the trusts. On this basis the documents in the physical possession of the trustees relating to the administration of the trust could be regarded as documents in the debtors’ control within the meaning of CPR 31.8. It was observed: ‘In determining whether documents in the physical possession of a third party are in a litigant’s control for the purposes of CPR 31.8, the court must have regard to the true nature of the relationship between the third party and the litigant. The concept of “right to possession” in CPR 31.8(2)(b) covers a situation where a third party is in possession of documents as agent for a litigant. The same would apply in my view if the true nature of the relationship was that the litigant was to be the puppet master in the handling of money entrusted to him for the specific purpose of defeating the claim of a creditor. The situation would be akin to agency. But even if there were on a strict legal view no “right to possession”, for example, because the parties to the arrangement caused the documents to be held in a jurisdiction whose laws would preclude the physical possessor from handing them over to the party at whose behest he was truly acting, it would be open to the English court in such circumstances to find that as a matter of fact the documents were nevertheless within the control of that party within the meaning of CPR 31.8(1). CPR 31.8(2) states that for the purpose of CPR 31.8(1) a party has or has had a document in his control if the case falls within paragraphs (a) to (c). It does not state that a party has or has had a document in his control if but only if the case falls within one of those paragraphs’2. 1 [2012] EWCA Civ 11. 2 [2012] EWCA Civ 11 at [39].

2.192  This follows the approach of the court to provision of information in orders ancillary to freezing orders which the court can make under CPR 25.1(1)(g) directing the provision of information about relevant assets.1 1

See, eg, JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWCA Civ 139.

Questions about a judgment debtor’s foreign assets 2.193  The question of the court’s power under RSC Ord 48 to examine a judgment debtor in relation to foreign assets was considered by the Court of Appeal in Interpool Ltd v Galani.1 1 [1988] QB 738, CA.

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2.194  Interpool Ltd was a US company which had obtained a French judgment in the sum of US$8,196,000 against a Greek judgment debtor, Galani, in respect of guarantees he had given. Following the judgment, Mr Galani moved from Paris to London and the judgment was registered as a judgment of the High Court under the Foreign Judgments (Reciprocal Enforcement) Act 1933.1 1

The French judgment of which enforcement was sought was given in 1985, prior to the Brussels Convention entering into force between France and the United Kingdom under the Civil Jurisdiction and Judgments Act 1982. The Foreign Judgments (Reciprocal Enforcement) Act 1933 was therefore the legislation applicable to the enforcement of a French judgment in England. 

2.195  An order was made for Mr Galani’s oral examination in relation to debts owed to him and as to his other property under RSC Ord 48. Mr Galani objected to answering any questions except those relating to any assets he may have within the jurisdiction of the English courts. This was on the grounds that the English court does not exercise extra-territorial jurisdiction and will not enforce its judgments by way of execution save as to assets which are within the jurisdiction. Since RSC Ord 48 was merely part of the machinery for the enforcement of judgments, any examination under RSC Ord 48 should be limited to assets within the jurisdiction. 2.196  While commending the attractive simplicity of the judgment debtor’s arguments, the Court of Appeal rejected them.  First, because it found that certain English enforcement procedures were not confined to English assets and, secondly, because there were policy reasons for rejecting the narrow construction of the rule for which the judgment debtor contended. 2.197  As regards the use of English enforcement proceedings to execute against foreign assets, Balcombe LJ first observed that RSC Ord 481 contained no express reference to the locality of debts. He then made various observations on the jurisdictional scope of English enforcement procedures. He noted that there was no limitation in the provisions of RSC Ord 49, which at the time governed garnishee proceedings,2 that the garnished debt must be properly recoverable within the jurisdiction. Rather the court had a jurisdiction to garnish a foreign debt, albeit that it may choose not to exercise its discretion to do so. However, these observations must now be seen as wrong in light of their Lordships’ decision in Société Eram Shipping Co Ltd v Compagnie Internationale de Navigation.3  (See further paras 3.72–3.88) Balcombe LJ then considered the court’s jurisdiction to make a charging order. He commented that he could see no reason why the jurisdiction to make a charging order should be construed more narrowly than the garnishee jurisdiction and should therefore encompass foreign assets. Again, these observations must now be seen as wrong given the recent developments in the law relating to third party debt orders noted in the previous paragraph. However, Balcombe LJ considered that there were other reasons why there should be jurisdiction to examine a judgment debtor as to interests held under a foreign trust.  First, such examination may be necessary to discover the nature and extent of the judgment debtor’s interest in that trust, in part to see whether it is in fact a ‘foreign’ trust. Secondly, Charging Orders Act 1979, s 1(5) requires the court to consider all the circumstances of the case and, in particular, any

124  Obtaining information about a judgment debtor’s assets evidence as to the personal circumstances of the debtor. The existence or otherwise of a judgment debtor’s interest in foreign trusts or properties may be relevant to the court’s determination of whether a charging order should be made. 1 2 3

The same is true of Pt 71. The predecessor to Pt 72, which is considered in detail in Chapter 3. [2004] 1 AC 260.

2.198  Having concluded that the judgment debtor was therefore wrong in his submission that English enforcement procedure is confined to English assets, the Court of Appeal considered that there were also policy reasons for giving RSC Ord 48 the wider meaning for which the judgment creditor contended.  Balcombe LJ noted that the provisions for the reciprocal enforcement of judgments between states were continuously expanding, as evidenced by the Civil Jurisdiction and Judgments Act 1982 (CJJA  1982), which had largely come into force the previous year. The Court accepted counsel for the judgment creditor’s submission that:1 ‘[I]t is entirely consistent with this pattern of legislation that the judgment creditor should have available to him a procedure, under Order 48, which he can utilise to find out whether, in default of any English assets, there are foreign assets available to satisfy his judgment. The use of Order 48 for this purpose is not regulating the conduct of the judgment debtor abroad so as to be contrary to the principle considered by Hoffmann J in Mackinnon v Donaldson, Lufkin and Jenrette Securities Corpn [1986] Ch 482.’ 1

[1988] QB 738 at 742.

2.199  While not applicable in Interpool,1 the Court also considered the provisions of art 16(5) of the Brussels Convention, which had since come into force by virtue of CJJA 1982, s 2(c). Article 16(5) provides that:2 ‘The following courts shall have exclusive jurisdiction, regardless of domicile:… 5. in proceedings concerned with the enforcement of judgments, the courts of the Contracting State in which the judgment has been or is to be enforced.’ 1 2

See para 2.193, n 1. Lugano Convention, art 16(5) and Brussels I Regulation, (Regulation (EC) No 44/2001), art 22(5) and Brussels I  Regulation (Recast) (Regulation (EU) No  1215/2012), art  24(5) contain identical provisions.

2.200  Balcombe LJ observed that:1 ‘Article 16(5) provides that, in proceedings concerned with the enforcement of judgments, the courts of the contracting state in which the judgment has been or is to be enforced shall have exclusive jurisdiction, regardless of domicile. But this provision must be read in the light of the fact that it is possible, as [counsel for the judgment debtor] conceded, for the same debt to be simultaneously enforced by judgments obtained, or registered, in more than one country. So this provision can only relate to the enforcement proceedings in a particular state. The use of Order 48, in English enforcement proceedings, in order to

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discover the existence of foreign assets, does not confer, or purport to confer, jurisdiction on the English court in relation to enforcement proceedings in any other country in which those assets may be situate.’ 1

[1988] QB 738 at 742–743.

2.201  Accordingly, the provisions of RSC Ord 48 were not limited to debts owed and assets located within the jurisdiction and the court had power to order a judgment debtor to answer questions intended to discover assets held outside as well as within the jurisdiction. 2.202  The decision in Interpool was considered by the Court of Appeal in Babanaft International Co SA  v Bassatne,1 a case concerning the court’s jurisdiction under SCA 1981, s 37(1) to issue an injunction restraining a defendant from dealing with its overseas assets. Accordingly, the court’s comments on the Interpool decision in the Babanaft case are strictly obiter.  Lord Justice Kerr specifically noted that the orders for the disclosure of assets abroad pursuant to RSC Ord 48 were not in issue in that appeal and added an ‘emphatic note of caution’2 in relation to those parts of his judgment which had not been canvassed in the arguments of counsel. However, he observed:3 ‘In Interpool Ltd v Galani [1988] Q.B. 738 this court ordered the defendant to make a full disclosure after judgment of his assets abroad, clearly in order to enable the plaintiff to use the disclosure for the purpose of enforcement proceedings in the jurisdictions where the disclosed assets were situated. The court also held, at p 1046D-G, that an order for disclosure by the defendant of his assets worldwide pursuant to Order 48 did not infringe article 16(5) of the European Judgments Convention. In my view, the correctness of that decision is not open to doubt.’ 1 2 3

[1990] Ch 13, CA. [1990] Ch 13 at 36. [1990] Ch 13 at 34.

2.203  Lord Justices Neill and Nicholls agreed that Interpool had established that there is no objection in principle to the judgment debtor being required to disclose overseas assets under RSC Ord 48. However, the latter added an addendum to his judgment in the following terms:1 ‘I  say nothing concerning the circumstances in which it will be proper for the court to make an order for the disclosure of information regarding assets situated abroad, either before judgment or after judgment. That is not a matter which arose, or was argued, on this appeal.  But in all cases where such an order is sought or made the court will need to be alive to the importance of exercising control over the use of information disclosed compulsorily about assets situated overseas.  It is obvious that such information can be used by a plaintiff in a manner that, in some circumstances, would be unjust to the defendant who has been compelled to disclose it.’ 1

[1990] Ch 13 at 46.

126  Obtaining information about a judgment debtor’s assets 2.204  He concluded that in light of the unforeseen consequences that an order for the disclosure of information could potentially have, the court may need to take steps to control the use made of such information overseas.1 1

Neill LJ did not elaborate on the type of ‘unjust’ circumstances he envisaged. While there may be circumstances where, for example, a judgment debtor cannot reveal the existence of foreign debts she is owed without being in breach of foreign law obligations to another party (such that the court may decline to order the judgment debtor to answer questions in that regard), this is likely to be the exception rather than the norm. Alternatively, in such circumstances the position could be addressed by requiring appropriate undertakings from the judgment creditor as to the disclosure and use made of any information relating to the judgment debtor’s foreign assets.

2.205  Interpool was also cited with approval by the Court of Appeal in Maclaine Watson.1  As discussed at paras 2.149–2.151, that case considered the court’s jurisdiction to order a judgment debtor to disclose assets under SCA 1981, s 37(1). Kerr LJ observed:2 ‘Finally, as regards, the extension by Millett J of his first order so as to include the disclosure of the [judgment debtor’s] assets outside the jurisdiction, there can be no doubt that he had the necessary jurisdiction for this purpose: see in particular the decision of this court in Interpool v Galani.’ 1 2

[1989] Ch 286, CA. [1989] Ch 286 at 306.

2.206  The Court of Appeal’s decision in Interpool was considered by the House of Lords in Société Eram Shipping Company v Compagnie Internationale de Navigation.1  Their Lordships noted that the Interpool decision had considered RSC Ord 48 procedure rather than the garnishee jurisdiction, which was the subject of the Société Eram appeal.2 In their Lordships’ view the comments made in Interpool as to the nature of the garnishee jurisdiction (see para 2.194) were erroneous.3 However, as has been noted, the Court of Appeal did not base its decision in Interpool solely on the availability of English execution steps against foreign assets. The Court also took into consideration wider policy arguments. One of the principal reasons for their Lordships’ finding in Société Eram that the English courts have no jurisdiction to garnish a foreign debt was that the garnishee process operates not as an in personam order against a third party but rather has proprietary consequences and takes effect as an order in rem against the debt owed by the third party.4 Their Lordships’ criticisms of the Interpool Court of Appeal’s analysis of the garnishee jurisdiction would not seem to extend to that Court’s finding that oral examination proceedings may be used in relation to overseas assets, since, in contrast to garnishee proceedings, neither RSC Ord 48 nor Pt 71 proceedings seek to assert any in rem jurisdiction over assets (whether located in the UK or overseas). More recently the House of Lords confirmed that the CPR  Pt  71 procedure should be available to elicit information as to a judgment debtor’s foreign assets. The decision in Interpool was expressly referred to and endorsed in Masri v Consolidated Contractors International Co SAL where Lord Mance readily accepted the submission ‘that there is nothing in CPR 71 to limit its scope to domestic assets’ and that ‘The Court of Appeal was right to reject a contrary submission in Interpool.’5 Accordingly, the Pt  71 procedure should be available to elicit information as to a judgment debtor’s foreign assets.

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[2004] 1 AC 260, HL. [2004] 1 AC 260 at 272, per Lord Bingham. [2004] 1 AC 260 at 283, per Lord Hoffmann, and at 289, per Lord Hobhouse. [2004] 1 AC 260 at 292, per Lord Millett. See further Ch 3. [2009] UKHL 43. See also the decision of the Court of Appeal in Masri v Consolidated Contractors International Co SAL [2008] EWCA Civ 303 where it was held that the speeches in Société Eram did not prevent the court from ordering the appointment of a receiver in respect of foreign assets by way of equitable execution, as a receivership order operates only in personam and has no proprietary consequences. Although the point appears to have been raised directly by counsel in front of the Court of Appeal in Masri v Consolidated Contractors International Co SAL [2008] EWCA Civ 876 (at [15]), the Court of Appeal did not address this point directly in its judgment.

Use of Part 71 in connection with foreign enforcement proceedings 2.207  In an article written shortly after the Court of Appeal’s decision in Interpool,1 Peter Kaye reviewed the Interpool judgment and the comments passed on it in Babanaft. Kaye concludes that while the English court has the power to order disclosure of foreign assets under the RSC Ord 48 procedure, it lacks jurisdiction to do so where the application is being brought for the purpose of foreign enforcement proceedings. 1

‘Examination of judgment debtors as to their assets abroad: courts’ powers and jurisdiction’ [1989] LMCLQ 465.

2.208  Kaye draws a distinction between those cases outside and cases governed by the Brussels Convention (and by implication the Lugano Convention, the Brussels I Regulation and Brussels I Regulation (Recast), which contain equivalent provisions).1  However, in both cases Kaye concludes that the English courts lack jurisdiction to order the examination of a judgment debtor to the extent that those proceedings contemplate enforcement proceedings overseas. 1

See Lugano Convention, art  16(5) and Brussels I  Regulation, (Regulation (EC) No  44/2001), art 22(5) and Brussels I Regulation (Recast) (Regulation (EU) No 1215/2012), art 24(5).

2.209  As regards jurisdictions outside the Brussels regime, from the passage from Interpool cited in para 2.200, Kaye concludes that: ‘… it may be deduced from Interpool v Galani that orders for examination of judgment debtors as to their foreign assets, under RSC Ord. 48 fall within the national jurisdiction of the English courts whenever these are made for the purposes of orders in English enforcement proceedings’ and continues:1 ‘However, where the RSC  Ord. 48 order is sought in aid of judgmentenforcement proceedings taking place not in England but in a foreign state (not party to the Brussels Convention), the English court would appear to lack jurisdiction to make such order.’ 1

[1989] LMCLQ 465 at 470.

2.210  In Kaye’s view, the ‘clear implication’ of the passage in Interpool cited in para 2.200,1 is that the English court would lack jurisdiction to make an order under

128  Obtaining information about a judgment debtor’s assets RSC  Ord 48 for the purpose of foreign enforcement proceedings.  However, it is questionable whether Kaye’s interpretation is in fact the ‘clear implication’ of that passage. The Court may simply have meant that by asking a question of a judgment debtor over whom it has personal jurisdiction about the existence of foreign assets, the English court is not asserting jurisdiction over any overseas assets which that person may hold. 1

Namely that the use of RSC Ord 48 in English enforcement proceedings to discover the existence of foreign assets does not confer, or purport to confer, jurisdiction on the English courts in relation to enforcement proceedings in another country where those assets are situate.

2.211  As regards the position under the Brussels Convention, Kaye concludes: ‘The answer, it is believed, is that to the extent that proceedings brought before the English courts for enforcement of an English or foreign judgment may be said to contemplate enforcement thereof in a foreign Contracting State, rather than in the United Kingdom, both the enforcement measures sought and, more particularly in present context, RSC Order 48, r 1 powers in relation to discovery of foreign (or even, in the circumstances, United Kingdom) assets of the judgment debtor lie beyond the jurisdiction of the English courts in accordance with art 19 of the Brussels Convention and, correspondingly, by virtue of art 16(5), within the exclusive jurisdiction of the courts of the foreign Contracting State or states in which the judgment is to be enforced and in which the foreign assets may be situated.’1 (Emphasis added.) 1

[1989] LMCLQ 465 at 471.

2.212  Thus he concludes that rather than the oral examination procedure being available in support of foreign proceedings:1 ‘On the contrary, it is felt, the plain meaning and intent of the words used in art  16(5) should be taken to be that measures of enforcement and orders relating thereto are to be limited exclusively to the enforcement in the United Kingdom – as the Contracting State of the forum – of the English or foreign judgment, and that to the extent that applications relate to foreign Contracting State enforcement, the English courts must decline jurisdiction to grant the relief requested, of their own motion, under art 19 of the Brussels Convention.’ 1

[1989] LMCLQ 465 at 471.

2.213  Accordingly, Kaye concludes that oral examination orders are prohibited where they are sought for the purposes of enforcement proceedings taking place outside the jurisdiction of England and Wales. 2.214  Kaye notes that this situation appears unsatisfactory, partly because it is at odds with the position under the Conventions in relation to disclosure ancillary to interim injunctions,1 and further because this interpretation raises both the cost and complexity of discovering the location of a judgment debtor’s assets. It would mean that the judgment creditor2 may have to go to each of the EU states to obtain an order for examination as to the judgment debtor’s assets so as to discover what, if any, assets are located in that particular EU state before issuing execution proceedings. Further,

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Kaye’s conclusion that oral examination proceedings are precluded to the extent that they ‘contemplate’ foreign enforcement3 begs the very question: until a judgment creditor has information as to the location of a judgment debtor’s assets, she will not be able to ‘contemplate’ enforcement proceedings, whether in the UK or anywhere else. 1

2 3

Where disclosure can be obtained where it is ancillary to an interim protective measure in support of proceedings in another Contracting State under the Brussels Convention, art 24. Lugano Convention, art 24, Brussels I Regulation, art 31 and Brussels I Regulation (Recast), art 35. Or at least one who has not been able to obtain post-judgment disclosure in support of a freezing injunction. See para 2.211.

2.215  While Kaye may be correct that amendment of the Brussels and Lugano Conventions and the Brussels I and the Brussels I (Recast) Regulation is necessary to avoid this spectre,1 his interpretation of the RSC Ord 48 procedure is manifestly at odds with the purposes and intent behind the Convention regimes.2 Section 5 of the Jenard Report,3 which by virtue of CJJA 1982, s 3 is admissible in the English courts as an aid to the construction of the Brussels Convention, discusses what meaning is to be given to the expression ‘proceedings concerned with the enforcement of judgments’: ‘It means those proceedings which can arise from ‘recourse to force, constraint or distraint on moveable or immovable property in order to ensure the effective implementation of judgments and authentic instruments.’ Problems arising out of such proceedings come within the exclusive jurisdiction of the courts of the place for enforcement. ‘Provisions of this kind appear in the internal law of many Member States.’ The footnote to the last paragraph adds: ‘… French courts have exclusive jurisdiction over measures for enforcement which is to take place in France (preventative measures, distress levied on a tenant’s chattels, writs of attachment and applications for enforcement of a foreign judgment); over distraint levied on immovable or moveable property, and over proceedings concerned with the validity of measures for enforcement.’ 1 2

3

Or a direct ruling from the European Court of Justice. Under what is now the Treaty Establishing the European Community, art 293, the member states agreed to enter into negotiations with a view to securing the simplification of formalities governing the reciprocal recognition and enforcement of judgments. Report by Mr P Jenard on the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1979 C 59, p 1).

2.216  The oral examination procedure would not obviously seem to fall within the types of proceedings listed in s 5 of the Jenard Report or the footnote to that section. 2.217  Further, as Kaye himself observes, the European Court of Justice’s favoured approach of adopting a strict construction of art 16 is based upon proximity of subjectmatter of the types of dispute prescribed in that article to the territories of competent courts.  In Reichert v Dresdner Bank AG,1 a case decided after Kaye’s article was

130  Obtaining information about a judgment debtor’s assets published, the European Court of Justice was asked to consider whether the ‘action paulienne’ under French law (which allows a creditor to obtain the revocation of a transaction whereby the debtor has effected a disposition in fraud of the creditor’s rights) qualified as ‘proceedings concerned with the enforcement of judgments’. The European Court of Justice held, in a passage that sheds considerable light on the scope of art 16(5), that: ‘22 The Dresdner Bank claims that the action paulienne, in so far as it is preparatory to the enforcement of a decision, does come within the exceptions set out in Article 16(5) of the Convention. … 24 It should be pointed out, in the first place, that … Article 16 of the Convention makes a number of exceptions to the general rule set out in Article 2 of the Convention by granting exclusive jurisdiction to the courts of a Contracting State other than that specified under Article  2 in proceedings which have a particular connection with that other State, on the basis of the location of immovable property, the seat of a company, an entry in a public register or, in the case of paragraph (5), the place where a judgment is to be enforced. 25 In the second place it should be pointed out that Article  16 must not be given a wider interpretation than is required by its objective, since it results in depriving the parties of the choice of forum which would otherwise be theirs and, in certain cases, in their being brought before a court which is not that of the domicile of any of them …. 26 From that point of view it is necessary to take account of the fact that the essential purpose of the exclusive jurisdiction of the courts of the place in which the judgment has been or is to be enforced is that it is only for the courts of the Member State on whose territory enforcement is sought to apply the rules concerning the action on that territory of the authorities responsible for enforcement.’ (Emphasis added.) 1 [1992] ECR I-2149, ECJ.

2.218  The Court then referred to s 5 of the Jenard Report quoted in para 2.215 and concluded that although the ‘action paulienne’ under consideration:1 ‘thus preserves the interests of the creditor with a view in particular to a subsequent enforcement of the obligation, it is not intended to obtain a decision in proceedings relating to “recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments” and does not therefore come within the scope of Article 16(5) of the Convention.’ 1

In the opinion of Mr Advocate General Gulamm, the position is stated rather more categorically: ‘The Dresdner Bank claims that that provision must not be restrictively interpreted and that it may cover a revocatory action such as the action paulienne because the purpose of the action to set the transaction aside is to prepare for enforcement of the creditor’s claim to the property in question … Clearly it should be accepted that courts in the State in which the judgment has been or is to be enforced have exclusive jurisdiction under Article 16(5) of the Convention only in cases directly connected with the enforcement of judicial decisions already taken or with other enforceable instruments.’ (Emphasis added)

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2.219  The procedure which was set out in RSC  Ord 48, and which is now contained in Pt 71, is not strictly a method of enforcement at all, since it is not in itself designed to extract payment from the judgment debtor. While Pt 71 proceedings may be a precursor or ‘preparatory’ to the enforcement steps contemplated by art 16(5) of the Brussels Convention1 (as was the action paulienne, in Dresdner), they are not enforcement proceedings in their own right. While it seems obvious that proceedings to seize an asset owned by a UK domiciliary which is located in Germany should be brought in Germany, the provisions of art  16(5) should not override the bedrock provisions of art 2 of the Convention regime2 to require that proceedings to examine that UK domiciliary as to what assets held in Germany should take place in Germany simply by virtue of the fact that some assets are located in Germany.3 1 2

3

Or the Lugano Convention, art 16(5) or the Brussels I Regulation, art 22(5) or Brussels I Regulation (Recast), art 24(5). That persons should be sued in the Contracting State in which they are domiciled.  Identical provisions appear as the Lugano Convention, art 2 and the Brussels Regulation, art 2 and the Brussels I Regulation (Recast), art 4. The House of Lords decision in Kuwait Oil Tanker Company SAK v Qabazard [2004] 1 AC 300 considered the provisions of art 16(5) in the context of garnishee proceedings and concluded that the effect of this provision was that the English court did not have jurisdiction to make a garnishee order in respect of a foreign debt. However, the question of whether the oral examination procedure provided under CPR Pt 71 should be considered ‘proceedings concerned with the enforcement of judgments’ under art 16(5) was not considered.

2.220  This mirrors the view taken by the Court of Appeal in Masri v Consolidated Contractors International Co SAL1 in the context of an application for an order for appointment of a receiver by way of equitable execution.2 The appellant judgment debtor argued that such an order could not be made on the basis that it would amount to a form of enforcement and fell within art 22(5) of Regulation (EC) 44/2001. The Court of Appeal rejected this contention, holding that the appointment of a receiver in respect of a judgment debtor’s assets was not enforcement but only a step which might lead to enforcement. There is no reason why the Pt 71 procedure should be viewed as constituting actual enforcement any more than does the appointment of a receiver. This was confirmed by the Court of Appeal in a later decision in Masri3 in which Sir Anthony Clarke MR said ‘…the only purpose of Part 71 is to assist the enforcement of a judgment debt. It is this ancillary to the proceedings in which the judgment was obtained.’ This view can also be seen in the appeal to the House of Lords where Lord Mance stated: ‘CPR 71 is concerned with obtaining information in aid of the enforcement of a private judgment’ (emphasis added).4 1 [2008] EWCA Civ 303. [2008] EWCA Civ 303 at [108]-[124]. 2 See chapter 6. 3 [2008] EWCA Civ 876. 4 [2009] UKHL 43 at [23].

2.221  In conclusion, therefore, the better view would appear to be that the English courts should have jurisdiction over UK domiciliaries to order disclosure of foreign assets under Pt 71 for the purpose of foreign enforcement proceedings.1 1

Especially where the Brussels Regime applies.

132  Obtaining information about a judgment debtor’s assets 2.222  This is supported by the more recent case of Schefenacker v Horvat.1 When considering the application of CPR Pt 71 it was observed that: ‘the foreign judgment can be relied on in the same way as the domestic one’. In Schefenacker judgment was obtained in Germany against Horvat who was resident in the UK. Horvat sought to have an order for him to be examined under CPR Pt 71 set aside on the grounds that the High Court did not have jurisdiction in the case of a judgment issued by an EU court. Deputy Insolvency and Companies Court Judge Baister noted that although the jurisdiction appeared to be limited to the court that made the order, CPR 70.1(2) (c) states that, in Pt 71, the phrase ‘judgment or order’ includes an award registered etc for judgment, but does not attempt to define or limit the phrase. Article 24(5) of Brussels I  Regulation (Recast) confers jurisdiction on the ‘courts’ of the Member State where a judgment is to be enforced. The High Court was such a court. The German judgment was clearly a judgment within the terms of Article 2 of Brussels I Regulation (Recast). It would be possible for a judgment creditor ‘armed with a judgment she is entitled to enforce, to use CPR 71 as a free standing procedure’ to get information from a debtor against whom she will go on to enforce the judgment. It would be odd if a foreign judgment creditor, while being entitled to use the rules for enforcement in the pure sense, could not avail themselves of the ancillary rules. The judgment does not distinguish between any enforcement contemplated in the UK or elsewhere. 1

[2020] EWHC 506 (Ch).

Subsequent hearings 2.223  Part 71 contains no limitation that an order for oral examination may be made only once.  In Sturges v Countess of Warwick1 it was held that where an oral examination had been held under one of the predecessors to Pt 71,2 a further examination may be ordered in special circumstances. The commentary to The White Book notes that the new rule places no restriction on repeat examinations and suggests that the court’s case management and costs powers should be used to prevent abuse.3 1 2 3

(1914) 30 TLR 112, CA. Rules of the Supreme Court 1883, Ord XLII, r 32. The White Book (Sweet & Maxwell, 2020), vol 1, para 71.2.8.

Adjournment of the hearing 2.224  Adjournment of the oral examination hearing is also possible, where, for example the judgment creditor requires the judgment debtor to produce relevant documents before the examination can proceed. CPR 71.7 makes specific provision for adjournment and states that the court will give directions as to how notice of the new hearing is to be served on the judgment debtor in the case of adjournment. As has been noted, in Mubarak Hughes J said: ‘I  am quite satisfied that the rules [Order 48] permit the examination to be adjourned from time to time, if that is necessary, and that orders for the production of relevant documents may also be made from time to time.’

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2.225  A judgment creditor may be well advised to apply for an adjournment where this is necessary to ensure that complete or truthful answers are being provided by the judgment debtor. 2.226  Where a hearing has been adjourned, it is vital that the judgment debtor is served with the amended order indorsed with the new date of examination. If this is not done, the judgment debtor’s failure to attend on the new date will not constitute contempt of court.  This was the Court of Appeal’s decision in Beeston Shipping Ltd v Babanaft International SA, The Eastern Venture,1 notwithstanding the fact that the judgment debtor’s legal representatives were aware of the adjourned date, were in communication with their client, and had confirmed to the judgment creditor’s solicitors that it was not necessary to re-serve the judgment debtor with the order adjourning the hearing. Dunn LJ observed:2 ‘… committal for contempt of court is an extreme remedy and, whatever the relationship between the solicitors may be and whatever knowledge in fact the person to be proceeded against for contempt of court has, none the less the committal proceedings will be bad unless the rules are strictly complied with.’ If a hearing is adjourned, for example to produce documents, ideally the debtor will be given the details relating to the new hearing prior to leaving. An alternative is for the debtor to agree to postal service for the new date. This will save the cost of personal service. 3 1 2 3

[1985] 1 All ER 923, CA. [1985] 1 All ER 923 at 927. The White Book (Sweet & Maxwell, 2020), vol 1, para 71.7.1.

Failure to comply with the order 2.227  It is the sanction of committal in the event of non-compliance with an order to attend court that gives the oral examination procedure teeth.  The penal notice contained in the order1 warns the judgment debtor that if she does not obey the order, she may be sent to prison for contempt of court. 1

See para 2.143.

2.228  CPR 71.8 sets out what will happen in the event of failure to comply with the order. If the judgment debtor: (a) fails to attend court; (b) refuses at the hearing to take the oath or to answer any question; or (c) otherwise fails to comply with the order; the court will refer the matter to a High Court judge or circuit judge.1 The judge or court officer making the referral must certify in writing in which respect the judgment debtor failed to comply with the order.2 The commentary to The White Book3 states that the most common type of non-compliance is the debtor’s failure to attend court to be examined. 1 CPR 71.8(1). 2 PD 71, para 6. 3 The White Book (Sweet & Maxwell, 2020), vol 1, para 71.8.1.

134  Obtaining information about a judgment debtor’s assets Suspended committal order 2.229  CPR 71.8(2) gives the judge to whom the matter is referred discretion1 to make a committal order against the judgment debtor, subject to the provisions of CPR 71.8(3) and 71.8(4): (a) CPR  71.8(3) provides that a committal order may not be made unless the judgment creditor has complied with the rules for payment of the judgment debtor’s travelling expenses2 and filed affidavits as to service of the order and payment of travelling expenses.3 (b) CPR  71.8(4) states that if a committal order is made, it will be suspended provided that the judgment debtor attends court for examination at a subsequent time and place, which will be specified in the order, and complies with the terms of that order and the original order. This hearing will be before a judge if either the original order was to attend before a judge or the judge making the suspended committal order directs that this should be the case.4 1

2 3 4

This discretionary aspect was emphasised by Rix LJ in Islamic Investment Co of the Gulf (Bahamas) Ltd v Symphony Guns NV [2008] EWCA Civ 389 when authorising a suspended committal order made by the first instance court. The first instance judge had not had sufficient information before him to conclude, to the criminal standard of proof, that the judgment debtor was deliberately in breach of the Court Order under CPR 71. Rix LJ also emphasised that the Court should be suitably cautious about imposing suspended committal orders in circumstances where there is evidence either of a medical kind or from a lawyer relating to the fact that the judgment debtor was not permitted to be outside a foreign jurisdiction on the day fixed for the examination under CPR 71. The appropriate practice in such cases is likely to be that the court issues a warning that, if the judgment debtor does not appear on the next occasion fixed, an order for committal may well be made. Matters were importantly considered in Broomleigh Housing Association Ltd v Okonkwo [2010] EWCA Civ 1113 where the Court of Appeal gave guidance at [22] to assist judges asked to make a suspended committal order. It set out the four options available to the judge in a bid to stop the ‘routine’ making of such orders. The Court of Appeal concluded CPR 71.8 gives the court power to make a committal order, but it requires the exercise of discretion. That discretion in turn requires consideration of the circumstances of the contempt. Where the party has left the jurisdiction see Alexander Vik v Deutsche Bank AG [2018] EWCA Civ 2011. Here Deutsche Bank was entitled to invoke the procedure in CPR 81 (with its undisputed extraterritorial reach) in respect of the alleged breach of the order made pursuant to CPR 71. Set out in CPR 71.4. Set out in CPR 71.5. PD 71, para 7.1.

2.230  Once the suspended committal order has been made it must be personally served on the judgment debtor in accordance with the rule in CPR  71.3, and an affidavit of service must be filed in accordance with CPR 71.5(1) and (2).1 However, there is no requirement to offer the judgment debtor travel expenses to attend the subsequent hearing. 1

PD 71, para 7.2.

2.231  If the judgment debtor attends court in accordance with the terms of the suspended committal order, the examination will then take place and the suspended committal order will be discharged.1 1

For an example, see Islamic Investment Company of the Gulf (Bahamas) Ltd v Symphony Guns NV [2008] EWCA Civ 389.

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2.232  If, however, the judgment debtor fails to attend court at the time and date specified in the suspended committal order and it appears to the judge or the court officer that the judgment debtor has been duly served with the order, the failure to attend will be certified in writing.1 Alternatively, if the judgment debtor fails to comply with any other term on which the committal order was suspended, this will also be certified in writing and the judge or court officer will set out details of the non-compliance.2 1 2

PD 71, para 8.1. PD 71, para 8.2.

Committal hearing 2.233  If the judgment debtor fails to comply with any term on which the committal order is suspended, she shall be brought before a judge to consider whether the committal order should be discharged.1 A  warrant for the judgment debtor to be brought before the court (rather than being taken to prison) may be issued by the court on the basis of a court certificate that the judgment debtor failed to comply with the terms of a suspended committal order (see previous paragraph).2 The judge3 will then consider whether or not the committal order should be discharged. 1 CPR 71.8(4)(b). 2 PD 71, para 8.3. 3 PD 71, para 8.4 provides that the hearing may take place before a master or district judge.

2.234  The judge will discharge the committal order unless she is satisfied beyond reasonable doubt that the judgment debtor has failed to comply both with the terms of the original order to attend court and the terms on which the committal order was suspended and that both orders have been duly served on the judgment debtor.1  A  criminal standard of proof is therefore imposed and the judge may discharge the committal order for procedural irregularity if, for example, she is not satisfied that the orders have been properly served. Committal is an extreme remedy and will not be used unless the rules are strictly complied with.2 The notes to The White Book observe that, in practice, the committal order is invariably discharged at this hearing because the judgment debtor agrees to be examined there and then, thus completing the purpose of Pt 71.3 1 2

3

PD 71, para 8.5. Beeston Shipping Ltd v Babanaft International SA, The Eastern Venture [1985] 1 All ER 923, CA, a case in which a judgment debtor was held not to be in contempt by failing to attend court on the adjourned hearing date since he had not been served with the amended order. The White Book (Sweet & Maxwell, 2020), vol 1, para 71.8.1.

Warrant for committal 2.235  If the judge decides that the committal order should not be discharged, a warrant for committal will be issued immediately1 and the judgment debtor will be taken to prison to serve the sentence. The sentence for committal is a maximum of two years.2 1 2

PD 71, para 8.6. Contempt of Court Act 1981, s 14(1).

136  Obtaining information about a judgment debtor’s assets Truthfulness of the judgment debtor’s answers 2.236  Much of the effectiveness of Pt 71 will depend on the nature of the questions asked and, of equal importance, truthful answers being given. This raises the question of whether a judgment debtor who can be shown to have given untruthful answers during an oral examination can be liable for committal. Although the provisions of CPR 71.8(1)(c) that the matter may be referred to a judge where a judgment debtor ‘otherwise fails to comply with the order’ might be read as suggesting that the power of committal extends to untruthful answers being given, it would seem that committal is not available in these circumstances. 2.237  The Report on the First Phase of the Enforcement Review published in July 2000 specifically considered the question of whether the sanction of committal should be available in the event of a judgment debtor providing untruthful answers during the oral examination procedure. It noted that reaction to the proposal to extend the committal power to a judgment debtor who had given untruthful answers had been mixed. The majority of panel members were concerned that a civil procedure with equivalent effect to trying a judgment debtor for perjury may not maintain the strict criminal standard of proof and that civil judges may be over-eager to impose a custodial sentence.1 1 Paragraph 101.

2.238  However, the Report also noted the merit in the argument that the court should take responsibility for ensuring its own integrity and punishing those who seek to abuse that integrity,1 pointing out that lying in a civil court should be punished as a civil offence (particularly if the criminal justice system was unwilling or unable to take responsibility for doing so). It was also argued that lying during the course of an oral examination should be viewed as a contempt of court in the same way as failing to attend or refusing to answer questions. 1

This argument was made by (amongst others) the Civil Justice Council. See paragraph 102.

2.239  The Report concluded with a specific recommendation that the committal power be extended to situations in which the debtor fails to answer questions truthfully,1 but suggested that this would need to be taken forward by enacting primary legislation as part of a more general streamlining of the contempt procedures.2  In the absence of such legislation, it seems that committal is not available, and the somewhat unsatisfactory distinction remains between a judgment debtor who refuses to answer questions and one who avoids the sanctions for contempt by attending the hearing and providing untruthful answers. 1 Paragraph 99. 2 Paragraph 105.

Perjury 2.240  In the absence of committal, the only sanction against a judgment debtor who gives untruthful answers during an oral examination may be a criminal prosecution for perjury. However, as the Report on the First Phase of the Enforcement Review notes:1

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‘At present there is an existing criminal penalty of perjury, but anecdotal evidence suggests that it is hardly ever used … it is far too cumbersome a weapon to be of any use in combating the casual untruths which are probably much more of a feature of the oral examination process.’ 1 Paragraph 100.

2.241  A conviction for the offence of perjury must satisfy the criteria under Perjury Act 1911, s 1(1), that the witness: (a) was lawfully sworn in a judicial proceeding; (b) made a false statement wilfully (rather than by mistake); (c) knew it was false or did not believe it to be true; and (d) that the statement was material to the proceedings. 2.242  The case would have to satisfy strict evidential requirements1 and the Crown Prosecution Service (CPS) will not prosecute if they do not think it is in the public interest. As the Report states:2 ‘The CPS and the police would need to be convinced that a serious transgression had occurred if they were to devote the resources necessary to bring a criminal prosecution.’ 1

The Crown Prosecution Service Code for Crown Prosecutors states that there must be sufficient evidence to provide ‘a realistic prospect of conviction’. 2 Paragraph 100.

2.243  However, there have been cases where a conviction for perjury has been made where a defendant has lied about assets.  In R  v Shamji1 an appellant was examined before a master and told various lies about his assets. In convicting him to 15 months’ imprisonment for perjury, the Court commented:2 ‘Sometimes in civil proceedings, as these were, the effect of perjury is to cause financial loss to others … but there is … in cases of this kind one victim of perjury. That victim is the course of justice and its proper administration. It is because of that inevitable feature of the offence that a conviction for perjury must always be visited …, save in the most exceptional circumstances … with an immediate custodial sentence.’ 1 2

(1989) 11 Cr App Rep (S) 587. (1989) 11 Cr App Rep (S) 587 at 589–590.

2.244  While the prospect of a conviction for perjury may encourage a judgment debtor to tell the truth under oral examination, this may seem a remote risk and is likely to occur only in the most serious cases or when the court is faced with a judgment debtor who has a history of dishonest conduct. A prosecution for perjury cannot force a judgment debtor to tell the truth and a conviction for perjury may do little to enhance the chances of a judgment creditor successfully enforcing her judgment. Possible limitations on Part 71 procedure 2.245  The common law privilege against self-incrimination and the provisions of the ECHR may both impact upon the operation of the Pt 71 procedure.

138  Obtaining information about a judgment debtor’s assets Privilege against self-incrimination 2.246  Under the privilege against self-incrimination, no person can be compelled to answer questions or produce documents, in civil or criminal proceedings, which may expose her to criminal proceedings.1  The privilege is set out in the Civil Evidence Act 1968, s  142 which provides the privilege excuses the production of documents or the answering of questions which, but for the privilege, would have to be produced/answered. However, it does not excuse the disclosure of the existence of such documents, only their production. 1 2

Blunt v Park Lane Hotel Ltd [1942] 2 KB 253, CA and, more recently, Den Norske Bank ASA v Antonatos [1998] 3 WLR 711, CA. ‘The right of a person in any legal proceedings … to refuse to answer any question or produce any document or thing if to do so would tend to expose that person to proceedings for an offence or for the recovery of a penalty: (a) shall apply only as regards criminal offences under the law of any part of the United Kingdom and penalties provided for by such law; and (b) shall include a like right to refuse to answer any question or produce any document or thing if to do so would tend to expose the husband or wife of that person to proceedings for any such criminal offence or for the recovery of any such penalty.’

2.247  There have been a number of statutory modifications to the privilege whereby defendants who make disclosures are given specific statutory protection in relation to the prosecution of particular offences.1 1

See, eg, Theft Act 1968, s 31, Criminal Damage Act 1971, s 9; Senior Courts Act 1981, s 72, and Fraud Act 2006, s 13.

2.248  In Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd1 it was held that a corporate body can claim privilege against self-incrimination. However, although the privilege against self-incrimination can be invoked by a person for her own protection or that of her spouse it cannot be invoked for the protection of a third party.2 It would appear that a director cannot claim the privilege against selfincrimination to avoid incriminating the company or vice versa. In Tate Access Floors Inc v Boswell3 the Court rejected the submission that the company was a mere creature of the directors. Therefore, to require disclosure by the company was an indirect disclosure by them. The Court noted that if people conduct their business through a corporation and take advantage of the separate legal entities, they could not then claim they are not separate legal entities where it was beneficial for them to do so. It remains unsettled whether the privilege can be invoked by an officer or employee of a company on the grounds that the company is at risk of incrimination4. 1 2 3 4

[1939] 2 K.B. 395. British Steel Co v Granada Television Ltd [1981] AC 1096, HL. [1990] 3 All ER 303. The question was left open in Re Westinghouse Uranium Contract [1978] AC 547, HL and Sociedade Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 WLR 280, CA. A provisional view that the company’s privilege does not extend to its officers can be seen in Kensington International Ltd v Congo & Others [2007] EWHC 1632 (Comm).

2.249  A person relying on the privilege must satisfy the court that disclosure of the information would tend to expose her to proceedings for a criminal offence or the recovery of a penalty.  There must be a reasonable risk that self-incrimination

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would be the result of providing the information;1 the privilege may not be claimed on the basis of a mere possibility that the facts might lead to exposure to criminal proceedings.2 1 2

Sociedade Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 WLR 280 at 290. Tarasov v Nassif (11 February 1994, unreported), CA.

2.250  In Den Norske Bank ASA v Antonatos1 the Court of Appeal thought that in cases where possible self-incrimination issues existed, it would also be inappropriate to make disclosure orders under asset-freezing injunctions and orders for crossexamination on disclosure affidavits.2  By analogy, a judgment debtor ordered to attend court pursuant to Pt  71 proceedings could therefore potentially invoke the privilege against self-incrimination to refuse to answer questions. One way round this possible obstacle to obtaining information may be to seek an assurance from the CPS that they would not use information disclosed in the examination for the purposes of prosecuting the person who made the disclosure. In United Norwest Co-operatives Ltd v Johnstone3 the Court of Appeal considered the right of defendants to civil fraud proceedings to invoke the privilege against selfincrimination in the context of an order for a disclosure ancillary to Anton Piller and Mareva injunctions. The Court held that where the CPS had given an assurance that it would not use the information disclosed for the purposes of prosecuting the defendant, and in reliance on that assurance or a court order made as a result of it the defendant disclosed self-incriminatory information, the court would not assist the CPS to obtain the information by the exercise of its statutory powers. However, where no assurance had been given by the CPS and the CPS had not consented to the order for disclosure in these terms, the court would not withhold its assistance. 1 2

3

[1998] 3 All ER 74 at 90, CA. See also Cobra Golf Inc v Rata [1998] Ch 109 at 126–128 in relation to search orders and Kensington International Ltd v Republic of Congo [2007] EWCA Civ 1128 in the context of Norwich Pharmacal relief. (1994) Times, 24 February, CA.

2.251  The privilege against self-incrimination may potentially therefore frustrate a judgment creditor’s attempts to enforce her judgment using the Pt 71 procedure (see also para 2.253). A further consideration is that a judgment creditor who obtains information from a judgment debtor as to her assets which is self-incriminatory would need to be mindful of the provisions of PCA 2002 (see para 2.88) which criminalises, among other things, the acquisition, use and possession of criminal property.1 1

PCA 2002, s 329. Criminal property is defined in PCA 2002, s 340 and includes documents and information.

Human rights 2.252  As has been noted in Chapter 1 The European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) may also potentially impact upon the operation of Pt 71. The ECHR now forms part of English law following the entry into force of the Human Rights Act 1998 (see further Chapter 1). Those articles

140  Obtaining information about a judgment debtor’s assets of the ECHR which might potentially be infringed by the provisions of Pt  71 are art 6 (the right to a fair trial) and art 8 (the right to respect for private and family life). ECHR, art 6 2.253  As regards art  6, the possibility that the Pt  71 procedure could lead to a defendant incriminating herself would seem to be the most likely potential infringement of art 6. In Saunders v UK1 the European Court of Human Rights held that evidence obtained under compulsion cannot be used in subsequent criminal proceedings.  As has been noted in para  2.247, a number of statutes have been amended to provide that, whilst the privilege against self-incrimination is abrogated in respect of disclosure in civil proceedings, the evidence will not be admissible in subsequent criminal proceedings.  Case law in relation to search orders and freezing injunctions suggests that a court would be unlikely to order a judgment debtor to answer a question put to her in an oral examination under Pt 71 where selfincrimination issues may arise.2 The likelihood of an art 6 infringement during the course of Pt 71 proceedings therefore seems remote. 1 2

(1997) 23 EHRR 313. See para 2.250.

ECHR, art 8 2.254  Under art 8 ECHR, everyone has the right to respect for her private and family life, her home and her correspondence. A procedure for compulsory examination and production of documents could therefore potentially infringe this right. 2.255  However, the right to respect for private and family life under art  8 is qualified. The second part of art 8 states: ‘There shall be no interference by a public authority with the exercise of this right, except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of … crime … or for the protection of the rights and freedom of others.’ 2.256  A  number of these qualifications may be relevant in the context of Pt  71 proceedings. A system whereby judgment creditors can recover sums rightfully due to them by recalcitrant judgment debtors is likely to be necessary ‘in the economic well-being of the country’.  Similarly, an infringement of the judgment debtor’s right to privacy in relation to her assets is likely to be necessary to protect the rights and freedom of the judgment creditor to obtain the sums rightfully due to her. The Strasbourg jurisprudence recognises as a necessary incident of the right to a fair trial the right of a judgment creditor to obtain effective enforcement of her judgment (see further Chapter 1). 2.257  One possible situation where art  8 infringements may apply is where an oral examination is sought in relation to a judgment debtor who has been ordered to pay a judgment debt by instalments and is up to date with the schedule of

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payments. While the CPR Pt 71 procedure is available in such circumstances, it is less clear that the infringement to the judgment debtor’s right to privacy would be justified in such circumstances, not least since the court would be likely to have taken the judgment debtor’s circumstances into account in ordering payment by instalments.  In any event, instalment orders are unlikely to apply in high value commercial litigation. 2.258  In Slade v Abbhi1 the judgment debtor owed the sum of £430,000. When this was unpaid, he was examined as to his means under CPR Pt 71. The judgment debtor disclosed over 1,000 pages of documents including bank statements, statements from an investment account held jointly with his wife, insurance policies, utility bills, documents concerning trusts relating to his wife and children, and material relating to unrelated commercial third parties. The debtor sought an order restricting or prohibiting the use of those documents under CPR 31.22(2) and that required an assessment of the competing weight to be given to privacy rights under art 8, fair/ public hearing rights under art 6 and the right of access to information by the press and public derived from art 10. An order restricting the use of the documents was made: the debtor’s art  8 rights in the information in question weighed heavily in the balance. The documents contained extensive personal and specific information about his bank accounts and very detailed information about his financial affairs and involved various members of his family. The concerns the debtor had about the potential misuse of the documentation and the information within it was credible. Thus, judgment debtors who are concerned about the use of information provided pursuant to Pt 71 being disclosed may apply for an order under CPR 31.22(2) to limit their use and human rights arguments may be applied. Whether broader challenges to the CPR Pt 71 procedure from a human rights perspective will follow remains to be seen. 1

[2020] EWHC 2181 (Comm).

Costs 2.259  Where the court makes an order under CPR  Pt  71 to obtain information from a judgment debtor, the judgment creditor will only be entitled to fixed costs for the application unless the court orders otherwise.1 The amount of fixed costs are the court fee of £552 together with the judgment creditor’s fixed costs shown in the table to CPR 45.8. These fixed costs will be £15 for each half hour (or part) where the questioning takes place before a court officer. Where the questioning takes place before a judge, the judge may summarily assess the costs.  In addition, CPR  45.8 prescribes a fee of £15 for effecting personal service of the order to attend court on the judgment debtor. As the notes to The White Book observe,3 where process servers are instructed to effect service, this figure is likely to be substantially less than the fee charged for doing so. 1 CPR 45.1(2)(g). 2 CPR 45.1(4) allows court fees to be recovered in addition to any fixed costs set out in CPR Pt 45. Court fees have already been considered in para 2.139. 3 The White Book (Sweet & Maxwell) 2020, vol 1, para 71.3.3.

142  Obtaining information about a judgment debtor’s assets 2.260  Where the application is entirely straightforward and the amounts in issue are relatively modest, the court’s award of costs is likely to be confined to fixed costs. However, in a complex case, where the examination takes place before a High Court Judge, the successful judgment creditor should seek an order at the hearing in relation to the recovery of those additional costs which are outside the fixed costs regime. 2.261  The general rule is that the court should make a summary assessment of the costs at the conclusion of a hearing lasting not more than one day unless there is good reason not to.1 Each party who intends to claim costs should prepare a written statement of costs which should follow as closely as possible Form N260.2  The statement must be signed by the party or her legal representative and must be filed at court with copies served on any party from whom recovery of costs is sought. Filing and service must be done as soon as possible and in any event at least 24 hours before the date fixed for the hearing.3 1 2 3

See Pt 44. A non-mandatory summary costs pilot is alternatively at PD 51X. General rules about costs are set out in Pt 44 and the accompanying Practice Direction, which should be referred to for the specific provisions.

Reform 2.262  The effectiveness of the oral examination procedure has been criticised for a number of reasons. These centre on three key aspects of the procedure: (a) the degree of co-operation required from the judgment debtor to attend court at the outset; (b) the fact that the judgment debtor may outwardly seem to comply with the order by providing answers, but the answers may be incomplete, unhelpful, untruthful or may otherwise defeat the judgment creditor’s purpose; and (c) the inability of either the court or the judgment creditor to verify the information given by the judgment debtor at the oral examination. 2.263  A  number of proposals for reform of the oral examination procedure were considered as part of the Lord Chancellor’s Department’s1 review of the civil enforcement system, which began in March 1998 and concluded with the Government’s White Paper in March 2003 ‘Effective Enforcement’, setting out the Government proposals for reform of civil enforcement law (see further Chapter 1). 1

Now known as the Ministry of Justice.

First Phase of the Enforcement Review 2.264  The First Phase of the Enforcement Review1 made various recommendations for reform of the oral examination procedure.  A  number of these (such as the introduction of a standard oral examination questionnaire and the replacement of postal service of the order to attend court with the requirement for personal service) have been implemented with the introduction of Pt  71 under the Civil Procedure (Amendment No  4) Rules 2001.2  However, some proposals remain

Procedure  143

recommendations. The most important of these is the proposal for the introduction of Data Disclosure Orders (DDOs), whereby the court would have the power to require third parties to provide information about a judgment debtor’s assets to aid the enforcement process.3 1 Report on the First Phase of the Enforcement Review, July 2000. 2 SI 2001/2792. 3 See Ch 3 of the March 2003 White Paper on Effective Enforcement. At present, while a court may order a defendant to sign a letter of instruction authorising certain individuals to obtain information relating to her assets from third parties such as banks, the third party will not be compelled to comply. Such letters are primarily sought during the course of litigation in conjunction with freezing injunctions to prevent a defendant from dissipating her assets, rather than at the enforcement stage.

2.265  The DDO proposal specifically responds to two of the key criticisms of the oral examination procedure, namely that it requires a high degree of co-operation from the judgment debtor and that there is no way for the judgment creditor to check the information obtained from the judgment debtor. 2.266  The March 2003 White Paper on Effective Enforcement envisaged a number of post-judgment situations in which a DDO might be available, although the possibility of obtaining a DDO before judgment was rejected,1 largely on the grounds that to allow a judgment creditor to ask for such information before a judgment would raise concerns in the areas of data protection and human rights. Notably, the White Paper envisaged that a DDO should be available where either the judgment creditor or the judge believes that the judgment debtor has lied on oath at the oral examination hearing.  Potentially, this not only provides a viable alternative to prosecuting the judgment debtor for perjury but may also mean that the judgment debtor will be less inclined to perjure herself in the first place (since she will know that a DDO could result in the truth being obtained). 1

See further Consultation Paper No 4, Chapter 4 (‘The Oral Examination’), paragraph 4.17.

2.267  In order to limit any abuses and ensure the process is compliant with data protection and human rights concerns it was not proposed that information received pursuant to a DDO would be released directly to the judgment creditor. Rather the court will consider the information and the results of the DDO will be sent to the judgment creditor in a form which will also indicate the enforcement methods which the court considers are available. It is not intended that the DDO should result in any automatic enforcement rights; the judgment creditor will need to take enforcement steps on the basis of the information supplied pursuant to the DDO. 2.268  Part 4 of the Tribunals, Courts and Enforcement Act 2007 adopts the proposals by introducing two new mechanisms to obtain information: Information Orders (applicable to the private sector), and Departmental Information Requests (applicable to the public sector). However, in March 2009 the Government announced its intention not to generally implement Pt 4 of the Tribunals, Courts and Enforcement Act 2007.

144  Obtaining information about a judgment debtor’s assets APPENDIX 1 Useful contact details 2.269  Association of British Investigators The Brentano Suite Catalyst House Centennial Park Elstree Hertfordshire WD6 3SY  Telephone: 020 8191 7500 Email: [email protected] Web: www.theabi.org.uk Central Registry of Administration and Winding Up Petitions The Central Registry can be searched by personal attendance. The Computer terminal is at: The Royal Courts of Justice Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL (Located on the left in the lobby, on the ground floor). Telephone: 0906 754 0043 (a premium rate number) and the line is open from 10.00 am until 4.30 pm. Civil Aviation Authority Aircraft Registration Section Aviation House Beehive Ring Road Crawley RH6 OYR Telephone: 0330 022 1917 Fax: (01293) 768590 Email: [email protected] Web: www.caa.co.uk/home Companies House Companies House Cardiff Crown Way Cardiff CF14 3UZ DX 33050 Cardiff Telephone: 0303 1234 500 Fax: 029 2038 0900 The Cardiff office is open 24 hours a day for the receipt of documents. Contact centre lines are open between 8.30am to 6pm (Monday to Friday).

Appendix 1  145

Companies House London Ground Floor 80 Petty France Westminster London SW1H 9EX Telephone: 0303 1234 500 Fax: 029 2038 0900 Opening hours between 9am to 5pm (Monday to Friday) with an external letterbox available for out of hours deliveries. Contact centre lines are open between 8.30am to 6pm (Monday to Friday). Companies House Edinburgh 4th Floor Edinburgh Quay 2 139 Fountainbridge Edinburgh EH3 9FF Telephone: 0303 1234 500 Fax: 029 2038 0900 Opening hours between 9am to 5pm (Monday to Friday) with an external letterbox available for out of hours deliveries. Contact centre lines are open between 8.30am to 6pm (Monday to Friday). Companies House Belfast Second Floor The Linenhall 32-38 Linenhall Street Belfast Northern Ireland BT2 8BG Telephone: 0303 1234 500 Opening hours between 9am to 5pm (Monday to Friday) with no external letterbox available for out of hours deliveries. Contact centre lines are open between 8.30am to 6pm (Monday to Friday). Web: beta.companieshouse.gov.uk Web: www.gov.uk/government/organisations/companies-house Dun & Bradstreet Long Cross Court 47 Newport Road Glamorgan CF24 0AD  Telephone: 0800 001 234 Email: [email protected] Web: www.dnb.co.uk

146  Obtaining information about a judgment debtor’s assets DVLA General enquiries Vehicle Record Enquiries Vehicle Customer Services DVLA Swansea SA99 1AJ DVLA – SAR Enquiries SAR Enquiries DVRE DVLA  Swansea SA6 7JL  Email: [email protected] HPI Limited Dolphin House New Street Salisbury Wiltshire SP1 2PH Telephone:0113 222 2010 Email: [email protected] Web: hpicheck.com Insolvency Service The Insolvency Service (Headquarters) 4 Abbey Orchard Street London SW1P 2HT Telephone: 0300 678 0015 (general enquiries) (available between 9am to 1pm and 2pm to 5pm Monday to Thursday, and 9am to 1pm on Friday). Email: [email protected] Web: www.gov.uk/government/organisations/insolvency-service Land Charges Department Land Charges Department PO Box 292 Plymouth PL5 9BY DX 8249 Plymouth (3) Telephone: 0300 006 6616 (available between 9am and 5pm Monday to Friday, excluding public holidays). Mutual Public Register Financial Conduct Authority 12 Endeavour Square London E20 IJN Telephone: 0300 500 8082 Email: [email protected] Web: mutuals.fca.org.uk/home/index

Appendix 1  147

UK Ship Register MCA Cardiff Ground Floor Anchor Court Keen Road Cardiff CF24 5JW Telephone: 029 2044 8800 Fax: 029 2044 8820 Web: www.ukshipregister.co.uk Registry Trust Ltd 153 – 157 Cleveland Street London W1T 6QW DX: Registry Trust Ltd, DX134211, Tottenham Court Rd 2 Telephone: 020 7380 0133 Email: [email protected] Web: www.trustonline.org.uk

148  Obtaining information about a judgment debtor’s assets APPENDIX 2 Company information available from Companies House 2.270 Information

Details

Basic company details available from Companies House website, beta.companieshouse.gov.uk or www.gov.uk/government/organisations/ companies-house

Includes: • Company number • Company type • Date of incorporation • Registered address • Previous registered names • Accounting reference date • Date last annual return is made up to and next return date • Date last accounts made up to and next accounts date • Branch details and oversea company information

Company appointments (CA 2006, s 162, s 275)

Details of the company’s director(s) and secretary1

Personal appointments (CA 2006, ss 162– 165 and ss 275–279)

Details of any other directorships held or previously held by the director(s)

Charges register (CA 2006, Part 25)

Brief details of all registrable charges and whether the charges have been fully or partially satisfied

Insolvency details (See para 2.31 for statutory references)

Details of: • Appointment of a receiver or manager • Appointment of an administrative receiver • Voluntary resolutions to wind up the company • Orders for the winding up of the company • Appointment of a liquidator • Appointment of a monitor

Company Accounts – Requirements vary depending upon the type of company concerned (CA 2006, ss 441–447)

Includes: • Company’s annual accounts • Directors’ report • Directors’ remuneration report (for quoted and unquoted traded companies only)

Company Confirmation Statement (CA 2006, s 853A)

Includes: • Confirmation that all information required to be delivered by the company to the registrar in relation to the ‘confirmation period’ has been delivered, or is being delivered at the same time as the confirmation statement.

1

Company directors and others such as secretaries, people with significant control and LLP members whose home address is publicly available on company documents can apply to remove their home address. This procedure cannot be used if the home address has been used as the company’s registered office. See The Companies (Disclosure of Address) (Amendment) Regulations 2018.

Appendix 3  149

APPENDIX 3 LLP information available from Companies House 2.271  Information Details Information

Details

Basic LLP details available from Companies House website, beta.companieshouse.gov.uk or www.gov.uk/government/organisations/ companies-house

Includes: • LLP number • LLP type • Date of incorporation • Registered address • Previous registered names • Accounting reference date • Date last annual return is made up to and next return date • Date last accounts made up to and next accounts date

LLP appointments (CA 2006, s 162; The LLP (Application of CA 2006) Regulations 2009, SI 2009/1804; LLPA 2000, s 9; The Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016, SI 2016/340)

Details of the LLP’s members and designated members1

Brief details of all registrable charges and whether Charges register (CA 2006, Part 25, Ch the charges have been fully or partially satisfied A1; The LLP (Application of the CA 2006) (Amendment) Regulations 2013, SI 2013/618) Insolvency details (See para 2.31 for statutory references)

Details of: • Appointment of a receiver or manager • Appointment of administrative receiver • Voluntary winding up of the LLP • Orders for the winding up of the LLP • Appointment of a liquidator • Appointment of monitor

LLP Accounts (CA 2006, ss 441–446; Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, SI 2008/1911; Small Limited Liability Partnerships (Accounts) Regulations 2008, SI 2008/1912; Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008, SI 2008/1913)

Includes: • LLP’s annual accounts • Auditors’ report

LLP Confirmation Statement (Annual Return) (CA 2006, s 853A as modified by the Limited Liability Partnerships (Application of the Companies Act 2006) Regulations 2009, Part 8, as made by The Companies and Limited Liability Partnerships (Filing Requirements) Regulations 2016, SI 2016/599)

Includes: • Confirmation that all information required to be delivered by the LLP to the registrar in relation to the ‘confirmation period’ has been delivered, or is being delivered at the same time as the confirmation statement.

1

Company directors and others such as secretaries, people with significant control and LLP members whose home address is publicly available on company documents can apply to remove their home address. This procedure cannot be used if the home address has been used as the company’s registered office. See The Companies (Disclosure of Address) (Amendment) Regulations 2018.

CHAPTER 3

Third party debt orders

INTRODUCTION 3.1  The fact that virtually every person, body corporate or human being, maintains a bank account makes the third party debt order process one of the most useful methods of execution available to a judgment creditor. A bank account in credit is a debt due by the bank to its customer. Disclosure during the course of litigation or the use of orders to obtain information from judgment debtors (see Chapter  2) may provide the judgment creditor with information on the judgment debtor’s bank details. The third party debt order procedure allows a judgment creditor to apply to the court for an order that a third party (such as a bank) should discharge a debt it owes to the judgment debtor by direct payment to the judgment creditor. 3.2  There are two essential features of the process. First, a third party debt order is a proprietary remedy which operates by way of attachment against the property of the judgment debtor (namely the debt owed by the third party, which is a chose in action). The first stage of the process, the interim third party debt order, freezes the debt in the hands of the third party. Subject to any monetary limit specified in the order, the third party cannot pay the debt away without risk of having to pay it over again to the judgment creditor. The second essential feature of the process is that it extinguishes the debt owed. The final third party debt order obliges the third party, subject to any monetary limit specified in the order, to make payment to the judgment creditor and not to the judgment debtor. In making that payment, the third party is discharged from its debt to the judgment debtor. 3.3  The procedure for obtaining third party debt orders is set out in Pt 72 of the Civil Procedure Rules 1998 (CPR), which came into force as part of the 26th set of amendments to the CPR on 25 March 2002. The new procedural regime repealed and replaced the long-standing method of enforcement known as ‘garnishee proceedings’ detailed in Rules of the Supreme Court 1965 (RSC), Ord 49.1 However, the historical antecedents of the third party debt order process go back much further in English legal history and have been traced to Roman occupation and beyond.2 The provisions of RSC Ord 49 were derived from the Common Law Procedure Act 1854, ss 6170,3

152  Third party debt orders which were themselves modelled on a procedure called ‘foreign attachment’ which existed in the Mayor’s court in London and some other cities. The new regime is set out in straightforward, modern language but contains little, if any, material difference in the underlying rules. The basic purpose of third party debt orders remains unchanged. As their Lordships have noted: 4 ‘The straightforward language of Part 72 is deceptive. Its true nature cannot easily be understood without a knowledge of its history and antecedents.’ 1 And in the County Court Rules 1981, Ord 30, which were also repealed and replaced. 2 See London Corpn v Cox (1867) LR 2 HL 239 at 256. 3 The procedure was subsequently contained in RSC  Ord 45 scheduled to the Supreme Court of Judicature Act (1873) Amendment Act 1875. 4 Société Eram Shipping Company Ltd v Cie Internationale de Navigation [2004] 1 AC 260 at 298, per Lord Millett.

3.4  Two decisions of the House of Lords in June 2003 have clarified how this venerable procedure should operate in the light of modern, multi-jurisdictional banking operations and practices. It had always been clear that a third party who owed a debt to the judgment debtor must be within the jurisdiction of the court for a third party debt order to be made against it.1 However, following what must now be seen as erroneous obiter dicta by the Court of Appeal in two cases in the late 1980s, SCF Finance Co Ltd v Masri (No 3)2 and Interpool Ltd v Galani,3 the received wisdom was that there was no limitation that the third party debt must also be properly recoverable within the jurisdiction.4 As will be seen,5 following their Lordships’ decisions in Société Eram Shipping Company Ltd v Cie Internationale de Navigation6 and Kuwait Oil Tanker Company SAK v UBS AG,7 and more recently Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq8 it now seems clear that judgment creditors cannot use the third party debt order process to enforce against foreign debts. 1

See CPR 72.1(1), which mirrors the requirement set out in the Common Law Procedure Act 1854, s  61 that ‘any other Person is indebted to the Judgment Debtor, and is within the Jurisdiction’. (Emphasis added.) 2 [1987] QB 1028. 3 [1988] QB 738. 4 See, eg, the former notes to RSC Ord 49: Supreme Court Practice 1999, vol 1, para 49.1.12. 5 See paras 3.72–3.88. 6 [2004] 1 AC 260. 7 [2003] UKHL 31. 8 [2017]  UKSC  64. See also Hardy Exploration & Production (India) Inc v Government of India [2018] EWHC 1916 (Comm).

Part 72: a two-stage process 3.5  Part 72 sets out a two-stage process for applying for a third party debt order. Interim third party debt order 3.6  First, the judgment creditor must make an application to the court for an interim third party debt order (formerly a garnishee order nisi). The application notice should

Debt owed by a third party  153

be in the prescribed form and contain the prescribed information. The application may be made without notice and will initially be dealt with without a hearing. If an interim third party debt order is made, the judgment creditor must then serve the order on the third party and the judgment debtor. Final third party debt order 3.7  Following service of the interim order a hearing takes place to consider whether a final third party debt order (formerly a garnishee order absolute) should be made. Both the third party and the judgment debtor may attend the hearing if they wish to object to the court making the final order. If the court makes a final third party debt order, the third party must pay over the amount specified in the order to the judgment creditor. The effect of that payment is to extinguish the debt owed by the third party to the judgment debtor to the extent of the amount paid over to the judgment creditor. 3.8  The steps which must be taken at each stage of the procedure, the obligations which arise and the effect of those steps are considered in detail in this chapter.

DEBT OWED BY A THIRD PARTY 3.9  Before making the application, the judgment creditor should consider whether the debt it seeks to attach falls into a category which is attachable under Pt 72. While bank and building society accounts are likely to provide the most fertile ground for use of the procedure, with certain exceptions, a judgment creditor can apply for a third party debt order in relation to ‘any debt due or accruing due’1 to the judgment debtor from a third party. 1 CPR 72.2(1)(a).

Debt ‘due or accruing due’ 3.10  The relationship of creditor and debtor must exist between the judgment debtor and the third party in order for the procedure to be used. A third party debt order can only be used to attach money due to the judgment debtor. It cannot be used to enforce against any of the judgment debtor’s other property. 3.11  The debt must be in existence at the date the interim third party debt order is made.1 There must be an ‘immediate and unconditional obligation’ to pay the relevant sum in order to constitute a debt ‘due or accruing due’.2 It is well established for this purpose that the debt must either be due (in the sense of instantly payable) or accruing due (in the sense of being payable in the future but by reason of an existing obligation).3 There ordinarily can be no attachment of a debt under Pt 72 if the sum is only payable subject first to satisfaction of a condition precedent. In Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq Lord Mance said4:

154  Third party debt orders ‘The concept of a debt for the purposes of a third party debt order, or its predecessor the garnishee order, is particularly well-settled by authority. First, “The test of ‘debt due’ is whether it is one for which the creditor could immediately and effectually sue”: Paget’s Law of Banking 14th ed (2014), para  31.8; see also Allinson’s Enforcement of a Judgment 12th ed (2016), para  8-03. The test goes back at least to Webb v Stenton (1883) 11 QBD 518’. 1 2

3 4

Hardy Exploration & Production (India) Inc v Government of India [2018] EWHC 1916 (Comm) citing Heppenstall v Jackson [1939] 1 KB 585, at 591–592. Hardy Exploration & Production (India) Inc v Government of India [2018]  EWHC  1916 (Comm); O’Driscoll v Manchester Insurance Committee [1915] 3  KB  499; Dawson v Preston [1955] 1 WLR 1219; Dunlop & Ranken v Hendall Steel Structures Pitchers (Garnishees) [1957] 1 WLR 1102. In the latter case, it was held that there was no debt arising under a building contract which could be the subject of a garnishee order where there was no ‘cause of action’ (at 1107 per Lord Goddard CJ) and no debt ‘owing or accruing’ (at 1108 per Havers J) unless and until an architect’s certificate had been issued (see paras 3.31–3.34). Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy [2014] EWCA Civ 1603 at [49]. [2017] UKSC 64 at [88].

3.12 In Hardy Exploration & Production (India) Inc v Government of India v India Infrastructure Finance Company (UK) Limited1 the position was summarised thus: ‘Accordingly, it follows that the Court may make a Third Party Debt Order in respect of a debt which is payable by reason of an existing obligation at the date of the making or service of the Interim Third Party Debt Order, whether payment is required instantly or in the future. An existing obligation is one which is a cause of action which may be the subject of an immediate suit before the Court. For this purpose, it does not matter if the amount to be paid is not yet quantifiable, provided that there is an existing obligation in respect of the debt. If, however, there is no existing obligation, for example because a contingency or condition precedent has not yet been satisfied at the relevant date, that will not be a debt which is amenable to a Third Party Debt Order.’ 1

[2018] EWHC 1916 (Comm) at [120].

Deferred payment 3.13 In Tapp v Jones1 a judgment creditor sought to garnish sums payable to the judgment debtor under an agreement whereby the garnishee had agreed to pay to the judgment debtor a sum of money by monthly instalments of £10 each. The Court considered what was the true construction of the Common Law Procedure Act 1854, s  61, forebear of Pt  72,2 which permitted the attachment of ‘all Debts owing or accruing’. Blackburn J stated:3 ‘It is evident that the legislature had in view both present debt and future debt, debita in praesenti, solvenda in futuro, for it speaks in the earlier part of the section of “debts owing and accruing”.’ He continued:

Debt owed by a third party  155

‘I have come to the conclusion that the true construction is that there is power to make an order against the garnishee for payment of his debts as and when they become payable, instead of making a fresh order as each falls due.’ 1 (1874–75) LR 10 QB 591. 2 See para 3.3. 3 (1874–75) LR 10 QB 591 at 592–593.

3.14  Field J concurred. Accordingly, an order could be made for payment of the accruing debt as and when it became payable by the garnishee. It was not necessary to wait until the debt had actually become payable before making the order, or to make a fresh order as each instalment fell due.

Interest in a trust 3.15  By contrast, in Webb v Stenton1 the Court of Appeal had to consider whether a judgment debtor’s life interest in the income arising from a fund vested in trustees was attachable. The income was payable half-yearly in February and August. At the time the judgment creditor applied for a garnishee order to attach the judgment debtor’s share of the income in the hands of the trustees (in November), the last half-yearly payment had been made and the trustees held no income from the trust property. 1 (1882–83) LR 11 QBD 518.

3.16  On this occasion, the Court had to construe the words of Ord 45, r 2 of the Judicature Act of 1873 (which had replaced the Common Law Procedure Act 1854, s 61, but was in the same terms as its predecessor, providing for the attachment of ‘all debts owing or accruing’ to the judgment debtor). Brett MR considered the meaning of ‘accruing debt’:1 ‘Now can it mean any debt which may at any future time arise between the judgment debtor and the person sought to be made a garnishee, there being no contract at that time between the judgment debtor and such person, or anything which can make any relation of any kind, legal or equitable, between them? To state the proposition is to shew its absurdity. Then can it be this, that it may be a debt which there is some probability may in future arise? Who can say where there is nothing out of which a debt can be said in law to arise, that it is probable that a debt may arise, as for instance a probability that the parties will make a contract. If it is not a debt it will not do. It must be something which the law recognises as a debt.’ 1

(1882–83) LR 11 QBD 518 at 523.

3.17  As regards the relationship between the trustees and the judgment debtor (as cestui que trust), until money came into the hands of the trustees then no debt existed between the trustees and the judgment debtor. Brett MR stated:1 ‘Therefore there are contingencies upon which no debt may ever arise, and all that can be said of it is, that it is probable that at the end of half-a-year money

156  Third party debt orders will come into the hands of the trustees, but until it does come into their hands, there is no debt existing between them and their cestui que trust.’ 1

(1882–83) LR 11 QBD 518 at 525–526.

3.18  Fry LJ and Lindley LJ concurred, the latter stating:1 ‘I should say, apart from any authority, that a debt legal or equitable can be attached whether it be a debt owing or accruing; but it must be a debt, and a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation, debitum in presenti, solvendum in futuro. An accruing debt, therefore, is a debt not yet actually payable, but a debt which is represented by an existing obligation.’ 1

(1882–83) LR 11 QBD 518 at 527.

3.19  Webb v Stenton was also followed in Re Greenwood,1 where it was held that since a garnishee order absolute could only garnish a debt due, it could not operate as a forfeiture of a life interest in a trust. In Re Sampson, Sampson v Sampson2 the Court considered whether funds in the hands of trustees could be attached where the terms of the trust were that the judgment debtor’s interest in the income from the trust arose only as it came into the hands of the trustees, following which it should be dealt with in one of two ways: if the judgment debtor had not done or suffered an act which would prevent his personal enjoyment of the income, that portion of the income should be paid to him; if he had, then it should be applied at the discretion of the trustees for the benefit of the judgment debtor’s wife and children. 1 2

[1901] 1 Ch 887. [1896] 1 Ch 630.

3.20  The Court held that since at the time the trustees were served with the garnishee order nisi the judgment debtor had not done anything to deprive himself of the income from the trust, the wife had not become entitled to the benefit of the discretionary trust in her favour and the funds could be attached. 3.21  As observed in The White Book1 and in Ferrera v Hardy2 only rarely can trust funds be attached through a third party debt order as ‘A trustee holds trust funds for the beneficiaries of the trust. He is not entitled, without placing himself in breach of trust, to pay those monies over to a third party in satisfaction of his personal debts.’3 Where a judgment creditor therefore seeks to attach funds payable to the judgment debtor under the terms of a trust, only funds currently in the hands of the trustees will be attachable, not future income, and the terms of the trust will need to be examined to ascertain whether the judgment debtor is presently entitled to those funds. In cases involving a trust it may be appropriate to appoint a receiver by way of equitable execution (see Chapter 6). 1 2

3

The White Book (Sweet & Maxwell, 2020), vol 1, at para 72.2.16 [2015] EWCA Civ 1202. However, rather than considering issues arising from a trust the Court in this case considered that the more pertinent question was whether or not the third party actually owed a ‘debt due or accruing due’ to the judgment debtor as required by CPR 72.1. [2015] EWCA Civ 1202 at [10].

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3.22  Similarly, where money is held by a bank for a trustee, that money is not a debt due to a beneficiary of the trust. In the case of AIG Capital Partners Inc v Kazakhstan,1 cash accounts held by a third party were not in the name of the judgment debtor (the state of Kazakhstan). The accounts were opened under an agreement which provided that the accounts reflected a debt owed by the third party to the bank as the account holder. The mere fact that the state had a beneficial interest in the cash accounts did not mean that there was a debt due or accruing due to it in respect of those accounts As there was no contractual relationship between the third party and the state, there was no debt due or accruing from the third party to the state. Therefore, a third party debt order could not be made. 1

[2005] EWHC 2239 (Comm).

Executors 3.23  Where judgment has been obtained against an executor of a deceased person’s estate in their capacity as executor, the third party debt order procedure can be used to execute against debts owed to the estate.1 A third party debt order can also be made against personal representatives where the deceased was indebted to the judgment debtor. However, care should be taken to address the order to the executors in their capacity as executors (and not personally).2 1 2

Burton v Roberts (1890) 29 LJ Exch 483. Stevens v Phelips (1875) LR 10 Ch App 417.

Bills of exchange 3.24 In Hyam v Freeman1 the Court made a garnishee order in respect of money which became payable on maturity of two bills of exchange. The order suspended execution until maturity and an injunction was also granted to restrain the judgment debtor negotiating the bills in the interim. The only reported instance of this case is a short summary in the Solicitors’ Journal of December 1890, so Pollock J’s reasoning behind the judgment is not detailed. However, it is notable that under Bills of Exchange Act 1882, s 3, a bill of exchange is an unconditional order in writing to pay a certain sum, in this instance at maturity. Like the agreement for payment by instalments in Webb v Stenton, a bill of exchange therefore represents an existing obligation and payment is not contingent on any supervening event. 1

(1890) 35 Sol Jo 87.

Rent 3.25  Rent is attachable.1 Where the judgment debtor is a landlord, particularly in the case of commercial premises, it may be worth considering whether there is attachable rent. However, although rent accrues from day to day and is apportionable accordingly under the Apportionment Act 1870, s 2, it cannot be attached unless it is actually payable by the tenant on the date the interim order was served.2 Future

158  Third party debt orders rent cannot be attached using the third party debt order procedure.3 It is likely to be more appropriate to appoint a receiver by way of equitable execution to receive rent payable to a judgment debtor (see Chapter 6). 1 2 3

Mitchell v Lee (1867) LR 2 QB 259. Barnett v Eastman (1898) 67 LJQB 517. In contrast to a debt payable by instalments as in Tapp v Jones, future rent may be probable but is not certain. See Barnett v Eastman (1898) 67 LJQB 517.

Unascertained debts 3.26 In O’Driscoll v Manchester Insurance Committee,1 the Court of Appeal had to consider whether the fact that the amount of a debt was not ascertained should prevent a garnishee order nisi being made. The judgment debtor was one of a panel of doctors who had done work under an agreement with the insurance committee. The committee had received funds with which to pay the panel doctors under their contracts with them and were indebted to the judgment debtor in respect of his work. However, the committee’s liability to pay the panel doctors was limited to the amount it received from the National Insurance Commissioners and the exact amount owed to the judgment debtor would have to be calculated in terms of his proportionate share of the panel fund. 1

[1915] 3 KB 499. See also Lucy v Wood [1884] WN 58, in which the Court held that given the fact that the judgment creditor is reliant on the judgment debtor for information about the judgment debt ‘it would be an absolute denial of justice if he could not get this order without swearing to the amount of the debt’.

3.27  The Court found that funds received by the committee to pay the judgment debtor were attachable, even though the precise sum payable to him had not yet been ascertained. Swinfen Eady LJ held that although the amount owing to the judgment debtor had not yet been ascertained:1 ‘There was, however, no contingency which could happen to deprive him of his right to payment on the figures being finally adjusted … there was a debt owing or accruing from the Insurance Committee to the panel doctors. It was not presently payable, the amount not being ascertained, but it was a debt to which the doctors were absolutely and not contingently entitled. The only question was as to the amount of the debt, the debt not being payable until the amount had been ascertained.’ 1

[1915] 3 KB 499 at 511–512.

3.28  Phillimore LJ and Bankes LJ concurred and, in an often-cited passage, the latter stated:1 ‘It is well established that “debts owing or accruing” include debts debita in praesenti solvenda in futuro. The matter is well put in the Annual Practice, 19152, p.808: “But the distinction must be borne in mind between the case where there is an existing debt, payment whereof is deferred and the case where both the debt and its payment rest in the future. In the former case there is an attachable debt, in the latter case there is not.” If, for instance, a sum of

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money is payable on the happening of a contingency, there is no debt owing or accruing. But the mere fact that the amount is not ascertained does not show that there is no debt.’ 1 2

[1915] 3 KB 499 at 516–517. The forerunner of the White Book.

3.29  In the context of unascertained debts it is worthwhile noting the position in relation to orders for costs which are to be assessed (where the assessment has not yet taken place and where the parties have not come to an agreement in respect of the sum payable). The authors are not aware of any authority dealing with whether a third party debt order may be obtained in respect of such sums. While the amount of the costs payable is not yet ascertained it could arguably be said to be accruing due (in the sense of being payable in the future but by reason of an existing obligation)1 and being analogous to the position in O’Driscoll v Manchester Insurance Committee.2 While the final figure will almost certainly be adjusted, arguably there is no contingency3 to deprive the judgment debtor of its right to payment. It is, however, easy to see how such an order might frequently place a third party in an uncomfortable position. The judgment creditor only has limited control over when the costs assessment takes place. Therefore, a third party could be waiting for some time unable to make payment to either the judgment debtor or judgment creditor. In such circumstances much may rest on how the court exercises its discretion and the particular facts of the case.4 1 2 3 4

Merchant International Co Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy [2014] EWCA Civ 1603 at [49]. See para 3.9. [1915] 3 KB 499. See paras 3.31–3.32. See Ch 4, paras 4.22 and 4.23 for cases dealing with untaxed costs in the context of charging orders.

Judgment debts 3.30  A judgment debt owed by a third party to the judgment debtor can be attached under the third party debt order procedure.1 However, the damages must be liquidated damages at the time the interim order is made, whereas unliquidated damages cannot be attached.2 In the context of liquidated and unliquidated sums the position relating to debts due to solicitors should be given special consideration. As noted in The White Book3 a solicitors’ bill which has not been subject to judicial assessment or determined is not a claim for a liquidated sum.4 Judicial assessment may be statutory or non-statutory (common law).5 Therefore, a statutory demand cannot be served in respect of it and a bankruptcy petition under IA 1986, s 267 cannot be based on such a bill. This is of potential importance to judgment creditors who may be aware of debts that are owed by a third party to a judgment debtor who is a solicitor’s firm (and extending to any other professionals whose fees may also be subject to assessment). Arguably, a third party debt order is not possible in these circumstances against the third parties because the debt is not liquidated but the authors are not aware of any authority on this point. 1

Dawson v Preston (Law Society, Garnishees) [1955] 3 All ER 314, in which there was held to be an attachable debt payable by the Law Society to a legally aided plaintiff in respect of damages he had won which had been paid to the Law Society, notwithstanding the fact that that debt could not yet be paid because the amount of the charge on the damages in favour of the Law Society in respect of

160  Third party debt orders costs had not yet been determined. Jones v Thompson (1858) EB & E 63, in which the Court refused to attach an amount for which the judgment debtor had obtained unliquidated damages since although a verdict had been given in the judgment debtor’s favour, the judgment had not yet been signed and thus there was not yet a debt due. Crompton J held: ‘I have always acted on the principle that it is not enough to shew that it is very probable that there soon will be a debt, but that it must be shewn that there is a debt, though it need not be yet due.’ Note that this case may now be of limited relevance given the modern practice on when a judgment is effective (see para 7.11). See also Holtby v Hodgson (1889) 24 QBD 103. 3 The White Book, (Sweet & Maxwell, 2020) vol 2, para 7C-117. 4 See Klamer v Kyriakides & Braier (a firm) [2005] BPIR 1142 and Truex v Toll [2009] EWHC 396 (Ch). 5 Slade (trading as Richard Slade and Co) v Abbhi [2019] EWHC 355 (Comm). 2

Contingent events 3.31  It was key to the Court’s ruling in O’Driscoll1 that it found that the third party (the insurance committee) was in fact indebted to the judgment debtor at the date the garnishee order nisi was served. Where the obligation to pay is contingent on another event taking place, there is only an attachable debt once that condition has been met. In Dunlop & Ranken Ltd v Hendall Steel Structures Ltd (Pitchers Ltd, Garnishees),2 judgment creditors of sub-contractors nominated under a standard form RIBA3 building contract sought to garnish monies in the hands of the principal contractors. The judgment creditors claimed that sums were owed to the sub-contractors by the principal contractors in respect of work done under the building contract. 1 2 3

See paras 3.26–3.28. [1957] 3 All ER 343. Royal Institute of British Architects.

3.32  The Court noted that it was often difficult to distinguish between cases where there was a debt accruing and where no debt existed1 and cited the passage from O’Driscoll quoted at para 3.28. The Court found that under the terms of the RIBA building contract the sub-contractor had no right to receive any sum of money at all from the principal contractor until a certificate had been issued by the architect and referred to a statement in the notes to Ord 45, r 1 in the Annual Practice 1957,2 which stated: ‘In the case, for example, of a building contract in the RIBA form, where the builder is paid on the certificate of the architect, it is plain that money in the hands of the building owner cannot be attached until a certificate is issued, and then only for the amount mentioned in that certificate.’ 1

2

Lord Goddard CJ at 345: ‘It is very often difficult to distinguish between a case where a debt has not accrued and there is no actual debt, and the case where there is a debt debitum in praesenti solvendum in futuro.’ The forerunner of The White Book.

3.33  Accordingly, the Court held that until a certificate was issued, the subcontractors had no right to be paid and there was no debt. 3.34  The decision in Dunlop appears to rest on the Court’s construction of the contract. It held that the fact that payment under the contract was to be made ‘in

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accordance with the certificates’ issued by the architect meant that payment should be made ‘if and when a certificate is given’.1 The architect’s certificate was thus a condition precedent to the debt becoming due. 1

[1957] 3 All ER 344 at 348. In fact no written contract was entered into between the sub-contractors and the principal contractors but that the RIBA form of contract clearly contemplated this should have been entered into and that the principal terms of the RIBA contract would be incorporated.

3.35  The decision in Dunlop was distinguished in the Canadian case of Sandy v Yukon Construction Co Ltd and Rush and Tompkins Construction Ltd,1 which also concerned a judgment creditor seeking to garnish amounts due to a sub-contractor from the principal contractor in respect of work done under a building contract. The Canadian garnishee rules were equivalent to the English rules in permitting the attachment of ‘debts, if any, due or accruing due’ and the Court considered both the O’Driscoll and Dunlop cases. As in Dunlop, no architect’s certificate in relation to the work done by the sub-contractor had been issued in accordance with the terms of the tender and it was argued that, as a result, no debt had come into existence. 1

(1961) 26 DLR (2d) 253.

3.36  The Alberta Supreme Court rejected that argument and found that the giving of the certificate was not a condition precedent to the debt coming into existence. It first held that an examination of the terms of the contract did not support the interpretation that the contract was an entire contract in which no debt could arise until the whole work was done since the contract provided for interim payments with only the final payment being retained until the work was complete and accepted. Johnson JA went on:1 ‘There is nothing to suggest in the granting or refusing of a certificate that there is ‘the happening of any contingency’ (mentioned by Bankes LJ in the O’Driscoll case, supra) preventing the establishment of a debt as the work is done, although, of course, the absence of the certificate in most cases will prevent the contractor from being able to sue. I say in most cases, for there are cases where the Courts have permitted recovery even where no certificate has been given.’ 1

(1961) 26 DLR (2d) 254 at 258.

3.37  The cases Johnson JA referred to were a decision of the Canadian Supreme Court in Oshawa v Brennan Paving Co1 and a decision of the House of Lords in Panamena Europea Navigacion Compania v Frederick Leyland & Co.2 Johnson JA observed:3 ‘It is inherent, I think, in both of these judgments that a prior debt existed before the certificate came into existence and that the certificate requirement merely postponed the payment until the certificate had been given. If the indebtedness was conditional upon the certificate, it would have been impossible for the Courts to have given the judgments they did in these cases.’ Accordingly, he concluded a debt was owed to the sub-contractor in Sandy which could be attached by garnishee proceedings and the judgment creditor could apply to the court for a determination of the amount of that debt. However, it is worth noting

162  Third party debt orders that the Panamena case concerned a contract for the repair of a ship and there were differences between the Court’s construction of the role of the surveyor in that case and the role of the architect in Dunlop. 1 [1955] 1 DLR 321. 2 [1947] AC 428. 3 (1961) 26 DLR (2d) 254 at 259.

3.38  It therefore seems that in all cases where a judgment creditor seeks to attach a debt due to a judgment debtor under this type of building contract, the contract concerned will need to be carefully interpreted to ascertain whether delivery of the architect’s certificate (or equivalent document) is a condition precedent on which the existence of the debt depends. The building industry has many standard form building contracts which contain complex series of interrelated provisions setting out the rights and obligations of the parties by reference to decisions of an architect, engineer or other third party. Each case will turn on its own facts. 3.39  Where the judgment debtor could sue the third party to recover the debt, it is clear there is an attachable debt. However, this is not an infallible test. Where the money is not payable until maturity of a bond, or the requisite date for the payment of the next instalment of a debt has not yet fallen, such analysis sheds little light on the question of whether there is an attachable debt. Debts created after service of the interim order 3.40 In Heppenstall v Jackson and Barclays Bank Ltd (Garnishees)1 Barclays were served with a garnishee order nisi attaching all debts owed by the bank to the judgment debtor on the date of service. In between the date of service of the order nisi and the date of the hearing of the application, the judgment debtor paid further sums into his account. The Court of Appeal held that there was clear authority ‘that a garnishee order attaches no debts which do not exist at the moment when the order is made and served.’2 If the judgment creditor wished to attach subsequent debts, he should have issued a further application. 1 2

[1939] 1 KB 585. [1939] 1 KB 585 at 592.

Bank and building society accounts General 3.41  The fact that Pt 72 contains specific rules which apply only to third party banks and building societies served with an interim third party debt order1 recognises that it is the ubiquitous nature of bank accounts that renders this method of enforcement so useful to the judgment creditor. 1

See further paras 3.133–3.143.

3.42  Before a credit balance on a bank account becomes payable (ie a debt due) to

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a customer, the customer must first have made a demand for payment. However, in N Joachimson v Swiss Bank Corporation1 the Court held that service of a garnishee order nisi (now an interim third party debt order) constitutes such demand.2 1 [1921] 3 KB 110. 2 In Rekstin v Severo Sibirsko Gosudarstvennoe Akcionernoe Obschuestvo Komseverput; and Bank for Russian Trade Ltd [1933] 1 KB 47, the Court held that service of the garnishee order nisi operates to revoke an account holder’s instructions to transfer funds which had not been fully carried out. See further paras 3.120–3.121.

3.43  Joachimson is also authority for rendering current accounts liable to attachment. The Senior Courts Act 1981 (SCA 1981), s 40 and the County Courts Act 1984 (CCA 1984), s 108 extend the types of accounts which can be attached to deposit accounts1 and withdrawable share accounts. 1

However, note the anomalous position of National Savings Bank deposit accounts, which cannot be attached using the third party debt order procedure. See further paras 3.90–3.91.

3.44  Under CPR  72.2(3) and SCA  1981, ss  40(2) and 40(3) (and equivalent provisions in CCA 1984, s 108), various prescribed conditions which must otherwise be met before money can be withdrawn from an account may be disregarded in third party debt order proceedings. These include any prior condition that: (a) a receipt for money deposited in the account be produced; (b) notice be given; (c) a personal application be made; or (d) a deposit or share account book be produced. 3.45  As will be seen1, the judgment creditor must, where possible, give details in the application notice of the name and address of the branch at which the judgment debtor’s account is believed to be held and the account number.2 1 2

See paras 3.98–3.102. Case law previously stated that a garnishee order nisi would not attach the balance of a bank account unless it correctly stated the name of the account as it appears in the books of the bank. Where the judgment debtor has and operates an account in a name other than its own, that name must appear in the order. See Koch v Mineral Ore Syndicate (1910) 54 Sol Jo 600 and para 3.103.

Foreign currency accounts 3.46  A  debt held in a foreign currency account within the jurisdiction is also attachable. Choice Investments Ltd v Jeromnimon1 sets out the machinery by which a debt payable in England and Wales in a foreign currency should be attached to satisfy an English sterling judgment: (a) As soon as reasonably practicable after service of the interim order, the bank should ascertain (at its then normal buying rate of exchange against sterling) the amount of foreign currency that would, if converted at that rate, equal the amount of judgment debt and costs. That amount of foreign currency in the account should then be attached by a ‘stop order’ on the requisite amount of currency (see paras 4.273–4.306). (b) As soon as the final order has been served, the bank should purchase (at its normal buying rate of exchange against sterling) the sterling equivalent of the

164  Third party debt orders attached amount of foreign currency (or, if the exchange rate has changed, so much as by that date would be equal to the sterling judgment debt and costs), and should pay that amount of sterling into court or to the judgment creditor. (c) The bank should also inform the court of the amount of foreign currency attached and the rate of exchange used so that the terms of the final order can be adapted to reflect this procedure, namely by ordering the bank to pay the sterling equivalent of the attached amount of foreign currency or the judgment debt and costs, whichever is less.2 1 [1981] QB 149. 2 The reasoning behind this adaptation of the wording of the final order is that if between the date of the attachment and the date of the final order exchange rate fluctuations are such that the attached amount of foreign currency is now more than enough to meet the sterling judgment debt and costs, the bank must release the balance of the foreign currency to the judgment debtor. Alternatively, if exchange rate fluctuations mean that the attached amount of currency is now less than the sterling judgment debt and costs, the bank is not prejudiced since it will be ordered to pay whichever is the lesser of the two.

Monies held as agent for others 3.47 In Hancock v Smith1 a judgment creditor sought to attach a bank balance held in the name of the judgment debtor, a stockbroker. All the money paid into the account represented funds received by the stockbroker on behalf of clients. The Court held that execution can only take effect on property which the debtor has a right to dispose of for its own purposes,2 and thus the account could not be attached. 1 2

[1889] LR 41 Ch D 456. See also Roberts v Death (1881–82) LR 8QBD 319, discussed further in para 3.166.

Joint debts 3.48  Where a debt is due to the judgment debtor jointly with another person (such a spouse, civil partner or business partner) it cannot be attached under the third party debt order procedure.1 1

Unless that other person is a joint judgment debtor. See para 3.54, n 1. See recently Taurus Petroleum Ltd v State Oil Marketing Company of the Ministry of Oil, Republic of Iraq [2017] UKSC 64 where it was held that there was, on the facts, no joint liability.

3.49 In MacDonald v The Tacquah Gold Mines Company,1 the third party, The Tacquah Gold Mines Company, had covenanted by mortgage deed to pay a sum to two individuals (Horton and Fitzgerald) jointly and not to either of them alone. The plaintiff, who was a judgment creditor of Fitzgerald, sought to garnish Fitzgerald’s share of the sum owing under the mortgage deed. The Court of Appeal unanimously held that the debt could not be garnished. Bowen LJ stated:2 ‘Where money is due on a covenant made with two persons jointly by which it is to be paid to such two jointly, no one of those two has any right to that money without the other of them.’ Accordingly, the debt was ‘therefore not a sum capable of being attached.’ 1 2

(1884) 13 QBD 535. (1884) 13 QBD 535 at 539.

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3.50  Brett MR and Fry LJ concurred, the latter stating in his judgment:1 ‘I  adhere to what was said by this Court in Webb v Stenton as to the word “indebted” in that rule.2 Then can it be said that the defendant company was indebted to the judgment debtor when they were indebted to him and another person jointly only? It seems clearly it cannot, and that the words of the rule are not applicable to such a case. If they were, the result would be to enable a judgment creditor to attach a debt due to two persons in order to answer for the debt due to him from the judgment debtor alone, which would be altogether contrary to justice.’ 1 2

(1884) 13 QBD 535 at 539. Namely Ord 65 of the Rules of 1875, which then contained the rules relating to garnishee orders and mirrored the provisions of the earlier Common Law Procedure Act 1854.

3.51  MacDonald was followed in Beasley v Roney1 and then in Hirschorn v Evans,2 which considered the position in relation to joint bank accounts. A husband and wife opened a joint bank account with Barclays Bank upon terms that the signature of either would be a sufficient discharge for the repayment of money deposited with the bank. The judgment creditor sought to garnish the account as a debt owed to the husband, the judgment debtor. The Court of Appeal held (Greer LJ dissenting) that:3 ‘one has to look at the account as a whole, and, looking at the account as a whole, I think it is in the nature of a joint account on which the bank are jointly liable to both parties and, consequently, the garnishee summons is misconceived in stating that the bank are indebted to the said judgment debtor in the sum there stated, whereas, in reality, they are jointly indebted both to the judgment debtor and to his wife.’ 1

2 3

[1891] 1 QB 509, in which Pollock B stated at 512 that the MacDonald case ‘is a distinct authority to shew that the debt owing by a garnishee to a judgment debtor which can be attached to answer the judgment debt must be a debt due to the judgment debtor alone, and that where it is only due to him jointly with another it cannot be attached’. [1938] 2 KB 801. [1938] 2 KB 801 at 812–813.

3.52  Mackinnon LJ concurred and also held that:1 ‘As the account was in the joint names and not in the name of the judgment debtor, the bank took the view that the summons did not attach any part of their debt on the joint account, and they could not dishonour cheques drawn on the joint account. I think they were right in that view. Indeed, if they had dishonoured cheques, I think they could have been sued by the joint creditors for so doing.’ 1

[1938] 2 KB 801 at 814.

3.53  Arguably, the wording of the Practice Direction to Pt  72 creates some ambiguity as to whether the third party debt order procedure can apply to joint accounts, since at para 3.1 it states: ‘A bank or building society served with an interim third party debt order is only required by rule 72.6, unless the order states otherwise –

166  Third party debt orders (1) to retain money in accounts held solely by the judgment debtor (or, if there are joint judgment debtors, accounts held jointly by them or solely by either or any of them);’ (Emphasis added.) 3.54  It could be argued that the inclusion of the words ‘unless the order states otherwise’ means that the CPR envisages that it is possible to make third party debt orders in respect of joint accounts in certain circumstances. However, the fact that, immediately following these words, para 3.1(1) of the Practice Direction states in parentheses ‘(or, if there are joint judgment debtors, accounts held jointly by them or solely by either or any of them)’ suggests that the better view is that the Practice Direction only envisages the attachment of a joint account where both the account holders are joint judgment debtors.1 This view is further supported by the direction in the following paragraph (PD 72, para 3.2) that a bank or building society served with an interim third party debt order is not required to retain money in accounts in the joint names of the judgment debtor and another person. 1 In Miller v Mynn (1859) 28 LJQB 324 the Court held that where a judgment creditor has a joint judgment against several judgment debtors, a debt due to any one or more of them may be attached.

3.55  MacDonald and Hirschorn were decided long before modern jurisprudence on freezing injunctions had developed. The standard form freezing injunction extends to assets held jointly by a respondent and another person.1 However, it appears that for the time being at least the position will remain that a joint account cannot be attached under a third party debt order. In March 2003 the Government published a White Paper on ‘Effective Enforcement’ as part of the Civil Enforcement Review arising from the Government’s ‘access to justice’ initiatives (see Chapter 1). Chapter 4 of the White Paper sets out the Government’s reasons for not proceeding with one of the proposals from the first phase of the Enforcement Review, namely that joint accounts should be subject to third party debt orders, and observes that any changes to this position would require primary legislation. 1

See para 6 of the specimen freezing injunction in the Practice Direction to Pt 25 (PD 25A). In Z Ltd v A-Z and AA-LL [1982] QB 558 CA, it was argued by counsel for the applicant banks that joint accounts present difficulties for banks and should not be caught by Mareva injunctions unless the judge in the exercise of discretion so directs. It was expressly submitted that a different position should not arise under a Mareva injunction than under a garnishee order which, under Hirschorn v Evans, could not be garnished. The judgments of Lord Denning MR, Eveleigh LJ and Kerr LJ concur that joint accounts should be subject to Mareva injunctions where this is justifiable for the protection of the plaintiff but none expressly considered the submission as to the inconsistency which thus arises between the position in relation to garnishee orders and Mareva injunctions.

3.56  The principal reasons stated in the White Paper for rejecting the proposal are the difficulties in coming up with a statutory definition of ‘joint account’, the operational difficulties for financial institutions in identifying joint accounts, difficulties in allocating ownership of funds in joint accounts, and addressing the rights of ‘innocent’ third parties to the account (who would need to be notified of the order so that they could challenge the deemed proportion of ownership and be made aware that the account had been frozen). It is notable that Fry LJ’s statement in MacDonald that garnishing joint accounts would be ‘altogether contrary to justice’ was made notwithstanding the fact that the plaintiff sought only to garnish that portion of the debt to which the judgment debtor was entitled, which was agreed between

Debt owed by a third party  167

Horton and Fitzgerald to be two thirds of the total sum. One of the reasons given in Hirschorn for the Court of Appeal’s refusal to garnish a joint bank account was the ‘unjustified and intolerable burden’ this would impose upon banks.1 The White Paper concludes that any change in the law to make joint accounts attachable would lead to an increased administrative burden on the courts and financial institutions, contrary to the aims of the Civil Enforcement Review. 1

MacKinnon LJ at 815.

3.57  Many if not all of the objections to attaching joint debts can be made in relation to freezing injunctions, which do extend to joint accounts. ‘Innocent’ third parties with an interest in a frozen account may apply to the court for an appropriate variation of the order and the standard form freezing injunction expressly provides this.1 Given that the purpose of a freezing injunction is to preserve assets for the purposes of satisfying a judgment when it appears likely that a claimant will succeed in its claim, this inconsistency in the court’s approach to joint accounts may seem illogical. However, there are a number of notable differences between a freezing injunction and an interim third party debt order. An applicant for a freezing injunction is required to provide an undertaking in damages in respect of any costs or loss caused to a third party as a result of the order. Freezing injunctions are not granted lightly and the applicant for a freezing injunction is under a ‘high duty’ to make full and frank disclosure of all material information.2 Were the law in relation to the attachment of joint debts under the third party debt order process to change, this would invariably entail the court having to direct a trial of an issue at the hearing to consider whether a final order should be made whenever the debt involved is a joint debt (see paras 3.165–3.166) to enquire what share of that debt rightly belongs to the judgment debtor. Such proceedings would entail further time and costs for both the judgment creditor and ‘innocent’ third parties such as the joint debtor or financial institutions. The effect would inevitably be to complicate and protract the enforcement process. 1

2

CPR 40.9 provides: ‘A person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside or varied.’ Paragraph 13 of the specimen freezing injunction in the Practice Direction to Pt 25 provides: ‘Anyone served with or notified of this order may apply to the court at any time to vary or discharge this order (or so much of it as affects that person), but they must first inform the Applicant’s solicitors.’ Ninemia Maritime Corpn v Trave GmbH (‘The Niedersachsen’) [1983] 1 WLR 1412; Brinks Mat v Elcombe [1988] 3 All ER  188; Fundo Soberano De Angola v dos Santos [2018]  EWHC  2199 (Comm).

Wages 3.58  Wages or salaries which are not presently payable cannot be attached under the third party debt order procedure since future unearned salary is not a debt ‘due or accruing due’.1 In Hall v Pritchett2 the Court held that the future salary of a medical officer could not be attached. In Mapleson v Sears3 the Court held that a proportion of the salary of a music hall artiste who had been engaged for a week could not be attached since under the terms of his contract there was no debt due to the artiste that was liable to attachment until the expiration of his week’s engagement.

168  Third party debt orders 1 The proper method for the attachment of wages is an attachment of earnings order – see para 3.65. 2 (1877–78) LR 3 QBD 215. 3 (1911) 56 Sol Jo 54.

3.59  The position in relation to future unearned salary should be contrasted with that where fees have been earned but are unpaid. In Edmunds v Edmunds1 a public vaccinator earned fees under a contract which specified that he should perform certain ministerial acts before becoming entitled to payment of the fees. Gorell Barnes J held that whether or not the fees were attachable depended upon the terms of the contract and, after a careful examination of its terms, he held:2 ‘The effect of my decision on this point is that the amount of 381. 18s. 6d was effectually earned for fees under this contract up to March 24, and that nothing which might happen afterwards could prevent that money becoming payable; and that although it was not to be payable, according to the terms of the contract, until one calendar month after Lady Day, it was, within the meaning of the garnishee order and the rules by analogy to which we act, a debt due or accruing due.’ 1 [1904] P 362. 2 [1904] P 362 at 373.

3.60  Subsequent smaller amounts which were also earned but not payable until later in the year only involved a question of suspension of the order.1 The Court of Appeal held the same view in relation to fees payable to a panel doctor by the Manchester Insurance Committee in O’Driscoll (see paras 3.26–3.28). 1

[1904] P 362 at 373.

Wages of Crown servants 3.61  The anomalous position of servants of the Crown should also be noted. In Lucas v Lucas1 the Court held that ‘sterling overseas pay’ payable to an Indian civil servant from the High Commissioner for India was not attachable since public servants have no right to their remuneration but rather are employed at the pleasure of the Crown. Pilcher J held:2 ‘I am satisfied that the rule of public policy to which Lord Blackburn refers would prevent Mr Lucas from successfully prosecuting any action against any officer of the Crown in respect of unpaid salary. There can, therefore, never be any “debt owing or accruing” from such an officer to Mr Lucas which can be attached by his wife under the machinery provided by [a predecessor to Pt 72].’ 1 [1943] P 68. 2 [1943] P 68 at 78. See also Hollinshead v Hazleton [1914-15] All ER Rep 1117.

3.62  In summary, salaries of public servants are not due from the Crown or the ministers of the Crown as a debt and cannot be sued for, providing a further reason why they cannot be attached under the third party debt order procedure.1 1

They can, however, be obtained in satisfaction of a judgment debt using the procedure set out in the Attachment of Earnings Act 1971. See Ch 1.

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3.63  It should also be noted that certain salaries are protected from attachment by statute.1 1

See further Chapter 1.

Pensions 3.64  Pensions, like earnings, are not attachable in so far as they represent sums which may become due in the future.1 However, where a pension has accrued due, it is attachable. In Booth v Trail, Corporation of Sunderland (Garnishees)2 the Court considered whether a sum already accrued due to a retired police constable in respect of his superannuation allowance was attachable. Lord Coleridge CJ held:3 ‘I am of the opinion that the judgment creditor is entitled to an order attaching so much of the pension as had already accrued due at the date of the summons. We are, however, bound by the decision of the Court of Appeal in Webb v Stenton, and independently of that decision it seems to me clear that sums which may or may not become due in the future are not debts owing or accruing within the meaning of the rules relating to the attachment of debts. Therefore, so much of the application as seeks to attach the pension prospectively as it falls due from time to time must be refused.’4 1 2 3 4

However, pensions are amenable to the procedure set out under the Attachment of Earnings Act 1971. See Ch 1. (1883–84) 12 QBD 8. (1883–84) 12 QBD at 10. Where the pension terms allow the judgment debtor to elect to commute a percentage of the pension see Blight v Brewster [2012] EWHC 165 (Ch); Field v Field [2002] All ER (D) 405 (Oct); Tasarruf Mevduati Sigorta Fonu v Merrill Lynch [2011] UKPC 17 (see Ch 6).

Attachment of Earnings Act 1971 3.65  As regards future earnings, the Attachment of Earnings Act 1971 (AEA 1971) makes provision for the attachment of the wages or salary1 of an employed person as a means of enforcing the discharge of monetary obligations. This procedure is covered in Chapter 1. 1

Under AEA 1971, s 24(1), ‘earnings’ includes any sums payable to a person by way of wages or salary (including fees, bonus, commission, overtime or other emoluments), pension and statutory sick pay. However, under s 24(2), certain payments are not to be treated as earnings for the purposes of the AEA 1971, including sums payable by a government department, sums payable to members of HM forces, social security pensions or benefits, disability pension or benefits, seaman’s wages and the guaranteed minimum pension. See further Ch 1.

Money in court 3.66  The third party debt order cannot be used to attach money standing to the credit of the judgment debtor in court procedure1 (on the basis that it is not appropriate for the court itself to be the subject of court proceedings). However, there is a simple, alternative procedure available to a judgment creditor to obtain funds in court in satisfaction of its judgment, which is set out in CPR 72.10. 1 CPR 72.10(1)(a). Re Greer [1895] 2 Ch 217 also states that a sum of money which has been ordered to be paid into court cannot be attached.

170  Third party debt orders 3.67  Under CPR  72.10(1)(b) a judgment creditor may apply for an order that money in court, or so much of it as is needed to satisfy the judgment and the costs of the application, be paid to it. The application should be made in accordance with CPR Pt 23 and the application notice must be served on both the judgment debtor and the Accountant General at the Court Funds Office. The judgment creditor is then protected from any attempt by the judgment debtor to seek payment out of funds held in court.1 Once the application notice has been issued, the money in court must not be paid out until the application has been disposed of.2 1 CPR 72.10(3). 2 CPR 72.10(3).

‘Within the jurisdiction’ 3.68  As noted in para 3.4, it is stipulated in CPR 72.1(1) that the third party who owes the debt which the judgment creditor seeks to attach must be ‘within the jurisdiction’. 3.69 In SCF  Finance Co Ltd v Masri (No  3)1 the garnishee was within the jurisdiction on the day that the application for a garnishee order nisi was made and had instructed her solicitors to accept service of that order. However, by the time the garnishee order nisi was made later that day, the garnishee had boarded an aircraft flying to Jordan. The garnishee then sought to appeal the order on the grounds, among others, that the judge was wrong in law in holding that she was a person ‘within the jurisdiction’ for the purposes of RSC Ord 49. 1

[1987] 1 QB 1028.

3.70  The Court of Appeal held that, subject to the court’s discretion, the mere ‘temporary physical presence of the garnishee within the territorial limits of England and Wales’ at the time the interim order is made is sufficient to found jurisdiction for the purposes of garnishee proceedings. Ralph Gibson LJ stated:1 ‘We have no doubt that physical presence of the garnishee in this country at the time of the making of the order nisi is sufficient to found jurisdiction which would not be lost by subsequent departure of the garnishee.’ 1

[1987] 1 QB 1028 at 1041.

3.71  In addition, where the third party has agreed to submit to the jurisdiction of the English court for the purposes of third party debt proceedings before the interim third party debt order is made, it will be within the jurisdiction for the purposes of Pt 72.1 It is worth noting that the Court in SCF Finance rejected counsel’s submission that for physical presence to found jurisdiction for a garnishee order it must exist at the time of service of the interim order or the making of the final order. Because in that case the garnishee had instructed her solicitors to accept service of the order, the question of how service of an interim order on a third party who is within the jurisdiction at the time the interim order is made but who has left before service of that order is effected did not arise. However, in such circumstances, permission to

Debt owed by a third party  171

serve out would presumably be needed and complicated questions of how the final order should be enforced against the overseas third party would be likely to arise. 1

SCF Finance Co Ltd v Masri (No 3) at 1041–1042.

Foreign debts 3.72  While it was clear that the third party must be within the jurisdiction for garnishee proceedings to be used, prior to two 2003 judgments of the House of Lords it seemed that there was no limitation that the third party debt must also be properly recoverable1 within the jurisdiction.2 1 2

See further para 3.85. See also the former notes to RSC Ord 49 at 49.1.12.

3.73  The 1927 case of Richardson v Richardson1 concerned the attachment of a foreign debt, namely credit balances held with the foreign branches of the National Bank of India Ltd. In his judgment, Hill J, following the earlier case of Martin v Nadel2 (which concerned a German debt), held that the foreign balances could not be attached. He stated:3 ‘The bank is no doubt indebted to the judgment debtor and the bank is within the jurisdiction. The Order deals with the case where “any other person is indebted to the judgment debtor and is within the jurisdiction.” But both in principle and upon authority, that means “is indebted within the jurisdiction and is within the jurisdiction.” The debt must be properly recoverable within the jurisdiction. In principle, attachment of debts is a form of execution, and the general power of execution extends only to property within the jurisdiction of the court which orders it. A debt is not property within the jurisdiction if it cannot be recovered here.’ 1 [1927] P 228. 2 [1906] 2 KB 26. See in particular the judgment of Vaughan Williams LJ at [1906] 2 KB 26 at 29. 3 [1927] P 228 at 235.

3.74  However, two judgments of the Court of Appeal in the late 1980s cast doubt on this judgment. In SCF Finance v Masri1 the Court held that it was not bound by the decision in Richardson and that RSC Ord 49:2 ‘contains no express requirement that the garnishee be indebted within the jurisdiction and we see no reason to read in words to that effect. We accept that in a case where the garnishee is not “indebted within the jurisdiction” this may be relevant to the exercise of the court’s discretion.3’ 1 [1987] QB 1028. 2 [1987] QB 1028 at 1044. 3 That is, the court’s discretion to make the garnishee order absolute.

3.75  SCF  Finance was followed in Interpool Ltd v Galani,1 where the Court of Appeal held that:2

172  Third party debt orders ‘Garnishee proceedings are governed by Ord 49, and we have already referred to the provisions of Ord 49, r.1(1) that the garnishee must be within the jurisdiction. There is no similar limitation that the garnished debt must be properly recoverable within the jurisdiction. The decision at first instance of Richardson v Richardson, that there is no jurisdiction to garnish a debt which is not recoverable within the jurisdiction is no longer good law.’ 1 [1988] QB 738. 2 [1988] QB 738 at 741.

3.76  However, in SCF  Finance the debt concerned was treated as properly recoverable in England1 and Interpool was not concerned with garnishee proceedings but rather the oral examination of the judgment debtor under RSC Ord 48.2 Thus, strictly, the observations of the Court of Appeal that the court had a discretion to garnish foreign debts (though it would not do so where this would be inequitable)3 were obiter in both of those cases. 1

2 3

[1987] QB 1028 at 1044. Similarly, in Deutsche Schachtbau-und-Tiefbohrgesellschaft mbH v Ras Al Khaimah National Oil Co and Shell International Petroleum Co Ltd [1988] 2 Lloyd’s Rep 293, which was appealed to the House of Lords, it was agreed that the debt concerned was an English debt. Now contained in Pt 71. See Ch 2. Eg because it may expose the garnishee to the risk of having to pay the debt twice.

3.77  In any event, the position taken by the Court of Appeal in SCF Finance and Interpool regarding the attachment of foreign debts must now be seen as incorrect following their Lordships’ decisions in Société Eram Shipping Co Ltd v Cie Internationale de Navigation1 and Kuwait Oil Tanker Co SAK v UBS AG.2 1 2

[2004] 1 AC 260, HL, [2003] UKHL 30. [2004] 1 AC 300, HL, [2003] UKHL 31.

3.78 In Société Eram the debt concerned was held with the Hong Kong branch of HSBC. Their Lordships unanimously found that no garnishee order should have been made in respect of that debt, although the reasoning given differed subtly in some respects. Discharge of the debt by virtue of the garnishee order was fundamental to the process. Lord Bingham stated that:1 ‘It is not in my opinion open to the Court to make an order in a case, such as the present, where it is clear or appears that the making of the order will not discharge the debt of the third party or garnishee to the judgment debtor according to the law which governs that debt.’ 1

[2004] 1 AC 260 at [26]. Lord Hoffmann agreed that the discharge of the debt was an essential part of the process (at [63]) as did Lord Millett (at [97]).

3.79  He continued that while, in practical terms, it does not much matter whether the court rules it has no jurisdiction to attach a foreign debt or that it should never exercise its discretion to do so, the former was the preferable analysis and he found himself in close agreement with the judgment of Hill J  in Richardson.1 Similarly, Lord Hobhouse agreed that the criticism of Hill J  expressed in SCF  Finance and Interpool was mistaken.2 1 2

[2003] UKHL 30 at [26]. [2003] UKHL 30 at [75].

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3.80  Other of their Lordships’ judgments also emphasised the need for the English courts to refrain from exerting exorbitant extraterritorial jurisdiction. Lord Hoffmann observed that:1 ‘The execution of a judgment is an exercise of sovereign authority. It is a seizure by the state of an asset of the judgment debtor to satisfy the creditor’s claim. And it is a general principle of international law that one sovereign state should not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state or compelling its citizens to do acts within its boundaries.’ 1

[2003] UKHL 30 at [54].

3.81  He went on to say that there are strong reasons of principle for not making a garnishee order in respect of a foreign debt and that, while the application of such principles is not the same as exercising a discretion, it also is not the same as a statutory rule restricting the discretion.1 He thus concurred with Lord Millett, who observed:2 ‘If the debt is situated and payable overseas, however, it is beyond the territorial reach of our Courts’ and later in his judgment said:3 ‘Our Courts ought not to exercise an exorbitant jurisdiction contrary to generally accepted norms of international law and expect a foreign Court to sort out the consequences.’ 1 2 3

[2003] UKHL 30 at [59]. [2003] UKHL 30 at [98]. [2003] UKHL 30 at [109].

3.82  The decision in Kuwait Oil concerned a Swiss debt. The UK and Switzerland are both signatories to the Lugano Convention,1 so the question of jurisdiction before their Lordships was not simply a matter of English or private international law but was also governed by the Convention regime. Article 16(5) of the Lugano Convention2 provides: ‘The following courts shall have exclusive jurisdiction, regardless of domicile: … 5. in proceedings concerned with the enforcement of judgments, the courts of the Contracting State in which the judgment has been or is to be enforced.’ 1 2

That is, the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988. Equivalent provisions are contained in the Brussels Convention, art 16(5), the Brussels I Regulation, art 22 and the Brussels I Regulation (Recast), art 24.

3.83  Since the judgment creditor was seeking to enforce against a debt situated in Switzerland, their Lordships held that the Swiss courts had exclusive jurisdiction over the enforcement proceedings and the English courts were bound to decline jurisdiction in favour of the Swiss courts in accordance with art  19 of the Convention.1 Their

174  Third party debt orders Lordships also held that, had the case not been governed by the Lugano Convention regime, they would have refused to make a garnishee order absolute for the reasons given in the Société Eram judgment. 1

Equivalent provisions are contained in the Brussels Convention, art 19, Brussels I Regulation, art 25 and Brussels I Regulation (Recast), art 27. By analogy, the same principles should therefore apply in the case of a debt situated in a Brussels regime state.

3.84  More recently the Supreme Court has applied Société Eram in Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq.1 In Taurus the claimant had obtained an arbitration award against the defendant. The claimant obtained a third party debt order in respect of moneys due under letters of credit issued by the London branch of a French bank in favour of the defendant. The letters of credit provided for payment to be made into an account at a New York bank. The Supreme Court discharged the order. When considering the situs of the debt, Lord Clarke observed:2 ‘It is common ground that all property, whether tangible or intangible, has a situs for legal purposes. It is further common ground that, as Moore-Bick LJ put it in para  14, in Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30; [2004] 1 AC 260 the House of Lords held that a third party debt order is a proprietary remedy, which, when complied with, operates to discharge the debt and to release the debtor from his obligation. Since it involves dealing with property, the English courts do not have jurisdiction to make such an order in respect of debts situated outside the jurisdiction, unless by the law applicable in that place an English order would be recognised as discharging the liability of the third party to the judgment debtor: see, in particular, per Lord Bingham of Cornhill at para 26. The parties agree that it is therefore necessary to identify the situs of the debts which Crédit Agricole owes to SOMO.’ 1 [2017] UKSC 64. 2 [2017] UKSC 64 at [29].

The courts’ approach to establishing the situs of the debt 3.85  It now seems clear that judgment creditors cannot use the third party debt order process to attach foreign debts by way of a third party debt order. The only judgment in the Société Eram judgment which expressly discussed the proper analysis of the ‘situs’ of a debt was Lord Hobhouse’s, which approved the Dicey and Morris formulation for the situs of a debt at Rule 112, which states that ‘choses in action generally are situate in the country where they are properly recoverable or can be enforced’.1 Lord Bingham observed2 that an order attaching a foreign debt may be made if it appears by the law applicable in that situs that the English third party debt order would be recognised as discharging the third party liability to the judgment debtor, though this distinction was likely to be ‘of little or no practical importance’. Lord Hoffmann recognised3 that different considerations may apply in cases where the ‘foreign’ debt either is not payable in a foreign country or is not governed by foreign law, but said that he found it hard to think of a principle which might override the

Debt owed by a third party  175

strong reasons of principle for not making a third party debt order in respect of a foreign debt.4 1 2 3 4

[2004] 1 AC 260 at [72]-[73]. [2004] 1 AC 260 at [26]. [2004] 1 AC 260 at [32]. [2004] 1 AC 260 at [59].

3.86  The Supreme Court had a further opportunity to consider the situs of a debt in Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq1 where the focus was on the application of the Court of Appeal’s decision in Power Curber International Ltd v National Bank of Kuwait SAK2 (which held that the situs of a debt represented by a letter of credit was to be found in the country of the place of payment (against documents) under the letter of credit). Lords Clarke and Neuberger preferred the analysis in the dissenting judgment in Power Curber that ‘The more difficult issue for me has been that relating to the lex situs of the debt. A debt is generally to be looked upon as situate in the country where it is properly recoverable or can be enforced.’ The long standing decision in Power Curber was therefore overruled. 1 [2017] UKSC 64. 2 [1981] 1 WLR 1233.

3.87 In Hardy Exploration & Production (India) Inc v Government of India1 Peter MacDonald Eggers QC, sitting as a Deputy Judge of the High Court, helpfully considered a number of authorities when identifying the situs of a debt and noted that the authorities pointed to either the residence of the debtor or the place where the debt is recoverable or enforceable, as the key to deciphering the situs of the debt2. It was noted that amongst the variety of choses of action: ‘…different rules for determining situs have been developed, depending on the nature of that chose in action. For example, the situs of a chose of action represented by a negotiable instrument is determined by the physical location of that instrument (Kwok Chi Leung Karl v Commissioner of Estate Duty [1988] 1 WLR 1035, 1040-1041) and the situs of a chose of action represented by a registered security or share is determined by the location of the register.’3 1 2 3

[2018] EWHC 1916 (Comm). [2018] EWHC 1916 (Comm) at [76]. [2018] EWHC 1916 (Comm) at [81].

3.88  Peter MacDonald Eggers QC went on to set out the following principles when considering jurisdiction and third party debt orders1: (1) The court may make a third party debt order only where the third party debtor is present within the jurisdiction and: (a) the debt is situated in the jurisdiction; or (b) the debt is situated in another jurisdiction, provided that it appears that by the law applicable in that foreign situs the English Order would be recognised as discharging the liability of the third party to the judgment debtor. (2) The exercise of the court’s jurisdiction in respect of a debt is an exercise of sovereign authority and it is a generally recognised principle of international law

176  Third party debt orders

(3)

(4)

(5)

(6)

(7)

that the courts of one state shall ‘not trespass upon the authority of another, by attempting to seize assets situated within the jurisdiction of the foreign state …’. The situs of the debt is necessarily linked to the law governing debts as recognised by generally accepted principles of private international law. The application of the law governing the debt determines whether or not the relevant debt has been discharged, whether by a third party debt order or otherwise, not only for the purposes of that legal system but also other legal systems, thus ensuring that the relevant debtor (including a third party debtor) will not be compelled to pay the same debt more than once. The principle determining the situs of the debt or other chose in action is ‘that debts or choses in action are generally to be looked upon as situate in the country where they are properly recoverable or can be enforced’. The general rule or presumption is that the debt or chose in action is properly recoverable or enforceable in the place of residence, or domicile, of the debtor. It is possible to interpret the authorities as suggesting that the debtor’s residence is the determinant of the situs of a debt, on the basis that that is the place where the debt is generally recoverable or enforceable but this would be at odds with the purpose of identifying the situs as the place where the governing law will determine whether or not the debt has been discharged and where the existence or extent of the debt may be determined by the law of a jurisdiction other than the place of the debtor’s residence or domicile. That general rule or presumption is open to displacement if it can be demonstrated that the relevant debt is properly recoverable or enforceable in a jurisdiction other than the debtor’s residence or domicile, for example if suit must be brought against the debtor in that other jurisdiction, such as by a ‘special agreement’ or an ‘exclusive right of suit’ agreed between the parties in question. The approach to determining the situs of the debt will differ if the relevant debt has not yet been established by a judgment or arbitral award or has been so adjudged.

The Court went on to determine that it had no jurisdiction to make a third party debt order. The debt concerned was situated in India and it was not established that the Indian court would recognise the debt as being discharged following compliance with a third party debt order. 1

[2018] EWHC 1916 (Comm) at [82].

The courts’ approach to extraterritorial orders 3.89  It appears that the courts’ approach to third party debt orders is now in line with that adopted in relation to the extra-territorial effect of freezing injunctions and orders requiring banks to produce documents relating to foreign branches. The standard form wording of world-wide freezing injunctions was modified following Kerr LJ’s observations in Babanaft International Co SA v Bassatne1 that unqualified world-wide freezing injunctions ‘can never be justified, either before or after judgment, because they would involve an exorbitant assertion of jurisdiction of an in rem nature over third parties outside the jurisdiction of our courts’.2 Similarly, in R v Grossman3 and MacKinnon v Donaldson, Lufkin & Jenrette Securities Corp4 orders for the production of documents in relation to foreign accounts were refused on the

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basis that jurisdictional conflict may otherwise follow and that a state should not demand obedience from foreigners in respect of their conduct outside the jurisdiction. Passages from these judgments were cited by their Lordships in Société Eram, and chime with the observations of Lord Hoffmann in that judgment:5 ‘If the Courts of one country in which a bank operates exercise no restraint about using their sovereign powers of compulsion in relation to accounts maintained with that bank at branches in other countries, conflict and chaos is likely to follow.’ 1 2

3 4 5

[1990] Ch 13. [2003] UKHL 30 at [35]. See also the decision of the Court of Appeal in Bank of China v NBM LLC [2001] EWCA Civ 1993; [2002] 1 WLR 844. It is now clear that the court’s freezing injunction jurisdiction is an in personam jurisdiction founded on the principle that a person who is subject to the jurisdiction of the court can be ordered to deal with its property in a certain way. (1981) 73 Cr App R 302. [1986] 1 Ch 42. At [55].

Crown debts 3.90  Under the Crown Proceedings Act 1947 (CPA 1947), s 25(4) and CPR 66.6 the third party debt order procedure cannot be used to attach a debt payable by the Crown to a judgment debtor. This includes balances held with the National Savings Bank which, although an institution that accepts deposits1 and that would otherwise be subject to third party debt orders, is under the control of the Crown.2 Accordingly, credit balances in deposit accounts with the National Savings Bank cannot be attached using the third party debt order procedure. 1

2

‘Accepting deposits’ is a specified kind of activity which is now defined under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI  2001/544, art  5. Under art  4 of the Financial Services and Markets Act 2000 (Exemption) Order 2001, SI 2001/1201, the exemption in respect of accepting deposits for the National Savings Bank, which was in place by virtue of it being listed in the Banking Act 1987, Sch II is preserved. National Savings is a government department and an executive agency of the Chancellor of the Exchequer.

3.91  However, CPA 1947, s 27 provides a method of attaching monies payable by the Crown to a judgment debtor where the judgment creditor would be entitled to a third party debt order were the third party not the Crown.1 The High Court may make an order restraining the judgment debtor from receiving the debt due from the Crown and directing payment of that debt to the judgment creditor.2 1

2

The attachment of National Savings Bank deposits was previously precluded from this alternative procedure (CPA 1947, s 27(1)(c)). However, this was repealed by Senior Courts Act 1981, s 139(1). While under the Senior Courts Act 1981, s 139(2), the Lord Chancellor may, by statutory instrument, re-impose that restriction no such order is currently in force. This means that National Savings Bank deposits may presently be subject to the provisions of CPA, s 27 for the attachment of Crown debts. The procedure cannot be used in respect of wages payable to officers of the Crown or money subject to statutory restrictions on assignment, charging or taking in execution (CPA 1947, s 27).

3.92  The procedure for attaching Crown debts is set out in CPR 66.7.

178  Third party debt orders Procedure for attaching a Crown debt 3.93  The application must be made by way of CPR Pt 23. Notice of the application must be served: (a) on the Crown; and (b) on the judgment debtor (or its solicitor), at least seven days before the hearing.1 1 CPR 66.7.

3.94  The application must be supported by written evidence setting out the facts on which it is based, and in particular, identifying the debt from the Crown. Where the debt from the Crown is money in a National Savings Bank account, the witness must if possible identify the number of the account and the name and address of the branch where it is held.1 1

CPR 66.7(4) and (5).

3.95  The provisions of CPR  72.8, which contain rules about a judgment debtor or third party objecting to a third party debt order (see paras 3.150–3.151) apply to applications under CPR Part 66, except that the court shall not have power to order enforcement to issue against the Crown.1 1 CPR 66.7(7).

Judgment creditor takes subject to prior equities 3.96  It should also be noted that the judgment creditor can have no greater right in relation to the debt than the judgment debtor had.1 In Tapp v Jones2 an order was made for payment of the garnishee’s debts ‘as and when they became payable’. Blackburn J  stated:3 ‘I  agree that no greater right is given to the creditor than the debtor had.’ In Re General Horticultural Company, ex p Whitehouse4 a judgment debtor had earlier charged a debt owed to him by a third party. The judgment creditor obtained a garnishee order nisi without notice of two of the three charges on the debt. The Court held that the charges had priority over the garnishee order nisi, even where the judgment creditor did not have notice of the charges, since the judgment creditor ‘can only obtain what the judgment debtor could honestly give him.’5 1

Tapp v Jones (1874–75) LR 10 QB 591; In O’Driscoll Swinfen Eady LJ stated at 513: ‘The judgment creditor who has obtained a garnishee order is in no better position in these respects than the judgment debtor.’ 2 (1874–75) LR 10 QB 591. 3 (1874–75) LR 10 QB 591 at 593. 4 (1886) LR 32 Ch D 512. 5 (1886) LR 32 Ch D 512 at 516. See also Badeley v Consolidated Bank (1888) LR 34 Ch D 536, CA and Davis v Freethy (1890) 24 QBD 519, CA, which followed ex p Whitehouse. Similarly, in Sinnott v Bowden (1912) 2 Ch 414, the Court held that a mortgagee’s rights are not displaced by a garnishee order nisi. See Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq [2017] UKSC 64 at [42].

PROCEDURE 3.97  The procedural rules relating to third party debt orders are set out in Pt 72.

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Application by the judgment creditor 3.98  The first step is an application by the judgment creditor for an interim third party debt order. The rules relating to the application are set out in CPR  72.3 (as supplemented by the Practice Direction to Pt 72). Which court? 3.99  The judgment creditor’s application should be issued in the court which made the judgment (unless that court was the CCMC) or, where the proceedings have since been transferred to another court, the transferee court.1 Save for judgments obtained in the CCMC,2 there is no provision for the automatic transfer of enforcement proceedings to the defendant’s local court as applies in the case of a claim for a specified amount of money against an individual.3 However, the court has a discretion to transfer the proceedings to the court where the judgment debtor resides or carries on business (or another court) on the application by a judgment debtor who wishes to oppose the judgment creditor’s application for a third party debt order4 (see paras 3.150–3.153).5 1

CPR 72.3(1). See provision at CPR 72.3(1)(b)(ii) where the application is to enforce a judgment obtained in the County Court Money Claims Centre. In brief, if the judgment has been obtained at the County Court Money Claims Centre a third party debt order must be sought in the County Court hearing centre for the area where the judgment debtor resides or carries on business and there is automatic transfer to that court. 2 See Fn 1. 3 CPR 26.2. 4 PD 72, para 4. 5 See further Ch 1 for general commentary on the transfer of proceedings.

Without notice 3.100  The judgment creditor’s application for a third party debt order may be made without notice to the judgment debtor.1 The notes to CPR  Pt  722 state that applications for third party debt orders are treated by the court as urgent business and will be placed before the district judge or master as soon as possible on the day they are received by the court. 1 CPR 72.3(1)(a). 2 The White Book (Sweet & Maxwell, 2020), vol 1, para 72.3.2.

Prescribed form 3.101  The application should be made on form N3491 and must be verified by a statement of truth signed by the judgment creditor or the judgment creditor’s solicitor. Form N349 contains or makes provision for the insertion of all the information required by CPR 72.3 and para 1.2 of the Practice Direction, namely: (a) details of the judgment or order sought to be enforced; (b) the name and address of the judgment debtor; (c) the amount of money remaining due under the judgment or order (the form requires the applicant to state both the amount of money the judgment required

180  Third party debt orders the judgment debtor to pay (including any costs and interest) and the amount remaining due, which may include further interest accrued since the date of the judgment);2 (d) whether the judgment provided for payment by instalments and, if so, the amount of the instalments that have fallen due and remain unpaid; (e) confirmation3 that the third party is within England and Wales and owes money to, or holds money to the credit of, the judgment debtor; (f) where the third party is a bank or building society: (i) its name and the address of its head office in England and Wales; (ii) the branch at which the account is held and its address, or alternatively that this information is not known; and (iii) the account number and sort code, or alternatively that this information is not known; (g) where the third party is not a bank or building society, the name and address of the third party; (h) the names and addresses of any persons (other than the judgment debtor) who have a claim to the money owed by the third party and the information known to the judgment creditor about each such claim; (i) the source and grounds of the judgment creditor’s knowledge or belief that the third party is indebted to the judgment debtor and, where relevant, that another person has a claim to the money owed by the third party; and (j) details of any other applications for third party debt orders the judgment creditor has made in respect of the same judgment debt.4 1 Available at www.gov.uk/government/publications/form-n349-application-for-third-party-debtorder 2 In White, Son & Pill v Stennings [1911] 2 KB 418 the Court of Appeal held that garnishee proceedings could not be commenced before the time given in a judgment for payment of the money had expired. This case concerned Ord XXVI, r 1 of the County Court Rules 1903, which required the applicant to swear an affidavit in support of the application stating that the judgment ‘is still unsatisfied’. However, the same principles should apply under Pt 72. See para 1.4 for a discussion of when a judgment becomes payable. 3 The Practice Direction to Pt 72 requires that such confirmation is provided to the best of the judgment creditor’s knowledge or belief. Section 5 of Form N349 requires the judgment creditor to state the source and grounds for its knowledge or belief that the third party is indebted to the judgment debtor. In Alawiye v Mahmood (t/a Amsons) [2007] 1 WLR 79 it was held that, to prove that the third party (a bank) owes money to the judgment debtor, evidence that does no more than indicate the earlier existence of the account and of its being in credit should suffice where there are no contrary indications. 4 Note that in Merchant International v Natsionalna Aktsionerna [2014] EWCA Civ 1603 the Court of Appeal gave best practice guidance when making an application for a third party debt order on a without notice basis. If there is a possible contention the applicant is ordinarily required to draw the court’s attention to any point which the debtor may be anticipated to take (with their own response to that point).

3.102  The Practice Direction to Pt 72 states that the court will not grant speculative applications for third party debt orders and will only make third party debt orders against a bank or building society if the judgment creditor’s application notice contains evidence to substantiate its belief that the judgment debtor holds an account with that institution.1 1

PD 72, para 1.3.

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3.103  No such warning was provided under the old RSC  Ord 49. However, the wording of the current Practice Direction is a reflection of the earlier position under case law. In Koch v Mineral Ore Syndicate, London and South Western Bank Ltd, Garnishees,1 the judgment creditor obtained a garnishee order nisi attaching all monies owed by London and South Western Bank to ‘Ernest Frederick Julius Berckhardt, trading as the Mineral Ore Syndicate’. The order was served on the bank, which informed the judgment creditor’s solicitors that it held no account in either of those names. The judgment creditor’s solicitors then told the bank that Mr Berckhardt had since informed them that the account was in fact in the name of the General Import Co. and was operated upon cheques drawn by ‘Julius Berckhardt, managing director’. They asked the bank to attach the balance on that account under the order nisi. 1

(1910) 54 Sol Jo 600.

3.104  The bank refused to do so on the grounds that the order nisi did not attach the balance of an account unless the order correctly set forth the names of the account as it stood in the books of the bank, and also because it wanted to be satisfied that no other person had an interest in that account. Before the judgment creditor had the order amended (to correct the judgment debtor’s name to Julius Berckhardt and insert the General Import Co’s name), two cheques were drawn on the account which were honoured by the bank. The bank argued that unless the approach they had adopted was correct, banks would be placed in an exceedingly difficult and wholly untenable position since the onus would be on them to decide in all doubtful cases where there was a discrepancy in the names whether or not they should freeze the account pending the hearing of the application. The Court of Appeal agreed. Had the bank frozen the account it would have been exposed to an action from their customer for breach of mandate and they were right not to do so. 3.105  The Court sanctioned the bank’s approach notwithstanding the fact that it had a customer whose name was very similar to that mentioned in the order nisi and who the bank knew described his business as the Mineral Ore Syndicate. This case and the wording of the Practice Direction to Pt 72 suggest that the court will be unlikely to tolerate a ‘scatter gun’ approach in relation to third party debt orders, where a judgment creditor attempts to serve all the major clearing banks with an interim third party debt order in the hope that an account will be identified and attached. They also illustrate the importance of the applicant for a third party debt order substantiating its belief as to the identity of the judgment debtor’s bank accounts in the application. This may entail the use of a court examination of the judgment debtor under the Pt 71 procedure to obtain information as to the judgment debtor’s assets before making an application for a third party debt order where necessary.1 1

See Ch 2.

Fee 3.106  The fee for issuing an application for a third party debt order (in both the High and County Court) is £110.1 All cheques should be made payable to ‘HM Courts and Tribunals Service’. A fee is payable for each party against whom the order is requested. 1

Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, paras 7.3(a) and 8.4(a), as amended.

182  Third party debt orders Interim third party debt order 3.107  The application will be dealt with by a master (or district judge) initially without a hearing.1 Consideration will be given to the information contained in the application notice and the court has discretion2 to make an interim third party debt order. However, in practice, the court’s discretion is likely to be exercised at the hearing for further consideration of the application. 1 CPR 72.4(1). 2 CPR 72.4(2) states that ‘The judge may make an interim third party debt order.’ (Emphasis added.)

Form of the order 3.108  The standard form interim third party debt order (Form N84) contains the information prescribed by CPR 72.4, together with certain other information. The order will: (a) fix a date for a hearing on which the court will consider whether a final third party debt order should be made. The date of that hearing will be at least 28 days after the interim third party debt order is made; and (b) direct that, until that hearing, the third party must not (unless the court orders otherwise) pay to the judgment debtor (or any other person) any sum of money owed to the judgment debtor which would reduce the amount owed by the third party to the judgment debtor to less than the amount specified in the order. The interim third party debt order will specify the amount of money which the third party must retain, which will be the total of: (i) the amount now owing under the judgment (including costs and interest); and (ii) the amount of the judgment creditor’s fixed costs which the court may eventually allow in respect of the application (see paras 3.194–3.200). (c) The interim third party debt order contained in Form N84 also: (i) notifies the third party that the interim third party debt order does not authorise the third party to pay any money to the judgment creditor at this stage (see paras 3.115–3.117); (ii) contains information as to hardship orders (see paras 3.126–3.131); (iii) notifies the third party of what it must now do (see paras 3.132–3.162); and (iv) states what will happen if a final third party debt order is made (see paras 3.185–3.189). Service of the interim order 3.109  Under CPR 72.5, copies of the interim third party debt order, the application notice and any documents filed in support of the application must be served: (a) on the third party, at least 21 days before the date fixed for the hearing; and (b) on the judgment debtor, at least seven days after service on the third party and at least seven days before the date fixed for the hearing. 3.110  The interim third party debt order becomes binding on the third party when it is served on it.1 1 CPR 72.4(4).

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3.111  If the third party in good faith pays the debt to the judgment debtor before service of the interim third party debt order, the order is inoperative. Similarly, a bona fide assignment of the debt owed by the third party before service of the interim order will defeat attachment.1 The third party should therefore be served as soon as possible after the interim order is obtained and before serving on the judgment debtor, since otherwise the judgment debtor may defeat the proceedings by instructing the third party to pay the funds away.2 The wording of CPR  72.5(1)(b)(i) would appear to impose a mandatory requirement that a copy of the order ‘must’ be served on the judgment debtor not less than seven days after a copy has been served on the third party. In any event, it may be self-defeating for the judgment creditor not to serve the third party first. 1 2

Hirsch v Coates (1856) 25 LJCP 315; Wise v Birkenshaw (1860) 29 LJ Ex 240; Holt v Heatherfield [1942] 2 KB 1. Cooper v Brayne (1858) 27  LJ  Ex 446. Note that this report appears incorrectly to refer to the garnishee having paid the debt away to the ‘official assignee of the judgment creditor’ (emphasis added). Presumably this should in fact have been a reference to the judgment debtor. See also paras 3.118 and 3.119.

3.112  Service is governed by Pt 6. Particular care should be taken both as to the place and method of service chosen, depending on the nature of the person to be served and the date on which service will be deemed to have been effected, to ensure that the requisite time periods are allowed in accordance with CPR 72.5. 3.113  Banks and building societies are invariably incorporated. CPR  6.3(2) together with the Companies Act 2006, s 1139 provide the methods for service on a company. The notes to Pt 721 recommend that banks and building societies should be formally served at their registered office2 with a copy of the order and other documents also being sent to any branch where it is known or suspected that the judgment debtor has an account. 1 2

The White Book (Sweet & Maxwell, 2020), vol 1, para 72.5.2. An overseas company will not have a registered office in the UK but is required to deliver to the registrar of companies the name and address of person(s) resident in the UK and authorised to accept service on the company’s behalf. Such address should be used for service on an overseas company, in addition to a copy of the order being sent to the relevant branch. See also Teekay Tankers Limited v STX Offshore & Shipping Co [2014] EWHC 3612 (Comm) where the company has a ‘place of business’ in the UK.

Certificate of service 3.114  CPR 6.4 makes provision for the court to serve the interim order. However, the judgment creditor may serve the order itself provided it notifies the court that it wishes to do so. The judgment creditor is likely to wish to take advantage of this provision so that it can retain control over the time and method in which service is effected. Where it does so, it must either file a certificate of service at court at least two days before the hearing or produce a certificate of service at the hearing.1 1 CPR 72.5(2).

184  Third party debt orders Effect of service of the interim third party debt order 3.115  The effect of service of the interim third party debt order on the third party is to attach the debt owed by the third party to the judgment debtor to answer the judgment creditor’s demand.1 The order does not create any security for the debt2 nor operate as a transfer of the debt, but creates an equitable charge on it.3 It binds the property of the judgment debtor (namely the debt owed by the third party) in the hands of the third party. The property of the third party is in no way involved.4 However, the third party cannot pay the debt away without risk of having to pay it over again to the judgment creditor.5 In the case of bank and building society accounts, service of the interim third party debt order operates to freeze the account(s).6 A bank served with an interim order may dishonour cheques drawn upon it by the judgment debtor.7 1 2 3

4 5 6

7

Rogers v Whiteley [1892] AC 118 at 123. Chatterton v Watney (1881) 17 Ch D 259. Re Combined Weighing and Advertising Machine Company (1889) 43 Ch D  99; Galbraith v Grimshaw and Baxter [1910] 1 KB 339, affirmed [1910] AC 508; Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30, at [87]. However, note that such charge will rank subsequent to prior equitable charges on the debt – see ex p Whitehouse and para 3.96. Société Eram Shipping Co Ltd v Cie Internationale de Navigation [2003] UKHL 30 at [28]. Galbraith v Grimshaw [1910] AC 508. Choice Investments Ltd v Jeromnimon [1981]  QB  149. Note that the obligation extends to other accounts held by the judgment debtor at the the bank or building society even where the account number has not been identified in the application. Rogers v Whiteley [1892] AC 118.

3.116 In Société Eram,1 the House of Lords examined the nature of garnishee or third party debt proceedings in detail and both Lord Bingham and Lord Hoffmann recited key passages from the authorities on the effect of a garnishee order nisi (now interim third party debt orders) in their judgments. Lord Bingham then neatly summarised the position:2 ‘A garnishee or third party debt order is a proprietary remedy which operates by way of attachment against the property of the judgment debtor. The property of the judgment debtor so attached is the chose in action represented by the debt of the third party or garnishee to the judgment debtor. On the making of the interim or nisi order that chose in action is (as it has been variously put) bound, frozen attached or charged in the hands of the third party or garnishee. Subject to any monetary limit which may be specified in the order, the third party is not entitled to deal with that chose in action by making payment to the judgment debtor or any other party at his request.’ 3 1 [2003] UKHL 30. 2 [2003] UKHL 30 at 24. 3 For a discussion of how the operation of third party debt orders may differ had the jurisdiction been developed as an ‘in personam’ rather than an ‘in rem’ jurisdiction, see Briggs Owing, owning and the garnishing of foreign debts [2003] LMCLQ 418. Briggs hypothesises that the development of an in personam jurisdiction whereby the judgment debtor is ordered to direct its civil debtor to make payment to the judgment creditor might have been preferable to the in rem operation of third party debt orders. However, such a perspective overlooks the fact that enforcement procedures are necessary precisely because a judgment debtor has failed to comply with an order of court namely that directing it to pay the judgment debt. A judgment creditor may well prefer the option of an order directed to a compliant third party than a further order against the judgment debtor, even where backed up by the coercive sanctions of the court.

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3.117  Lord Bingham’s summary was expressly stated to apply to both garnishee and third party debt orders. However, it is notable that Pt 72, unlike its predecessor, RSC  Ord 49, contains no reference to attachment or the proprietary effect of the interim order, but simply directs that the third party must not reduce its liability to the judgment debtor to less than the amount specified in the order. Lord Millett sought to address this in his judgment:1 ‘I wish to add one thing more. RSC, Order 49 has now been replaced by Part 72 of the Civil Procedure Rules, which is cast in more modern language. It is common ground that, as the editorial introduction states, the basic purpose of the rule remains unchanged. Unfortunately all reference to attachment has been dropped, and there is no longer any indication that the order has proprietary consequences. The words which formerly created an equitable charge at the interim stage have been replaced by a power to grant an injunction, which is normally a personal remedy. The straightforward language of Part 72 is deceptive. Its true nature cannot easily be understood without a knowledge of its history and antecedents. I do not, with respect, regard this as an altogether satisfactory state of affairs.’ 1

[2003] UKHL 30 at [112].

Debt paid by cheque before service of the interim order 3.118  As has been noted in para 3.111, where a third party has paid the debt to the judgment debtor in good faith before service of the interim order, there is no attachable debt. However, where the third party has paid the judgment debtor by cheque and is served with the interim order before the cheque is presented, the situation becomes a little more complicated. If the third party stops payment of the cheque, there will be an attachable debt on which the order can operate. This is what happened in Cohen v Hale,1 where the Court found that on the third party stopping the cheque it was ‘as if it had never been given’2 so that the debt could be attached under a garnishee order. 1 (1877–78) LR 3 QBD 371. 2 (1877–78) LR 3 QBD at 373.

3.119  However, the third party may have good reason for not wishing to stop the cheque given to the judgment debtor. Where the cheque has subsequently passed into the hands of a bona fide holder for value, stopping the cheque may render the third party liable to an action by the holder. The courts have held that there is no obligation on the drawer of a cheque to stop the cheque for the benefit of another person.1 The giving of the cheque has the effect of payment of the debt so that the recipient no longer has the right to sue for the debt. This right is only revived in the event that the cheque is dishonoured. Therefore, if the third party chooses not to stop the cheque, there will be no attachable debt.2 1 2

Re Palmer, ex p Richdale (1881–82) LR 19 Ch D 409, which considered this question in the context of bankruptcy proceedings. Elwell v Jackson (1885) 1 TLR 454.

186  Third party debt orders Revocation of the account holder’s instructions 3.120  Joachimson is authority for the proposition that service of the interim third party debt order operates as a demand for repayment of a customer’s account (see para 3.42). In Rekstin v Severo Sibirsko Gosudarstvennoe Akcionernoe Obschestvo Komseverputj and the Bank for Russian Trade Ltd1 the judgment debtors instructed their bank to close their account and transfer the funds to another entity, to whom they owed nothing. The bank made the relevant entries in its books for the purposes of closing the account on the same day as it received the instruction. Shortly afterwards that same day, and before notice had been given to the proposed transferees and the transfer accepted by them, the bank was served with a garnishee order nisi. 1

[1933] 1 KB 47.

3.121  The Court of Appeal held that the mere making of book entries to give effect to the account transfer without payment to the transferee meant that the judgment debtor’s instruction to close the account was still revocable at the time the garnishee order nisi was served and that the order operated as a revocation of that instruction. In his judgment, Lord Hanworth MR considered the observations of the House of Lords in Rogers v Whiteley1 and said:2 ‘That is a direct authority that the garnishee order nisi attaches the funds in the hand of the banker and acts as a revocation of any direction given by the judgment debtor in regard to the disposition of the funds.’ He concluded:3 ‘It appears to me that the House of Lords have definitely held that a garnishee order nisi revokes any order to transfer which has not been fully carried out.’ 1 2 3

(1889) 23 QBD 236. [1933] 1 KB 47 at 67. [1933] 1 KB 47 at 67.

No obligation to pay under the interim order 3.122  As Lord Denning MR noted in Choice Investments Ltd v Jeromnimon,1 the: ‘“attachment” is not an order to pay. It only freezes the sum in the hands of the bank until the order is made absolute or is discharged. It is only when the order is made absolute that the bank is liable to pay.’ Thus, the third party must not pay the judgment creditor on service of the interim order. Form N84 specifically draws this to the attention of the third party. The obligation to pay to the judgment creditor only arises once the final third party debt order has been made (see paras 3.185–3.189). 1

[1981] QB 149 at 155. See also Re Webster [1907] 1 KB 623.

3.123  The need for the third party to refrain from making payment to the judgment creditor prior to the final order is illustrated by Crantrave Ltd v Lloyds Bank plc.1 In that case the garnishee bank paid funds held by the judgment debtor with the bank to the judgment creditor following service of the garnishee order nisi. The garnishee

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order was not made absolute and the proceedings founded on it were stayed. The judgment debtor was subsequently wound up and the liquidator claimed repayment of the sum the bank had paid over to the judgment creditor. The Court of Appeal resoundingly rejected2 the bank’s argument that it genuinely believed that it was entitled to act as it did and that this should be a defence to the claim. The Court found that the bank had no authority or purported authority from its customer to make the payment and ‘there was no obligation imposed on them by due process of law to make the payment, since the garnishee order had not been made absolute.’ Accordingly, the bank had no defence to the liquidator’s claim for repayment of the money.3 1 [2000] QB 917. 2 [2000] QB 917 at 924, which states: ‘It is a startling proposition that bankers can pay sums to a third party out of a customer’s account because they believe the customer to be indebted to that third party. I see no difference in principle between a judgment debt and other perceived debts. As against a customer, a contrary principle would place the bank in a position to act as debt collector for creditors of the customer.’ 3 [2000] QB 917 at 925.

3.124  Similarly, in the earlier cases of Turner v Jones1 and Re Webster, ex p Official Receiver,2 garnishees of judgment debtors who paid sums over to the judgment creditors before the garnishee order was made absolute were found to have no answer to a claim for repayment of the debt when the judgment debtors subsequently became bankrupt. In the former case, Bramwell B stated: ‘I own the inclination of my own opinion is, that the garnishee is not protected unless he gets a Judge’s order directing payment as there mentioned.’ 1 2

(1857) 1 H & N 878. [1907] 1 KB 623.

3.125  The clear message is that a third party who pays sums over to the judgment creditor (or anyone else) prior to the court making a final third party debt order does so at its peril.

Debtors in hardship 3.126  The provisions for individual judgment debtors in hardship were a new introduction under Pt 72. As had been noted, service of an interim third party debt order on a bank or building society will freeze the judgment debtor’s account(s) and there must be at least 28 days after the interim order is made before the hearing at which the court will consider whether to make the order final.1 Freezing the judgment debtor’s bank account may leave her unable to pay her mortgage or meet ordinary living expenses. CPR  72.7 allows a judgment debtor who is an individual and is suffering hardship in meeting ordinary living expenses as a result of her bank or building society account(s) being frozen to apply to the court for an order permitting the bank or building society to make one or more specified payments out of the account. An order for such a payment is called a hardship payment order and will be made based on Form N37. 1 CPR 72.4(5).

188  Third party debt orders 3.127  The judgment debtor’s application for a hardship payment order should be made by application notice under Pt  23. The rules as to which court should hear the hardship order application are set out in CPR  72.7 and PD  72, paras 5.1–5.3. The judgment debtor does not have to make the application to the court in which the third party debt order proceedings are taking place, and where the application is made to a different court the application will not be transferred to that court. In High Court proceedings the application may be made at the Royal Courts of Justice or at any district registry,1 but the judgment debtor may only apply to one court for the order. 1

CPR  72.7(2). In County Court proceedings the application may be made to any County Court hearing centre.

3.128  Where the application for a hardship payment order is made in a different court to the court dealing with the third party debt order proceedings, the court dealing with the third party debt order will send copies of the original application notice (Form N349) and the interim third party debt order to the court dealing with the application for a hardship payment order. However, where both the application for a third party debt order and the application for a hardship payment order are proceeding in the same court, the notes to Pt 721 state that it is generally preferable to advance the hearing of the application to make the final third party debt order so that it is heard at the same time as the judgment debtor’s application for a hardship payment order. This will save time and costs and will enable all the issues to be resolved at one hearing. The judgment creditor should ask the court to do this if the court has not already done so of its own initiative. 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 72.7.5.

3.129  The judgment debtor should file detailed evidence in support of the application for a hardship payment order explaining why the payment is needed and the application notice must be verified by a statement of truth. Paragraph 5.6 of the Practice Direction to Pt 72 states that the evidence filed in support of the application should include documentary evidence such as bank statements, wage slips and mortgage statements to prove the debtor’s financial position and the need for the payment. 3.130  The application notice does not need to be served on the third party but must be served on the judgment creditor at least two days before the hearing unless the court orders otherwise.1 In cases of exceptional urgency, the court may deal with the application without notice to the judgment creditor.2 If the court decides to deal with the application without it being served on the judgment creditor, where possible it will normally direct that the judgment creditor be informed of the application and give it the opportunity to make representations by telephone, fax or other appropriate means. 3 1 2 3

CPR 72.7(5). PD 72 para 5.4. PD  72, para  5.4 but in the practical experience of the authors these applications are, outside of London, usually dealt with as box work by the district judge. PD 72, para 5.5.

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3.131  The court has a discretion to make the order and may permit the third party to make one or more payments out of the account. The court may also specify to whom the payments are to be made, and, for example, may therefore specify that the bank make payment direct to the judgment debtor’s mortgagee. Obligations of a third party served with an interim third party debt order 3.132  The obligations of the third party served with an interim third party debt order are set out in CPR 72.6 and in Form N84, the standard form interim third party debt order. The exact nature of those obligations will depend on the nature of the third party. In summary, they consist of: (a) the obligation not to reduce the amount owed to the judgment debtor to less than the amount specified in the order; (b) in the case of banks and building societies, the obligation to search for accounts; and (c) the obligation to disclose certain information to the court and the judgment creditor. Banks and building societies 3.133  The obligations on a third party bank or building society are set out in CPR 72.6(1)–(3). Search for accounts 3.134  A  bank or building society served with an interim third party debt order ‘must carry out a search to identify all accounts held with it by the judgment debtor.’1 The wording of Form N84 and para 3.1(2) of the Practice Direction make it clear that the bank is only required to search for (or disclose information relating to – see paras 3.137–3.143) accounts held solely by the judgment debtor. The bank is not required to search for accounts held in the joint names of a judgment debtor and another person.2 1 CPR 72.6(1). 2 Unless that other person is a joint judgment debtor – see para 3.1(1) of the Practice Direction. See also paras 3.48–3.57.

Disclosure of accounts held with affiliated entities? 3.135  Given that the rules require the bank or building society to search for accounts held with ‘it’, it seems that the search should be confined to accounts held by the judgment debtor with the legal entity named as the third party in the interim order and on whom the order has been served.1 Were the bank to disclose information relating to accounts held with affiliated entities, for example, the affiliated entity with whom the account is held may face a claim from the account holder for breach of the contractual duty of confidentiality owed by a bank to its customer.2

190  Third party debt orders 1

2

Where there is any ambiguity in this regard, e.g. because the bank has been incorrectly named in the order, this should be addressed in the subsequent disclosure of information made by the bank – see para 3.142. Such entity would not have a defence of falling within one of the exceptions to the duty of confidentiality owed by a bank to its customers set out in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461, such as disclosure under compulsion of the law, since the order does not concern this entity.

Disclosure of accounts held with foreign branches or subsidiaries? 3.136  Similarly, while there is no express limitation in CPR 72.6 or Form N84 that the bank’s search for accounts should be confined to accounts held with that entity that are within the jurisdiction, the dicta of the House of Lords in Société Eram and the Court’s ruling that the third party debt order procedure cannot be used to attach foreign debts1 would suggest this is the better view. Given that following its search for accounts the bank must disclose each account identified to the court and the judgment creditor, there would appear to be further support for this interpretation of the rule in the Court of Appeal’s ruling in R v Grossman.2 In that case the Court held that an application under the Bankers’ Book Evidence Act 1879 addressed to the English branch of a bank for the inspection of documents held with the Isle of Man branch should not be allowed. The Court found that the fact that the Manx branch was subject to the laws and regulations of the Isle of Man meant that for these purposes the Manx branch should be treated as a separate legal entity from the head office in London.3 Similarly, if a bank were to disclose information relating to foreign accounts held with it by the judgment debtor pursuant to an English interim third party debt order, this may place the bank in breach of the local law governing the account. The fact that the CPR provides a specific procedure for a judgment creditor to obtain information from the judgment debtor as to its assets (including overseas assets),4 in Pt 71 arguably provides an additional reason for interpreting the requirement in this way. 1 2 3 4

See paras 3.72–3.88. (1981) 73 Cr App Rep 302. (1981) 73 Cr App Rep 302 at 308. See paras 2.1–2.206.

Information to be disclosed 3.137  Within seven days of being served with the interim order in respect of each account identified, the bank or building society must disclose to the court and the judgment creditor:1 (a) the account number; and (b) whether the account is in credit and, if so: (i) whether the account balance is sufficient to cover the amount in the interim order; (ii) if it is not sufficient, the amount of the balance at the date the bank was served with the order; and (iii) whether the bank asserts any right to the money in the account, whether pursuant to a right of set off or otherwise, and the grounds for that assertion. 1 CPR 72.6(2).

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3.138  Alternatively, if the judgment debtor does not hold an account with the bank or building society, or the bank or building society is unable to comply with the order for any other reason, it must inform the court and the judgment creditor of that fact within seven days of being served with the interim order.1 1 CPR 72.6(3).

3.139  As regards the obligations of third party banks and building societies, the wording of the standard form interim third party debt order, Form N84, states: ‘If the third party is a bank or building society, it must search for all accounts held solely by the judgment debtor and, within 7 days of receiving this order, give details of them to the court and the judgment creditor, stating whether it holds sufficient to cover the total shown and, if not, the amounts in them.’ 3.140  This wording does not make clear the obligation under CPR 72.6(3) for the third party bank or building society to inform the court and the judgment creditor where it does not hold an account for the judgment debtor or cannot comply with the order for some other reason. Third party banks and building societies should be made aware that they are also required to provide this information to the court and the judgment creditor where relevant. 3.141  The example given in CPR 72.6(3) of where a bank or building society is unable to comply with the order for ‘any other reason’ is where the bank has more than one account holder whose details match the information provided in the interim order and it cannot identify which one the order applies to. Alternatively, it may be that the order has been served on the wrong legal entity in a group of affiliated banking entities. The judgment creditor may apply to the court to vary the order or make a fresh application for a third party debt order once the correct information has been obtained. 3.142  It may be most convenient for the bank or building society to provide the information required by CPR  72.6 to the court and judgment creditor in writing (either by letter or fax), though there is no requirement to do so.1 If a letter is sent, it would be advisable for the third party bank or building society on whom the order has been served to state clearly the name of the legal entity on whom the interim order was served and on whose behalf the letter is written. This will avoid any ambiguity where the order has been served on the wrong legal entity by the judgment creditor. 1

By contrast, a third party other than a bank or building society is required to provide written notification if it claims not to owe the debt or to owe less than the amount specified in the interim order (CPR 72.6(4)).

3.143  The bank or building society is allowed to deduct a sum from the balance in the account for its administrative expenses in complying with the order (see para 3.199).

192  Third party debt orders Other third parties 3.144  Where the third party is not a bank or building society it must notify the judgment creditor and the court in writing within seven days of the order if it claims: (a) not to owe any money to the judgment debtor; or (b) to owe less than the amount specified in the order.1 1 CPR 72.6(4).

Where the judgment creditor disputes the third party’s notice 3.145  Where the third party has given notice under CPR 72.6 that it does not owe any money to the judgment debtor, or that the amount owed is less than the amount specified in the interim order, and the judgment creditor wishes to dispute this, the judgment creditor must file and serve written evidence setting out the grounds on which it disputes the third party’s case.1 Such evidence is likely to take the form of a witness statement from the judgment creditor exhibiting documentary evidence in support. This evidence must be filed and served on each party as soon as possible and in any event at least three days before the hearing.2 1 CPR 72.8(3). 2 CPR 72.8(4).

If the third party does not comply with the interim order 3.146  The notes to CPR 72.61 observe that: ‘It is to be hoped that the third party will comply with his obligations under this new Rule … but the inevitable question arises what if he does not?’ 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 72.6.1.

3.147  A third party other than a bank or building society is only required to notify the court and the judgment creditor where it claims not to owe any money to the judgment debtor or to owe less than the amount specified in the order. Thus, where no such notification is received, the court will assume that the debt is not disputed and make a final third party debt order. It will then be for the third party to seek to set aside or appeal the order if no debt is owed. If it does not have a good explanation for why it did not make timely notification of this fact, it may face a costs sanction. 3.148  A bank or building society is required to inform the court of the position in relation to accounts held with it by the judgment debtor even where none exist. The discussion in the notes to The White Book1 observes that despite short time limits banks or building societies do comply with the rule. Whether the court would proceed to make a final third party debt order in the absence of such information would likely depend on the particular facts of the case and evidence before the court. The notes to The White Book have previously observed that, if a bank does not comply or alternatively arrange to be represented to make submissions at the hearing, the court could telephone the bank to ascertain the position in accordance with the court’s

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duty to actively manage cases under CPR 1.4. However, the obligation on the third party bank or building society to search for and disclose the position in relation to the judgment debtor’s accounts arises pursuant to an order of the court and it follows that an institution that fails to provide the requisite notification or, alternatively, fails to attend the hearing to make a final third party debt order to make representations may face liability for contempt of court.2 1 2

The White Book (Sweet & Maxwell, 2020), vol 1, para 72.6.1. In light of this, the fact that the interim third party debt order in Form N84 does not make clear the obligation on banks and building societies to inform the court and judgment creditor, even where they hold no account for the judgment debtor or cannot comply with the order for some other reason, is unsatisfactory.

Additional steps by the third party 3.149  Where the third party objects to the court making a final third party debt order or knows or believes that someone other than the judgment debtor has an interest in the money specified in the interim order, it must take certain further steps. Objections to a final third party debt order 3.150  As will be seen,1 the final third party debt order will direct the third party to pay the debt owed to the judgment creditor rather than to the judgment debtor and the third party will be discharged from its obligations to the judgment debtor to the same extent. As a result, the third party is not prejudiced by the order and in most cases the third party will have no objection to the order being made. 1

See paras 3.184–3.191

3.151  However, if the judgment debtor or third party objects to the court making a final third party debt order, the burden is on the judgment debtor or third party to show cause why the interim order should not be made final.1 It must file and serve written evidence stating the grounds for its objections in accordance with CPR 72.8.2 Such evidence must be filed and served on each party as soon as possible and in any event at least three days before the hearing.3 In such circumstances the judgment debtor or third party will inevitably also wish to attend the hearing to make representations as to why the final third party debt order should not be made. In Newman v Rook4 it was held that a garnishee must set up a prima facie case before the court would order trial of an issue (see paras 3.165–3.166). 1

Roberts Petroleum Ltd v Bernard Kenny Ltd [1982] 1 WLR 301, a case concerning charging orders where the same principles apply. This principle was stated in the Court of Appeal judgment and was not affected by the reversal of this decision by the House of Lords. 2 CPR 72.8(1). 3 CPR 72.8(4). 4 (1858) 4 CBNS 434.

3.152 In Vinall v de Pass1 the third party filed an affidavit denying that he owed the debt specified by the judgment creditor to the judgment debtor but declined, repeatedly, to deny that he owed any debt to the judgment debtor. The House of Lords

194  Third party debt orders held that garnishee order attaches all debts owed by the third party to the judgment debtor2 and that given the third party’s refusal to give any answer other than a denial that a particular debt was owed, the garnishee order absolute was properly made against him. 1 [1892] AC 90. 2 This would be subject to any limit specified in the order.

3.153  The circumstances in which the court may decline to make a final third party debt order are considered in paras 3.167–3.183. Persons other than the judgment debtor with a claim to the debt 3.154  If the judgment debtor or third party knows or believes that a person other than the judgment debtor has a claim to the money specified in the interim order, it must file and serve written evidence stating its knowledge of that matter.1 Such evidence must be filed and served on each party as soon as possible and in any event at least three days before the hearing.2 1 CPR 72.8(2). 2 CPR 72.8(4).

3.155  If the court is notified that some person other than the judgment debtor may have a claim to the money specified in the interim order, it will serve notice of the application and hearing on that person.1 That person may then wish to attend the hearing to provide evidence of its claim to the money. 1 CPR 72.8(5).

3.156  If the third party knows that some person other than the judgment debtor has a claim to the money and does not disclose that fact to the court, it may be liable to that person. In Wood v Dunn1 the garnishee had been served with a garnishee order nisi and at that time had no reason to object to the order being made absolute nor knew of any other interest in the debt. The garnishee order absolute was made and served on the garnishee, following which he made payment to the judgment creditor in compliance with the order. However, during the interval between the interim and the final order, unbeknown to the garnishee, the judgment debtor was adjudged bankrupt. The Court held that the garnishee was protected from any claim for the debt by the trustees in bankruptcy by the fact that he had paid in compliance with the garnishee order absolute. The Court noted that it would be a hardship for the garnishee to have to apply to have the order set aside in these circumstances and that the relevant legislative provisions,2 stated that payment in accordance with a garnishee order absolute shall be a valid discharge of the debt to the judgment debtor, even if the order is subsequently set aside or the judgment reversed. However, the Court noted (obiter) that:3 ‘if the present defendants [the garnishee] had had notice of the trust deed [the bankruptcy] at the time, or after the ex parte order of attachment was served upon them, and before the time for shewing cause, they would have had good cause to shew, and the order for payment would not have been made; and we think that there can be no doubt that, in that case, the proper course to take

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would be to shew cause, and if the garnishee were to pay instead of shewing cause, that the assignees could recover against him.’ 1 2 3

(1866–67) LR 2 QB 73 at 82. The modern counterparts of which are contained in CPR 72.9(3). See further para 3.174. (1866–67) LR 2 QB 73 at 82.

3.157  This is exactly what happened in The Leader.1 In that case, the garnishee failed to inform the Court of a lien which the judgment debtor’s solicitors had over a sum owed by the garnishee (of which the garnishee had knowledge) before the garnishee order absolute was made and the sums were paid over to the judgment creditors.2 The Court held that the garnishee ought to have apprised the judge of the existence of the lien before the final orders were made and he was therefore liable to the judgment debtor’s solicitors for that sum. 1 (1868) LR 2 A&E 314. 2 The facts in this case are complicated since the debt owed by the garnishee was itself a judgment debt owed in consequence of proceedings which had been brought against the garnishee (the defendant) by the plaintiff. After the plaintiff recovered judgment against the defendant, judgment creditors of the plaintiff sought to attach the judgment debt owed by the garnishee. These were the garnishee proceedings to which this case relates.

Right of set-off or counterclaim by the third party 3.158  If the third party is a bank or building society, it should have informed the court where it asserts any right to the money in the account, whether pursuant to a right of set off or otherwise, and the grounds for that assertion.1 The third party should be allowed to avail itself of any right of set-off against the judgment debtor which existed when the interim order was made. In Tapp v Jones2 the Court held:3 ‘I  agree that no greater right is given to the [judgment] creditor than the [judgment] debtor had. It is obviously just that if a cross debt were due to the garnishee at the date of the attachment there should be a right of set-off in his favour, and I should strive hard to give effect to that if I could, though there would be difficulties in the way.’ 1 2 3

See para 3.137. (1875) LR 10 QB 591. See para 3.13. See also Fraser v Oystertec Plc (Third Party Debt Order) [2004] EWHC 1582 (Ch). (1875) LR 10 QB 591 at 593.

3.159  Where the third party has a counterclaim which could be set off against a claim by the judgment debtor for repayment of the debt, the third party should be able to avail itself of this counterclaim so that the amount the third party is ordered by the court to pay over to the judgment creditor is reduced accordingly. The third party should set out the nature and extent of its counterclaim in a witness statement filed and served in accordance with CPR 72.8 (see para 3.151). 3.160 In Hale v Victoria Plumbing Co Ltd1 the judgment creditor sought to attach sums owed by the garnishee, a building contractor, to the judgment debtor, a plumbing contractor. The garnishee filed an affidavit stating that it was not indebted to the judgment debtor and had claims against the judgment debtor for breach of contract

196  Third party debt orders in excess of the sum claimed by the judgment creditor. The Court of Appeal held that since RSC Ord 18, r 17 provided that claims arising out of the same transaction between two parties can be set off against each other, then, notwithstanding the fact that the garnishee had not brought proceedings against the judgment debtor, the garnishee order should be set aside. The same principles should apply under the CPR.2 1 2

[1966] 2 QB 746. The modern counterpart of RSC Ord 18, r 17 is contained in CPR 16.6, which provides that where a defendant contends it is entitled to money from the claimant and relies on this as a defence to the claim, that contention may be included in the defence and set off against the claim, whether or not it is added as a counterclaim.

3.161  Hale distinguished the earlier Court of Appeal authority of Stumore v Campbell & Co,1 where the Court held that a solicitor could not set off a claim for costs against monies it held for a client for a special purpose which had failed, since when the purpose failed a trust arose for repayment of that money to the client. Danckwerts LJ stated in his judgment in Hale that the decision in Stumore ‘may be perfectly correct, and I say nothing against the decision whatever, but it seems to me to be utterly different from the present case’.2 1 2

[1892] 1 QB 314. [1966] 2 QB 746 at 751.

3.162  While the court may take into account claims which the third party has against the judgment debtor in considering whether to make a final third party debt order, it will not decide issues between the third party and the judgment creditor in third party debt order proceedings. In Sampson v The Seaton and Beer Railway Company1 a garnishee refused to pay over to the judgment creditor the full amount of a debt owed to the judgment debtor on the grounds that it claimed the right to retain an amount owed to it by the judgment creditor. Lush J held:2 ‘The machinery provided [under garnishee proceedings] for determining questions of disputed liability has reference solely to cases where the garnishee disputes his liability to the judgment debtor. And although we have no doubt that the state of accounts between the garnishee and the judgment debtor may and ought to be gone into, so that the garnishee may not be in a worse position than if he had been sued for his debt by the judgment debtor, the case is different as between him and the judgment creditor. There is no place for the discussion of cross claims between the garnishee and the judgment creditor. If it had been intended to let in such claims, some mode of adjusting them in case of dispute would have been also provided. But there is none.’ However, it is questionable whether this remains good law in light of the provisions of CPR 72.8(6)(c), which allow the court to decide any issues between ‘any of the parties and any other person who has a claim to the money specified in the interim order’ at the hearing for further consideration of the application.3 The overriding objective and the efficient administration of justice would suggest that such consideration could be best dealt with at such hearing. 1 (1874–5) LR 10 QB 28. 2 (1874–5) LR 10 QB 28 at 30. 3 See paras 3.163–3.154.

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Hearing for further consideration of the application 3.163  At least 28 days after the interim third party debt order is made there will be hearing at which the court will consider whether to make a final third party debt order. 3.164  CPR 72.8(6) provides: ‘At the hearing the court may (a) make a final third party debt order; (b) discharge the interim third party debt order and dismiss the application; (c) decide any issues in dispute between the parties, or between any of the parties and any other person who has a claim to the money specified in the interim order; or (d) direct a trial of any such issues, and if necessary give directions.’ There is therefore a range of options open to the court at the hearing. When will the court order a trial of the issues? 3.165  CPR  72.8(6)(c) makes it clear that the master (or district judge) can decide the issues raised by the parties at the hearing for further consideration of the application. The notes to CPR 72.81 observe that only exceptionally will it be necessary for the master to give directions and order a trial of any issue between the parties pursuant to CPR 72.8(6)(d). In Newman v Rook2 Willes J sitting in the Court of Common Pleas held that: ‘I should say that the mere assertion by the garnishee that he disputes the debt amounts to nothing: there is no substantial dispute until some real answer or defence is set up.’ 1 2

The White Book (Sweet & Maxwell, 2020), vol 1, para 72.8.1. (1858) 4 CB 434.

3.166 In Wise v Birkenshaw1 the Court held that where a garnishee had satisfied the master by affidavit that there was no attachable debt, there should be no trial of that issue. However, if there were any reasonable doubt as to whether a debt existed, the matter should be tried. Reasonable grounds for directing a trial to decide whether or not a debt exists will have to amount to more than an assertion of the judgment creditor’s beliefs. In Roberts v Death2 the Court held that where there are reasonable grounds for suggesting that the judgment debtor is not entitled to money owed by a third party for its own use, the court ought not to make the final order until it has enquired whether or not the judgment debtor is so entitled. In that case, the money was owed to the judgment debtor as trustee for another and the Court of Appeal held that the garnishee order absolute ought not therefore to have been made. If there are serious doubts as to the solvency of the judgment debtor, the court should not make the order until there has been an enquiry into this matter.3 1 (1860) 29 LJ Exch 240. 2 (1881–82) LR 8 QBD 319. 3 See para 3.182.

198  Third party debt orders The court’s discretion to make a final third party debt order 3.167  The use of the word ‘may’ in CPR  72.8(6) indicates that the court has a discretion to make the final third party debt order. 3.168 In Roberts Petroleum Ltd v Bernard Kenny1 the Court of Appeal set out various general principles governing the court’s discretion to make a charging order under the Charging Orders Act 1979. As Lord Brandon of Oakbrook observed, the same general principles should apply to third party debt orders: ‘(1) The question whether a charging order nisi should be made absolute is one for the discretion of the court. (2) The burden of showing cause why a charging order nisi should not be made absolute is on the judgment debtor. (3) For the purpose of the exercise of the court’s discretion there is, in general at any rate, no material difference between the making absolute of a charging order nisi on the one hand and a garnishee order nisi on the other.2 (4) In exercising its discretion the court has both the right and the duty to take into account all the circumstances of any particular case, whether such circumstances arose before or after the making of the order nisi. (5) The court should so exercise its discretion as to do equity, so far as possible, to all the various parties involved, that is to say the judgment creditor, the judgment debtor, and all other unsecured creditors.’3 1 2

3

[1982] 1 All ER 685. Similar sentiments were expressed in the earlier Court of Appeal decision in Rainbow Properties v Moorgate [1972] 2 All ER 821 where Buckley LJ at 824 expressed the view: ‘I for myself can see no difference between those considerations which are relevant to the question whether the discretion should or should not be exercised to make absolute a garnishee order and those considerations which are relevant to the question whether the court should or should not make absolute a charging order.’ [1982] 1 All ER 685 at 689.

3.169  The Court of Appeal’s decision in Roberts v Kenny was subsequently reversed in the House of Lords but the principles set out above were not effected by that reversal and remain good law.1 1

Two further principles were set out by Lord Brandon of Oakbrook at [1982] 1 All ER 685 at 689 but the House of Lords subsequently overturned these see the judgment of Lord Brightman at [1983] 2 AC 192 at 213.

3.170  The court’s direction in respect of third party debt orders was considered in Westacre Investments Inc v Yugoimport SDPR,1 The Court was considering a delay of more than six years by the judgment creditor in applying for a third party debt order. It noted the distinction between an application for a writ of execution more than six years after the date of judgment (which required the court’s permission under RSC  Ord 46 r 2(1) (now CPR  83.2(3)) and in respect of which permission will ordinarily be refused unless the judgment creditor can demonstrate exceptional circumstances that would justify the granting of permission), and an application for either a charging order or a third party debt order in the same timescale. The Court considered that authorities in respect of writs of execution in this context were not relevant to the consideration of an application for a charging order or a third party

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debt order. Any argument to the contrary ran counter to the scheme in CPR  Part 72 which expressly places on the judgment debtor the onus of making good any objection to the making of a final order. The lapse of six years since judgment bore no special significance in the context of charging orders or third party debt orders. It was simply one factor to be taken into account in the overall exercise of discretion. In the current case it was a factor to which the Court would attract very little weight – in the context of third party debt order proceedings, it was of no great significance that the judgment debtor might argue that the judgment creditor might, with the exercise of greater diligence, or had it prioritised its efforts differently, have been able to discover the existence of the third party debt sooner (particularly in circumstances where it was vigorously denied by the third party that the debt was in fact owed to the judgment debtor). The Court stated that in the absence of some compelling evidence of prejudice to the judgment debtor accruing from the delay in enforcement, the Court would regard the grant of a third party debt order as ‘virtually axiomatic’. 1

[2008] EWHC 801 (Comm).

Third party debt order would be inequitable 3.171  An order will not be made where it would be inequitable. In Kennett v Westminster Improvement Commissioners1 a number of bondholders had agreed to advance money to the commissioners on terms that all of the bondholders were to rank equally. One of the bondholders then sued the commissioners on one of the bonds and obtained judgment. He then sought to attach a debt owed to the commissioners through garnishee proceedings. The Court held that it would be inequitable to make the garnishee order absolute since the effect of so doing would be to give that bondholder a priority over the other bondholders. This would be in violation of his agreement with the other bondholders. 1

1856 25 LJ ExCh 97.

Double jeopardy 3.172  Where there is a ‘real or substantial risk’ of the third party being required to pay the debt a second time it will be inequitable to make a final third party debt order. In Deutsche Schachtbau und Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd1 the House of Lords held (Lord Templeman dissenting) that a garnishee order absolute should not be made in respect of an English debt owed by Shell to the judgment debtor, since there was a ‘real and substantial risk’2 that Shell would be required by a foreign court to pay the debt over again to the judgment debtor.3 Lord Goff also observed that:4 ‘as a general rule, commercial pressure cannot of itself be enough to render it inequitable to make an order absolute.’ 1

[1990] 1 AC  295. Arguably, this case should still be seen as the leading authority on this point notwithstanding the obiter dicta the judgment contains on whether the court has jurisdiction to garnish foreign debts. As Lord Hobhouse observed in Société Eram at 75: ‘It is unfortunate also that what Lord Goff said in Deutsche Schachtbau und Tiefbohrgesellschaft mbH v Shell International Petroleum Co Ltd [1990] 1 AC 295 should have been cited without having proper regard to what that case was about. The debt was a commercial debt with an admitted situs in England. It was properly

200  Third party debt orders

2 3

4

recoverable in England and the order made by the English court would discharge the debt. The question which arose was the exceptional one, whether there was a real and substantial risk that the garnishee, Shell, would nevertheless in a foreign country, be compelled to pay the debt again. This did not raise a question of jurisdiction of lack of subject matter but more simply the, in that case, difficult question whether it was equitable in the discretion of the court to make the garnishee order.’ [1990] 1 AC 295 at 344. The House of Lords held this view notwithstanding the fact that the foreign proceedings had been illegitimately started by the judgment debtor in breach of an arbitration agreement between the parties and that according to generally accepted rules of international law the foreign court did not have jurisdiction to make such an order. [1990] 1 AC 295 at 352.

3.173 In Soinco SACI and Eural Kft v Novokuznetsk Aluminium Plant (No 2)1 the Court of Appeal had to consider a similar scenario to that before their Lordships in Deutsche Schactbau. In this case the judgment creditors had brought proceedings to enforce a Zurich arbitration award against the judgment debtors, a Russian enterprise, relating to an aluminium smelting contract in Russia. The judgment creditors had obtained a garnishee order attaching all debts owed by the third party, a Guernsey company, to the judgment debtors. In the meantime, civil proceedings had been instituted by the Russian authorities before a Russian arbitral court seeking a declaration that the contract between the judgment creditor and judgment debtor was invalid. The third party’s debt was admitted and had been paid into a London bank account but the third party sought to appeal the garnishee order absolute on the grounds that, notwithstanding the attachment of the debt by the English court, they might be compelled to pay that debt to the judgment debtors by some order to be made by the Russian courts. 1

[1998] 2 Lloyd’s Rep 346.

3.174  Lord Justice Chadwick summarised the position:1 ‘It is common ground that the power of the Court to make a garnishee order, in circumstances in which it has jurisdiction to do so, remains discretionary. It is also common ground that the principles upon which that discretion should be exercised – at least for the purposes of the present proceedings – were considered exhaustively by the House of Lords in [Deutsche Schachtbau] … In short, the Court, in the exercise of its discretion, should not make a garnishee order in circumstances in which it would be inequitable to expose the garnishee to the risk of being compelled to pay the attached debt twice over – the risk of “double jeopardy”.’ 1

[1998] 2 Lloyd’s Rep 346 at 347–348.

3.175  Lord Justice Chadwick went on to point out that Lord Goff had been careful to stress in Deutsche Schachtbau that the third party does not have to establish certainty or even a very high risk of being compelled to pay the debt twice, but only a ‘real risk’ of being required to do so.1 1

[1998] 2 Lloyd’s Rep 346 at 354.

3.176 In Soinco, in contrast to the Deutsche Schachtbau case, the Court found that there was insufficient evidence to displace the assumption that the Russian

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courts would respect the accepted norms of international private law and refuse to recognise the arbitration award and the English garnishee order, thus the garnishee order absolute stood. It was also of significance that the third party and the judgment debtor were closely linked and the history of their trading relationship suggested there was little risk of the judgment debtor taking steps in Russia or elsewhere to force the third party to make a second payment. Insolvency of the judgment debtor 3.177  Where the insolvency of a judgment debtor is established, the court is unlikely to exercise its discretion to make the final third party debt order since to do so would effectively give the judgment creditor preference over other creditors of the judgment debtor’s estate. In Pritchard v Westminster Bank Ltd,1 Lord Denning MR, sitting in the Court of Appeal, observed:2 ‘The general principle, when there is no insolvency, is that the person who gets in first gets the fruits of his diligence … But it is different when the estate is insolvent … The court will not allow one creditor, however diligent he may be, to get an advantage over the others by getting in first with a garnishee order.’3 1 2 3

[1969] 1 WLR 547. [1969] 1 WLR 547 at 999–1000. These dicta are now effectively reflected in the Insolvency Act 1986, s 183(2)(a), under which if a creditor has notice of a meeting having been called at which a resolution for winding up is to be proposed, it will not be entitled to retain the benefit of the attachment against a liquidator unless it has completed the attachment before it had notice of that meeting.

3.178  Similarly, in Wilson (D) (Birmingham) Ltd v Metropolitan Property Development Ltd1 the Court of Appeal held:2 ‘The position is, I think, that a court in considering whether or not to exercise its discretion to make absolute a garnishee order in circumstances such as this, must bear in mind not only the position of the judgment creditor, the judgment debtor and the garnishee, but the position of the other creditors of the judgment debtor and must have regard to the fact that proceedings are on foot, and were on foot at the time the garnishee proceedings were launched, for ensuring the distribution of the available assets of the judgment debtor company among the creditors pari passu.’ 1 2

[1975] 2 All ER 814. [1975] 2 All ER  814 at 819, per Buckley LJ. See also FG  Hemisphere Associates LLC  v Congo [2005]  EWC  3103, which indicates that it may be equitable to prefer a creditor who is actively pursuing its debt over a creditor who is not.

3.179  The same principles applied when the House of Lords decided that the liquidation of the defendants was sufficient cause for the Court to exercise its discretion not to make a charging order absolute in Roberts Petroleum Ltd v Bernard Kenny Ltd.1 Both third party debt order and charging order proceedings are methods of enforcement that depend on the exercise of the court’s discretion. The same considerations apply in the exercise of that discretion in both types of proceedings.2 1 2

[1983] 2 AC 192. See, eg, the judgment of Buckley LJ in Rainbow v Moorgate Properties [1975] 2 All ER 821 at 824.

202  Third party debt orders 3.180 In Roberts, in contrast to the earlier cases of Pritchard and Wilson, a resolution to wind up the judgment debtor company on grounds of insolvency intervened between the charging order nisi and the hearing for further consideration. Their Lordships held that while each case would be a matter for individual judgment in the particular circumstances,1 the imposition of a statutory scheme for the distribution of assets among creditors was sufficient cause for the court to exercise its discretion not to make the charging order absolute. Lord Brightman, who gave the lead judgment, with which their Lordships unanimously agreed, stated that the purpose of the hearing for further consideration of the application was to enable the court to review the position inter partes.2 Before reviewing the authorities Lord Brightman observed:3 ‘If the statutory scheme for dealing with the assets of the company has been irrevocably imposed on the company, by resolution or winding up order, before the court has irrevocably determined to give the creditor the benefit of a charging order, I would have thought that the statutory scheme should prevail.’ He went on: ‘I do not see why a creditor should gain an advantage merely because he has a revocable order for security at the time when the statutory scheme comes into existence.’ 1 2 3

[1983] 2 AC 192 at 212. [1983] 2 AC 192 at 208. [1983] 2 AC 192 at 209.

3.181  By analogy, the same principle should apply if an individual is adjudged bankrupt after the interim order but before the final order. 1 1

Roberts disapproved the earlier Court of Appeal decision in Burston Finance v Godfrey [1976] 2 All ER 976, where the Court of Appeal upheld an order for a charging order absolute notwithstanding the fact that the judgment debtors had been adjudged bankrupt prior to the further hearing.

3.182 In George Lee & Sons (Builders) v Olink1 the Court of Appeal held that where there was serious doubt as to whether an estate was solvent, a garnishee order absolute should not be made until there had been an enquiry into whether the estate was solvent or insolvent. 1

[1972] 1 WLR 214.

3.183  Finally, it is also worth noting in the content of insolvency that in Lancaster Motor Company (London), Ltd v Bremith, Ltd. Barclays Bank, Ltd (Garnishees)1 the Court of Appeal held that where a liquidator of a company had been appointed, a judgment creditor of that company could not garnish a bank account held by the liquidator. In his judgment, with which Clauson and Goddard LJJ agreed, Sir Wilfrid Greene MR considered the position under the then current regime, RSC Ord 45, and stated:2 ‘Here the money held by the bank was not owing to the judgment debtors. The judgment debtors were the company and the account was in the name of the liquidator. The liquidator alone could sue the bank. His cheque alone would be honoured. There was no relationship of banker and customer or debtor and creditor between the bank and the company.’

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He continued:3 ‘The crucial matter to be observed is what is the relationship of the alleged debtor to the judgment debtor. That relationship must be one of debtor and creditor and unless it falls within that description the rule does not apply.’ 1 2 3

[1941] 1 KB 675. [1941] 1 KB 675 at 677. [1941] 1 KB 675 at 679.

Final third party debt order Form of the order 3.184  Form N85 contains the standard form final third party debt order. This will order the third party to pay a specified sum of money to the judgment creditor by a certain date. It also provides that the judgment creditor’s costs of the application are to be retained out of the money received by the judgment creditor in priority to the judgment debt (see para 3.194). Form N85 also states the effect of the order, namely: (a) to reduce the amount owed to the judgment debtor by the third party by the amount paid under the order plus any costs and expenses to which the third party is entitled; (see further paras 3.199-3.200); and (b) to reduce the amount owed by the judgment debtor to the judgment creditor by the amount paid by the third party less the judgment creditor’s costs of the application (see further para 3.194). Effect of a final third party debt order 3.185  As has been noted in para 3.122, the third party must not pay the debt to the judgment creditor until the final third party debt order has been made. 3.186  CPR 72.9(2) provides: ‘If — (a) the third party pays money to the judgment creditor in compliance with a third party debt order; or (b) the order is enforced against him, the third party shall, to the extent of the amount paid by him or realised by enforcement against him, be discharged from his debt to the judgment debtor.’ 3.187  The effect of a final third party debt order was succinctly summarised by Lord Bingham in his judgment in Société Eram:1 ‘When a final or absolute order is made the third party or garnishee is obliged (subject to any specified monetary limit) to make payment to the judgment creditor and not to the judgment debtor, but the debt of the third party to the judgment debtor is discharged pro tanto.’ 1

[2003] UKHL 30 at [24].

204  Third party debt orders 3.188  The discharge of the debt owed by the third party to the judgment debtor is an essential feature of the procedure. Its importance was highlighted by their Lordships in Société Eram and the fact that an English garnishee order would not operate to discharge a foreign debt was key to their Lordships’ reasoning in that case. As has been noted,1 Lord Bingham stated:2 ‘It is not in my opinion open to the Court to make an order in a case, such as the present, where it is clear or appears that the making of the order will not discharge the debt of the third party or garnishee to the judgment debtor according to the law which governs that debt.’ Lord Hoffmann concurred:3 ‘The discharge of the third party’s indebtedness effected by rule 72.9(2) (formerly RSC, Ord 49, r 8) is therefore an essential part of the execution.’ As did Lord Millett:4 ‘The discharge of the debt owed by the third party to the judgment debtor is not, therefore, merely a fortunate consequence of the order but a necessary and integral part of it. It is what justifies the making of the order and makes it a process of execution against the assets of the judgment debtor.’ 1 2 3 4

See para 3.78. [2003] UKHL 30 at [26]. [2003] UKHL 30 at [63]. [2003] UKHL 30 at [97].

3.189  CPR 72.9(1) provides that a final third party debt order shall be enforceable as an order to pay money. It can therefore be enforced in the same way as any other order of the court and if the third party does not pay over the sums in accordance with the order, the judgment creditor can, for example, bring enforcement proceedings against the third party to enforce payment.

Setting aside the order 3.190  A third party who pays in compliance with a final third party debt order will be discharged from the debt owed to the judgment debtor even if the third party debt order (or original judgment) is subsequently set aside. 3.191 A  third party who objects to a final third party debt order being made should file evidence stating its grounds for such objection in advance of the hearing and make representations at the hearing as necessary.1 However, the court has jurisdiction to set aside a final third party debt order2 and if the third party (or another party with an interest in the debt) was not present at the hearing or new information has come to light since the hearing, it should promptly apply for the order to be set aside. 1 2

See para 3.151. See, eg, Moore v Peachey (1892) 66 LT 198; Burrell & Sons v Read (1895) 11 TLR 36; Marshall v James [1905] 1 Ch 432; O’Brien v Killeen [1914] 2 Ir R 63.

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Appealing the order 3.192  In addition, if the third party considers that the court should not have made the order, it may appeal in accordance with the procedure set out in CPR 52.1 However, a higher court will be reluctant to interfere with the exercise of discretion2 and the final order will not be interfered with by a higher court unless wrong in principle3 or unjust due to a serious procedural or other irregularity in the proceedings in the lower court.4 1

Appeal of the decision of a master or district judge of the High Court is to be made to a High Court judge. A decision of a district judge of the County Court is appealable to a circuit judge. See further PD Pt 52, para 2A. 2 See Wise v Birkenshaw (1860) 29 LJ Exch 240. 3 See Wicks v Shanks (1893) 67  LT  109, a case concerning charging orders, where the same considerations apply. 4 CPR 52.21(3).

Building society balances 3.193  A final third party debt order will not require a payment which would reduce the amount in a judgment debtor’s account with a building society or credit union to less than £1.1 1

PD 72, para 6.

Costs 3.194  Where a judgment creditor is awarded costs on an application for a third party debt order1 it retains those costs out of the money recovered under the order.2 Such costs shall be deemed paid first out of the money recovered, in priority to the judgment debt.3 The effect of this provision is to reduce the amount of the judgment debt by the amount received after the costs of making the application have been deducted. Thus where the debt owed by the third party to the judgment debtor is less than the total of the amount awarded by the court in respect of costs plus the judgment debt, a portion of the judgment debt will remain outstanding. 1 2 3

Or an order for payment out of funds held at court in accordance with the procedure set out in CPR 72.10 – see paras 3.66–3.67. CPR 72.11. Unless the court orders otherwise: see CPR 72.11(a). CPR 72.11(b). These matters are also stated in the standard form final third party debt order contained in Form N85.

3.195  Where the court makes a final third party debt order under CPR 72.8(6)(a) it will award the judgment creditor fixed costs of the application. The interim third party debt order will have specified the amount secured by it and the amount ordered in this regard will appear in the final third party debt order. The fixed costs are the court fee (currently £110) together with the judgment creditor’s fixed costs payable under CPR 45.8. These are: (a) if the amount recovered is less than £150, one half of the amount recovered; (b) if the amount recovered is more than £150, £98.50.

206  Third party debt orders 3.196  Where the application is unopposed and a final third party debt order is made at the hearing without further consideration of any issues, the court’s award of costs is likely to be confined to these amounts. However, where the third party or judgment debtor (or some other person) objects to the final third party debt order being made, the judgment creditor may have incurred further costs in relation to the issues between the parties (for example, as a consequence of having to prepare and file written evidence disputing the third party’s case). In such circumstances the successful judgment creditor should seek an order in relation to the recovery of those additional costs, which are outside the fixed costs regime, at the hearing. 3.197  Where a judgment creditor’s application has been unsuccessful it may be ordered to pay the costs of the other parties, particularly in the case of a third party who has been put to the expense of filing evidence objecting to a final third party debt order being made. In such circumstances those parties should also be prepared to apply to the court for costs at the hearing. In addition, where the judgment debtor or third party disputes the liability and the judgment creditor declines to contest the issue and abandons the application, it may be liable for the costs incurred by the other parties.1 1

Wintle v Williams (1858) 3 H&N 288.

3.198  The general rule is that the court should make a summary assessment of the costs at the conclusion of a hearing lasting not more than one day unless there is good reason not to.1 Each party who intends to claim costs should prepare a written statement of costs which should follow as closely as possible Form N260.2 The statement must be signed by the party or its legal representative and must be filed at court with copies served on any party from whom recovery of costs is sought. Filing and service must be done as soon as possible and in any event at least 24 hours before the date fixed for the hearing.3 1 2 3

See CPR Pt 44. At time of writing a non-mandatory summary costs pilot scheme is also in place (PD 51X). Parties may alternatively choose to use form N260A. General rules about costs are set out in Pt 44 and the accompanying Practice Direction, which should be referred to for the specific provisions.

3.199  The interim third party debt order1 also provides: ‘A bank or building society may deduct an amount from any money held for the judgment debtor, for its expenses in complying with this order.’ 1 Form N84.

3.200  While the wording of the order is not entirely clear, this would seem to be a reference to the fact that, independently of any award of costs, a deposittaking institution1 is entitled to deduct a ‘prescribed sum’ from the debt owed to the judgment debtor (ie the account balance) for administrative and clerical expenses in complying with a final third party debt order.2 Such sum has been varied from time to time by statutory instrument and is currently set at £55.3 The final third party debt order contained in form N85 also states that the amount owed by the third party to the

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judgment debtor will be reduced by the amount the third party pays under that order and any costs and expenses to which the third party is entitled. 1 2 3

Defined in SCA 1981, s 40(6). This includes banks and building societies. SCA 1981, s 40A(1) and CCA 1984, s 109(1). Attachment of Debts (Expenses) Order 1996, SI 1996/3098. Note that under SCA 1981, s 40A(1B) the institution may deduct this sum even where the debt owed is insufficient to cover both the deduction for expenses and the amount attached by the interim third party debt order in respect of the judgment debtor and costs.

Interplay with the insolvency regime 3.201  Chapter 1 considers generally the interaction between the law of enforcement and the insolvency regimes relating to corporate and individual judgment debtors. This section considers the application of the rules set out in the Insolvency Act 1986 (IA 1986), ss 183 and 346, to third party debt orders for the purposes of bankruptcy and winding up. 3.202  IA  1986, ss  183 and 346 provide that unless a judgment creditor has completed the attachment of a debt under third party debt order proceedings by receipt of the debt before the commencement of the winding up or bankruptcy of a judgment debtor, it will be deprived of the benefit of that attachment as against a liquidator or trustee in bankruptcy. For the purposes of these sections ‘completed’ means receipt of debt.1 1

IA 1986, ss 183(3) and 346(5).

CHAPTER 4

Charging orders

INTRODUCTION 4.1  A judgment debtor who is seeking to avoid paying a judgment debt is likely to find it harder to conceal the ownership of land than many other assets. In addition, subject to existing charges on the land, a judgment debtor’s equity in his home or commercial premises is likely to be a significant asset available to the judgment creditor for the purposes of enforcement.  Such considerations make charging orders an attractive form of enforcement to many judgment creditors who may have exhausted all other forms of enforcement and are faced with a judgment debtor who refuses to pay. 4.2  A charging order is a means of securing a judgment debt by imposing a charge over a judgment debtor’s land, securities or certain other types of property.  The charging order creates an equitable charge and therefore, subject to any prior charges affecting the property, places the judgment creditor in the position of a secured creditor. Such security may be sufficient for many judgment creditors, particularly large financial institutions who, with the assurance that if the property is sold the funds released will be used in discharge of the judgment debt, may be content to use the charging order as a form of long-term security. However, should the judgment creditor prefer to satisfy the judgment debt, the charging order also provides a means whereby the judgment creditor can apply to the court for an order for sale of the charged property. 4.3  The modern form of a charging order over land has a historical antecedent in the (now abolished) writ of elegit, described in Blackstone’s Commentaries on the Laws of England of 1768.1 The nineteenth century saw the introduction of the Judgments Act 1838 (JA 1838), whereby every judgment, whether in law or in equity, operated to impose an equitable charge on all the landed interests (legal and equitable) of the judgment debtor.2  However, the judgment creditor could not bring proceedings to enforce the charge until one year after the judgment and during that period had no priority over other creditors if the judgment debtor went into bankruptcy. Leaving to one side reform of the procedure for registration of charges, more than a century was

210  Charging orders to pass before Parliament reformed the law relating to charging orders by enacting the Administration of Justice Act 1956 (AJA 1956). Under AJA 1956, s 35, a judgment creditor could only obtain a charging order over specified parcels of a judgment debtor’s land, rather than the blanket charge over all the judgment debtor’s landed interests obtainable under JA 1838. 1 2

Vol 3, pp 418–420.  The writ of elegit was abolished by the Administration of Justice Act 1956, s 34(1). See further para 6.90, n 1 for further background on writs of elegit. JA 1838, s 13.

4.4  The modern form of charging order over securities similarly has historical antecedents.  Charging orders over securities were available under JA  1838, s  14 (the effect of which was extended by the Judgments Act 1840, s 1). These statutory provisions were subsequently repealed but the power to make charging orders over securities were replaced by rules of court. 4.5  By the early 1970s a number of concerns had been raised about the operation of the law relating to charging orders in the wake of two Court of Appeal decisions. In Re Overseas Aviation (GB) Ltd1 the Court of Appeal (by a majority) held that a charging order on land does not, of itself, operate to give the judgment creditor any preference in the event of the insolvency of the judgment debtor. In order to acquire a preference over other creditors it was necessary for the judgment creditor to take at least one further, often purely formal, step in appointing a receiver. 1

[1963] Ch 24.

4.6  Separately, in Irani Finance Ltd v Singh1 the Court of Appeal found that a beneficial interest in land held on trust for sale was not an ‘interest in land’ for the purposes of AJA  1956, s  35, the statutory regime then governing charging orders.2 Accordingly, a charging order could not be obtained over a judgment debtor’s interest in co-owned land. 1 2

[1971] Ch 59. The main ground for this decision was that, since the interest of a beneficiary under a trust for sale was technically an interest in the proceeds of sale of land, not the land itself, it was not land or an interest in land for the purposes of the Administration of Justice Act 1956, s 35.

4.7  These ‘defects’1 in the law were referred to the Law Commission, together with a concern relating to the statutory provisions for the discharge of charging orders.2  The Law Commission published its report into the operation of the law relating to charging orders in March 1976.3  The Report’s key recommendations included that: (a) the effect of Overseas Aviation should be reversed, so that the making of a charging order should amount to completion of the execution for the purposes of insolvency legislation; (b) the court should have a ‘full’ discretion whether or not to make a charging order and, in exercising this discretion, the court should take into account any evidence before it on both the personal circumstances of the judgment debtor and any other creditors of the judgment debtor who might be unduly prejudiced by the making of a charging order;

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(c) the court should have power in all circumstances to make a charging order in respect of a beneficial interest of a judgment debtor arising under a trust of land; (d) the court’s powers to charge a trustee’s interest in securities should correspond with its power to charge a trustee’s interest in land; and (e) the court should have express power to make an order discharging the property subject to a charging order. 1 2 3

Law Commission Report, 1976, para 1. Under the pre-1979 regime it was unclear whether a judgment debtor could obtain a court order formally discharging the charging order after satisfying the judgment debt. Law Commission No 74, Cmnd 6412.

4.8  The 1976 Law Commission Report also proposed a draft charging orders bill, the text of which was largely enacted in the Charging Orders Act 1979 (COA 1979), the statutory regime now governing charging orders.  However, while COA  1979 introduced a new statutory framework, much of the case law predating that Act considers equivalent or very similar former statutory provisions and therefore remains binding authority.  Under COA  1979 a charging order takes effect as an equitable charge,1 albeit a species which is imposed by statute and by a court, which is available only in relation to restricted categories of assets, and which has generated its own body of case law in addition to the general principles applying to equitable charges. 1

COA 1979, s 3(4).

4.9  The Civil Enforcement Review instituted by the Lord Chancellor’s Department in March 1998 as part of the civil justice reforms1 reviewed the existing charging orders regime. Its conclusions were published in the ‘Effective Enforcement’ White Paper in March 2003. The White Paper made a number of procedural recommendations but stated:2 ‘… the Review has identified no significant means by which the charging order procedure should be changed … It is our conclusion that the existing procedure works well in the main.’ 1 2

See further Ch 1. At para 388.

4.10  The procedural rules for obtaining a charging order are contained in Pt 73 of the Civil Procedure Rules 1998 (CPR). Part 73 came into force on 25 March 20021 and replaced the former procedure under the Rules of the Supreme Court 1965 (RSC), Ord 50 and the County Court Rules 1981, Ord  31.2 Further changes to centralise the procedure were implemented in April 2016.3 This chapter deals with the current charging order regime (rather than considering the position where charging orders were obtained prior to 6 April 2016 under the old regime). So far as case law in this chapter respect predates the latest version of CPR Pt 73 their general authority is not however altered by the revised procedure. 1 2 3

Civil Procedure (Amendment No 4) Rules 2001, SI 2001/2792. Formally preserved in CPR, Schs 1 and 2. The Civil Procedure (Amendment) Rules 2016, SI 2016/234.

212  Charging orders A two/three stage process 4.11   The process of enforcement, namely obtaining the charging order over the judgment debtor’s assets, is a two-stage process. First, an application is made for an interim charging order, which is then followed by an application for a final charging order.  Once the charging order has been obtained, it takes effect as an equitable charge over the judgment debtor’s property and places the judgment creditor in the position of a secured creditor. Some judgment creditors, particularly banks or other financial institutions, are content to leave the matter there and use the charging order as a form of long-term security for the debt.1 1

See March 2003 White Paper, Effective Enforcement ch 4, section 2, para 374, which notes that from a sample of 800 charging order cases of one major creditor in only one instance was an application for an order for sale made. Rather, lenders with the security of a charging order will accept long term repayment agreements to clear the judgment debt.

4.12  However, unlike other processes of enforcement (such as third party debt orders or writs of control), completion of the process of enforcement with the final charging order will not realise funds to satisfy the judgment debt. In order to achieve this, this judgment creditor will need to take a further step, namely proceedings to enforce his rights as a secured creditor under that equitable charge by applying for an order for sale. 4.13  An outline of the process is set out in paras 4.14–4.17. Interim charging order 4.14  The judgment creditor first makes an application for an interim charging order (formerly a ‘charging order nisi’). The application notice must be in the prescribed form and contain the prescribed information. The application may be made without notice and will initially be dealt with without a hearing. If the interim charging order is made the judgment creditor must then serve the order on the judgment debtor and certain other parties. Final charging order 4.15  Following service of the interim charging order it will be determined whether a final charging order (formerly a ‘charging order absolute’) should be made. In uncontested applications, as will be seen, in certain circumstances, this is a paper exercise. Where the matter is contested the judgment creditor, the judgment debtor and any person who objects to the court making a final charging order may attend the hearing. The court may make a final charging order, discharge the interim charging order, decide any issues in dispute, direct a trial of any such issues or make such order was the court considers appropriate. Order for sale 4.16  A judgment creditor who is not content with the position of secured creditor and seeks cash in satisfaction of the judgment debt must seek to realise his security

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and enforce the charging order by applying for an order for sale of the charged property. This involves bringing fresh proceedings under CPR Pt 8. 4.17  As will be seen, the court has a discretion as to whether to make the relevant order at each stage of this process. The steps which must be taken at each stage of the procedure, the obligations which arise and the effect of those steps are considered in detail later in this chapter.

JURISDICTION 4.18  The court’s power to make a charging order over a judgment debtor’s assets derives from COA 1979, s 1(1), which provides: ‘Where, under a judgment or order of the High Court…or a County Court, a person (the “debtor”) is required to pay a sum of money to another person (the “creditor”) then, for the purpose of enforcing that judgment or order, the appropriate court may make an order in accordance with the provisions of this Act imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become under the judgment or order.’ 4.19  Accordingly, charging orders are available to secure a sum payable under a judgment or an order of the court, including assessed costs. The charging order must be made in accordance with the provisions of COA 1979 and may only be made in relation to those types of property of the judgment debtor specified in COA 1979 (see further paras 4.33–4.59). 4.20  It is key to note at the outset that COA 1979, s 1(1) provides that the court ‘may’ make a charging order.1 As will be seen, statute therefore confers a discretion as to whether or not to make the order and the court must consider ‘all the circumstances of the case’ in so doing. 2 1 2

COA 1979, s 1(3) provides that an order under COA 1979, s 1(1) is referred to as a ‘charging order’. COA 1979, s 1(5) and see further paras 4.151–4.197.

4.21  Pursuant to COA  1979, s  3(1) the charging order may be made either absolutely or subject to conditions, such as notifying the debtor when the charge is to become enforceable or as to other matters. As will be seen, in light of the potentially draconian nature of a charging order, a range of statutory and procedural safeguards are built in to the process in order to seek to ensure that the process is fair and that vulnerable judgment debtors are adequately protected.

Ascertained sum 4.22  It is a well-established principle that a charging order cannot be given except for an ascertained sum. In Widgery v Tepper1 the Court had declared that the plaintiffs were entitled to a share in the proceeds of sale of certain property that had been

214  Charging orders received by the defendants. The Court directed an account of what was due to the plaintiffs and ordered that that the defendants should pay over what was found to be due, together with the costs of the suit. The plaintiff then obtained a charging order nisi. The defendants appealed against the charging order absolute being made on the grounds that the sum due to the plaintiffs had not yet been ascertained and costs had not been taxed.2 The Court of Appeal upheld the defendants’ appeal. James LJ held: ‘The authorities are sufficient to shew that a charging order cannot be given except for an ascertained sum, and not for costs, charges and expense, until they have been taxed.’ 1

2

(1877)  LR  6 Ch D  364.  It is interesting to note that the Court stated that it could not consider the question of what steps the plaintiff ought to have taken to protect their entitlement to the funds in question but speculated that the plaintiffs may be entitled to an injunction in some other proceeding. See the judgments of James LJ and Cotton LJ at 369 and 370 respectively. Such costs would now be assessed under the provisions of CPR Pt 47.

4.23  Similarly, in A&M Records v Darakdjian1 the Court held that a charging order could not be obtained in relation to an award of costs which had not yet been taxed since the Court had no power to make a charging order for an unascertained sum. While Widgery and A&M Records are cases under the statutory regimes preceding COA 1979, the relevant statutory provisions are in the same form. Widgery was cited in the 1996 Court of Appeal decision in Ezekiel v Orakpo,2 where Millett, LJ held: ‘[The defendant’s] submission was founded on the well-established principle that a Charging Order cannot be given except for an ascertained sum: see Widgery v Tepper (1877) LR 6 Ch D 364, a decision of this court. It is clear law, for example, that a charging order cannot be made for untaxed costs.’ More recently the application of this principle can be observed in Monte Developments Ltd (In Administration) v Court Management Consultants Ltd3 where the sums claimed were not, at the time the charging order was made, monies due, or to become due, under an order of the Court. There was therefore no jurisdiction to make the charging order. This means that it will often be necessary to seek two charging orders – one for the judgment debt and then one for the costs once those are assessed. 1 2 3

[1975] 1 WLR 1610. [1997] 1 WLR 340. [2010] EWHC 3071 (Ch).

Interest on a judgment 4.24  COA 1979, s 1(1) provides that a court may make a charging order securing the payment of ‘any money due or to become due under the judgment or order’. Interest accrues on a sterling High Court judgment under JA 1838, s 17. 4.25 In Ezekiel v Orakpo1 the Court of Appeal considered whether a charging order secured the payment of interest on a judgment debt even though the charging order was silent as to interest. Millett LJ concluded that the charging order did secure the payment of interest on the judgment even though it contained no mention of interest for two different reasons. First, he cited the provisions of JA 1838, s 172 and held:

Jurisdiction  215

‘It follows that there is no need to mention interest in the judgment itself, or in the Order carrying the judgment into effect, or in a Charging Order, since the reference to the judgment alone is enough. It is, of course, much the better practice to include an express reference to interest so that the effect of the Order is clear to the judgment debtor, but it is not strictly necessary.’ 1 2

[1997] 1  WLR  340.  This case is also discussed further at paras 7.109–7.119 in relation to the provisions of the Limitation Act 1980. Which now states: ‘Every judgment debt shall carry interest at the rate of 8% per annum from such time as shall be prescribed by the rules of court … until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment.’

4.26  Secondly, he found that since COA  1979, s  3(4) provides that a charging order takes effect as an equitable charge created by the judgment debtor by writing under his hand: ‘It must therefore be given the same effect, unless the Act itself provides otherwise, as would an equitable charge on the land in question to secure a stated principal sum but with no mention of interest. Such a charge would carry interest even though there were no words allowing interest in the charge itself.’1 1

It is also worth noting that the Court rejected the judgment debtor’s argument that a charging order cannot be made to secure future interest accruing under JA 1838 since the amount of such interest cannot be ascertained in advance (and thus does not constitute an ascertained sum). Millet LJ held: ‘However, the Charging Order Act itself entitles the court to make a Charging Order for monies due or to become due, and it appears to me that future interest at an ascertained rate (albeit a variable rate) from the date of judgment to the date of payment is an ascertained, or at least ascertainable, sum for the purpose of the rule in question.’ This line of reasoning was cited in Holder v Supperstone [2000] 1 All ER 473, where the court rejected the argument that since a charging order could only be made in respect of ascertained indebtedness, a sum due in respect of untaxed costs specifically could not be added to the security conferred by a charging order. Rather, the court held that the costs of enforcing a charging order could be added to the sum secured by the charge made under such an order and the submissions to the contrary involved ‘a confusion between the rules which govern the nature of the debts in respect of which there is a power to make charging orders under s 1(1) of the 1979 Act and the rules which apply to the holder of a charging order which govern what right he has to add to the security conferred by the charging order further sums for interest and costs, which are not found in s 1(1) but rather in the common law applicable to equitable chargees generally applied to charging orders by s 3(4) of the 1979 Act. It seems to me, with respect, that this is a contrast of which Millett LJ was fully aware when he gave judgment in Ezekiel’s case. Although he treated the interest accruing on the judgment debt as being a debt in respect of which a charging order could be made because such interest was ascertainable at time of the making of the charging order, it seems clear that it also could have been added to the judgment debt by the holder of the charging order when its amount was subsequently ascertained.’ (Evans-Lombe J at 478.)

4.27  As Millett LJ noted, however, as a matter of best practice the charging order should be drafted to state expressly that it covers interest on the judgment debt and the standard form final charging order (Form N87) expressly states this.1 1

See further para 4.198

Costs of enforcing the charge 4.28  The Court of Appeal in Ezekiel also considered whether a charging order secured the costs of enforcing the charge and concluded that, since by statute the

216  Charging orders charge took effect as if it were an equitable charge given by the judgment debtor, such costs were secured.1 Millett, LJ stated: ‘So far as the costs of enforcing the security are concerned, it is of course perfectly true that at the date of the Charging Order, or indeed subsequently, it was quite impossible to ascertain them. The judge came to the conclusion that the Charging Order must, by the provisions of the statute, be given the same effect as if it were an equitable charge under hand only. If it were, the chargee would have the right in equity to add the costs of enforcing the security to the security. He considered that that should be implied into the Charging Order by virtue of s 3(4). I agree with him and do not think it necessary to add anything further on the matter.’ 1

See also the commentary on Holder v Supperstone in para 4.26, n 1.

4.29  The costs of the application to obtain the charging order itself should however be expressly claimed. It is best practice for the charging order to be drafted so that it expressly states that it covers the costs of the application. The standard form final charging order Form N87 expressly states this.1 1

See further para 4.198.

Judgment debt payable by instalments 4.30  COA  1979, s1(1) provides that a court may make a charging order for securing the payment of any money ‘due or to become due under the judgment or order’. Section 1(7) expressly sets out that: ‘The fact that there has been no default in payment of the instalments does not prevent a charging order from being made in respect of that sum.’1 Section 1(8) obliges the court, when considering all the circumstances, to take into account the fact that there has been no default.2 COA 1979, s 1(6) applies ss 1(7) and (8) to both High Court and County Court judgment debts payable by instalments. 1

2

See para  4.18. Tribunals, Courts and Enforcement Act 2007 (TCEA), s  93 came into force on 1  October 2012 and amended COA  1979, s  1 to insert these new subsections. Prior to this the position was different in the County Court by virtue of County Courts Act 1984, s 86(1) which meant that a charging order could not generally be obtained until after default on one or more instalments payable under the judgment.  The application notice for a charging order (Form N379 or N380) requires the judgment creditor to state, if the judgment debt is payable by instalments, the amount of any instalments which have fallen due and remain unpaid. See further para 4.77.

Judgment debt not yet immediately payable 4.31  Similarly, the wording of the statute empowers the court to make a charging order in respect of a debt which is not yet immediately payable.1 (Again, how the court will exercise its discretion in this regard is considered at paras 4.190–4.192.) This allows for an application to be made for an interim charging order on entry of judgment. There is no need for a judgment creditor to wait for the usual 14 days

Assets that may be charged  217

for payment to pass.2 In High Court cases there appears to be scope for applying for an interim charging order at the same time as the judgment being entered (in County Court judgments this would not generally be possible given the usual position for applications to be made to the County Court Money Claims Centre (see paras 4.69–4.72). 1 Robinson v Bailey [1942] Ch 268, see further para 4.190. 2 CPR 40.11.

Other types of charging order 4.32  Charging orders may also be obtained in certain circumstances under the Solicitors Act 1974,1 the Partnership Act 1890, the Insolvency Act 1986 (IA 1986),2 and the Council Tax (Administration and Enforcement) Regulations 1992.3 These schemes for obtaining charging orders are outside the scope of this book and, except for charging partnership interests,4 are not considered further. 1 2 3

4

Solicitors Act 1974, s  73 provides that a solicitor may apply for a charging order on his client’s property in order to enforce payment of his costs. IA  1986, s  313 makes provision for a trustee in bankruptcy to apply for a charging order over a bankrupt’s interest in a dwelling house. SI 1992/613. Under the provisions of reg 50 a local authority may apply to the County Court for a charging order over a dwelling in respect of which council tax arrears are outstanding in excess of £1,000.  There are also provisions relating to the availability of charging orders in certain circumstances under the Agricultural Holdings Act 1986, s 85 and Child Support Act 1991, s 33. See further paras 4.60–4.62.

ASSETS THAT MAY BE CHARGED 4.33  The assets over which a charging order can be obtained1 are set out in COA 1979, s 2. Section 2 states: ‘(1) Subject to subsection (3) below, a charge may be imposed by a charging order only on: (a) any interest held by the debtor beneficially – (i) in any asset of a kind mentioned in subsection (2) below, or (ii) under any trust; or (b) any interest held by a person as trustee of a trust (“the trust”), if the interest is in such an asset or is an interest under another trust and (i) the judgment or order in respect of which a charge is to be imposed was made against that person as trustee of the trust, or (ii) the whole beneficial interest under the trust is held by the debtor unencumbered and for his own benefit, or (iii) in a case where there are two or more debtors all of whom are liable to the creditor for the same debt, they together hold the whole beneficial interest under the trust unencumbered and for their own benefit. (2) The assets referred to in subsection (1) above are – (a) land, (b) securities of any of the following kinds –

218  Charging orders (i) government stock, (ii) stock of any body (other than a building society) incorporated within England and Wales, (iii) stock of any body incorporated outside England and Wales or of any state or territory outside the United Kingdom, being stock registered in a register kept at any place within England and Wales, (iv) units of any unit trust in respect of which a register of the unit holders is kept at any place within England and Wales, or (c) funds in court. (3) In any case where a charge is imposed by a charging order on any interest in an asset of a kind mentioned in paragraph (b) or (c) of subsection (2) above, the court making the order may provide for the charge to extend to any interest or dividend payable in respect of the asset.’ 1

The importance of researching a judgment debtor’s assets and means before issuing proceedings or instituting enforcement steps is considered in Ch 2.

4.34  A  charging order may therefore be imposed on any beneficial interest the judgment debtor holds in any asset of the kind mentioned in COA  1979, s  2(2), namely land, securities and funds in court. Alternatively, a charging order may be imposed on a judgment debtor’s beneficial interest under a trust. A charging order may also be imposed on a judgment debtor’s legal interest under a trust in certain circumstances. Each of these provisions is considered in turn below.

Charge can only be imposed on the judgment debtor’s interest 4.35  As the wording of the statute makes clear, save in the restricted circumstances where a charging order can be obtained over a judgment debtor’s legal interest in a trust, a charging order can only be obtained over the judgment debtor’s own beneficial interest in a relevant asset. The charge imposed cannot extend further than that interest. This point was illustrated in Gill v The Continental Union Gas Company Ltd,1 where a judgment creditor sought to obtain a charging order over shares which a judgment debtor held as bare trustee, having previously disposed of the shares for valuable consideration to a third party prior to the charging order nisi having been obtained.2 The charging order was not allowed since the Court found that a judgment creditor cannot, by means of his charging order, get any more than the debtor could honestly give him. 1 2

(1871–72) LR 7 Exch 332. Gill concerned the provisions of JA 1838, which provided that in order for a charging order to be obtained the judgment debtor must have stock ‘standing in his name in his own right, or in the name of any person in trust for him’. However, the fact that this was understood by the court to mean the judgment debtor’s ‘beneficial interest’ (the wording used in the modern counterpart of COA 1979) is reflected by the headnote to Gill which states: ‘In an action, under [JA 1838] against a company for permitting the transfer of shares after notice of a charging order nisi, and before the making of it absolute, it is a good answer to shew that the judgment debtor in whose name the shares stood had no beneficial interest in them.’ (Emphasis added.)

Assets that may be charged  219

4.36  The point was succinctly stated in Hawks v McArthur,1 where Vaisey J held: ‘The charging order affects only such interest, and so much of the property affected, as the person whose property is purported to be affected could himself validly charge.’ 1

[1951] 1 All ER 22.

4.37  However, in Walton v Allman1 the High Court held that the judgment debtor’s interest did not have to be quantifiable at the time the charging order was made. The Court concluded that ‘some’ beneficial interest was enough. 1

[2015] EWHC 3325 (Ch).

Land 4.38  Before considering the provisions of COA  1979 relating to charging a judgment debtor’s interest in land, it is worth briefly outlining how an interest in land may be held. 4.39  The simplest case is where the judgment debtor is the sole owner of the property, ie the judgment debtor is both the legal and beneficial owner. 4.40  Commonly a judgment debtor will co-own land with another person, for example a spouse. In practice co-owned land is now held under either a joint tenancy or a tenancy in common.1  Statute provides that at law co-owners must hold as joint tenants.2 In equity, however, the co-owners may hold their interests either as joint tenants or tenants in common.  The main difference between these forms of co-ownership is that joint tenants are considered to be a single owner and when one of them dies the property automatically vests in the other joint tenant (or joint tenants if there is more than one survivor).  By contrast, tenants in common own undivided shares and are free to transfer their interest in the property individually either during their lifetime or in their wills.3 An equitable joint tenancy of land can be converted into an equitable tenancy in common by a process known as severance and the imposition of a charging order against the interest of one equitable joint tenant is considered an act of severance.4 In other words, once a charging order has been imposed upon the equitable interest of one joint tenant in the land, the co-owners will hold their equitable interests as tenants in common. 1 2 3 4

Megarry and Wade, The Law of Real Property (9th edn, Sweet & Maxwell, 2019), Ch 12. Law of Property Act 1925, ss 1(6), 34(1), 36(2) and the Settled Land Act 1925, s 36(4). Megarry and Wade, The Law of Real Property (9th edn, Sweet & Maxwell, 2019), para 12-011. Megarry and Wade, The Law of Real Property (9th edn, Sweet & Maxwell, 2019), para 12-047.

4.41  Any co-owned land will almost invariably be held under a trust of land. The Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996), s 1 defines a trust of land widely as ‘any trust of property which consists of or includes land’ except settled land or land to which the Universities and College Estates Act 1925 applies. The trust can be of any description, whether express, implied, resulting or constructive, and includes a trust for sale and a bare trust and trusts which were

220  Charging orders created or arose before the commencement of TLATA 1996. The manner of holding follows the trust for sale (which TLATA 1996 replaced): the legal estate in land and all powers of disposition and management are vested in the trustees. Where the land is registered it will be registered in the name of the trustees. 4.42  Pursuant to COA  1979, s  2(1)(a)(i) and (2)(a), a charging order may be imposed on a judgment debtor’s beneficial interest in land.1  Further, pursuant to COA 1979, s 2(1)(a)(ii), a charging order may be imposed upon a judgment debtor’s beneficial interest under any trust, which would include a beneficial interest under a trust of land where a judgment debtor co-owns land with another person. In certain circumstances, a charging order may also be imposed upon a judgment debtor’s legal interest in land – for example, where there are co-owners of a property who together own the whole of the beneficial interest in the land and who are joint judgment debtors in respect of the same judgment debt.2 ‘Land’ is not defined further in COA 19793 but includes freehold and leasehold land.4 1

2 3 4

While it may not often be relevant in the context of high value commercial enforcement, it should be noted that where a judgment creditor is seeking to enforce a costs order against a party who is an individual who receives funded services from the Legal Services Commission, the Civil Legal Aid (Costs) Regulations 2013, SI 2013/611, reg 11 provides that where, for the purpose of enforcing a costs order against such a person (alone or together with any other judgment creditor), a charging order under COA 1979, s 1 is made in respect of the client’s interest in the main or only dwelling in which he resides, that charging order shall operate to secure the amount payable under the costs order (including, without limitation, any interest) only to the extent of the amount (if any) by which the proceeds of sale of the client’s interest in the dwelling (having deducted any mortgage debts) exceed £100,000. The regulations also provide that an order for sale of the dwelling shall not be made on the basis of the charging order. Pursuant to COA  1979, s  2(1)(b)(iii).  See also National Westminster Bank Ltd v Allen [1971] 2 QB 718. See COA 1979, s 6 (Interpretation). Interpretation Act 1978, s 5 provides: ‘In any Act, unless the contrary intention appears, words and expressions listed in Schedule 1 to this Act are to be construed according to that Schedule.’ Schedule 1 provides: ‘‘‘Land” includes buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land.’

4.43  The post-COA  1979 charging order regime differs significantly from its predecessor regime as regards beneficial interests in land.  As has been noted in para 4.6, in Irani Finance, the Court of Appeal held that the beneficial interest under a trust for sale of land1 could not be made the subject of a charging order under AJA 1956, s 35. Following that decision, COA 1979 entered into force on 3 June 1980.2 COA 1979, s 7 repealed AJA 1956, s 35 and, not least given the background to the new legislation as set out in the 1976 Law Commission Report, the provisions of s  2 of the new Act may have seemed clear.  However, only two months after COA  1979 entered into force this very question came before the court.  National Westminster Bank Ltd v Stockman3 was an appeal against the refusal of a master to make a charging order nisi in respect of a beneficial interest in land where the master was not satisfied that the provisions of COA 1979, s 2 enabled the order to be made. 1

2 3

Trusts for sale have now been replaced by trusts of land under TLATA 1996. However, the trust of land follows the trust for sale in that the legal estate (and the powers of disposition and management) is vested in the trustees of land on trust for the beneficiaries. Charging Orders Act 1979 (Commencement) Order 1980, SI 1980/627, para 2. [1981] 1 WLR 67.

Assets that may be charged  221

4.44  Russell J upheld the appeal in no uncertain terms: ‘The ratio of the judgment of the court in the Irani case was that the words “interest in land” to be found in s 35 Administration of Justice Act 1956 did not include interests under trusts for sale of land. Such interests were not interests in land but interests in the proceeds of the sale of land.  Those equitable interests, therefore, were not caught by the provisions of s 35 and no charging order could be made. Section 35 of the 1956 Act has now been repealed by s  7 of the Charging Orders Act 1979. The short point for my consideration is whether s 2 of the 1979 Act has removed the limitations of s 35 of the 1956 Act, as interpreted by the Court of Appeal in the Irani case, so as to permit charges on the interests of those, such as the defendant in the instant case, who hold real property under the terms of a trust for sale. In my judgment it was plainly the intention of Parliament that the availability of charging orders should be extended to cover cases in which the interest sought to be charged is a beneficial interest in the proceeds of sale of land held under a trust for sale. I think that that object has been achieved by the plain wording of s 2, despite the interesting arguments to the contrary advanced by counsel for the defendant.’ 4.45  Accordingly, it is clear that a charging order may be imposed over a judgment debtor’s beneficial interest in land. Further, in Walton v Allman1 the High Court held that the judgment debtor’s interest did not have to be quantifiable at the time the charging order was made. The Court concluded that ‘some’ beneficial interest was enough. 1

[2015] EWHC 3325 (Ch).

Securities 4.46  Pursuant to COA 1979, s 2(2)(b) the kinds of securities over which a charging order may be imposed comprises: government stock, stock of corporates incorporated within England and Wales (other than building societies1), stock of overseas corporates (provided the stock register is kept within England and Wales), and units of any unit trust (provided the register of unit holders is kept within England and Wales). 1

Under COA 1979, s 6(1) ‘building society’ is defined to have the same meaning as in the Building Societies Act 1986.

4.47  ‘Government stock’ is defined1 as ‘any stock issued by Her Majesty’s government in the United Kingdom or any funds of, or annuity granted by, that government’. 1

COA 1979, s 6(1).

4.48  The definition of corporate ‘stock’ under COA  1979 is remarkably wide. COA 1979, s 6(1) states:

222  Charging orders ‘“stock” includes shares, debentures and any securities of the body concerned, whether or not constituting a charge on the assets of that body.’ 4.49  The 1976 Law Commission Report also recognised that any list of assets amenable to a charging order may well become outdated over time with the development of completely new kinds of securities. The widely drafted ambit of ‘securities’ under COA  1979, s  6(1) is further recognition of this fact.  A  tighter definition of securities would arguably be overly prescriptive and would be unlikely to be able to keep pace with developments in modern financial instruments. Further, as will be seen, in the event that the corporate body which has issued the security felt that, for some reason, the imposition of a charging order in relation to a particular kind of financial instrument was inappropriate, the company would be afforded the opportunity to make representations to this effect at the hearing when the court considers whether to make a final charging order.1 1

See further paras 4.137–4.142.

Dividends and interest 4.50  Where securities of the type listed in COA 1979, s 2(2)(b)1 are charged by a charging order, the court has the power to order that the charge should extend ‘to any interest or dividend payable in respect of the asset’.2 Where appropriate the order should state that it also applies to such interest or dividend. 1 2

Or funds in court – see paras 4.52–4.53. COA 1979, s 2(3).

4.51  As will be seen at the end of this chapter, further protection against securities being transferred out of the hands of a judgment debtor is available in the form of stop orders and stop notices. Where dissipation of the securities is a real risk, the judgment creditor may also have sought a freezing injunction in relation to those assets (see further Chapter 1).

Funds in court 4.52  In addition to interests in land and securities, a judgment creditor can also obtain a charging order over any interest held by the judgment debtor beneficially in ‘funds in court’ pursuant to COA 1979, s 2(2)(c). 4.53  Where funds in court are charged by a charging order, the court has the power to order that the charge should extend to interest payable on those funds.1 Again, it is advisable for the order expressly to state that this is the case. (Alternatively, if money is standing to the credit of the judgment debtor in court, the judgment creditor may apply for an order that the funds be paid to him under the procedure set out in CPR 72.10 – see further Chapter 3 in this regard). 1

COA 1979, s 2(3).

Assets that may be charged  223

Interest in a trust Beneficial interest in a trust 4.54  A charging order may be imposed on any interest held by the judgment debtor beneficially under any trust.1 In the case of Nelson v Greening Sykes (Builders) Ltd2 the Court of Appeal confirmed that a charging order may even be imposed as an interest held under a bare trust. Similarly, in Royal Oak Property Co Ltd v Iktilat3 the Court decided that an equity of redemption is a sufficient interest in land for the purposes of imposing a charging order under COA 1979. 1 COA 1979, s 2(1)(a)(ii). 2 [2007] EWCA Civ 1358. 3 [2008] EWCA 1703 (Ch).

Interest under a foreign trust 4.55 In Interpool Ltd v Galani1 the Court of Appeal speculated that an English court may have jurisdiction to charge a judgment debtor’s beneficial interest under a ‘foreign trust’, but as a matter of discretion would not exercise that jurisdiction where it could expose the trustees to a risk of double jeopardy’.2 However, the Court in Interpool was concerned with the oral examination of the judgment debtor under RSC Ord 483 and thus the Court’s observations on charging order jurisdiction are strictly obiter. 1 [1988] QB 738. 2 [1988] QB 738 at 741–742, per Balcombe LJ. 3 The predecessor to Pt 71 proceedings.

4.56  While it is correct that COA 1979 contains no jurisdictional limitation as to the location of the assets subject to a charging order, the Court’s observations in Interpool as to the jurisdiction to charge to an interest under a foreign trust were predicated (in part at least) on the view that the court had jurisdiction to garnish1 a foreign debt, and there was no reason that a more restrictive limitation should therefore apply to charging an interest under a foreign trust.2 However, this obiter speculation must now be seen as wrong in light of the House of Lords’ decisions in Societe Eram Shipping Co. Ltd v Cie Internationale de Navigation3 and Kuwait Oil Tanker Company SAK v Qabazard,4 which for all practical purposes concluded that the English court does not have jurisdiction to garnish a foreign debt.5 The position was further explored in Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Iraq6 and Hardy Exploration & Production (India) Inc v Government of India.7 Further, even if, which seems unlikely for the reasons given in those cases, the court does have jurisdiction to impose a charging order over a judgment debtor’s beneficial interest in a ‘foreign trust’, there may be difficulties in establishing that English law trust concepts apply in relation to foreign assets and that the judgment debtor has the sort of beneficial interest that would be amenable to a charging order. 1 The predecessor to the third party debt order procedure under Pt 72. 2 Balcombe LJ at 741. 3 [2004] 1 AC 260. 4 [2003] UKHL 31.

224  Charging orders 5

These cases are discussed at paras 3.72–3.89. Alternatively, if the court has jurisdiction, it should not exercise it to garnish a foreign debt. Because the same principles apply as regards the exercise of the court’s jurisdiction in relation to third party debt order proceedings as those applicable to charging orders, the court should not exercise its jurisdiction to impose a charging order over an interest in a foreign trust. Subject to the court’s discretion, where the judgment is in a foreign currency, the charge will be expressed in its sterling equivalent (Practice Direction (Judgments: Foreign Currency) [1976] 1 WLR 83 remains in force). In the case of Carnegie v Giessen [2005] EWCA Civ 191, the Master chose not to employ his jurisdiction to revise a judgment for a charging order that was expressed in dollars retrospectively. 6 [2017] UKSC 64. 7 [2018] EWHC 1916 (Comm).

Constructive or resulting trusts 4.57  COA 1979 provides that a charging order may be imposed over an interest in ‘any’ trust and this would cover implied trusts such as a resulting or constructive trust. 4.58  Full consideration of the circumstances in which implied trusts may arise is outside the scope of this book and standard works on the law of trusts should be consulted. However, it may be worth the judgment creditor considering whether the judgment debtor holds any such interests which may be amenable to a charging order, particularly where he suspects that the judgment debtor may have been concealing assets. In such circumstances, the judgment creditor should provide detailed evidence to the court of the circumstances in which the trust and the judgment debtor’s interest under that trust arose in the form of a witness statement in support of the application for a charging order. Legal interest in a trust 4.59  In certain circumstances, a charging order may be imposed on a judgment debtor’s legal interest in a trust. The interest in the trust of which the judgment debtor is trustee must be either an interest in an asset of the kind set out in COA 1979, s 2(2)1 or an interest under another trust. If so, the judgment debtor’s legal interest in the trust can be charged in three sets of circumstances, which are set out in COA 1979, s 2(1)(b)(i)–(iii): (a) where ‘the judgment or order in respect of which a charge is to be imposed was made against that person as trustee of the trust’.2 Where a court has ordered that a trustee of a trust, in his capacity as trustee, must pay a sum of money to the judgment creditor, the judgment creditor may apply for a charging order over the trustee’s legal interest in the trust. (b) where ‘the whole beneficial interest under the trust is held by the debtor unencumbered3 and for his own benefit’.4 In such circumstances there is no other beneficiary who may be disadvantaged by the charge and thus the court may charge the legal interest. Where a judgment debtor can show that he holds the legal interest on trust for a third party (and provide conclusive evidence), he may be able to resist the making of a final charging order.5 (c) where ‘there are two or more debtors all of whom are liable to the creditor for the same debt, they together hold the whole beneficial interest under the trust

Assets that may be charged  225

unencumbered and for their own benefit’.6 An obvious example of where this provision would apply is where there are joint judgment debtors who are coowners of the land. In order for a charging order to be obtained over the legal estate there must be ‘unity of the debt’, ie the judgment debtors must be liable to the creditor for the same debt. If two judgment debtors who jointly hold the whole of the beneficial interest under a trust are both liable to the same judgment creditor but in respect of separate debts, the legal estate cannot be charged under this provision. 1 2 3 4 5

6

Since COA 1979, s 2(1)(b) refers to an interest in ‘such an asset’. COA 1979, s 2(1)(b)(i). Ie the interest is not subject to some prior right such as a charge or mortgage. COA 1979, s 2(1)(b)(ii). Barclays Bank v Forrester [1987]  CLYB  2537.  See further para  4.142.  The burden of proving that the interim charging order should not be made final will rest on the judgment debtor in such circumstances: Aero Properties Ltd v Citycrest Properties Ltd [2003] All ER (D) 218. COA 1979, s 2(1)(b)(iii).

Interest in a partnership 4.60  While COA  1979 contains no provision for a judgment debtor to apply to the court for an order charging a partner’s interest in the partnership property, the Partnership Act 1890 (PA 1890) provides such a mechanism.1 PA 1890, s 23(2) (as amended) states: ‘The High Court or a judge thereof or a County Court, may, on the application of any judgment creditor of a partner, make an order charging that partner’s interest in the partnership property and profits with payment of the amount of the judgment debt and interest thereon, and may by the same or subsequent order appoint a receiver of that partner’s shares of profits (whether already declared or accruing), and of any other money which may be coming to him in respect of the partnership, and direct all accounts and inquiries, and give all other orders and directions which might have been directed or given if the charge has been made in favour of the judgment creditor by the partner, or which the circumstances of the case may require.’ 1

Under the previous law, a judgment obtained against a partner could be executed against the property of the partnership.  PA  1890, s  23 now prohibits this but instead provides a mechanism whereby execution can be obtained against a partner’s share in the partnership.

4.61  PA  1890, s  23(3) provides the other partner or partners with a statutory right to redeem the interest charged or, in case of a sale being directed, to purchase that interest.  PA  1890, s  33 also provides that a partnership may, at the option of the other partners, be dissolved if any partner suffers his share of the partnership property to be charged under the Act for his separate debt.  Accordingly, if a judgment creditor discovers that the judgment debtor acts in partnership with others, expressing an intention to charge the judgment debtor’s interest in the partnership property may be a good way of bringing pressure to bear on the judgment debtor to settle his liability.

226  Charging orders 4.62  The procedure for obtaining a charging order under PA  1890, s  23(2) is set out in CPR  PD 73, para  6. The application must be made in accordance with CPR Pt 231 and every application notice issued and order made on such application must be served on the judgment debtor and on such of his partners as are within the jurisdiction.2 1 2

PD 73, para 6.2. PD 73, para 6.4. This provision affords the other partners the opportunity to exercise their statutory right to redeem the interest charged or purchase the partnership interest in the event of a sale.

Changes to the categories of prescribed assets 4.63  COA 1979, s 3(7) provides that: ‘The Lord Chancellor may by order made by statutory instrument amend section 2(2) of the Act by adding to, or removing from, the kinds of asset for the time being referred to there, any asset of a kind which in his opinion ought to be so added or removed’. 4.64  As yet, no order has been made under this subsection. However, this statutory provision affords the Lord Chancellor the power to increase, or decrease, the scope of assets which may be subject to a charging order in the future should he consider that the circumstances warrant such a change. 4.65  The widening of the category of stock amenable to charging orders and the inclusion of unit trusts were both enacted in COA 1979, s 2(2) as a result of consultation in the production of the 1976 Law Commission Report, which concluded that the previous list was unnecessarily restrictive. The 1976 Law Commission Report also recognised that no such list was likely to remain appropriate forever and that totally new kinds of ‘securities’ may develop. It therefore included a recommendation for a power to extend the list further from time to time, which eventually took the form of COA 1979, s 2(7).1 1

See the 1976 Law Commission Report, para 86.

Application to the Crown 4.66  Charging orders are not available against the Crown by virtue of the Crown Proceedings Act 1947, s  47.1  However, a procedure exists for the payment of judgment debts owed by the Crown (see paras 1.107–1.109). 1 CPR 66.6.

PROCEDURE FOR OBTAINING A CHARGING ORDER 4.67  The procedural rules which give effect to the provisions of COA  1979 are contained in CPR Pt 73 (as supplemented by the Practice Direction).

Procedure for obtaining a charging order  227

Application for interim charging order 4.68  The first step is an application by the judgment creditor for an interim charging order. Which court? 4.69  COA 1979, s 1(1)1 provides that the ‘appropriate court’ may make a charging order in accordance with the provisions of COA 1979. COA 1979, s 1(2)2 sets out the definition of appropriate court as follows: ‘The appropriate court is— (a) in a case where the property to be charged is a fund in court, the court in which that fund is lodged; (b) in a case where paragraph (a) above does not apply and the order to be enforced is a maintenance order of the High Court or an order for costs made in family proceedings in the High Court, the High Court or the family court; (ba) in a case where paragraph (a) does not apply and the order to be enforced is an order of the family court, the family court; (c) in a case where none of paragraphs (a), (b) and (ba) above applies and the judgment or order to be enforced is a judgment or order of the High Court for a sum exceeding the county court limit, the High Court or the county court; and (d) in any other case, the county court’. 1 2

‘Maintenance order’ is defined in COA 1979, s 1(2) to have the same meaning as in the Attachment of Earnings Act 1971, s 2(a). COA 1979, s 1(2) continues: ‘In this section “County Court limit” means the County Court limit for the time being specified in an Order in Council under section 145 of the County Courts Act 1984, as the County Court limit for the purposes of this section.’ At present, no order has been made under the relevant provisions of the County Court Act 1984 setting the County Court limit for these purposes. However, under the Interpretation Act 1978, s 17(2)(b), the County Courts Jurisdiction Order 1981, SI 1981/1123 applies, of which s 2 sets a limit of £5,000 for these purposes.

4.70  Accordingly, under the provisions of COA  1979, the County Court has concurrent jurisdiction to make a charging order in relation to High Court judgments, save in the case where the property to be charged is a fund held in the High Court (in which case, the application must be made in the High Court). Where the judgment is a County Court judgment, the application must be made in the County Court.1 1

COA 1979, s 1(2)(d).

4.71  Where an application for a charging order is to be made to the County Court it must be made to the County Court Money Claims Centre (unless the application is for a charging order over an interest in a fund in court, in which case the application must be made to the court hearing centre at which the judgment or order was made).1 1

CPR 73.3(2)-(3). Note that where an application for a charging order over an interest in a fund is made COA 1979, s 1(2)(a) provides that an application should be lodged in the court in which the fund is lodged. However, CPR 73.3(3) clarifies the position where the relevant court would otherwise simply be the unified County Court.

228  Charging orders 4.72  Accordingly, the general rule is that the application for a charging order must be issued in the court which made the judgment or order of which enforcement is sought.1 However, where the judgment is for less than £5,000, the application must be made in the County Court. The key exception from a commercial enforcement perspective is when enforcement is sought against funds in court (see paras 4.69 and 4.71). The concurrent jurisdiction of the County Court in respect of High Court judgments is also important to note. An application will either be a County Court Money Claims Centre (CCMCC) case or a non-CCMCC case.2  A  County Court judgment or order will generally be a CCMCC case unless it relates to a fund in court, when it will be a non-CCMCC case. 1 2

Although most applications relating to County Court judgments will be made to the County Court Money Claims Centre rather than to a local County Court hearing centre. A non-CCMCC case relates to any case outside of the CCMCC including applications made in the High Court.

More than one judgment or order against the same judgment debtor 4.73  CPR  73.3(4) provides that (subject to the provisions of CPR  73.3(2) and (3) as to which court the application for a charging order must be issued in), a judgment creditor may apply for a single charging order in respect of more than one judgment or order against the same debtor. As noted at para 4.70 under the provisions of COA  1979, the County Court generally has concurrent jurisdiction to make a charging order in relation to High Court judgments. This means that where a creditor has a variety of High Court and County Court judgments against the same judgment debtor the creditor could potentially make one application to the CCMCC to enforce all of the judgments. Application for charging orders in relation to more than one asset 4.74  Similarly, a judgment creditor may apply in a single application notice for charging orders over more than one asset.1  However, if the court makes interim charging orders over more than one asset, it will draw up a separate order relating to each asset. The fee is payable per asset. 1

PD 73, para 1.3.

Without notice 4.75  The judgment creditor’s application for an interim charging order may be made without notice to the judgment debtor and almost invariably is.1 1 CPR 73.3(1).

Prescribed form 4.76  The application notice for applications in the CCMCC and elsewhere must be in the form and contain the information required by the Practice Direction to Pt  731 and must also be verified by a statement of truth.2  The prescribed form is

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Form N379 if the application relates to land, or Form N380 if the application relates to securities. 1 CPR 73.3(5). 2 An affidavit in support of the application is no longer required. See The White Book (Sweet & Maxwell, 2020), vol 1, para 73.3.2.

4.77  The information which Form N379/N380 must contain is as follows: (a) the name and address of the judgment debtor; (b) details of the judgment or order sought to be enforced; (c) the amount of money remaining due under the judgment or order; (d) if the judgment debt is payable by instalments, whether the order was made on or after 1 October 2012 and the amount of any instalments which have fallen due and remain unpaid; (e) if the judgment creditor knows of the existence of any other creditors of the judgment debtor, their names and (if known) their addresses; (f) identification of the asset or assets which it is intended to charge; (g) details of the judgment debtor’s interest in the asset; and (h) the names and addresses of the persons on whom an interim charging order must be served under CPR 73.7. (see further paras 4.89–4.92).1 1

PD 73, para 1.2. Forms N379 and N380 require the applicant to provide details of other persons who may have an interest in the property under the heading ‘Other persons to be served’. In the case of securities, Form N380 suggests that this includes any co-owners and trustees. In the case of land, Form N379 suggests that this includes ‘any co-owners, trustees and persons with rights of occupation’.

4.78  Forms N379 and N380 also make provision for any further information the judgment creditor wishes the court to take into account.  The notes to The White Book1 suggest that this section could be used by the judgment creditor to provide evidence that a judgment debtor has the means to satisfy a judgment but is refusing to do so, and/or to provide information about other methods of execution which have been tried and failed. Frequently a judgment creditor may find that the name on the title of the asset is not precisely the same name as that in the judgment. Where this is the case the judgment creditor can set out in this section why they are nevertheless the same person. The provision of such information is advisable in light of the court’s duty to take into account all the circumstances of the case in considering whether to make a charging order (see further para 4.152). 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 73.4.2.

4.79  Where the judgment creditor is a corporation, the person signing the application notice on behalf of the corporation must also state the sources of the information he has used to complete the form. 4.80  In the case of land, it is advisable for the judgment creditor to attach Office Copy Land Register entries to evidence the judgment debtor’s interest in the property and Form N379 makes provision for this. Where the judgment creditor believes that the judgment debtor has a beneficial interest in the land which is not evidenced by the Land Register entries,1 he will need to explain the reason for his belief. Relevant

230  Charging orders information may have been provided by the judgment debtor during the course of earlier Pt 71 proceedings (see Chapter 2). 1

For example, where property is purchased in another party’s name but the judgment debtor contributes to the purchase price so that he acquires an interest under a resulting trust proportionate to his contribution to the purchase price.

4.81  Similarly, in the case of securities, the judgment creditor will also need to state his reasons for believing the judgment debtor has the interest in the securities specified in Form N380.  It is advisable for copies of the judgment debtor’s share certificate or other documentary evidence of the holding in securities to be provided. Fee 4.82  The fee for issuing an application for a charging order is £110 in both the High Court and County Court.1 The fee is payable for each charging order applied for. Cheques are payable to HMCTS. If the court makes interim charging orders over more than one asset, it will draw up a separate order relating to each asset. The fee is payable per asset. 1

Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, Fees 7.3(b), 8.4(b).

Interim charging order 4.83  The application for a charging order in CCMCC cases and cases heard elsewhere will initially be dealt with without a hearing.1 In a CCMCC case, under CPR 73.4(3), if the charge relates to the judgment debtor’s interest in land and none of the exceptions in CPR  73.4(4) apply this initial stage may be dealt with by a court officer.2 In a non-CCMCC case the application will initially be dealt with by a judge.3 1 2

3

CPR 73.4(2) and 73.6(2). The exceptions relate to applications under COA  1979, s  2(1)(b)(i), applications relating to partnership property under s 23 of the Partnership Act 1890, where an instalment order has been made before 1  October 2012 or where the court officer otherwise considers that the application should be dealt with by a judge. If the application seeks a charge beyond the judgment debtor’s interest in land the application will be dealt with by a judge (see n 3 concerning the meaning of ‘judge’). CPR 2.3(1) provides that ‘judge’ means, unless the context otherwise requires, ‘a judge, Master or district judge or a person authorised to act as such’. CPR 2.4(a) provides that where the CPR provide for the court to perform any act then, except where an enactment, rule or practice direction provides otherwise, that act may be performed in relation to proceedings in the High Court, by any judge, master or district judge of that court. In the High Court the practice is for such applications to be dealt with by a master (or district judge in the regions).

Discretion to make an interim charging order 4.84  COA  1979, s  1(1)1 and CPR  73.4(5), 73.4(6) and 73.6(3) provide that the court officer or judge2 (as applicable) ‘may’ make an interim charging order. There is therefore discretion to make the order. In a CCMCC case a party may request that a decision by a court officer be reconsidered by a district judge.3 As will be seen, the

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court also has a discretion to make the final charging order. For the purpose of the exercise of the court’s discretion there is, in general, no material difference between the making of an interim charging order and a final charging order.4  However, in practice the court is likely to grant the interim charging order and consider fully the exercise of its discretion at the hearing for further consideration of the application. The principles governing the exercise of the court’s discretion are considered in paras 4.151–4.197. 1 COA 1979, s 1(1) simply refers to ‘an’ order. 2 See para 4.83, n 3. 3 CPR 73.5 4 As per Lord Brandon of Oakbrook at 689 in the Court of Appeal decision in Roberts Petroleum v Bernard Kenny [1982] 1 All ER 685. See further paras 4.160–4.169.

4.85  If the court makes an interim charging order, the order will:1 (a) impose a charge over the judgment debtor’s interest in the asset to which the application relates; and (b) in relation to a non-CCMCC case fix a hearing to consider whether to make a final charging order as provided by CPR 73.10A(3)(a) (see paras 4.143–4.150);  (c) in relation to a CCMCC case a district judge may consider it appropriate to transfer the application to the judgment debtor’s home court for the fixing of a hearing to consider whether to make a final charging order as provided by CPR 73.10A(3)(a). According to the Civil Procedure Rules Committee minutes of November 2015, in respect of CCMCC cases, an interim charging order made by a court officer was seemingly to be made by way of an unless order (so that if no objection was received within a stated deadline a final charging order will be made). This is not specifically reflected in CPR  73 but has been put into operation. Where a court officer makes an interim charging order the standard order expresses to the judgment debtor that they may request reconsideration of the decision (without a hearing) and unless an objection is received to the continuation of the charge the application will be without a hearing to determine whether the interim order should be made final. Further, in the CCMCC where it is not considered appropriate to transfer the application to the debtor’s home court at the time of making the interim charging order, the same wording may also be used by a district judge. 1

CPR 73.4(5), 73.4(6) and 73.6(3).

Form of the order 4.86  Form N86 contains the standard form interim charging order. The judgment debtor’s beneficial interest in the asset which is subject to the charge is described in a schedule contained in the order.

Effect of the interim charging order 4.87  COA 1979, s3(4) provides that a charge imposed by a charging order takes effect as an equitable charge created by the judgment debtor by writing under his

232  Charging orders hand. The effect of the interim charging order is therefore to impose a charge over the judgment debtor’s property and convert the judgment creditor into a secured creditor of the judgment debtor. The position was summarised by Buckley LJ in the Court of Appeal decision in Rainbow v Moorgate Properties Ltd:1 ‘The effect of the charging orders was not, I think, such as can be accurately described as conferring “additional security”; in fact it converted the plaintiffs, as unsecured creditors, into secured creditors for the amount of the charge, and to the extent that a secured creditor is better off than an unsecured creditor if the debtor is insolvent or likely to be insolvent, the effects of the orders must be to confer an advantage on the creditor to whom such an order is granted, and in that sense it does give a priority in favour of other unsecured creditors.’ 1

[1975] 2 All ER 821 at 823–824. This case considered the earlier statutory regime under AJA 1956, s 35 but the relevant statutory provisions are the same under COA 1979.

4.88  It is important to note that the charge is imposed from the date of the interim charging order, not the subsequent final charging order (see further para  4.200).  However, while the interim charging order creates an immediate charge over the judgment debtor’s property, that charge is defeasible since the interim charging order is revocable at the hearing for further consideration of the application.1 As is discussed further in paras 4.160–4.169, in Roberts Petroleum Ltd v Bernard Kenny Ltd (in liquidation)2 the House of Lords had to consider whether a charging order nisi should be made absolute when a creditor’s voluntary liquidation had since intervened.  Lord Brightman found that the judgment creditor: ‘had no more than a defeasible charge at the date of the commencement of the liquidation, so that the right of the receiver [ie the receiver appointed by the judgment creditor under the charging order]3 to retain the asset as against the liquidator was only a defeasible right. Neither the precarious existence of the charge nor the precarious possession of the receiver seems to me to afford a convincing reason for consolidating the position of the judgment creditor visà-vis the general body of unsecured creditors … .’4 1

2 3 4

Roberts Petroleum Ltd v Bernard Kenny Ltd (in liquidation) [1983] 2 AC  192 at 205, 208, 209, per Lord Brightman. Where a court officer has made the interim order there is also another stage at which the debtor may object as set out in CPR 73.5. As The White Book 2020 notes (at vol 1, para 73.5.1) there is a degree of overlap between this rule and the provisions of CPR 73.10(2) which allow for a debtor to object to the making of a final order. [1983] 2 AC 192. See para 4.5. [1983] 2 AC 192 at 209. As Judge Paul Baker QC (sitting as a judge of the High Court) observed in Calor Gas Ltd v Piercy [1994] 2 BCLC 321: ‘The way the law has been relaxed is that prior to this, before a charging order nisi could be regarded as completed it had to be accompanied by the appointment of a receiver, and there was such a receiver in Roberts Petroleum Ltd v Bernard Kenny Ltd. All that the 1979 Act does is that it ensures that an order without a receiver is completion of the execution but, and this is where the case comes in, the initial order nisi is still defeasible in the sense as it was used by Lord Brightman in the Roberts Petroleum Ltd’s case.’

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Service of the interim charging order Parties to be served 4.89  Under CPR  73.7(7), copies of the interim charging order, the application notice and any documents filed in support of the application must be served by the judgment creditor on the following persons: (a) the judgment debtor; (b) if the order relates to an interest in land any co-owner; (c) the judgment debtor’s spouse or civil partner (if known); (d) such other creditors as are identified on the application notice or as the court directs; (e) if the order relates to an interest under a trust, on such of the trustees as the court directs; (f) if the interest charged is in securities other than securities held in court, then: (i) in the case of stock for which the Bank of England keeps the register, the Bank of England; (ii) in the case of government stock to which (i) does not apply, the keeper of the register; (iii) in the case of stock of any body incorporated within England and Wales, that body; (iv) in the case of stock of any body incorporated outside England and Wales or of any state or territory outside the United Kingdom, which is registered in a register kept in England and Wales, the keeper of that register; (v) in the case of units of any unit trust in respect of which a register of the unit holders is kept in England and Wales, the keeper of that register; and (g) if the interest charged is in funds in court, the Accountant General at the Court Funds Office. 4.90  The reason for service of the interim charging order on the judgment debtor, trustees (in the case of an interest under a trust), party who administers the register (in the case of stock) and Accountant General at the Courts Funds Office (in the case of funds in court) is self evident, since they are either a party with an interest in the asset or a party who is responsible for administering dealings in relation to the asset. 4.91  Under CPR  75.7(7)(d) the court has power to direct service of the order on other creditors of the judgment debtor and the application notice (Form N379/ N380) requires the applicant to state those other creditors of the judgment debtor of whom he is aware. The reason for this provision is that the court will not make a charging order where it is not equitable to do so and one of the factors which may be relevant in this regard is the solvency of the judgment debtor and the position of other creditors. This is discussed further in paras 4.156–4.172. Land – service on spouses/civil partners 4.92  CPR 73.7(c) expressly requires service of the interim charging order on the judgment debtor’s spouse or civil partner. Prior to 6 April 2016 no express rule in the CPR required such service.

234  Charging orders Deadline for service 4.93  Where the interim charging order was made at the CCMCC and has not been transferred out under CPR 73.4(6) the documents1 must be served by the judgment creditor within 21 days of the date of the interim charging order.2 If the judgment creditor does not comply with these deadlines for service (and does not apply for an extension of time) then the matter will be referred to a district judge to consider whether to dismiss the application and discharge the interim charging order.3 Where the interim charging order was made at a court other than the CCMCC, or where the matter has been transferred out under CPR 73.4(6) for a hearing, the documents must be served by the judgment creditor not less than 21 days before the hearing.4 In any event, the judgment creditor should proceed to serve the interim charging order as soon as possible in order to be protected in the event that the judgment debtor disposes of the property. In the case of land, the judgment creditor will have to take additional steps in order to be protected against third party purchasers of the judgment debtor’s property.5 1

Namely the interim charging order, the application notice and any documents filed in support of the application (see para 4.89). 2 CPR  73.7(1). The judgment creditor can apply for an extension of time in respect of the above deadlines by applying to the CCMCC (CPR 73.7(3)). 3 CPR 73.7(4). 4 CPR 73.7(5). 5 See paras 4.101–4.133.

Certificate of service 4.94  The judgment creditor must serve the order.1  This enables the judgment creditor to retain control over the time and method in which service is effected. Where the interim charging order has been made at the CCMCC, and has not been transferred out under CPR 73.4(6) for a hearing, the judgment creditor must file a certificate of service in relation to each person served, together with a statement of the amount due under the judgment or order including any costs and interest, within 28 days of the date of the interim charging order.2 Where the interim charging order has been made at a court other than the CCMCC, or where the matter has been transferred out under CPR 73.4(6) for a hearing, a certificate of service must be filed at least two days before the hearing or a certificate of service must be produced at the hearing.3 1 CPR 73.7(1) and 73.7(5). 2 CPR 73.3(2). 3 CPR 73.7(6)(a)-(b).

Effect of service of the interim charging order 4.95  The effect of service of the interim charging order will depend on the nature of the judgment debtor’s property which is subject to the order.

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Effect of interim order in relation to securities 4.96  Where a judgment debtor has been served with an interim charging order relating to his interest in securities, if that judgment debtor disposes of that interest the disposition shall not be valid as against the judgment creditor.1 The importance of serving the interim charging order on the judgment debtor as soon as it has been obtained is therefore evident. 1

So long as the charging order remains in force: CPR 73.8(1).

4.97  Under CPR 73.7, service of an interim charging order relating to an interest in securities must also be effected on the company or holder of the stock register. Once served with the order, that party must not permit any transfer of any of the securities or pay any dividend, interest or redemption payment relating to them unless the court gives permission.1  Service of the order should therefore operate to prevent shares being registered in a third party’s name. 1 CPR 73.8(2).

4.98  Further protection is given to the judgment creditor under CPR  73.8(3), which provides that if a company or keeper of a stock register who has been served with an interim charging order permits the securities charged to be transferred, he will be liable to pay the judgment creditor the value of the securities transferred or the amount of the dividend or interest payment made (unless such sum exceeds the judgment debt, in which case he will be liable for the amount necessary to satisfy the judgment debt in respect of which the charging order was made).1 1

If the company can show that the judgment debtor whose name appears on the stock register had no beneficial interest in the shares, it will not be liable for permitting the transfer of the shares: Gill v The Continental Union Gas Co Ltd (1871–72) LR 7 Exch 332, a case under JA 1838 but which contained like provisions to CPR 73.8.

4.99  Such protections may not be sufficient to ensure that assets are available to satisfy the judgment debt, however. Difficulties can be caused where the judgment debtor has disposed of the beneficial interest in his shares but this not has yet been reflected in the stock register.  In Hawks v McArthur,1 the Court found that even though the judgment debtor and the transferees had transferred shares (for valuable consideration) in flagrant breach of the company’s articles of association relating to share transfers, the transferees had equitable rights in the shares that preceded the equitable rights under the charging order (which had not been obtained until after the transfer). Accordingly, although the judgment debtor still held the legal title to the shares, a charging order could not be obtained.2 1 2

[1951] 1 All ER 22. In such circumstances obtaining a freezing injunction earlier in the proceedings may assist in the preservation of assets.

Effect of interim order in relation to funds in court 4.100  If a judgment debtor disposes of his interest in funds in court that are subject to an interim charging order that has been served on him and on the Accountant

236  Charging orders General,1 that disposition will not be valid as against the judgment creditor (so long as the charging order remains in force).2 However, note that there is no equivalent provision to CPR 73.8 imposing a liability on the Accountant General if funds which are subject to a charging order are improperly paid out of court.3 1 In accordance with CPR 73.7(7). 2 CPR 73.9. 3 See further para 4.285 for a discussion of Bath v Bath [1901] 1 Ch 460, a case which considered whether the Court Funds Office should be liable in the event that funds are improperly paid out of court in breach of a stop order.

Effect of interim order in relation to land 4.101  As is the case with any unregistered charge over land, a sale to a bona fide purchaser without notice will defeat the charge. In order to be effective, the charging order must therefore be appropriately registered. CPR  73 makes no provision in relation to the protection of a charging order by ensuring its registration by the court so this responsibility (as ever) rests on the judgment creditor.

Registering a charging order over land 4.102  The means by which registration of a charging order over land is effected depends on both the nature of the judgment debtor’s interest in the land that has been charged and whether the land is registered or unregistered. Registration should be effected as soon as the interim charging order has been obtained, rather than waiting for the final charging order, in order to prevent the charge being defeated by failure to register in the intervening period. 4.103  In practice, title to the vast majority of judgment debtors’ property is registered.  However, although all land in England and Wales is now subject to compulsory registration,1 unregistered title is still occasionally encountered and will be for some time to come. 1

Since 1  December 1990 the whole of England and Wales has been subject to compulsory registration of title: Registration of Title Order 1989, SI 1989/1347. See the Land Registration Act 2002, s 4.

4.104  The mechanics for registration of a charging order over registered and unregistered land are governed by entirely different statutory regimes. In the case of registered land, this is governed by the Land Registration Act 2002 and in the case of unregistered land by the Land Charges Act 1972. The statutory regimes are mutually exclusive and charging orders affecting registered land cannot be protected under the Land Charges Act 1972.1 The means by which a judgment creditor can determine whether land is owned by a judgment debtor and whether the title to the land is registered or unregistered are considered in Chapter 2. 1

LCA 1972, s 14 and Land Charges Rules 1974, r 13.

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Registering a charging order over unregistered land 4.105  Assuming that an index map search reveals that the land is unregistered, COA 1979, s 3(2) provides that the Land Charges Act 1972 (LCA 1972) shall apply in relation to charging orders as they apply to other orders or writs for the purpose of enforcing judgments. The LCA 1972 requires the Chief Land Registrar to continue to maintain numerous registers noting interests that affect unregistered land. These registers include the register of pending actions and register of writs and orders affecting land,1 which are considered in turn. 1

LCA 1972, s 1.

Register of pending actions 4.106  The register of pending actions allows the registration of ‘any action or proceeding pending in court relating to land or any interest in or charge on land’.1 This would include an application notice seeking a charging order. In most cases it will not be necessary to register the application notice itself because the interval between the issue of the application and the making of an interim charging order is normally very short. 1

LCA 1972, ss 5(1) and 17(1).

4.107  Where the judgment creditor has grounds to believe that the judgment debtor intends to deal with the land imminently, it may be appropriate to register the application (as distinct from the interim order) as a pending land action, although a related injunction should also be sought restraining the sale.  However, bearing in mind the injunction will not confer any priority on the judgment creditor if the judgment debtor breaches the injunction, the application for the charging order should still be registered to secure the advantages of registration (see para 4.109). Where an application is made to register a pending action, it should be registered against the estate owner or other person whose estate or interest is intended to be affected1 (see paras 4.115–4.117). 1

LCA 1972, s 5(4).

4.108  It is not possible to protect an application to obtain a charging order over a tenancy in common held in unregistered land as this falls outside the definition of land in LCA 1972 which excludes from its scope an ‘undivided share in land’ (see further paras 4.115–4.117).1 1

LCA 1972, s 17(1) and Perry v Phoenix Assurance plc [1988] 1 WLR 940. See further Megarry and Wade, The Law of Real Property (9th edn, Sweet & Maxwell, 2019), para 12-076.

Effect of registration as a pending action 4.109  Registration of the interim charging order as a pending action, where correctly registered, constitutes actual notice of the order.1 However, where it is not registered it will only bind a purchaser with express notice of it.2 1 2

Law of Property Act 1925, s 198.  LCA 1972, s 5(7).

238  Charging orders Practice and procedure for applying to register a pending action 4.110  The appropriate form to register an application for registration of a pending action is Form K3.1 The fee is £1 per name.2 The registration of a pending action ceases to have effect at the end of the period five years from the date on which it was made.3 In the unlikely circumstances where protection is still required after this period, the registration can be renewed. Once this is done, the registration shall have effect for five years from the date of renewal.4 1 2 3 4

Land Charges Rules 1974 SI 1974/1286, r 5 and Sch 2. The form can be downloaded from www.gov. uk/government/publications/pending-action-registration-application-k3 Land Charge Fees Rules 1990, SI 1990/327 Sch 1. LCA 1972, s 8. LCA 1972, s 8.

Register of writs and orders affecting land 4.111  Once an interim charging order has been made, it should be registered as a writ or order affecting land.1  LCA  1972, s  6(1) provides that ‘any writ or order affecting land issued or made by any court for the purpose of enforcing any judgment’ may be registered in the register of writs and orders affecting land. This clearly includes either an interim or final charging order.  In practice, the interim order should be registered to ensure that priority is not lost in between the time the interim charging order is made and the time the final charging order is made. 1

Otherwise the judgment creditor takes the risk of the registration of the application being vacated by the court. LCA 1972, s 5(10) and Sowerby v Sowerby (1982) 44 P & CR 192.

Sole owners 4.112  In some cases the property will belong solely to the judgment debtor, particularly where the judgment debtor is a corporate.  Where this is the case, an interim charging order over unregistered land can properly be registered in the register of writs and orders affecting land. Trusts of land 4.113  LCA 1972, s 6(1A) prohibits the registration of any writ or order affecting an interest under a trust of land1 being registered as a writ or order affecting land.2 In short, almost all charging orders imposed upon a beneficial interest under a trust relating to unregistered land are incapable of registration as a writ or order affecting land.3  The reason for this is that a beneficial interest may be ‘overreached’ by a purchaser.4 1 The meaning of trust of land is considered in para 4.41. 2 In Perry v Phoenix Assurance plc [1988] 1 WLR 940, an undivided share in land (ie a tenancy in common) was held not to fall under the definition of land in LCA 1972. LCA 1972, s 6(1A) is much wider than just tenancies in common and covers almost all forms of co-ownership of land. If the judgment creditor were to manage to register a charging order over a tenancy in common this would not constitute actual notice of the charging order because it would have been registered contrary to LCA 1972 (Law of Property Act 1925, s 198(2)).

Procedure for obtaining a charging order  239 3

4

Neither can a Class C(iii) land charge (general equitable charge) be registered instead: Land Charges Act 1972, s 2(4) which excludes, among other things, any trust of land from the definition of a Class C(iii) land charge. The process whereby a purchaser of a legal estate in land can take free of any beneficial interests in the land by paying the purchase monies to two or more trustees.

4.114  There are a number possible ways for a judgment creditor in such a position to protect himself.  First, where no sale of the property appears to be imminent, proceedings could be brought for an order for sale of the land pursuant to TLATA 1996, s 14. Those proceedings can then be registered as a pending land action under LCA  1972, s  5(1) (see paras 4.106–4.111).  However, this should be done without delay because the judgment creditor has no protection before this is done.  In the event that there appears to be a risk that the land might imminently be sold, a receiver could possibly be appointed over the judgment debtor’s share of the land.  However, given that it may not be possible to register the receiver’s appointment as a pending land action, it is hard to see the advantages of this other than the fact it would restrain the judgment debtor from dealing with the land and if the received gives notice of their appointment to the prospective purchaser then, in practice, that purchaser will, likely, insist that the sale proceeds are applied to discharge the charging order. Further, it would seem that if notice of the charge was given to the trustees (ie  the co-owner), should the sale proceeds be paid away, a remedy may be available against the trustee. Registration against the name of the ‘estate owner’ 4.115  The entry is made against ‘the name of the estate owner or other person whose land, if any, is affected by the order registered’.1  Estate owner means ‘the owner of the legal estate’.2 In practice, the ‘names should be that or those appearing on the [abstract of] title’3 even if known by a different name or another name appears on his birth certificate.4 This creates a difficulty for the judgment creditor who is unlikely to have access to the title deeds (unless the judgment arises out of a dispute concerning a transaction involving the judgment debtor’s land). However, under the Pt  71 procedure, the judgment debtor could be ordered to produce the title deeds when he attends court to provide information about his means.5 If any doubt remains it seems prudent to consider registration in more than one name.6 1 2 3

LCA 1972, s 6(2). LCA 1972, s 17(1) and Law of Property Act 1925, s 205(1)(v). Oak Co-operative Building Society v Blackburn [1968] Ch  730 at 742, CA (decided under the Land Charges Act 1925) and Standard Property Investment plc v British Plastics Federation (1987) 53 P & CR 25 at 32. 4 Standard Property Investment plc v British Plastics Federation (1987) 53 P & CR 25 at 35. 5 CPR 71.2(6)(b). 6 Although in Standard Property Investment plc v British Plastics Federation (1987) 53 P & CR 25 at 30, Walton J suggested multiple registrations ‘fills one with alarm’ he stopped short of saying it could not be done.

4.116  An error in the name registered will be invalid against a purchaser who applies for an official search in the correct full names of the estate owner and receives a clear certificate of search.1  However, an error in the name registered does not entirely invalidate the registration where the name given might fairly be

240  Charging orders described as a version of the proper names of an estate owner (such as Frank instead of Francis). Such a registration would be valid against someone who failed to make a search or who applied for an official search in the wrong name and received a clear certificate of search.2 Registration will be wholly ineffective where it omits one of the names of the estate owner.3 1 2 3

Oak Co-operative Building Society v Blackburn [1968] 1 Ch 730 at 743, CA (decided under the Land Charges Act 1925). Oak Co-operative Building Society v Blackburn [1968] 1 Ch 730 at 743, CA. Diligent Finance Co Ltd v Alleyne (1972) 23 P & CR 346 (omitted middle name).

4.117  The registration of a writ or order affecting land ceases to have effect at the end of the period five years from the date on which it was made.1 If protection is still required after this period, the registration can be renewed and once this is done, the registration shall have effect for five years from the date of renewal.2 1 2

LCA 1972, s 8. LCA 1972, s 8.

Effect of registration as a writ or order against land 4.118  Registration of the interim charging order as a writ or order against land, where correctly registered, constitutes actual notice of the order.1 Where the charging order has not been registered it is void against a purchaser of the land even if the purchaser has actual notice of the charging order.2 1

2

Law of Property Act 1925, s 198. As has been noted, if the judgment creditor were to manage to register a charging order over an interest under a trust of land this would not constitute actual notice of the charging order because it would have been registered contrary to LCA 1972. LCA 1972, s 6(4). Contrast pending actions which by virtue of LCA 1972, s 5(7) bind a purchaser with express notice even if not registered.

Practice and procedure for registering a writ or order 4.119  Where registration is required, the appropriate form for the registration of a writ or order is Land Registry Form K4.1 The current fee for a registration or renewal of a registration is £1 per name.2 The register of land charges is a public register3 and an official search of the register can be made using Land Registry Form K15.4 The current fee for searches is £1 or £2 per name depending on how the search is carried out.5 1 2 3 4 5

The form can be downloaded from https://www.gov.uk/government/publications/writ-or-orderregistration-application-k4 Land Charges Fees Rules 1990, SI 1990/327, Sch 1. LCA 1972, s 9(1). Land Charges Rules 1974, r 3(2).  The form can be downloaded from www.gov.uk/government/ publications/land-charges-official-search-application-k15 Land Charges Fees Rules 1990, SI 1990/327, Sch 1.

Cancellation of either a pending action or a writ or order affecting land 4.120  An application for cancellation of either a pending action or a writ or order affecting land is made using from K11.1 This should be done where a final order is

Procedure for obtaining a charging order  241

refused or the charging order is satisfied (either by sale or payment by the judgment debtor). 1

Land Charges Rules 1974, SI 1974/1286, r 10.

Registering a charging order over registered land 4.121  Protection of a charging order against registered land is relatively simple.  Assuming that an index map search reveals that the land is registered, COA 1979, s 3(2) provides that the Land Registration Act 2002 (LRA 2002) shall apply in relation to charging orders as they apply to other orders or writs for the purpose of enforcing judgments. 4.122  Under LRA  2002 a charging order can be protected by either a notice or a restriction.1  The Act imposes a duty to act reasonably when applying to register a notice or restriction and no application should be made without proper grounds. A  failure to observe this duty may result in a claim for damages as the duty is owed ‘to any person who suffers damage in consequence of its breach’.2 This provision should present no difficulties for a judgment creditor who has applied for or obtained a charging order. 1

2

Under the Land Registration Act 1925, either a caution against dealings or notice would have been used: Land Registry Practice Guide 19: notices, restrictions and the protection of third-party interests in the register (February 2020). LRA 2002, s 77.

Registration of the application or order? 4.123  The LRA  2002 provides that a pending land action1 and a writ or order affecting land2 can be protected by the entry of a notice.3  The Land Registration Rules 2003 also provide that a pending land action4 and a writ or order affecting land5 can be protected by the entry of a restriction.6 The practical significance of this is that both the application and the charging order can potentially be protected by either notice or restriction as appropriate. 1 2 3 4 5 6

Within the meaning of LCA 1972. Of a type mentioned in LCA  1972, s  6(1)(a) (ie  a writ or order issued by a court to enforce a judgment). LRA 2002, ss 87(1)(a)-(b) and 32(1). See also LRA 2002, s 34(1) and Land Registration Rules 2003, r 172(1) and (3). Within the meaning of LCA 1972. Of a type mentioned in LCA  1972, s  6(1)(a) (ie  a writ or order issued by a court to enforce a judgment). LRA 2002, s 43(1)(c) and Land Registration Rules 2003, r 172(2)–(3).

Notices 4.124  Where the judgment debtor is the sole owner of the registered land, either the application notice or the interim charging order can be protected by the entry of a notice.1 A notice is an entry in the register denoting a burden affecting the registered estate2 and is registered against the registered estate affected by the interest.3

242  Charging orders Any notices will appear in the charges register of the registered title affected.4 The fact that an interest is the subject of a notice does not necessarily mean that the interest is valid, but does mean that the priority of the interest, if valid, is protected.5 1 2 3 4 5

LRA 2002, ss 34(1) and 87(1). LRA 2002, s 32(1). LRA 2002, s 32(2). Land Registration Rules 2003, r 84(1). LRA 2002, s 32(1).

4.125  Notices can either be agreed or unilateral.1 In the context of charging orders an agreed notice is available where the Land Registrar has been sent a certified or official copy of the interim charging order with the application.2 Where, for whatever reason, a certified or official copy of the interim charging order cannot be provided (for example, because the judgment creditor has not yet received the sealed interim charging order from court), a unilateral notice can be registered instead because it does not require proof of the interest to be provided to the Land Registrar at the time of registration. 1

2

LRA 2002, s 34(2). An agreed notice is something of a misnomer because it can be entered without the registered proprietor’s consent where the Land Registrar is satisfied as to the validity of the applicant’s claim: LRA 2002, s 34(3)(c). See the Land Registration Rules 2003, r 81(1)(b) and Land Registry Practice Guide 19: notices, restrictions and the protection of third-party interests in the register (February 2020).

Agreed or unilateral notice? 4.126  A judgment creditor who can provide a certified or official copy of the sealed application notice or interim charging order is, in principle, free to apply for either an agreed notice or a unilateral notice.1 The form of the notice makes no difference to priority. However, a unilateral notice must be notified to the registered proprietor by the Land Registrar2 and the registered proprietor has an automatic right to apply for its cancellation.3  Objections by the judgment debtor are often groundless but the Land Registrar is duty bound to consider them and will transfer them to the Adjudicator if the parties cannot agree.4 By contrast, an application by the registered proprietor to cancel an agreed notice could only be made if the charging order has expired.5 The inconvenience which may therefore be caused by an application for cancellation by the judgment debtor in the case of a unilateral notice should be weighed against the possibility that where the application to register is urgent (for example, the judgment creditor is aware of an impending dealing with the title), the Land Registry may refuse his application for an agreed notice (which would leave the priority of his interest unprotected until he could apply for a unilateral notice).6 In these circumstances, the safer course is to apply for a unilateral notice in the first instance. 1 2 3 4 5 6

Land Registry Practice Guide 19: notices, restrictions and the protection of third-party interests in the register (February 2020). LRA 2002, s 35(1). LRA 2002, s 36(1) and Land Registration Rules 2003, r 86. LRA 2002, s 73(7). Land Registration Rules 2003, r 87. Land Registry Practice Guide 19: notices, restrictions and the protection of third-party interests in the register (February 2020).

Procedure for obtaining a charging order  243

4.127  The relevant form is Land Registry form AN11 for an agreed notice and form UN12 for a unilateral notice. The current application fee for either form of notice is £40 where the application is made by post or in person. However, where electronic means is used the fee is £20.3 1 2

3

Land Registration Rules 2003, r 81(1)(a). Land Registration Rules 2003, r 83. The forms can be downloaded from www.gov.uk/government/ publications/agreed-notice-registration-an1 (AN1) and www.gov.uk/government/publications/ unilateral-notice-application-to-enter-un1 (UN1). Land Registration Fee Order 2013, SI 2013/3174, Sch 3.

Cancellation of a notice 4.128  The beneficiary of a notice can apply for its removal using form UN2.1 This should be done where a final order is refused or the charging order is satisfied (either upon sale from the proceeds or by payment by the judgment debtor). 1

LRA 2002, s 35(3) and Land Registration Rules 2003, r 85(1).

Beneficial interest in registered land held under a trust of land 4.129  Where an application notice is issued or an interim charging order is made over a beneficial interest in registered land held under a trust of land, the judgment creditor should apply for a restriction.1  A  restriction ‘is an entry in the register regulating the circumstances in which a disposition of a registered estate or charge may be the subject of an entry in the register’.2 Where a restriction is entered on the register, it confers no priority but no entry of the type prohibited by the restriction can be made otherwise than in accordance with the terms of the restriction.3 1 2 3

LRA 2002, s 43(1)(c) and Land Registration Rules 2003, r 172(2)–(3). Note also that LRA 2002, s 33(a)(i) provides that it is not possible to protect an interest under a trust of land by notice. LRA 2002, s 40(1). LRA 2002, s 41.

4.130  A charging order over a beneficial interest in registered land held under a trust of land may be registered as Form K1 of the standard form of restrictions which appear as the Land Registration Rules 2003, Sch 4. It will be noted that the restriction only requires the judgment creditor to be given notice of any disposition and will not prohibit the disposition from being made. In order to better protect his position a judgment creditor may, at the final charging order stage, request the court to order a non-standard form of restriction.2 This wording usually requires 14 days advance notice of a proposed disposition to the judgment creditor. This gives a judgment creditor time to decide what action it wishes to take in order to protect its interest (for example, obtaining an undertaking for appropriate sale proceeds to be paid to him to discharge some or all of the judgment debt). 1

2

Which provides that: ‘No disposition of the [registered estate or registered charge dated [date]] is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to [name of person with the benefit of the charging order] at [address for service], being the person with the benefit of [an interim] [a final] charging order on the beneficial interest of (name of judgment debtor) made by the (name of court) on (date) (Court reference …).’ LRA 2002, s 46. See further The White Book (Sweet & Maxwell, 2020) vol 1, para 73.4.3.1.

244  Charging orders 4.131  The relevant form for the registration of a beneficial interest in registered land held under a trust of land is Land Registry Form RX1.1 The current fee to apply to enter a restriction is £40 where the application is made by post or in person. However, where electronic means is used the fee is £20.2 1 2

Land Registration Rules 2003, r 92(1). The form can be downloaded from www.gov.uk/government/ publications/enter-a-restriction-registration-rx1 Land Registration Fee Order 2013, SI 2013/3174, Sch 3.

Cancellation of a restriction 4.132  The owner of the land can apply for its removal using form RX3.1 This should be done where a final order is refused or the charging order is satisfied (either by sale or payment by the judgment debtor). 1

Land Registration Rules 2003, r 97(1). Where the beneficiary of the restriction consents an application to ‘withdraw’ the restriction the beneficiary may apply to withdraw the restriction using Form RX4. See further Land Registry Practice Guide 19: notices, restrictions and the protection of third-party interests in the register (February 2020). In practice use of the RX4 signed by the solicitor for the holder of the charging order is the preference of most conveyancing solicitors.

Outline applications to register a notice or restriction 4.133  Where an application to register an application notice or an interim charging order over registered land was urgent, a procedure known as an outline application previously existed.1 This type of application ceased in April 2018. Business customers can make full applications immediately online and so there was no longer a need for this service.2 1 2

Land Registration Rules 2003, r 54. Land Registration (Amendment) Rules 2018, SI 2018/70.

Do charging orders also need to be registered at Companies House? 4.134  COA 1979, s 3(4) provides that a charge imposed by a charging order shall have the like effect as an equitable charge created by the debtor by writing under his hand. Where the judgment debtor is a company, the question therefore arises as to whether charging orders have to be registered with the registrar of companies.1 1

Sections 860 and 878 (charges created by a company) and ss 874 and 889 (consequences of a failure to register) of Companies Act 2006 repealed the equivalent Companies Act 1985 provisions (ss 395 and 396) on 1 October 2009. The registration of a charge created on or after 6 April 2013 is governed by Companies Act 2006, ss 859A–859 (Companies Act 2006 (Amendment of Part 25) Regulations 2013, SI 2013/600). A charge which a company ‘creates’ falls within the scope of the legislation. The registrar of companies must register any such charge if the company, or any interested person, delivers to the registrar for registration the specified information within the time frame specified. Where the required documents are not delivered within the specified time, the security conferred by the charge is void against the company’s liquidator or administrator and creditors.

4.135  This question was answered by the Court of Appeal in Re Overseas Aviation Engineering (GB) Ltd,1 which held that charging orders did not have to be registered with the registrar of companies. Although Re Overseas Aviation was decided by

Procedure for obtaining a charging order  245

reference to AJA 1956, s 35(3) and Companies Act 1948, s 95, the statutory forebears of COA 1979, s 3(2), (4) and Companies Act 2006 respectively, the language used in the former statutes has been substantially replicated and thus the case remains good law. 1

[1963] Ch 24.

4.136  Lord Denning gave four reasons as to why registration of charging orders over company property with the registrar of companies was not required: (a) The language of AJA 1956, s 35(3) made clear that the only form of registration with which the judgment creditor has to comply was registration pursuant to the Land Charges Act 1925 (in the case of unregistered land) and the Land Registration Act 1925. Similarly, the language of COA 1979, s 3(2) refers only to registration under LCA 1972 and LRA 2002. (b) The words ‘the like effect’ were ambiguous and are capable of meaning that the charging order is to have ‘the like effect as a valid equitable charge’. They do not compel the judgment creditor to make any formal registration of the charge in order to give it validity, save for registration under the Land Charges and Land Registration Acts. (c) Practical difficulties would arise since under the Companies Act 1948, s 98 the judgment debtor company would be under a duty to register the charging order within 21 days even though the interim charging order may have been obtained without notice. Similar difficulties would arise under Companies Act 2006. (d) The legislature would not have intended to make such a change affecting companies and no other debtors except by an express change to the relevant companies legislation.

Objections to a final charging order 4.137  ‘Any person’ who wishes to object to the court making a final charging order must file and serve on the applicant written evidence stating the grounds of his objections.1 The category of persons who may object to a final charging order being made is not therefore simply confined to the judgment debtor and may include, for example, other creditors, persons with a beneficial interest in the property in the case of land, or conceivably even the issuer company in the case of a charging order made in relation to securities. 1

CPR 73.10(2) (CCMCC cases where no transfer has been made) and CPR 73.10A(2) (non-CCMCC cases or a CCMCC case which has been transferred out under CPR 73.4(6)).

4.138  The evidence opposing the final charging order must be filed and served at least seven days before the hearing in respect of non-CCMCC cases (or a CCMCC case which has been transferred out under CPR 73.4(6))1 or, in a CCMCC case, not later than 28 days after service on that person of the application notice and interim order.2 A witness statement with, where relevant, supporting documents setting out the person’s grounds for opposing the final charging order should be provided. 1 CPR 73.10(2). 2 CPR 73.10A(2).

246  Charging orders Burden of proof 4.139  The court retains a discretion and will consider the position of the creditor, debtor and interested third parties. Previously the burden of proof was considered to fall on the judgment debtor (or other person) to show why a final charging order should not be made.1 1

Roberts Petroleum Ltd v Bernard Kenny Ltd (in liquidation) [1982] 1 All ER 685. Similarly, in Aero Properties v Citycrest Properties [2003] All ER (D) 218 the Court held that the burden of proving that an interim charging order should not be made final rested on the judgment debtor, although in that case it had not been discharged.

4.140 In National Guild of Removers and Storers Ltd v Jones1 the Court of Appeal questioned whether this previous authority was still applicable. It was noted that the rules relied on in previous authorities differed from the existing CPR provisions. The decision in Roberts was based on RSC Ord 50, r 1. This rule was not replicated in CPR Pt 73 (which provides only that a judgment debtor wishing to object to the making of a final order must file and serve written evidence stating the grounds of his objection). There is no explicit requirement upon the court to make the order final unless the judgment debtor shows cause for not making the order. It was observed by Pitchford LJ that this was not surprising given the requirements in COA Act 1979, s 1(5) which provide that when making a charging order the court needs to consider all the circumstances of the case and any evidence before it including the personal circumstances of the debtor and whether any other creditors of the debtor would be unfairly prejudiced by such an order. It was noted that an interim charging order is made without a hearing and usually without notice to the debtor. Thus, the court is unlikely at the interim stage to be furnished with full information about the debtor’s financial circumstances. It was considered that it would therefore not be appropriate for the court to be automatically required to make a final order should the judgment debtor not make representations against it. However, this issue was not determinative of the appeal and the Court of Appeal declined to make a ruling as full argument was not heard. It was noted, however, that this needed to be brought to the attention of the legal profession. The position is therefore somewhat uncertain. 1 [2012] EWCA Civ 216.

4.141 In Nightingale Mayfair Ltd v Mehta,1 the Court had to decide the preliminary issue of where the burden of proof lay once evidence had been filed to object to the making of a charging order absolute. The evidence in question sought to establish that the judgment debtor had no beneficial interest in the land concerned.  In his judgment Blackburne J  summed up the dicta in earlier authorities and held that it is for the judgment creditor initially to provide evidence that the interest to be charged is beneficially owned by the judgment debtor. At the interim charging order stage, the case for a charging order has been made out on the evidence before the court. It is then for the judgment debtor to adduce evidence as to why a final charging order should not be made.  If he does so, the burden shifts back to the judgment creditor.2 Blackburne J concluded the issue by summarising the position as follows: ‘In short, as in litigation generally, the burden is “a swinging burden” … This means no more and no less than that, as the evidence of varying weight develops

Procedure for obtaining a charging order  247

before the court, the evidential burden of proof will remain with or shift to the person who will fail without further evidence. … The initial burden is plainly on the judgment creditor. Thereafter the burden rests with whichever side will lose on the basis of the weight of the evidence then before the court.’ 1 [1999] All ER (D) 1501. 2 While Nightingale concerned the provisions of RSC Ord 50, and in particular r 1(3) which provided that ‘unless sufficient cause to the contrary be shown’ the judgment debtor’s interest should be charged (wording which is not replicated in Pt 73), there is no logical reason why the principles as to the burden of proof established in Nightingale should no longer apply. Indeed, in The National Crime Agency v Dong [2017] EWHC 3116 (Ch) it was common ground that the judgment creditor was to establish that the judgment debtor had a beneficial interest in the property when this was challenged.

4.142  In the case of land, the fact that the judgment debtor is the only registered proprietor is good prima facie evidence in favour of granting a charging order against him. Where the judgment debtor nonetheless seeks to defeat a charging order by claiming that he holds the property on trust for another and where the evidence is inconclusive, the court is likely to make a final charging order (and thus postpone the arguments as to whether there is in fact a trust to the hearing for the order for sale).1  Alternatively, the court could direct a trial to determine the beneficial ownership of the property.2 1 2

Barclays Bank v Forrester [1987] CLYB 2437. See paras 4.147–4.150.

Further consideration of the application 4.143  Where an interim charging order is made in the CCMCC, where no earlier transfer out has taken place under CPR  74.4(6) and where no objection has been received within 28 days of service of the application notice and order, the application will be referred to a district judge for consideration as to whether a final order should be made. Alternatively, where no objection is filed, the decision whether to impose a final charging order may, in certain circumstances, be considered by a Legal Adviser at the CCMCC.1 Legal Advisers have limited powers and may only make a final charging order if: (a) it provides that the charge imposed by the interim order is to continue without modification (except for the amount secured) or; (b) to discharge the interim order and dismiss the application where the judgment creditor has made such a request. Otherwise the matter is to be referred to a district judge.2 In a CCMCC case, if any person files evidence stating grounds of objection to the making of a final charging order, the court must transfer the application for hearing to the judgment debtor’s home court and notice of the hearing will be served.3 1 2 3

CPR 73.10(6). ‘Legal Advisers’ are defined at CPR 73.1(ea). CPR  73.10(6A). A  right to reconsideration of a decision made by a Legal Adviser is set out at CPR 73.10ZA. CPR 73.10(3) and CPR 73.10(5).

4.144  Where an interim charging order was made other than at the CCMCC or has been transferred out under CPR  73.4(6) there will be a hearing for further consideration of the judgment creditor’s application for a charging order. The interim charging order is made without notice on the strength of the information contained in

248  Charging orders the judgment creditor’s application notice. The purpose of the further consideration of the interim order is to enable the court to review the position inter partes.1 1

Roberts v Kenny [1983] 2 AC 192.

4.145  When considering an application further (as at para 4.143), or at the hearing, the court may:1 (a) make a final charging order confirming that the charge imposed by the interim charging order continues, with or without modification; (b) discharge the interim charging order and dismiss the application; (c) decide any issues in dispute between the parties, or between any of the parties and any other person who objects to the court making a final charging order; or (d) direct a trial of any such issues, and if necessary give directions; or (e) make such other order as the court considers appropriate. 1

CPR 73.10(7) and 73.10A(3).

4.146  There are therefore a range of options open to the court when considering whether to make the charging order final. The use of the word ‘may’ shows that the court has a discretion to make the final charging order. This discretion is discussed at paras 4.151–4.197. When will the court direct a trial of issues between the parties? 4.147  CPR 73.10(7) and CPR 73.10A(3) make it clear that any issues in dispute between the parties (or between any of the parties and any other person who objects to the court making a final charging order) can be decided upon at the hearing. The commentary in The White Book1 observes that only exceptionally will it be necessary for directions to be given for a trial to be ordered of any issue between the parties pursuant to CPR 73.10(7)(d) or CPR 73.10A(7)(d). 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 73.10.2.

4.148  The circumstances in which a trial of issues between the parties will be appropriate was considered by the Court of Appeal in Rosseel NV  v Oriental Commercial & Shipping Co (UK) Ltd.1 In that case there was a dispute as to whether the judgment debtor beneficially owned land against which a charging order had been made, or whether the land actually belonged to third parties. The Court approved2 a note to RSC Ord 50 (the procedural rule then applying to charging orders), which is repeated in Pt 73,3 to the effect that if title to stock or shares which are subject to a charging order is disputed, an issue may be directed to be tried, and observed that the same principles should apply in relation to a dispute as to the beneficial ownership of land.4 Parker LJ, who gave the lead judgment, concluded: ‘Where there is a real dispute, it is, as it seems to me, necessary in order to do justice that an issue should be tried and the court can in the exercise of its power to regulate its own procedure direct such issue.’ 1

(1991) Times, 11 October. The relevant issue on appeal was whether the judge had the power to direct trial of an issue under RSC Ord 50. The wording of CPR 73.8(2)(c) now makes clear that there is such a power but the principles discussed in the case are still relevant.

Procedure for obtaining a charging order  249 2 3 4

Parker LJ stated: ‘The note is not based on any authority, but I would endorse it.’ The White Book (Sweet & Maxwell, 2020), vol 1, para 73.10.3. See, eg, Nightingale Mayfair Ltd v Mehta, discussed in para 4.141.

4.149  A mere assertion by the judgment debtor that a final charging order should not be made will not suffice.1 Where there is serious doubt as to the judgment debtor’s solvency, the court may make an order for an inquiry into this issue.2 1

Newman v Rook (1858) 4 CB 434, a case relating to garnishee orders, but similar principles should apply. 2 See George Lee & Sons (Builders) Ltd v Olink [1972] 1 All ER 359, a case relating to garnishee orders but similar principles should apply.

4.150  Where the court directs that there is an issue to be tried the practice is to adjourn the application to make the charging order absolute until after the decision on the issue.1 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 73.10.3 and Rosseel NV v Oriental Commercial and Shipping (UK) Ltd [1991] 2 Lloyd’s Rep 625.

The court’s discretion 4.151  As has been noted, the court has a discretion as to whether or not to make a charging order.1 This discretion exists both when the court considers the application for an interim charging order and at the hearing for further consideration of the application, and there is no difference between the principles the court should apply in exercising that discretion at either stage.2 1 2

See para 4.20. See para  4.84.  Should the judgment creditor subsequently proceed to enforce the security by applying for an order for sale, the court has a further discretion as to whether to or not to make that order. See paras 4.221–4.223.

4.152  Under COA  1979, s  1(5) the court must take into account all the circumstances of the case in exercising its discretion to make a charging order, and in particular must consider any evidence before it as to the personal circumstances of the judgment debtor and whether any other creditor of the debtor would be likely to be unduly prejudiced by the making of a charging order.  Each case is a matter for the individual judgment of the court in the circumstances of that particular case.1 1

Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 2 AC  192. In C&W  Berry Ltd v Armstrong Moakes [2007] EWHC 2101 (Ch) the High Court considered an argument that it should discharge a charging order absolute on the grounds that the charging order absolute should not have been made in the first place in light of the impending bankruptcy of the judgment debtor. The Court distinguished Roberts v Kenny and IDC Ltd v Marrons [2001] BPIR 600 on the grounds that those were both cases in which the relevant charging orders were made absolute in the knowledge of pending insolvency proceedings and knowingly had the effect of giving priority over unsecured creditors. In contrast, in the C&W  Berry case neither the judgment creditor or indeed the Court acknowledge that a bankruptcy petition had been presented by another trade creditor when the charging order absolute was made. The Court noted that s  1(5)  COA  1979 states: ‘In deciding whether to make a charging order the Court shall consider all the circumstances of the case and, in particular, any evidence before it as to (a) the personal circumstances of the debtor, and (b) whether

250  Charging orders any other creditor of the debtor would be likely to be unduly prejudiced by the making of the order’. The High Court considered that the words ‘any evidence before it’ meant that where there was no evidence before the court at the time of making the charging order absolute, the charging order absolute should not subsequently be discharged on the grounds that it should never have been made in the first place. Such an argument required the application of hindsight, and was prohibited by the words of s 1(5) COA 1979. The Court went on to exercise its discretion under s 3(5) COA 1979 and upheld the discharge of the charging order on other grounds. See further the unusual case of White v Williams [2011] EWHC 494 (Ch) where a final charging order was refused by Briggs J. The applicant in this case had entered into a loan agreement with trustees in relation to a church building but had not secured the loan. When that building was subsequently sold the debt was not repaid by the trustees. A charging order was sought on a different church property run by the trustees. However, this was refused due to the congregation being innocent parties – they should not suffer due to the trustees’ breach of trust.

4.153  The leading case on the principles governing the court’s discretion to make a charging order is the Court of Appeal decision in Roberts Petroleum Ltd v Bernard Kenny Ltd (in liquidation)1 and the subsequent reversal of that decision in the House of Lords.2  In giving the lead judgment in the Court of Appeal, Lord Brandon of Oakbrook laid out the following principles as relevant to the court’s exercise of its discretion under COA 1979: ‘(1) The question whether a charging order nisi should be made absolute is one for the discretion of the court. (2) The burden of showing cause why a charging order nisi should not be made absolute is on the judgment debtor. (3) For the purpose of the exercise of the court’s discretion there is, in general at any rate, no material difference between the making absolute of a charging order nisi on the one hand and a garnishee order nisi on the other.3 (4) In exercising its discretion the court has both the right and the duty to take into account all the circumstances of any particular case, whether such circumstances arose before or after the making of the order nisi. (5) The court should so exercise its discretion as to do equity, so far as possible, to all the various parties involved, that is to say the judgment creditor, the judgment debtor, and all other unsecured creditors.’4 1 2 3

4

[1982] 1 All ER 685. [1983] 2 AC 192. Similar sentiments were expressed in the earlier Court of Appeal decision in Rainbow v Moorgate Properties Ltd [1975] 2 All ER  821 where Buckley LJ at 824 expressed the view:  ’I  for myself can see no difference between those considerations which are relevant to the question whether the discretion should or should not be exercised to make absolute a garnishee order and those considerations which are relevant to the question whether the court should or should not make absolute a charging order.’ [1982] 1 All ER 685 at 689.

4.154  The Court of Appeal’s decision in Roberts v Kenny was subsequently reversed in the House of Lords but the principles set out above were not effected by that reversal and remain good law.1 1

Two further principles were set out by Lord Brandon of Oakbrook at 689 but the House of Lords subsequently overturned these: see the judgment of Lord Brightman, [1983] 2 AC 192 at 213. See para 4.164–4.165.

Procedure for obtaining a charging order  251

Developments following the interim charging order 4.155  It is clear that the court can take into account what has happened since the interim charging order in deciding whether to make the final charging order.1 1

Roberts v Kenny [1983] 2 AC 192. See also Ropaigealach v Allied Irish Bank plc [2001] EWCA Civ 1790 at [15] for a clear synopsis of the law on this point.

Undue prejudice to other creditors 4.156  The COA 1979 requires the court to take into account the likelihood that a charging order will cause undue prejudice to other creditors in considering whether to make the final charging order.1 Because charging orders take effect as an equitable charge on the judgment debtor’s property, a judgment creditor with the benefit of a charging order has an advantage over the unsecured creditors of the judgment debtor. The position of other judgment creditors will be particularly important when the judgment debtor is insolvent or facing the prospect of insolvency. 1

COA 1979, s 1(5)(b).

4.157 In Rainbow v Moorgate Properties Ltd1 the Court of Appeal had to consider how the court’s discretion under AJA  1956, s  352 should be applied in an appeal against two charging orders absolute which had been made after the judgment debtor company had gone into creditors voluntary liquidation and subsequently petitioned for its own winding up. 1 2

[1972] 2 All ER 821. Although this case therefore predates COA  1979, it remains good law since the earlier statutory provisions were equivalent to those under COA 1979 for these purposes.

4.158  On the facts of that case, the Court of Appeal held that the judgment creditors’ charging orders absolute could not stand. In considering the matter, Buckley LJ found that the considerations which are relevant to the exercise of the court’s discretion to make a charging order absolute are the same as those which the court should apply in deciding whether to make a garnishee order absolute (now a final third party debt order), and cited his own judgment in the earlier Court of Appeal decision in D. Wilson (Birmingham) Ltd v Metropolitan Property Developments Ltd:1 ‘The position is, I think, that a court in considering whether or not to exercise its discretion to make absolute a garnishee order in circumstances such as this must bear in mind, not only the position of the judgment creditor, the judgment debtor and the garnishee, but the position of the other creditors of the judgment debtor and must have regard to the fact that proceedings are on foot, and were on foot at the time the garnishee proceedings were launched for ensuring the distribution of the available assets of the judgment debtor company among the creditors pari passu.’2 1 2

Bar Library Transcript No 383A of 1974. [1975] 1 WLR 788 at 793.

4.159  On the facts in Rainbow the Court of Appeal found that, while the judgment creditors had not done anything wrong in seeking to obtain the charging orders

252  Charging orders absolute (not least since they had no knowledge of the judgment debtor’s financial situation), the orders should be discharged. Buckley LJ stated:1 ‘While I have much sympathy for the plaintiffs and quite understand that they are anxious that payment should be made, I think it is wrong, when the court is aware of the fact that the debtor is, or is likely to turn out to be, insolvent, that one creditor should be given an advantage over other creditors by an exercise of the discretion of the court under s 35 of the Administration of Justice Act 1956.  … the court has to be satisfied that it is proper for the court, in the exercise of its discretion, to place [the judgment creditor’s] at an advantage over other creditors. If there were no countervailing reasons the court would make charging orders in the present case but, in my judgment, there are countervailing reasons connected with the moratorium and the proposed scheme of arrangement which I have mentioned which in this case do make it improper to give the plaintiffs an advantage over other creditors.’ 1

[1972] 2 All ER 821 at 825.

Roberts v Kenny 4.160  The need to balance the conflicting interests of a judgment creditor seeking to exercise his right to enforce his judgment and the rights of all creditors in an insolvency to be treated equally were at the centre of the court’s considerations in Roberts v Kenny in both the Court of Appeal and the House of Lords. 4.161  The Court of Appeal judgment in Roberts v Kenny described two further principles in addition to those set out in para 4.153, which related to the exercise of the court’s discretion in the context of a judgment debtor’s insolvency. These were overturned by the House of Lords on appeal. Before considering the reasons for that reversal, it is worth briefly summarising the facts in the case. 4.162  A  judgment creditor of a company had obtained a charging order nisi over the land of the judgment debtor company.  The judgment debtor company subsequently convened a meeting of its shareholders on short notice and resolved to put the company into voluntary liquidation. The question for the Court was whether, in the circumstances, it should exercise its discretion to make the charging order absolute. The High Court judge thought it should not and discharged the charging order but the Court of Appeal disagreed and reinstated the charging order. 4.163  In giving the lead judgment in the Court of Appeal, Lord Brandon of Oakbrook held that proof of the combination of circumstances that the judgment debtor is insolvent and that a scheme of arrangement has been set on foot by the main body of creditors and has a reasonable prospect of succeeding will generally justify the court in exercising its discretion by refusing to make the order absolute. However, in the absence of the combination of these circumstances, the court will generally be justified in exercising its discretion to make the order absolute. The judgment debtor appealed. 4.164  Lord Brightman, who gave the lead judgment in the House of Lords, noted that the Court of Appeal had correctly identified the conflict between two well-

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established principles of law that were central to the matters at issue in the case: first, a judgment creditor is in general entitled to enforce a money judgment which he has lawfully obtained against a judgment debtor by all or any of the means of enforcement prescribed by the relevant rules of court; secondly, when a judgment debtor (natural person or a corporate body) has become insolvent, all the unsecured creditors should be treated equally. Lord Brightman summarised both the question facing the Court and his views on how it should be answered as follows:1 ‘The basic question which confronts the court when it is faced with an application by an execution creditor to convert an order nisi into an order absolute in a case such as the present is whether the asset in question should fall outside the statutory scheme which, by virtue of the liquidation is then in existence, or should be subject to that scheme.  In the absence of persuasive authority to the contrary, and it will of course be necessary to consider the authorities, I  would myself have thought that the court should exercise this discretion so that the asset falls within the statutory scheme.  The purpose of the further consideration of the order nisi is to enable the court to review the position inter parties. At the date of the order nisi the court has made no irrevocable decision.  If therefore the statutory scheme for dealing with the assets of the company has been irrevocably imposed on the company by resolution or winding up order before the court has irrevocably determined to give the creditor the benefit of the charging order, I would have thought that the statutory scheme should prevail.’ 1

[1983] 2 AC 192 at 208.

4.165  Having reviewed the authorities1 the House of Lords found that while each case was a matter for the individual judgment of the court in the circumstances of that particular case, the liquidation of a company is, without more, sufficient cause for the court to exercise its discretion not to make the final charging order. The liquidation brought into operation a statutory scheme for dealing with the assets of the company which in general should prevail. It was irrelevant whether the statutory scheme was achieved through the compulsory winding up of a company, or a resolution of a company in general meeting for voluntary winding up because in each case the statutory scheme should prevail. As Hale LJ put it in Ropaigealach v Allied Irish Bank plc:2 ‘Roberts Petroleum held, in effect, that one judgment creditor should not be able to steal a march on the other unsecured creditors by getting a speedy charging order nisi and thereby pre-empting the statutory insolvency scheme. That of course is all relevant to the matters in s 1(5)(b) of the 1979 Act.’3 1 See para 4.166, n 1. 2 [2001] EWCA Civ 1790. 3 Or as Lord Brightman put it at 209 in Roberts v Kenny: ‘I do not see why a creditor should gain an advantage merely because he has a revocable order for security at the time when the statutory scheme comes into existence.’

4.166  The same principles would apply if an individual is made bankrupt after an interim charging order is made but before the final charging order.1 However, note that in Nationwide Building Society v Wright & Anor2 the building society

254  Charging orders appealed a decision which had granted an application by the trustee in bankruptcy discharging a charging order which had been obtained by the building society over the share of the bankrupt judgment debtor in a property. The interim charging order was made before the presentation of the bankruptcy petition against the judgment debtor. Unknown to the Court or to the building society, the final charging order was made after presentation of the petition but before the making of the bankruptcy order. It was held that it was clearly the intention of the legislature that a creditor who had completed execution before the bankruptcy order was made was not to be deprived of its security by reason of the bankruptcy order alone. Nothing in this case justified a departure from the principle that a judgment creditor, who had obtained a final charging order before the making of a bankruptcy order, was not to be deprived of the benefit of his security by reason of the bankruptcy alone. Under the Insolvency Act 1986 a bankruptcy commences when the order for bankruptcy is made. Therefore, those who obtain a final charging order before the commencement of the bankruptcy in good faith, for value and without notice that the petition has been presented generally will not be affected by the subsequent bankruptcy. This is different to corporate insolvency where a winding-up order is backdated to the date of the petition (transactions since that date can be set aside by the liquidator). 1 See Industrial Diseases Compensation Ltd v Marrons [2001] BPIR 600, and the House of Lords’ express disapproval in Burston Finance Ltd (in liquidation) v Godfrey [1976] 1 WLR 719, and in Roberts v Kenny. The House of Lords in Roberts v Kenny also reviewed the decisions in Hudson’s Concrete Products Ltd v D B Evans (Bilston) Ltd (1961) 105 Sol Jo 281, D Wilson (Birmingham) Ltd v Metropolitan Property Developments Ltd [1975] 2 All ER 814 (where the judgment debtor’s insolvency had intervened between the making of a garnishee order nisi and the hearing for further consideration, so that the Court refused to make the garnishee order absolute) and Rainbow v Moorgate Properties Ltd [1975] 1 WLR 788 (where the Court discharged a charging order because a judgment debtor had presented its own winding up petition prior to the charging order absolute being made), and criticised the interpretation that had been placed on these cases in Burston (which was to the effect that each contained significant circumstances in addition to the presentation of a winding up petition, notably the preparation of a scheme of arrangement or moratorium, from which it could be inferred that an understanding existed between creditors as to common forbearance from pressing ahead with individual remedies in the interests of all ‘a holding back of action for the common benefit’). 2 [2009] EWCA Civ 811.

4.167  Effectively, therefore, in circumstances where a judgment debtor is insolvent, a judgment creditor who is seeking a charging order must overcome a presumption that the statutory regime should prevail. However, each case will be a matter for the individual judgment of the court in the circumstances of that particular case. In Re a Debtor (nos 31/32/33 of 1993), Calor Gas v Piercy1 the Court had to consider the position where a judgment creditor had obtained a charging order nisi after which proposals for individual voluntary arrangements had been made in relation to the judgment debtor’s estate.  Following presentation of the proposals, interim orders freezing the position of the debtor’s estate were made in accordance with IA 1986, s  252 following normal practice.2  The charging orders were then made absolute notwithstanding the fact that the interim orders were by then in place. In British Arab Commercial Bank Plc v Ahmad Hamad Algosaibi and Brothers Co3 it was observed that Calor Gas was exceptional because all the other creditors of the judgment debtor were only creditors for small sums so that on administration and sale by the trustee in bankruptcy, they would only receive a very small sum (so that they would not be

Procedure for obtaining a charging order  255

‘unduly prejudiced’ if the order were made absolute). It was expressly noted that Calor Gas demonstrates that, even where the statutory regime applies, the court has a residual discretion in an exceptional case to make a final charging order. 1 2

3

[1994] 2 BCLC 321. IA 1986, s 252 provides: ‘(1) In the circumstances specified below, the court may, in the case of a debtor (being an individual) make an interim order under this section. (2) An interim order has effect that, during the period for which it is in force – (a) no bankruptcy petition relating to the debtor may be presented or proceeded with, and (b) no other proceedings, and no execution or other legal process, may be commenced or continued against the debtor or his property except with the leave of the court.’ [2011] EWHC 2444 (Comm).

4.168  The judge in Calor Gas reviewed the House of Lords’ decision in Roberts v Kenny and said: ‘As I read Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 1 All ER 564, [1983] 2 AC 192 in considering whether an order should be made absolute after bankruptcy or liquidation almost as a course the order will be discharged. Yet where there is no supervening bankruptcy the court has a wider discretion than where there had already been a bankruptcy. Even in the latter case where there had already been a bankruptcy, the court is not deprived of all discretion in the matter and I take that from the passage of Lord Brightman’s speech to which I referred (see [1983] 1 All ER 564 at 575, [1983] 2 AC 192 at 211).’ 4.169  The judge then considered the circumstances in this case and, in particular, the personal circumstances of the debtor and whether any other creditor of the debtor would be likely to be unduly prejudiced. While he found that both factors pointed towards discharging the order, against those considerations there were special circumstances, which pointed in favour of upholding the master’s decision to make the order absolute.  These comprised the fact that the judgment creditor had been deprived of important statutory rights due to the manner in which the scheme had been implemented. These considerations, together with the delay and expense the judgment creditor had suffered as a consequence, tipped the balance in favour of upholding the charging order absolute. 4.170  Essentially the court will seek to ensure fairness among all creditors where insolvency has occurred or is in prospect and so will not allow an advantage to be conferred on one creditor by means of a charging order. In British Arab Commercial Bank Plc v Ahmad Hamad Algosaibi and Brothers Co1 the Court observed that in a case where no statutory insolvency scheme applies the general rule is the principle of ‘first past the post’. However, this is only a general rule, to which there may be exceptions when it is appropriate in the exercise of the court’s discretion not to make a charging order final. It was further noted that the discretion afforded to the court whether to make the final order is not a general or unfettered one. It guards against ‘undue’ prejudice and this will usually arise from unconscionable or ‘sharp’ conduct by the judgment creditor. The other creditors would inevitably suffer some prejudice if one was granted a final charging order but there was nothing ‘undue’ about it. 1

[2011] EWHC 2444 (Comm). See also Midtown Acquisitions LP v Essar Global Fund Limited and Others [2018] EWHC 789.

256  Charging orders 4.171  Clearly, therefore, a judgment creditor must make careful enquiries to find out the financial state of the judgment debtor before seeking to obtain a charging order since otherwise he runs the risk of incurring costs in obtaining the charging order which may lead him to no advantage. The manner in which a judgment creditor can search for insolvency steps affecting a judgment debtor has been considered in Chapter 2. 4.172  In some respects, this may seem to cause an element of unfairness to a creditor who has diligently obtained judgment and proceeded to take enforcement steps (incurring further costs in the process) only to have such diligence go unrewarded by the intervention of a statutory scheme on insolvency. Such grievances may seem particularly acute when the prospect of the judgment debtor’s future insolvency were not apparent at the time the judgment and the interim charging order were obtained. Personal circumstances of the judgment debtor 4.173  COA 1979 requires the court to take into account the personal circumstances of the judgment debtor in considering whether to make the charging order.1 Financial hardship to the judgment debtor alone is unlikely to be sufficient for the court to exercise its discretion against making the charging order, since the starting point is that a judgment creditor is generally entitled to enforce a money judgment by any means of enforcement available.2 However, where the charging order is being sought over a matrimonial or family home, the court will take into account not just the position of the judgment debtor but also the situation of the judgment debtor’s family.3 Difficulties therefore arise where the court is faced with competing claims over the family home made by a judgment debtor’s spouse or former spouse and a judgment creditor. 1 2 3

COA 1979, s 1(5)(a). Roberts v Kenny [1983] 1 All ER 564. Harman v Glencross [1986] 1 All ER 545 at 561, per Fox LJ: ‘It seems to me that ‘the personal circumstances of the debtor’ would include the fact that he is obliged to make provision for his wife and young children, that he has no property with which to do so apart from the equity of his share of the matrimonial home and that his former wife has no resources of her own of any consequence. But, if that is not so, those facts are included in the expression “all the circumstances of the case”. So far as the wife is concerned, they are, I think, the most important factor.’

4.174  These competing claims were considered by the Court of Appeal in First National Securities Ltd v Hegerty.1 In that case a matrimonial home was owned jointly by the judgment debtor and his wife.  The judgment creditor obtained a charging order nisi on the husband’s beneficial interest in the house.  Shortly afterwards the wife commenced divorce proceedings and was joined as a party to the charging order proceedings. When the matter came before the master for further consideration of the charging order application, he refused to make the order absolute and discharged the order nisi. The judgment creditor appealed and Bingham J  allowed the appeal and made the charging order absolute. He rejected an application on behalf of the wife that the matter should be transferred to the Family Division so that the wife’s interest in the property could be determined under the Matrimonial Causes Act 1973, Pt II at the same time as the judgment creditor’s claim for a charging order. The wife appealed. 1 [1985] QB 850.

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4.175  The Court of Appeal found that there were not sufficient grounds for holding that Bingham J was so clearly wrong in exercising his discretion as he did that it should interfere with his decision and upheld the charging order absolute. In concurring with Bingham J’s dismissal of the wife’s submission that the charging order application should be transferred to the Family Division, Stephenson LJ held: ‘I  have, however, come to the conclusion (1) that the court should not use its powers under Part II of the Matrimonial Causes Act 1973 to override the claims of a creditor seeking security for a debt by a charging order; (2) that it should not discharge or vary a charging order so as to prefer a wife’s claim to such a creditor’s; (3) that it can, and often should postpone the enforcement of a charging order until the hearing of any application under s 30 of the Law of Property Act 1925, when the court can decide between the competing claims of wife and creditor.’ 4.176  Accordingly, the Court found that the subsequent application under Law of Property Act 1925 (LPA 1925), s 30 for an order for sale of the matrimonial home was the correct venue to consider the competing claims of the judgment creditor and the judgment debtor’s spouse since the wife’s possession of the house could not be disturbed until after that hearing. (LPA 1925, s 30 has now been replaced by TLATA 1996, s 14.) 4.177  By the time that the Court of Appeal came to give judgment in Hegerty, the first instance decision in Harman v Glencross had been given by Ewbank J.1 The facts in Harman were that a husband and wife had purchased a house in their joint names but the marriage had broken down and the wife had petitioned for divorce. The wife commenced ancillary proceedings for a property adjustment order and other financial relief, served notice of severance of the joint tenancy, and subsequently obtained a decree nisi. Shortly afterwards, a creditor of the husband obtained judgment against him and then obtained a charging order absolute in respect of the husband’s interest in the matrimonial home (in contrast to the situation in Hegerty, where the charging order nisi was obtained before the wife commenced divorce proceedings). However, the judgment creditor did not serve the application for the charging order on the wife or give her notice of it. When the wife discovered the existence of the charging order she applied under COA 1979, s 3(5) for it to be discharged, or in any event not enforced until the hearing of her application for ancillary relief. The charging order proceedings were then transferred to the Family Division to be heard by the same court hearing the wife’s application for ancillary relief in her divorce proceedings. 1

[1984] 2 All ER 577.

4.178  The Family registrar ordered that the charging order was to be subject to any order made in the ancillary proceedings and further ordered, in the ancillary proceedings, that the husband’s interest in the matrimonial home was to be transferred to the wife.  The judgment creditor appealed against the variation of the charging order made by the Family registrar. The Court of Appeal therefore had to consider

258  Charging orders how the interests of the wife and children were to be balanced against the interests of the judgment creditor.1 1

The Court also had to consider when, if at all, it was appropriate for the court to consider the wife’s position when deciding whether to make a charging order in respect of a matrimonial home.

4.179  The Court of Appeal in Harman1 first observed that the comments made by the Court of Appeal in Hegerty to the effect that the first instance decision of Ewbank J in Harman was wrong were obiter. This was because, first, Hegerty was not concerned with the exercise of the court’s powers under the Matrimonial Causes Act 1973, and secondly, because the Court in Hegerty had expressly disclaimed any intention to bind the Court of Appeal in Harman. 1

[1986] 1 All ER 545.

4.180  The Court then stated Lord Brandon’s dictum in Roberts v Kenny that a judgment creditor is in general entitled to enforce a money judgment which he has lawfully obtained against a judgment debtor by all or any of the means of enforcement prescribed by the relevant rules of court, but noted that this proposition is qualified (for example, where the interests of other creditors must be taken into account). Having accepted that the court is properly concerned to protect the wife’s right to occupy the matrimonial home, the Court went on to consider how that right should be protected. Balcombe LJ observed that the Court of Appeal in Hegerty had come to the view that the wife’s right of occupation was adequately protected by LPA 1925, s 30 hearing, but observed that if the position is considered by the Family Division pursuant to her application for ancillary relief under the Matrimonial Causes Act 1973, there are a number of ways in which her right to occupy the matrimonial home can be protected. He observed that the position in Harman differed significantly from that in Hegerty in that divorce proceedings had been commenced before the charging order nisi was obtained, and concluded:1 ‘If a judgment creditor obtains his charging order nisi after the wife has filed her divorce petition (which will usually contain a prayer for ancillary relief), then unless the court which hears the application to make the charging order absolute is satisfied that the wife’s rights will be adequately protected by the court’s discretion under s 30 of the Law of Property Act 1925, bearing in mind the limitations of that section mentioned above, it seems to me that it will normally be appropriate to take the course taken in the present case, and to transfer the judgment creditor’s application for a charging order to the Family Division so that it may be heard by the court hearing the wife’s application for ancillary relief.’ 1

[1986] 1 All ER 545 at 557–558.

4.181  Accordingly, there were no grounds for holding that the judge was wrong to exercise his discretion in the manner that he had and the Court upheld the order making the charging order subject to the order made in the ancillary proceedings. 4.182  Balcombe LJ went on to set out1 a number of general principles for how the courts should deal with the competing interests of a spouse and a judgment creditor in these circumstances:

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(a) Where a judgment creditor has obtained an interim charging order on the matrimonial home before the wife has started divorce proceedings, it is difficult to see why the court should refuse to make the final charging order, and the wife’s right of occupation should be ‘adequately protected’ under LPA 1925, s 30. (b) Where the interim charging order has been made after the wife’s petition, then on the application for a final charging order, unless it appears to the court that the circumstances are so clear that it is proper to make the order there and then, the usual practice should be to transfer the application to the Family Division so that it may he heard with the wife’s application for ancillary relief to enable one court to be in a position to consider all the circumstances of the case. Of particular relevance in considering such transfer will be: (i) whether the value of the equity in the house is sufficient to enable the final charging order to be made and realised at once even though that may result in the wife and children being housed at a lower standard than they might reasonably have expected had only the husband’s interests been taken into account against them.  (For example, in Llewellin v Llewellin,2 the court found that even if the charging order was made absolute and the charge was then realised by a sale of the house, the resultant proceeds of sale would clearly be sufficient to provide adequate alternative accommodation for the wife and children.) (ii) Failing that, the court should make only such order as may be necessary to protect the wife’s right to occupy (with the children where appropriate) the matrimonial home. The normal course should then be to postpone the sale of the house for such period only as may be requisite to protect the right of occupation,3 bearing in mind that the court is holding the balance, not between the wife and the husband, but between the wife and the judgment creditor.4 (iii) Finally, the court should consider whether there is any point in denying the judgment creditor his charging order if the wife’s rights of occupation could, in any event, be defeated by the judgment creditor making the husband bankrupt.5 (c) Once the final charging order has been made, it would normally require some special circumstance, (for example, as in Harman, where the wife had no notice of the charging order application) for the court to set the charging order aside under COA 1979, s 3(5). 1 2 3 4 5

[1986] 1 All ER 545 at 558–559. [1985] CA Bound Transcript 640. A form of ‘Mesher’ order, from Mesher v Mesher and Hall [1980] 1 All ER 126. Notably the judgment creditor in Harman was not prepared to accept a Mesher order. The Court found that this did not apply in Harman since the wife had given valuable consideration for the transfer of the property, but did not rule this out as a ground of objection if the facts had been different.

4.183  Fox LJ, who gave the second judgment in Harman, concurred with these principles but emphasised that the point of a transfer to the Family Division of an application for a charging order is simply to ensure that the court is fully apprised of all the circumstances of the case relating to the judgment debtor and his family – the

260  Charging orders application remained a charging order application and should not be treated as if it were the wife’s application under the matrimonial jurisdiction. 4.184  A number of commentators have criticised the lack of coherence in these judgments.1  A  procedural decision as to which court should hear the application for a charging order may inevitably involve different factors being weighed in the balance. The cases show that under COA 1979, s 1(5) a wife’s interests in the matrimonial home should be taken into account whenever the court is considering whether to make a charging order. Both Hegerty and Harman were decided before the Human Rights Act 1998 came into force. Human rights considerations may be a further factor in suggesting that where there is insufficient equity in a matrimonial home to enable the charging order to be enforced immediately while leaving sufficient funds to provide adequate protection for the wife’s accommodation, the better approach is for the court to make the charging order subject to postponing the judgment creditor’s right to enforce the charge for such period as is necessary to protect the spouse’s and children’s rights to occupy the matrimonial home. 1

See, eg, Warburton ‘Victory for the sprinter’ Conv 1986, July–August, 291–295.

4.185  This was the approach Waite J followed in AustinFell v AustinFell,1 a case heard in the Family Division. In that case the Court faced the familiar dilemma of striking a balance between the family security claimed by the wife and children in matrimonial proceedings and the commercial security claimed by a judgment creditor bank in charging order proceedings.  In that case, the matrimonial home had been purchased in joint names but the husband’s business subsequently got into serious financial difficulties and his bank obtained judgment against him. Later that year the husband and wife separated. The bank then obtained a charging order against the husband’s share in the matrimonial home. The wife applied to discharge the charging order and also brought divorce proceedings. The registrar directed that the wife’s application to discharge the charging order be heard at the same time as her application for financial relief in the divorce proceedings. 1

[1990] 2 All ER 455 and as approved by the Court of Appeal in Kremen v Agrest [2013] EWCA Civ 41, at [13].

4.186  On the hearing of both applications the registrar, exercising the unfettered discretion conferred by both the Matrimonial Causes Act 1973, s  25(1) and COA 1979, s 1(5) to have regard to ‘all the circumstances of the case’, set aside the charging order and directed that the husband’s half share of the matrimonial home be transferred to the wife. The registrar’s decision was made on the ground that the wife’s claim to the matrimonial home was overwhelming as against the husband and should prevail over a creditor’s claim for security, and where it was not possible both to enforce the charging order and to provide adequate protection for the wife’s accommodation, the charging order should be discharged to allow her to have the full equity in the property unencumbered by the charging order. The registrar also refused to allow the bank’s security to be deferred so that the competing claims might be looked at again in a few years’ time. 4.187  The bank appealed, contending that while it accepted the wife’s need to house herself and her children, the bank’s security ought not to be swept aside so

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completely. The bank therefore sought to preserve the charging order absolute it had obtained, but to delay its enforcement until the children reached maturity.1 Waite J  allowed the bank’s appeal and granted a postponed enforcement order until the children reached maturity.  The argument centred around what Balcombe LJ had meant in Harman by ‘adequate protection’ for the wife in considering whether to make a charging order. Waite J held that the interpretation the wife had sought to put on the guidelines laid down by the Court of Appeal in Harman were plainly perverse. He held:2 ‘When the judgments of the Court of Appeal in Harman v Glencross [1986] Fam 81 are read as a whole in the context of the facts with which they were dealing, they plainly refute the idea that there can ever be automatic predominance for any claim: whether it be the wife’s claim for permanent adequate protection of her right of accommodation or the creditor’s claim for permanent protection of his debt. Every case depends, as Fox LJ said in Harman v Glencross, at p 104A, upon striking a fair balance between the normal expectations of the creditor and the hardship to the wife and children if a charging order is made. The use of the expression “hardship” in that formula necessarily implies that there will be instances in which the wife and/or children will be compelled, in the interests of justice to the judgment creditor, to accept a provision for their security of accommodation which falls below the level of adequacy.’ 1 2

Ie a Mesher order, see para 4.182, n 3. [1990] 2 All ER 455 at 460.

4.188  The right of occupation to be protected is not therefore permanent protection. As Balcombe LJ stated in Harman, where a judgment creditor seeks an alternative to immediate enforcement via a Mesher type postponed enforcement order, such an order ought not to be refused save in exceptional circumstances. Inevitably, such an order may involve hardship on both sides (for the wife, in having to pay off accumulated interest on the charge during the postponement period, and for the judgment creditor, in having to wait for its money). Nonetheless:1 ‘A  postponed enforcement order nevertheless represents the fairest balance between the competing claims of wife and creditor, in the endeavour which the court has to make to give some effect to both, and that is the order which I propose to direct.’ 1

[1990] 2 All ER 455 at 463.

Hardship to the judgment creditor 4.189 The Harman case made clear that the court will take into account evidence of hardship that will be suffered by the judgment creditor if a charging order which is not immediately enforceable is not granted.1 In that case the judgment creditor had not submitted any evidence as to his means. Similarly, in Austin-Fell the judgment creditor bank’s personal circumstances were not taken into account since the bank acknowledged that it had the protection of substantial resources on which loss of the security for the relatively small debt concerned would make little dent.2 However, a judgment creditor who will suffer hardship if the charging order is not granted

262  Charging orders would be well-advised to submit evidence as to this hardship in the event that the application for a charging order is opposed or sought to be varied or discharged. 1 2

[1986] 1 All ER 545 at 553. See also Kremen v Agrest [2013] EWCA Civ 41 at [36]. [1990] 2 All ER 455 at 462.

Judgment debt not immediately payable 4.190  As has been noted, the court has the power to make a charging order in respect of a judgment debt which is not yet immediately payable.1  However, the question remains how the court should exercise its discretion in such circumstances. In Robinson v Bailey2 the Court had to consider whether a charging order should be available to secure an order for specific performance whereby the judgment debtor was ordered to pay £50 a year quarterly to the judgment creditor.  The judgment creditor sought to obtain a charging order over the judgment debtor’s local loan stock which was valued at over £3,000.3 1 COA 1979, s 1(1) and see para 4.31. 2 [1942] Ch 268. 3 In Robinson, a pre-COA 1979 case, the court, somewhat reluctantly, assumed it had jurisdiction to make a charging order notwithstanding that the judgment debt is not yet immediately payable on the basis of earlier case law. That the court now has such jurisdiction is clear from the wording of COA 1979, s 1(1).

4.191  Simonds J held that the court’s jurisdiction must be exercised ‘only with the greatest care’ where a charging order is intended to secure future payments and the court must be guarded in exercising it.1 On the facts in Robinson, Simonds J refused to grant the charging order, stating: ‘I  cannot conceive that it would be proper for the court, by reason of an apprehended future failure of the defendant to satisfy the terms of the judgment, to lock up so disproportionate an amount of his property to satisfy so small a debt.’ In his view, a charging order should not be used as a ‘lever’ to force a judgment debtor to comply with a future (and in that case contingent) obligation. 1

Simonds J also appears to have been influenced by the fact that the future payments were conditional on the continued life of the judgment creditor.

4.192  However, the fact that the value of the judgment debtor’s asset is disproportionately greater than the amount of the judgment debt will not of itself be a bar to a charging order if, in all the circumstances of the case, the judge considers it is proper to make the order.  In Archer v Williams1 a ‘penniless’ defendant was ordered to pay £2,500 damages. A  charging order was granted over a defendant’s home in respect of that judgment debt, and although the value of the defendant’s home is not revealed in the judgment, it is likely to have been considerably in excess of £2,500. Mr Justice Jackson expressly acknowledged the relative modesty of the sum of damages compared to the defendant’s equity in her home, when making the charging order: ‘It seems to me that, considering all the circumstances of the case, and considering the relatively modest sum involved in comparison with the

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equity in the defendant’s house, the proper order is for this court to make a charging order against the defendant’s house in the sum of £2,500.  I  make such an order, because I consider that that is the only proper exercise of this court’s discretion. I do so without any enthusiasm in view of the defendant’s circumstances.’ 1

[2003]  EWHC  1670. See also Packman Lucas Ltd v Mentmore Towers Ltd [2010]  EWHC  1037 (TCC) and Re:Goldspan Limited [2001] 10 WLUK 776.

Judgment debt payable by instalments 4.193  The fact that there has been no default in payment of the instalments does not prevent a charging order from being made in respect of that sum. However, the court is obliged in considering all the circumstances, to take into account the fact that there has been no default.1 Whether the court will exercise its discretion and make the order to do so will depend on the circumstances of the case. In Mercantile Credit Co Ltd v Huxtable2 the Court of Appeal held that a court cannot be faulted for exercising its discretion in favour of not making a charging order against a debtor’s property where it is clear that he has properly complied with the terms of an order for the payment of a judgment debt by instalments.3 The White Book4 states: ‘Where there is an instalment order that is being complied with it is suggested that the size of the debt and the size of the instalments will be important considerations. The larger the debt and the smaller the instalments, the more likely it is that a charging order will be made. However, if it is a modest debt that can be, and is being, paid off by reasonable instalments over a reasonable period of time, the court may well decide that a charging order is not appropriate.’ It further notes: 5 ‘Where execution by writ of control has been stayed on terms that the defendant pays by instalments (or similarly, where the court has ordered payment by instalments pursuant to r.40.11) and where the defendant is complying and thus is not in arrears, the Court may properly exercise discretion not to make a charging order (Mercantile Credit Co Ltd v Ellis).’ 1 2 3

4 5

COA 1979, ss 1(6) and 1(7). See para 4.30. (1987) Times, 1 April. Obiter, the Court held that although it had not been necessary to decide the point in that case, it would have found that there was no jurisdiction to make a charging order as long as the instalments were being regularly paid by the judgment debtor.  However, it should be noted that Mercantile Credit concerned a decision of the County Court, to which County Courts Act 1984, s 86 applied (which has been since amended by TCEA 2007, see para 4.30). The White Book (Sweet & Maxwell, 2020), vol 1, para 73.4.4. The White Book (Sweet & Maxwell, 2020), vol 1, para 73.4.5.

4.194 In Ropaigealach v Allied Irish Bank plc1 the judgment creditor obtained a charging order nisi which was made absolute three months later.  However, in the meantime an order for payment of the judgment debt by instalments had been made.  The judgment debtor appealed against the charging order absolute on the grounds that, in light of the instalment order, the effect of County Courts Act 1984,

264  Charging orders s 86(1) was that the court had no jurisdiction to make the order. The County Courts Act 1984, s 86(1) as it stood at the time2, provided: ‘Where the court has made an order for payment of any sum of money by instalments, execution on the order shall not be issued until after default in payment of some instalment according to the order.’ 1 [2001] EWCA Civ 1790. 2 County Courts Act 1984, s 86(1) has since been amended to refer only to warrants of control (see para 4.30).

4.195  The Court of Appeal dismissed the judgment debtor’s appeal. Hale LJ held: ‘I  therefore conclude, as a matter of statutory construction, that there is jurisdiction to make a charging order absolute if a charging order nisi has been obtained before the instalment order was made. It is also tolerably clear that there is nothing wrong, in principle, with a charging order and an instalment order coexisting.’ 4.196  The Court noted that an instalment order provides for the method of payment by a judgment debtor, whereas a charging order gives security for the eventual payment of that debt. Accordingly, there were many circumstances in which it would be entirely sensible and satisfactory from both parties’ points of view for an instalment order and a charging order to co-exist, particularly where, as in the circumstances of Ropaigealach, under the terms of the instalment order the debt will not be payable for many years (if at all), so that there is all the more reason to secure its eventual payment via a charging order. 4.197  While it is therefore open to the judgment debtor at the hearing for further consideration of the application (or subsequently) to seek to persuade the court not to make (or to discharge) a final charging order on the basis that he will pay off the judgment debt by instalments such arrangements will not preclude a charging order being made but are circumstances the court ought to take into account. A judgment creditor faced with such a proposal who nonetheless wishes to obtain the security of a charging order could provide an undertaking to the court not to enforce the security through applying for an order of sale while the judgment instalments are being met.1 1

This could be made a condition of the order: see COA 1979, s 3(1).

Final charging order 4.198  Form N87 contains the standard form final charging order. The order will state that the interim charging order shall continue (subject to any modifications made by the final charging order, which will be stated) and that the judgment debtor’s interest in the asset described in the order stands charged with a payment of the sum now owing under the judgment debt, together with any interests and the costs of the application. The order also provides that those costs are to be added to the judgment debt.

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4.199  CPR 73.10(8) and CPR 73.10A(4) provide that if the court makes a final charging order which charges securities (other than securities held in court), the order will include a stop notice unless the court otherwise orders. Form N87 contains the appropriate wording. Effective date of the final charging order 4.200  If the court proceeds to make a final charging order, that order operates from the date the interim charging order was made.  In Haly v Barry1 a judgment creditor had obtained a charging order nisi upon shares belonging to the judgment debtor.  However, before he had obtained the charging order absolute, a decree was made for the administration of the judgment debtor’s estate.  The plaintiff in the administration suit sought an injunction to prevent the judgment creditor taking further steps in the execution which was refused. One of the grounds on which the plaintiff appealed to the Court of Appeal was that the judgment debtor’s property was not charged until the charging order absolute had been made. 1

(1867–68) LR 3 Ch App 452.

4.201  The Court of Appeal dismissed the appeal on a number of grounds (some of which are no longer good law1) but in particular rejected the plaintiff’s argument that a charging order should be considered as two orders such that the charging order nisi ‘goes for nothing’ unless it is followed by the charging order absolute. Page Wood LJ held:2 ‘It is obvious that throughout these sections one order only is spoken of, which is at first to be an order nisi, and is afterwards to be made absolute.’ And later continued:3 ‘The statute directs the Judge to make an order nisi. If sufficient cause is shewn against it, it falls, but if not, it remains in force, and in the meantime it is operative, taking the fund out of the control of the debtor, and the only question remaining is, whether any sufficient cause can be shewn against making it absolute.’ 1 2 3

See further para 4.271. (186768) LR 3 Ch App 452 at 456. (186768) LR 3 Ch App 452 at 457.

4.202 While Haly concerned the provisions of the Common Law Procedure Act 1852 (the statutory regime then governing charging orders), the modern day provisions of COA 1979 similarly refer to the court making ‘an’ order.1 1

See COA 1979, s 1(1).

4.203  Haly was followed in Brereton and Wife v Edwards1 but was heavily criticised in subsequent cases2 in relation to its conclusions concerning the interaction between charging orders and the insolvency regime.  However, Haly remains good law in so far as it lays down the principle that when a final charging order is made it is to be treated as an order which has been effective since the date of the interim charging order.3

266  Charging orders 1 (1888) LR 21 QBD 226. 2 See the Court of Appeal’s decision in Burston Finance Ltd (in liquidation) v Godfrey [1976] 1 WLR 719, which was itself disapproved by the House of Lords in Roberts Petroleum Ltd v Bernard Kenny Ltd (in liquidation) [1983] 2 AC 192, but not on this point. 3 See the Court of Appeal’s comments in Ropaigealach v Allied Irish Bank plc [2002] 03 EG 130, at [11]: ‘A charging order absolute takes effect from the date of the charging order nisi: see Haly v Barry (1868) LR 3 Ch App 452, which is still good law on this point.’

Costs 4.204  CPR  45.8 provides that the fixed costs recoverable against the judgment debtor on the making of a final charging order under CPR 73.8.2(a) are £110 plus any reasonable disbursements in respect of search fees and the fee for registration of the order. The total amount is, usually, therefore £263 (£110 court fee (para 4.82), £110 fixed costs, £3 to obtain the Office Copy Land Register entry (see paras 2.46–2.47 and para 4.82), £20 to register the interim order and £20 to register the final order (para 4.127)). These costs are also secured under the charging order.1 1

See para 4.29.

4.205  Where judgment debtor (or some other person) objects to the final charging order being made, the judgment creditor may have incurred further costs in relation to the issues between the parties (for example, as a consequence of having to prepare and file written evidence disputing the judgment debtor’s case or in connection with the trial of an issue). In such circumstances the successful judgment creditor should seek an order at the hearing in relation to the recovery of those additional costs, which are outside the fixed costs regime.1 1

The general rule is that the court should make a summary assessment of the costs at the conclusion of a hearing lasting not more than one day unless there is good reason not to. Each party who intends to claim costs should prepare a written statement of costs which should follow as closely as possible Form N260. The statement must be signed by the party or his legal representative and must be filed at court with copies served on any party from whom recovery of costs is sought. Filing and service must be done as soon as possible and in any event at least 24 hours before the date fixed for the hearing. See further Pt 44. At the time of writing a non-mandatory summary costs pilot scheme is also in place (PD 51X). Parties may alternatively choose to use form N260A.

Discharge or variation of the charging order 4.206  COA 1979, s 3(5)1 provides: ‘The court by which a charging order was made may at any time, on the application of the debtor or of any person interested in any property to which the order relates, make an order discharging or varying the charging order.’2 1

2

Equivalent provisions exist in relation to charging orders made under the Council Tax (Administration and Enforcement) Regulations 1992, SI 1992/613, whereby a local authority may apply to the County Court for a charging order over a dwelling in respect of which council tax arrears are outstanding in excess of £1,000. Council Tax (Administration and Enforcement) Regulations 1992, reg  51(4) make equivalent provision in relation to charging orders made under those regulations.

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4.207  The use of the word ‘may’ in COA 1979, s 3(5) clearly shows that the court has a discretion to discharge or vary a charging order. Who can apply? 4.208  A person interested in the property to which the charging order relates will obviously include the judgment debtor, but will also include the judgment debtor’s spouse, even where it is the husband’s beneficial interest in the matrimonial home that has been charged and the charging order does not encroach upon the wife’s beneficial interest.1 A trustee in bankruptcy or liquidator would similarly appear to fall within the category of interested persons within COA 1979, s 3(5).2 1 2

Harman v Glencross [1986] 1  All ER  545, and C&W  Berry Ltd v Armstrong-Moakes [2007] EWHC 2101 (Ch). However, note the comments of Williamson H, QC in Banque Nationale de Paris plc v Montmand Ltd (1999) Times, 7 September. See also the commentary on Jelle in para 4.209.

Subsequent insolvency of the judgment debtor 4.209 In Jelle Zwemstra Ltd v Walton and Stuart,1 the Court considered how the discretion to discharge a charging order should be exercised upon a judgment debtor’s subsequent bankruptcy.  In that case, a charging order absolute had been obtained against a judgment debtor’s only asset, his home. Approximately ten months later the judgment debtor was declared bankrupt and his trustee in bankruptcy discovered that the judgment debtor had a large number of other creditors whose debts had accrued before the charging order had been made absolute but who were not apparent when the charging order was made.  The trustee in bankruptcy applied to discharge the charging order on the grounds that it unfairly prejudiced the other creditors as it effectively took up all of the judgment debtor’s recoverable assets. 1 [1997] CLY 3002.

4.210  The Court held that it would not exercise its direction to discharge the charging order.  The Court accepted that it had the power to do so, noting that although IA  1986, s  346 allowed a judgment creditor to retain the benefit of a completed execution that was obtained prior to a bankruptcy, the Court nevertheless has a discretion to discharge or vary a charging order at any time pursuant to COA, s  3(5).  The Court noted that there was no direct authority on how that discretion should be exercised,1 and said that while regard must be had to the interests of all creditors, the grounds for setting aside a valid charging order absolute must be more compelling than those for setting aside a charging order nisi. An order discharging or varying a charging order should not be made unless the injustice caused to the other creditors in not discharging or varying the charging order substantially outweighed the injustice that would be caused to the judgment creditor if the charging order were set aside. 1

While observing that Roberts v Kenny provided guidance on how the discretion should be exercised when insolvency intervenes between the interim charging order and final charging order.

4.211  In the circumstances of Jelle, the Court found that the charging order should not be set aside.  In reaching this conclusion, the Court considered the following

268  Charging orders factors to be relevant: the judgment creditor had pursued its debts through the courts while the other creditors had not done so; the charging order had been made nearly a year before the judgment debtor became bankrupt; and there was no evidence that the judgment creditor was trying to ‘steal a march’ on other creditors. 4.212 In C&W  Berry Ltd v Armstrong-Maokes1 the High Court reviewed the discharge of a charging order by the District Court under s  3(5) of the Charging Orders Act 1979 (although neither the District Judge nor the High Court was referred to the Jelle case). The High Court considered that the District Judge properly declined to place weight on the judgment creditor’s inactivity in enforcing the charging order because the judgment creditor had taken the sensible approach not to force the sale of the property that was occupied by the judgment debtor (until his death) and by his widow. However, the judgment creditor’s conduct in the judgment debtor’s bankruptcy was more significant; the judgment creditor had mentioned the charging order in a proof of debt submitted in 1992, but it did not provide a valuation of the charging order, nor did it mention the charging order throughout a prolonged series of events over the years thereafter, either before or after the judgment creditor received a bankruptcy dividend based on the full amount of the debt owed to it. Further, a payment by the widow of £10,000 to the trustee in bankruptcy of the judgment debtor in respect of the judgment debtor’s share of the house that was the subject of the charging order was then used to pay a dividend to creditors, including Berry. Although the widow had derived a benefit from making the payment in that the trustee in bankruptcy did not take possession of the house in order to force its sale, this benefit did not carry sufficient weight to displace the factors in her favour in the exercise of the court’s discretion. Accordingly, the High Court upheld the discharge of the charging order absolute obtained by Berry. 1

[2007] EWHC 2101 (Ch).

4.213  Also see commentary concerning Nationwide Building Society v Wright & Anor1 at para 4.166. 1 [2009] EWCA Civ 811.

Procedure 4.214  CPR 73.10B sets out the procedure for making an application to set aside or discharge a charging order. The application should be made in accordance with Pt 23. 4.215  Where the final charging order was made without a hearing under CPR 73.10(6A) or CPR 73.10(7) any application to discharge or vary a charging order must be made to the CCMCC. Upon the filing of an application to discharge or vary a charging order at the CCMCC, the application must be transferred for a hearing to the judgment debtor’s home court.1 Where the final charging order was made at a hearing, any application to discharge or vary a charging order must be made to the court which made the charging order.2 The court may direct that any interested person be joined as a party to such an application or that the application be served on any such person.3 1 See CPR 73.1(c). 2 CPR 73.10B(1), (2) and (3). 3 CPR 73.10B(4).

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4.216  Any order discharging or varying a charging order must be served on all persons on whom the charging order was required to be served.1 1 CPR 73.10B(5).

4.217  Where a charging order has been protected by an entry registered under LCA 1972 or LRA 2002, an order discharging the charging order may direct that the entry be cancelled.1 The party who applied for the discharge would be well advised to include such provision in the draft order. 1

COA 1979, s 3(6).

Appeal 4.218  As many of the cases cited in this chapter illustrate, a judgment debtor may also seek to appeal the making of a charging order. However, a higher court will be reluctant to interfere with the exercise of a lower court’s discretion and the final order will not be set aside unless wrong in principle1 or unjust due to a serious procedural or other irregularity in the proceedings in the lower court.2 1

Wicks v Shanks (1893) 67  LT  109.  In Harman v Glencross, the Court of Appeal decided not to interfere with the lower court’s exercise of its discretion even though Fox LJ (with whom Mustill LJ concurred) stated that he would have exercised it differently. 2 CPR 52.21(3).

ORDER FOR SALE 4.219  Once the judgment creditor has obtained the charging order he will have security for the payment of his debt.  However, this will not of itself result in the judgment creditor receiving funds in settlement of the judgment debt.  Where the judgment creditor is not prepared to wait for the judgment debtor to sell the property, he will need to take further steps to enforce the charge and satisfy the judgment debt. Separate proceedings must be issued under CPR Pt 8 in order to do this.

Jurisdiction to make an order for sale 4.220  Where the judgment debtor is the sole owner of the charged property, the court’s jurisdiction to grant an order for sale falls within the inherent equitable jurisdiction of the court by virtue of the fact the charging order takes effect as an equitable charge.1  County Courts Act 1984, s  23(c)  provides for the extent of the County Court’s jurisdiction to hear and determine such proceedings. Where the judgment debtor co-owns the property with another person, the judgment creditor must make an application for an order for sale under TLATA  1996, s  14.2  This provides: ‘(1) Any person who is a trustee of land or has an interest in a property subject to a trust of land may make an application to the court for an order under this section.

270  Charging orders (2) On an application for an order under this section the court may make any such order (a) relating to the exercise by the trustees of any of their functions (including an order relieving them of any obligation to obtain the consent of, or to consult, any person in connection with the exercise of any of their functions), or (b)  declaring the nature or extent of a person’s interest in property subject to the trust, as the court thinks fit.’ 1 2

COA 1979, s 3(4) and Tennant v Trenchard (1868–9) LR 4 Ch App 537. TLATA  1996, s  14 is not relevant where the property is solely owned by the judgment debtor: Pickering v Wells [2002] 2 FLR 798. However, note observations at para 4.253 below.

A further discretion 4.221  A judgment creditor with the benefit of a charging order is a person ‘with an interest in a property subject to a trust of land’ for the purposes of TLATA 1996, s 14 and therefore has standing to apply for an order for sale. This was decided by the case of Midland Bank plc v Pike,1 where the Court held that a judgment creditor with a charging order on the share of a co-owner in the proceeds of sale of land is a ‘person interested’ under LPA 1925, s 30.2 LPA 1925, s 30 has now been replaced by TLATA 1996, s 14 but the position remains unaltered.3 1 2

3

[1988] 2 All ER 434. LPA 1925, s 30 provided ‘(i) If the trustees for sale refuse to sell or to exercise any of the powers conferred by either of the last two sections, or any requisite consent cannot be obtained, any person interested may apply to the court for a vesting or other order for giving effect to the proposed transaction or for an order directing the trustees for sale to give effect thereto, and the court may make such order as it thinks fit.’ Since the statutes refer to ‘any person interested’ and ‘any person … who has an interest’ respectively.

4.222  CPR 73.10C(1) provides: ‘Subject to the provisions of any enactment, the court may, upon a claim by a person who has obtained a charging order over an interest in property, order the sale of the property to enforce the charging order.’ The use of the word ‘may’ in the procedural rules, like the equitable jurisdiction and statutory provision founding the court’s jurisdiction to make an order for sale, indicates that the court has a further and separate discretion as to whether or not to grant the order for sale. 4.223  An order for sale can be a draconian step in the case of land, particularly where the property in question is the judgment debtor’s home.  As will be seen from the discussion of the case law which follows, the court will consider all the circumstances of the case in deciding whether to exercise this discretion. Relevant factors are likely to be the judgment debtor’s conduct, the prospects of the debt being paid without the sale, the size of the judgment debt1, the value of the property, and, in the case of land, whether the property is the judgment debtor’s home and whether there are any co-owners of the property. 1 See Packman Lucas Ltd v Mentmore Towers Ltd [2010] EWHC 1037 (TCC) at [27]: ‘The size of the debt, and its value relative to the debt, are matters to be taken into consideration in the exercise of the court’s discretion. There are no rules or presumptions’. See also Amari Lifestyle Limited (T/A Amari Super Cars) v Warnes [2017] EWHC 1891 (Ch).

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Orders for sale under LPA 1925, s 30 4.224  While the principles governing the court’s discretion to make an order for sale under LPA  1925, s  30 have now been superseded by the TLATA  1994, s  14 regime, it is worth reviewing the case law relating to the former statutory provision to gain an understanding of the history and development of the court’s jurisprudence in this area. 4.225  As has been noted, in Harman v Glencross the Court of Appeal held that a spouse’s right of occupation should be adequately protected by LPA 1925, s 30. Under the old LPA 1925, s 30 regime, the general principle was that the judgment creditor’s interests should prevail except where there were ‘exceptional circumstances’.  In Re Citro (Domenico) (a bankrupt)1 the Court had to consider the position between the interests of a trustee in bankruptcy and an innocent spouse. Nourse LJ held as follows: ‘Where a spouse who has a beneficial interest in the matrimonial home has become bankrupt under debts which cannot be paid without the realisation of that interest, the voice of the creditors will usually prevail over the voice of the other spouse and a sale of the property ordered within a short period. The voice of the other spouse will only prevail in exceptional circumstances. No distinction is to be made between a case where the property is still being enjoyed as the matrimonial home and one where it is not. What then are exceptional circumstances? As the cases show, it is not uncommon for a wife with young children to be faced with eviction in circumstances where the realisation of her beneficial interest will not produce enough to buy a comparable home in the same neighbourhood, or indeed elsewhere. And, if she has to move elsewhere, there may be problems over schooling and so forth. Such circumstances, while engendering a natural sympathy in all who hear of them, cannot be described as exceptional. They are the melancholy consequences of debt and improvidence with which every civilised society has been familiar.’ 1

[1991] Ch 142 at 157.

4.226  A  trustee in bankruptcy is, however, under a statutory duty to realise the assets of the bankrupt.  There is no such duty upon a chargee under a charging order.  However, in Lloyds Bank plc v Byrne & Byrne,1 the Court found that the same considerations as in Re Citro apply to the respective interests of chargees and innocent spouses. Parker LJ held: ‘… I  accept that the statutory duty of the trustee is a powerful factor to be borne in mind when considering the exercise of discretion, but I cannot accept that it justifies any change in approach. Moreover, the position of a chargee may well be more powerful. If the sale is postponed the chargee creditor will suffer a postponement of the full amount of what may be a very large and increasing debt, whereas on a bankruptcy each individual creditor may suffer very little… In my judgment, this is wholly a matter of discretion and there is no difference in principle between the case of a trustee in bankruptcy and that of a chargee.’ 1

[1993] 1 FLR 369.

272  Charging orders 4.227 In Barclays Bank plc v Hendricks1 the judgment debtor had separated from his wife and left the matrimonial home of which the wife was co-owner to move into another house owned by the wife alone. The judgment debtor owed various sums of money to the bank who obtained a charging order absolute against the husband’s interest in the first house and sought an order pursuant to LPA 1925, s 30 for the sale of the house. An order was made for the property to be sold at a price not less than £200,000. The wife appealed from the order and asked the court to exercise its discretion to defer sale of the house until her children, who were then 10 and 13, had reached the age of 18 or finished full-time education. She contended that if she were forced to vacate her present home she would have to compel her husband to leave the second house to make way for her and that might bring their present amicable arrangements to an end so that he would cease to make the mortgage repayments on the first house. Moreover, the children did not wish to leave their current home which was nearer to their school and friends. 1

[1996] 1 FLR 258.

4.228  Laddie J reviewed the decisions in Re Citro and Lloyds Bank v Byrne. He first observed that since the judgment debtor husband had now left the matrimonial home, the only collateral purpose under the trust for sale arising under LPA 1925 on which the wife could rely no longer existed.1 Accordingly, the wife had to be able to show exceptional circumstances if her wish to remain in the first house were to prevail over the interests of the judgment creditor.  Laddie J  concluded there were no such circumstances. The fact that the wife owned another house and moving her children there would not even involve them changing schools meant that she was in a comparatively favourable position. Further, the fact that the order for sale would only result in the judgment creditor recovering some 20% of its judgment debt did not mean the order for sale should not be granted. 1

The Court contrasted the position in Abbey National v Moss [1994] 1 FLR 307, where the collateral purpose under the LPA 1925 trust for sale was that one co-owner could remain in occupation until she died, such that no order for sale was granted on application by a judgment creditor of the other co-owner, who had obtained a charging order.

Moratorium before possession 4.229  Laddie J went on to observe that when a court makes an order for the sale of a property in such circumstances, it still has to decide precisely when the innocent spouse must leave the home, and that no guidance had been given in the High Court or the Court of Appeal as to the factors which should be taken into consideration in determining the length of the moratorium period. In his view: ‘It seems to me that the period before the innocent spouse has to give up possession should be such as to allow sufficient time to facilitate the departure from the property without adding unnecessarily to the distress and dislocation which will, in any event, be suffered by the innocent spouse and the children. However, any such period should be as short as possible in the circumstances and any period more than a few weeks should be avoided if it is likely to cause significant hardship to the chargee.’

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4.230  In this case, the date by which the wife was ordered to vacate the house was postponed in order to avoid the move taking place in the middle of the children’s school terms.  Similarly, in Pickering v Wells1 the Court ordered that an order for sale should be postponed for a period of three months to allow the judgment debtor sufficient time to carry out negotiations to obtain a mortgage to pay off the judgment debt. Such periods have also been equally applicable under the TLATA 1996, s 14 regime. For instance, in Edwards v Bank of Scotland Plc2 a period of four months balanced between the need to bring matters to a conclusion and the need to give an appropriate opportunity to sell the property and purchase one. In C Putnam & Sons v Taylor3 possession was delayed by several months. In Close Invoice Finance Ltd v Pile4 possession was deferred by a year.5 1 2 3 4 5

[2002] 2 FLR 798. [2010] EWHC 652 (Ch). [2009] EWHC 317 (Ch). [2008] EWHC 1580 (Ch). The author has been involved in two cases where possession was delayed for over a year in each case – once to allow the children of the family to reach 18 and once to allow the property to be repaired and marketed by the debtor.

Orders for sale under TLATA 1996, s 14 4.231  As has been noted, trusts for sale and LPA  1925, s  30 have now been replaced by TLATA 1996. The relevant provisions of TLATA 1996, s 14 are set out at para 4.220. TLATA 1996, s 15 provides: ‘15 Matters relevant in determining applications (1) The matters to which the court is to have regard in determining an application for an order under section 14 include— (a) the intentions of the person or persons (if any) who created the trust, (b) the purposes for which the property subject to the trust is held, (c) the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home, and (d) the interests of any secured creditor of any beneficiary. … (3) In the case of any other application, other than one relating to the exercise of the power mentioned in section 6(2), the matters to which the court is to have regard also include the circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property subject to the trust or (in case of dispute) of the majority (according to the value of their combined interests).’ 4.232  TLATA 1996, s 15 has therefore introduced a change in the law in relation to the way in which the court will exercise its power to order a sale at the suit of a chargee of the interest of one of the beneficial owners of the property. It prescribes the matters which the court must take into account on an application for such an order for sale and states that the interests of a secured creditor (which includes a judgment creditor with a charging order over one co-owner’s beneficial interest) are only one of the matters the court should consider in determining whether to make an order for

274  Charging orders sale. While even under LPA 1925, s 30 regime the court would consider the purpose for which the property subject to the trust was held in determining whether an order for sale should be made,1 the court must also now take into account the welfare of minors in occupation of the land as their home as well as the intentions of those who created the trust. 1

See, eg, the judgment of Evans-Lombe J quoted in Bankers Trust Co v Namdar (unreported) 18 July 1995 and the judgment of Laddie J in Barclays Bank plc v Hendricks [1996] 1 FLR 258 at 263.

4.233  This change of position in the law was expressly acknowledged by Neuberger J in Mortgage Corporation v Shaire.1 In that case a chargee of a husband’s beneficial interest in the matrimonial home applied for an order for sale under TLATA 1996, s14. The husband had since died and his wife, the co-owner, opposed the application on the grounds that since TLATA 1996, s 15 required the court to take into account factors other than just the interests of the chargee when making an order for sale, the chargee’s desire for such an order should not necessarily prevail over her desire to remain in the home. 1

[2001] Ch 743.

4.234  Neuberger J enumerated no less than eight reasons why TLATA 1996 had introduced a change in the law. In summary, these were as follows: (a) Had there been no intention to change the law, it is hard to see why Parliament had set out in TLATA 1996, s 15(2), (3) the factors which have to be taken into account specifically, albeit not exclusively, when the court is asked to exercise its jurisdiction to order a sale. (b) Parliament could not have intended to confirm the law as laid down in Lloyds Bank v Byrne while specifying that the interest of a chargee is only one of four specified factors to be taken into account in TLATA 1996, s 15, not least since there is no suggestion that the interest of a chargee is to be given any more importance than the interests of the children residing in the house.1 (c) There is nothing in the language of TLATA 1996 to suggest that in the absence of a strong reason to the contrary, the court should order sale in the case of a trust of land (in contrast to the name ‘trust for sale’ and the law as it developed under the LPA 1925 regime). (d) Parliament clearly considered that a different approach is appropriate in a case where one of the co-owners was bankrupt and a case where one of the co-owners had charged his interest,2 in contrast to the former regime where the court found that it should adopt precisely the same approach in both cases (Citro and Byrne). (e) The Court of Appeal had indicated that TLATA 1996 was intended to change the law.3 (f) There is support for this view in the leading textbooks.4 (g) The views expressed in the Law Commission report which gave rise to TLATA 1996 support this view.5 (h) Indications of judicial dissatisfaction with the state of the former law and suggestions that the balance should be tipped somewhat more in favour of families and against banks and other chargees.6 1

See also the observations of Mr D Oliver QC (sitting as a judge in the High Court) in Pickering v Wells [2002] 2 FLR 798 regarding TLATA 1996, ss 14 and 15: ‘Those statutory provisions were

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2 3

4

5 6

introduced in order to mitigate the perceived harshness of the common law rule that the interests of those who are entitled to seek an order for sale are prima facie paramount.’ By comparison of TLATA 1996, s 15(2) and (3) with the Insolvency Act 1986, s 15(4) and the new s 335A. From the obiter sentence in the judgment of Peter Gibson LJ in Banker’s Trust Co v Namdar [1997] CA Transcript No 349, whereby the judge concluded that the wife’s appeal against an order for sale had to be refused in light of the reasoning in Citro and Byrne, but observed: ‘It is unfortunate for Mrs Namdar, that the very recent Trusts of Land and Appointment of Trustees Act 1996 was not in force at the relevant time [ie at the time of the hearing at first instance]’. Neuberger J noted that this observation should be treated with caution. Referring to Megarry and Wade The Law of Real Property (6th edn, Sweet & Maxwell, 2004) at para  9-064 (now 9th edn, 2019, para  12-06) and Emmet on Title (19th edn, Sweet & Maxwell, January 1999 release) at para 22–035 (now 2018, para 22-025). Transfer of Land, Trusts of Land (Law Com No 181), 8 June 1989, in particular at paras 12.9 and 13.6 of the report and at fn 143. Neuberger J  observed that while Bingham LJ agreed with Nourse LJ in Citro, he expressed unhappiness with the result ([1991] Ch  142 at 161), and that Sir George Waller’s dissatisfaction went so far as led him to dissent ([1991] Ch 142 at 161–163). The Court of Appeal in decision in Abbey National plc v Moss [1994] 2 FCR 587 also suggested a desire for a new approach.

4.235  Neuberger J concluded as follows: ‘All these factors, to my mind, when taken together point very strongly to the conclusion that section 15 has changed the law. As a result of section 15, the court has greater flexibility than heretofore, as to how it exercises its jurisdiction on an application for an order for sale on facts such as those in Re Citro and Lloyds Bank plc v Byrne & Byrne. There are certain factors which must be taken into account (see s 15(1) and, subject to the next point, s 15(3)). There may be other factors in a particular case which the court can, indeed should, take into account. Once the relevant factors to be taken into account have been identified, it is a matter for the court as to what weight to give to each factor in a particular case.’ 4.236  Having arrived at this conclusion, Neuberger J considered the question of the extent to which the old authorities remained good law in relation to how the court should exercise its discretion to make an order for sale. He observed: ‘On the one hand, to throw over all the wealth of learning and thought given by so many eminent judges to the problem which is raised on an application for sale of a house where competing interests exist seems somewhat arrogant and possibly rash. On the other hand, where one has concluded that the law has changed in a significant respect so that the court’s discretion is significantly less fettered than it was, there are obvious dangers in relying on authorities which proceeded on the basis that the court’s discretion was more fettered than it now is. I think it would be wrong to throw over all the earlier cases without paying them any regard. However, they have to be treated with caution, in light of the change in the law, and in many cases they are unlikely to be of great, let alone decisive, assistance.’ After observing that the weight to be given to each of the factors the court had to take into account pursuant to TLATA 1996, s 15 was a matter for the court in each particular case, on the facts of Mortgage Corporation, Neuberger J declined to make

276  Charging orders an order until the parties had had an opportunity to consider the consequences of his conclusions on the law. 4.237  Each case will therefore be decided on its own particular facts and in appropriate circumstances banks or creditors will be able to obtain orders for sale over co-owned homes, particularly where there is evidence that the chargee is not being given proper recompense for being kept out of his money.  In Bank of Ireland Home Mortgages Ltd v Bell,1 a Court of Appeal case decided after Mortgage Corporation, the husband had left the property and the wife opposed the order for sale. At first instance the judge had refused an application for an order for sale made by a bank with the benefit of a mortgage over co-owned property. The bank appealed. 1

[2001] 2 FLR 809.

4.238  The Court of Appeal found that the judge at first instance had erred in the exercise of his discretion as to whether or not to make an order for sale and had both taken into account irrelevant considerations and not taken into account relevant considerations.  In considering whether to make an order for sale of the property, the Court first observed that the judge should consider the matters set out in TLATA  1996, s  15, which included the interests of a secured creditor, and the mortgagee bank was clearly entitled to protection in respect of its advances.  The judge should also have given consideration to the fact that the debt was increasing daily, and that, as the wife’s  10% beneficial interest in the property would be swallowed up on a sale, the bank would be entitled to all the proceeds of the sale. The judge had also erred in giving weight to irrelevant considerations, such as the intention that the property should be held on trust as a matrimonial home (since this intention had evaporated with the departure of the husband by the time that the bank had brought the possession proceedings) and the fact that there was a second chargee of the property.  The fact that the couple’s son resided in the property should only have been a very slight consideration given that he was almost 18 at the time of the trial. Whilst the wife’s health was a relevant consideration, proper regard should have been given to a postponement of the sale of the property, rather than refusing to order the sale. 4.239  Peter Gibson LJ concluded: ‘Prior to [TLATA  1996] the courts under s  30 of the Law of Property Act 1925 would order the sale of a matrimonial home at the request of the trustee in bankruptcy of a spouse or at the request of the creditor chargee of a spouse, considering that the creditors’ interest should prevail over that of the other spouse and the spouse’s family save in exceptional circumstances. The 1996 Act, by requiring the court to have regard to the particular matters specified in s  15, appears to me to have given scope for some change in the court’s practice.  Nevertheless, a powerful consideration is and ought to be whether the creditor is receiving proper recompense for being kept out of his money, repayment of which is overdue (see The Mortgage Corp v Silkin and anor; The Mortgage Corp v Shaire and ors [2000] 2 FCR 222, 80 P & CR 280). In the present case it is plain that by refusing sale the judge has condemned the bank to go on waiting for its money with no prospect of recovery from

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Mr and Mrs Bell and with the debt increasing all the time, that debt already exceeding what could be realised on a sale.  That seems to me to be very unfair to the bank.’ 4.240  Sir Christopher Staughton agreed with Peter Gibson LJ on this point. He said: ‘Unless there is a sale in the foreseeable future, the bank will get no return for its money, and no repayment of principal, until such time as Mrs Bell wishes to leave the house or is compelled to do so. That would not be justice in this case.  The bank is a beneficiary of the trust referred to in s  15 as much as Mrs Bell.’ 4.241  TLATA 1996, ss 14 and 15 only apply where the property is co-owned. This protection will therefore be of no assistance to a judgment debtor who is the sole owner of the property. What protection is then open to a sole owner of property with children? Can he resist an application to enforce a charging order by arguing that his eviction and the eviction of his children from the family home would be a breach of their human rights?

Human rights issues 4.242  As has been noted in Chapter 1, the Human Rights Act 1998 (HRA 1998) incorporates into UK law the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR).  Under HRA  1998, s  6 it is unlawful for a court, as a public body, to act in a way that is incompatible with the ECHR rights and freedoms.  The question therefore arises as to whether human rights arguments can be invoked to resist the enforcement of a charging order against property. 4.243  It is important to recognise from the outset that powerful human rights arguments also operate in favour of the judgment creditor. Strasbourg jurisprudence has recognised the right of judgment creditors under the ECHR to have their judgment enforced as ancillary to the right to a fair trial that is guaranteed by ECHR, art 6.1 1

Hornsby v Greece (1997) 24 EHRR 250 (paras 40–41). See further Ch 1.

4.244  Further, both of the rights that judgment debtors may seek to rely upon to resist enforcement being implemented over their property are qualified rights. Both art  8 (the right to respect for private and family life) and art  1 of Protocol 1 (the protection of property) are qualified in favour of the rights of others. Article  8(2) provides: ‘There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.’

278  Charging orders 4.245  Similarly, art 1 of Protocol 1 provides: ‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.’ 4.246  Clearly, the rights of judgment creditors to have their judgments enforced and the public interest in ensuring judgment creditors have this right fall within these qualifications.1 1

See also the European Commission decision in K v Sweden (Application No 13800/88).

4.247  It is worth considering at which stage in proceedings related to charging orders that a judgment debtor would be best advised to raise human rights arguments. Potentially, such arguments could be raised both at the hearing to decide whether to make a final charging order, or at the hearing for an order for sale. 4.248  In light of the European Court’s decision X  v France,1 the better view is that such arguments should only be raised at the hearing for an order for sale, since it is only at that stage that there is a tangible interference with property. X v France concerned a complaint by an individual that the registration of a mortgage against him by tax authorities constituted a breach of art 1 of Protocol 1. The mortgage had been obtained to secure the payment of evaded taxes and fines that the individual might eventually be ordered to pay. The commission held that the mortgage was not a ‘deprivation of his possessions’ within the terms of art 1 of Protocol 1.2 Since charging orders take effect as an equitable charge against the judgment debtor’s beneficial interest,3 the imposition of a charging order should not amount to a ‘deprivation’ of possessions under art 1 of Protocol 1. 1 2

3

(1982) 5 EHRR 298. In addition, on the point of whether the mortgage constituted an interference with the individual’s right to peaceful enjoyment of his possessions, the Commission held that given the purpose behind the mortgage, it was a measure authorised by the second paragraph of art 1 of Protocol 1. Since it was designed: ‘to secure the payment of taxes or other contributions or penalties’, such considerations would not apply in the case of a charging order obtained by a commercial judgment creditor. COA 1979, s 3(4).

4.249  In any event, the court still has to consider the qualifications to both art 1 of Protocol 1 and art 8 in deciding whether enforcement of a charging order amounts to a breach of a judgment debtor’s (or occupiers) human rights.  Case law is still developing and much will depend on the facts of the case. An order for sale of vacant commercial property belonging to a corporate judgment debtor clearly has very different human rights implications to an order for sale of a house that serves as the family home of an individual judgment debtor.

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4.250  Such arguments were raised in Pickering v Wells,1 where the Court had to consider one of the procedural requirements that existed prior to the introduction of Pt 732 relating to witness statements or affidavits in support of a claim for an order of sale of land subject to a charging order. The rules required that the witness statement or affidavit had to set out details of all persons in possession of the property and had to state whether a class F land charge, notice/caution under the Matrimonial Homes Act 1967 or a notice under the Matrimonial Homes Act 1983 had been registered and whether notice of the proceedings had been served on those in possession or those whose interests had been so registered.3 The judgment debtor contended that these procedural requirements meant that the court was obliged to consider the welfare of her three children who lived in the property with her. 1 2 3

[2002] 2 FLR 798. RSC Ord 88, r 5A(f). Similar procedural requirements are now incorporated into the Practice Direction to Pt 73.

4.251  The Court first observed that since the judgment debtor was the sole owner of the charged property, it was not obliged to take into account the interests of her children under TLATA 1996, ss 14 and 15. The purpose of the procedural requirements was to enable the court to take into account all the competing proprietary interests in the property. This did not extend to the welfare or needs of those in occupation. As regards possible human rights objections, this policy was: ‘… entirely consistent with the policy of the law that a creditor is entitled to be paid and to be paid in due time, and I do not believe that the introduction of Art 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 into English law through the Human Rights Act 1998 affects that position. Article 8 provides, first, that everyone has the right to respect for his private and family life, his home and his correspondence, and, secondly, that there should be no interference by a public authority with the exercise of this right, except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. In my judgment, the interpretation that I have placed on Ord 88, r 5A, results in the enforcement of the charging order being in accordance with the law, and indeed being in accordance with the law for the protection of the right of Miss Wells to be paid the sum due to her.’ 4.252  However, the Court clearly left open further consideration of this issue by observing that the point was of sufficient importance to merit consideration by the Court of Appeal, although under the rules, permission to appeal could not be granted in this case. 4.253  However, the Court differed from the conclusion in Pickering v Wells more recently in Close Invoice Finance Ltd v Pile.1 In this case a judgment debt had been obtained against a husband and wife and a charging order was sought

280  Charging orders against the family home. It was noted that it would be somewhat capricious if the court would be required to take into account the interests of other occupiers of the property (here an elderly mother and two children) if the judgment debt was against only one of the co-owning parents (in which case TLATA 1996, ss 14 and 15 would be engaged) but not where the judgment debt was against both parents. HHJ Purle QC observed if the only other occupier was the other co-owner it would be very material that that other co-owner was also a judgment debtor but here the other occupiers were the children and grandmother. Thus, it seemed quite senseless that whether or not their interests were taken into account should depend upon the accident of whether or not the debt was owed jointly by their parents, or only by one of them. While strictly speaking it was correct that TLATA 1996, s 14 would not be relevant where the land itself is charged (as where the judgment debtor is the sole owner) it was noted that the same considerations are effectively to be taken into account in the exercise of the undoubted discretion that the court has under CPR 73.10(1) (now CPR 73.10C). 1

[2008] EWHC 1580 (Ch). See also Fred Perry Holdings Ltd v Genis [2015] 1 P. & C.R. DG5 (in which the author was the Judgment Creditor’s advocate) which followed the approach in Close Invoice Financing Ltd v Pile [2008] EWHC 1580 (Ch). Master Price also considered in Fred Perry Holdings Ltd the argument that art 8 and Protocol 1, art 1 of the ECHR bolstered the rights of the family members. He acknowledged that those provisions have domestic effect under the Human Rights Act 1998. Master Price accepted that the provisions of TLATA 1996 were compatible with the Convention (they involved balancing the interests of all involved). Nevertheless, Master Price admitted: ‘there may be cases in which the question arises as to whether an order for sale is a disproportionate interference with the rights of family members.’

4.254 In National Westminster Bank v Rushmer1 it was submitted that when considering whether to enforce a charging order the Court was obliged to consider the human rights of the occupier (here the occupier was an innocent occupier). Referring to Close Invoice Finance Ltd v Pile2 and Putnam & Sons v Taylor3 the Court noted that the power to enforce a charging order under TLATA  1996, s  14 was compatible with the ECHR and that the Court’s discretion under TLATA 1996, s  15 had to be exercised compatibly with ECHR rights. Arnold J  held that if due consideration was given to the factors specified in TLATA  1996, s  15 this would generally allow for the balance of rights and an express consideration of whether an order for sale was a proportionate interference with the rights of those affected may not always be necessary.1 1 2 3

[2010] EWHC 554 (Ch). [2008] EWHC 1580 (Ch). [2009] EWHC 317 (Ch).

4.255  However, the human rights of occupants appear to have been further strengthened by Manchester City Council v Pinnock1 (a case in which possession orders were sought by public authority landlords) where Lord Neuberger considered Zehentner v Austria.2 In Zehentner the European Court of Human Rights considered ECHR, art 8 in the context of an order evicting the applicant from her home following a ‘judicial sale’ after the making of the Austrian equivalent of a charging order. It was observed that a person at risk of eviction from their home should ‘be able to have the proportionality of the measure determined by an independent tribunal in the light of the relevant principles under Article 8’. In Pinnock Lord Neuberger observed:3

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‘…if our law is to be compatible with article 8, where a court is asked to make an order for possession of a person’s home at the suit of a local authority, the court must have the power to assess the proportionality of making the order, and, in making that assessment, to resolve any relevant dispute of fact’. While the Supreme Court’s judgment related to local authority landlords in possession claims its observations are likely to have a wider effect. Existing case law relating to orders for sale does not generally consider proportionality but we may see the dicta in Pinnock change this. Arguably a case for an express consideration of proportionality is stronger in cases involving orders for sale than in possession order cases (because in a possession order case a landlord is seeking a legal right of possession whereas, where an order for sale is sought, the court is exercising its discretion to enforce a debt). Where an application is made for an order for sale applicants should be prepared to deal explicitly with human rights arguments and their position in relation to proportionality. 1 [2010] UKSC 45. 2 20082/02, [2009] ECHR 1119. 3 [2010] UKSC 45 at [49].

4.256  When it comes to proportionality regulated by statute TCEA  2007, s  94 enables the introduction of a minimum financial threshold for orders for sale. At present, The Charging Orders (Orders for Sale: Financial Thresholds) Regulations 20131 are in place but, as observed in The White Book, they are feeble so as to be pointless and of no practical use.2 1 SI 2013/491. 2 The White Book (Sweet & Maxwell, 2020), vol 1, para 73.10C.10. They apply where a charging order has been made to secure payment under a ‘regulated agreement’ (within Consumer Credit Act 1974 s 189(1)) and provide that no order for sale can be made to recover an amount less than £1,000.

4.257  The Effective Enforcement White Paper recommended that the availability of orders for sale following the imposition of a charging order be retained. It states:1 ‘We have concluded, in the light of all the evidence available to us, that the court has adequate discretion to refuse orders for sale if they would be unduly oppressive to a vulnerable debtor, and that orders for sale should be retained as part of the civil enforcement system.’ 1

At para 390.

4.258  The protection of vulnerable judgment debtors was a key focus for the civil justice review and it is notable that the White Paper concluded that ‘existing judicial discretion is a sufficient safeguard for vulnerable judgment debtors’.1  The White Paper reviews a ‘package of safeguards’2 which inform the judicial discretion to make an order for sale. The existence of such safeguards, together with judicial recognition of the judgment creditor’s right to enforcement, may mean that a judgment debtor who seeks to oppose an order for sale on human rights grounds may face severe difficulties. 1 2

At para 391. Including: (a) COA 1979, ss 1(5) and 3(1); (b) TLATA 1996, s 15; (c) Mesher type orders; (d) the decision in Royal Bank of Scotland v Etridge (No 2) [2002] 2 AC 773 (where it was held that a

282  Charging orders lender will not be able to enforce a charge over property where the consequence of non-compliance with the loan in respect of which the security was given was not explained to both chargees); (d) the decision in Bank of Ireland Home Mortgages v Bell [2001] 2 FLR 809; and (e) the requirement upon judgment creditors to name all known creditors, existing charge holders and beneficiaries when applying for an order for sale.

Procedure relating to an order for sale 4.259  CPR 73.10C sets out the procedure for enforcement of a charging order by sale. The judgment creditor must issue fresh proceedings under the Pt 8 procedure and further reference should be made to that Part.1 1 CPR 73.10C(4).

Which court? 4.260  Where the charging order was made in the CCMCC a claim for an order for sale should be made in the debtor’s home court. Otherwise it should be issued in the court which granted the charging order, unless that court does not have jurisdiction to make an order for sale.1 The County Court threshold is presently where the debtor owes more than £350,000.2 Where that is the case the claim will usually be issued in the High Court, Chancery Division (in the district registry in which the land is situated). In Harlow & Milner Ltd v Teasdale3 Judge Peter Coulson QC remarked that CPR 73.10 (the predecessor to CPR 73.10C) did not contain any requirement as to the court in which (seemingly meaning which division of the High Court) an order for sale of land should be started. Although PD 73, para 4.2 states that: ‘A claim in the High Court for an order for sale of land to enforce a charging order must be started in Chancery Chambers at the Royal Courts of Justice or a Chancery district registry’ in Harlow & Milner it was held that an order for sale could be made in the Technology and Construction Court. This was affirmed in Packman Lucas Ltd v Mentmore Towers Ltd4 where Coulson J  pointed out that CPR  73.10C contains no such requirement. Thus, applications may be bought outside of the Chancery Division if appropriate. PD 73, para 4.3 should now be considered with reference to Practice Direction – Business and Property Courts and the Advisory Note issued by the Chancellor dated 13 October 2017 (Pt 57A, para 57A.0.1). 1

CPR 73.10C(2) and CPR 73.10C(3). County Courts Act 1984, s 23(c), provides the extent of the County Court’s jurisdiction to hear and determine such proceedings. 2 CPR  73.10C(3) and CPR PD  73, paras 4.1–4.2. The County Court Jurisdiction Order 2014, SI 2014/503, increased the County Court equity limit from £30,000 to £350,000. The High Court has the power to transfer the proceedings to the County Court under County Courts Act 1984, s 40(2). 3 [2006] EWCA 1708. 4 [2010] EWHC 1037 (TCC).

Evidence in support of the claim 4.261  A  copy of the charging order must be filed with the claim form.1  The following information must also be contained in the written evidence filed in support of the claim2 and the claimant must take all reasonable steps to obtain this information before issuing the claim:3

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(a) identify the charging order and the property sought to be sold; (b) state the amount in respect of which the charge was imposed and the amount due at the date of issue of the claim; (c) verify, so far as known, the debtor’s title to the property charged; (d) state, so far as the claimant is able to identify: (i) the names and addresses of any other creditors who have a prior charge or other security over the property; and (ii) the amount owed to each such creditor; and (e) give an estimate of the price which would be obtained on sale of the property. (f) if the claim relates to land, give details of every person who to the best of the claimant’s knowledge is in possession of the property; and (g) if the claim relates to residential property: (i) state whether: (A) a land charge of Class F; or (B) a notice under s 31(10) of the Family Law Act 1996, or under any provision of an Act which preceded that section,4 has been registered; and (ii) if so, state: (A) on whose behalf the land charge or notice has been registered; and (B) that the claimant will serve notice of the claim on that person. It may therefore be necessary for the judgment creditor to undertake Part 71 proceedings (Orders to obtain information from a judgment debtor – see Chapter 2) before making the application. 1 CPR 73.10C(5). 2 PD 73, para 4. 3 PD 73, para 4.4. 4 The Family Law Act 1996, s 31(10) provides for the registration of matrimonial home rights.

Form of the order for sale 4.262  Sample forms of orders for sale are set out in the Appendix to the Practice Direction for Pt 73. The two sample forms are an order for sale following a charging order where the property is solely owned by the judgment debtor, and an order for sale following a charging order where the property is owned by the judgment debtor and another person. However, the sample orders are for guidance only and are not prescribed forms of order – they may be adapted or varied by the court to meet the requirements of individual cases.1 1

PD 73, para 4.5.

4.263  The order for sale will allow the judgment debtor one last chance to pay the judgment debt since it will provide that the part of the order providing for the sale will not take effect if the judgment debtor pays the amount secured by the charge together with the costs of the application for the order for sale and interest by a specified date.  Failing that, the property will be sold for a sum not less than that specified in the order. The order will also set out a date by which possession of the property must be delivered to the judgment creditor.

284  Charging orders Mechanics of sale 4.264  The order should also set out the mechanics whereby the judgment creditor can carry out the sale and transfer the legal title to a third party purchaser. In the sample forms in Appendix A to the Practice Direction to Pt 73, this is done by: (a) in the case of an order for sale following a charging order where the property is solely owned by the judgment debtor, creating and vesting in the judgment creditor a legal term in the property pursuant to LPA 1925, s 90;1 and (b) in the case of an order for sale following a charging order where the property is owned by the judgment debtor and another person, appointing the judgment creditor (or his solicitor) to convey the property under the Trustee Act 1925, s 50. 1

The inclusion of such provision is vital since it enables the judgment creditor to convey the judgment debtor’s legal estate. LPA 1925, s 90(1) (Realisation of equitable charges by the court) grants the court the power to create and vest in the judgment creditor a legal term of years to enable him to carry out a sale of the land once an order for sale has been made. The judgment creditor will then have power to sell the land by virtue of LPA 1925, s 101(1). The length of the term is usually 3,000 years in the case of freehold property. In the case of leasehold property it will depend on the length of the judgment debtor’s leasehold interest.

Proceeds of sale 4.265  The order for sale should also provide how the proceeds of sale are to be applied by the judgment creditor: (a) where the property is solely owned by the judgment debtor, the judgment creditor should first pay off the costs and expenses of effecting the sale, then any prior charges, before retaining the amount due to him under the order for sale then paying the balance (if any) to the judgment debtor. (b) where the property is owned by the judgment debtor and another person, the judgment creditor should first pay off the costs and expenses of effecting the sale, then any prior charges, then divide the remaining proceeds between himself and the judgment debtor’s co-owner in accordance with the beneficial entitlements, before retaining the amount due to him under the order for sale from the judgment debtor’s share, then paying the balance (if any) to the judgment debtor. Redemption of charge once an order for sale has been made 4.266  As has been noted in para  4.263, the order for sale will provide the judgment debtor with one last chance to pay off the judgment debt and redeem the charge. A judgment debtor may seek to retain possession of the property by paying the judgment debt when, for example, a judgment creditor has exchanged contracts for the sale of land to a purchaser but before the completion of that sale has taken place. However, the judgment debtor’s right to redeem the charge will be barred once an unconditional contract for the sale of the charged property has been entered into (ie following exchange of contracts in the case of land).1 It may still be advisable to ask the court to draw up the order for sale to state expressly that once contracts have been exchanged, any purported redemption of the judgment debt by the judgment debtor will be of no effect. 1

Property & Bloodstock Ltd v Emerton [1968] Ch 94.

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Interaction with the insolvency regime 4.267  The effect a judgment debtor’s insolvency (or prospective insolvency) will have on the exercise of the court’s discretion to make a charging order has been considered at paras 4.151–4.172.  The effect of a judgment debtor’s supervening insolvency in an application to discharge a charging order is discussed at paras 4.209–4.213. 4.268  Chapter 1 considers generally the interaction between the enforcement and insolvency regimes relating to corporate and individual judgment debtors. This section considers the application of the rules set out in IA 1986, ss 183 and 346 relating to the ‘completion’ of charging orders for the purposes of bankruptcy and winding up. 4.269  As is explained further in Chapter 1, pursuant to IA 1986, ss 183 and 346, unless a judgment creditor has completed a process of execution against goods or land before the commencement of the winding up or bankruptcy of a judgment debtor, he will be deprived of the benefit of that execution as against a liquidator or trustee in bankruptcy. For these purposes an execution against goods or land is completed by the making of a charging order under COA 1979, s 1.1 1

IA 1986, ss 183(3)(a) and (c) and 346(5)(a) and (b).

4.270  What these sections leave unclear is whether an execution against land is ‘completed’ when an interim charging order is obtained, or whether it is not completed until the final charging order has been made.  Since the court may not have had the opportunity to consider ‘all the circumstances of the case’ (as it is required to do under COA 1979, s 1(5)) until the hearing for further consideration of the application, the wording of COA 1979 would suggest that ‘completed’ for the purposes of IA 1986 should be read as a reference to the final charging order. 4.271 In Roberts v Kenny the House of Lords considered the question of when a charging order was completed for the purposes of the Companies Act 1948 (CA 1948), s 325, which was the statutory predecessor of IA 1986 and in similar terms.  CA  1948, s  325 disentitled a creditor to retain the benefit of an execution unless he had completed the execution before the commencement of a winding up.  CA  1948, s  325(2) deemed an execution against land to be completed by the appointment of a receiver. (As has been noted in the introduction to this chapter, the need to appoint a receiver once a charging order had been obtained was removed following the entering into force of COA  1979.) The judgment creditor sought to argue that the execution was deemed to be complete once it had obtained the charging order nisi and an order for the appointment of a receiver. Lord Brightman rejected that submission:1 ‘The argument is formidable but I do not think it is correct. When the section speaks of an execution against land being ‘deemed to be completed … by the appointment of a receiver’ I think that it is looking at a final order of the court effecting such appointment, and not at an order which is made provisionally, ex parte, pending further consideration by the court when the application is heard inter partes. I would expect to find clear words if I am to construe ‘completion,’

286  Charging orders even ‘deemed completion,’ as comprehending a mere interim appointment of a receiver which is made ex parte and is not a final appointment. “Completion” of execution infers an element of finality. In the case of execution against goods, there must be both seizure and sale. In the case of an attachment of a debt there must be receipt of the debt. A debt due to the judgment debtor would not be paid to the judgment creditor under a garnishee order which was merely nisi. The argument based on section 325 is at best an argument by analogy to what the position would be if the order were made absolute and the liquidator invoked this section. I think the argument founders because it is based on a misconstruction of the section.’ 1

[1983] 2 AC 192 at 213.

4.272  This passage from Roberts v Kenny was cited in Coutts and Co v Clarke,1 where the Court of Appeal considered when a charging order is complete for the purposes of IA 1986, ss 183 and 346. The Court found that execution is complete for the purposes of IA 1986 when the final charging order has been obtained. Lord Justice Peter Gibson referred to the passage from Lord Brightman’s judgment above and held:2 ‘To my mind those remarks and that reasoning plainly support the approach of the judge, and are quite inconsistent with the remarks to which I have referred in the Haly case, which must be treated as no longer of validity. The recognition by Lord Brightman that the order nisi created an immediate charge and converted the creditor into a secured creditor did not detract from the fact that the order was defeasible if sufficient cause were shown. The argument that the execution was complete on the making of the order nisi was specifically rejected. For similar reasons it seems to me clear that the execution was not complete by a mere order nisi rather than an order absolute. The specific references to a charging order in s 183 and s 346, and the completion of the execution, must in my judgment be construed now consistently with the reasoning in Roberts, and in the absence of an element of finality there is no completion of execution for the reasons which Lord Brightman gave.’ 1 [2002] EWCA Civ 943. 2 At [39].

STOP ORDERS AND STOP NOTICES 4.273  COA 1979, s 5(2) provides: ‘The power to make rules of court under section 1 of, and Schedule  1 to, the Civil Procedure Act 1997 shall include power by any such rules to make provision— (a) for the High Court to make a stop order on the application of any person claiming to be entitled to an interest in prescribed securities; and (b) for the service of a stop notice by any person claiming to be entitled to an interest in prescribed securities.’1 1

COA 1979, s 5(2) was substituted by the Civil Procedure (Modification of Enactments) Order 2002, SI 2002/439, arts 2, 5(a) and came into force on 25 March 2002 (see SI 2002/439, art 1.)

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4.274  Those rules of court are contained in sections II and III of Pt  73, which provide that the court may make a stop order or a stop notice (respectively) on the application of a person claiming to be entitled to an interest in prescribed securities.  ‘Prescribed securities’ are defined in COA  1979, s  5(1) as ‘securities (including funds in court) of a kind prescribed by rules of court made under this section’. In summary: (a) A stop order may be obtained in relation to funds in court and securities. A stop order relating to securities has the effect of preventing dealings in securities and may also prohibit the payment of any dividend or interest relating to such securities. A stop order relating to funds in court will prohibit dealings with the funds or any income on them. (b) A stop notice may only be obtained in relation to securities. It has the effect of preventing any dealings in the securities without first giving 14 days’ notice to the person who obtained the order (usually the judgment creditor). 4.275  The purpose of a stop order is to afford the applicant an opportunity to take whatever further steps he considers appropriate to secure his claim to the relevant assets.  Similarly, the requirement to provide notice to the party who obtained a stop notice before dealing in securities affords the applicant the opportunity to assert his claim to the securities.  In many cases, the next step is likely to be an application for a charging order over the securities or funds in court.  However, it may be that the judgment creditor is not yet in a position to apply for a charging order, perhaps because the sums due to him are not yet ascertained.1  Stop orders and notices are not therefore means of enforcement but rather methods whereby the judgment creditor can take steps to preserve a judgment debtor’s assets so that they are available for enforcement. (This and other means of preserving a judgment debtor’s assets for enforcement purposes are discussed in Chapter 1.) However, as the relevant primary legislation and procedural rules are the same as in relation to charging orders, stop orders and stop notices are covered in outline in this chapter for convenience. 1

See further paras 4.22–4.23.

Stop orders 4.276  A stop order is ‘an order of the High Court not to take, in relation to funds in court or securities specified in the order, any of the steps listed in s 5(5) of the [COA 1979]’.1 Those prohibited steps2 are: (a) the registration of any transfer of the securities; (b) in the case of funds in court, the transfer, sale, delivery out, payment or other dealing with the funds, or of the income thereon; (c) the making of any payment by way of dividend, interest or otherwise in respect of the securities; and (d) in the case of a unit trust, any acquisition or dealing with the units by any person or body exercising functions under the trust. 1 2

CPR 73.11. See also COA 1979, s 5(1). COA 1979, s 5(5)

288  Charging orders Procedure for applying for a stop order 4.277  Part 73 prescribes two methods of obtaining a stop order. Where there are existing proceedings, the application should be made by application notice under Pt 23.1 Where there are no existing proceedings in the High Court, the application for a stop order should be made by Pt 8 claim form.2 1 CPR 73.12(2)(a). 2 CPR 73.12(2)(b).

Funds held in court – procedure 4.278  Where an order has been made that funds should be paid into court, a stop order can be obtained.1 1 In Shaw v Hudson (1879) 48  LJ  Ch  689 the Court held that a stop order can even be obtained notwithstanding that the funds have not yet been paid into court. However, where there are no funds in court and there is no order for payment of funds into court, a stop order cannot be obtained: Wellesley v Mornington (1863) 11 WR 17.

4.279  A stop order relating to funds in court may be made on the application of any person:1 (a) who has a mortgage or charge on the interest of any person in the funds; or (b) to whom that interest has been assigned; or (c) who is a judgment creditor of the person entitled to that interest. 1 CPR 73.12(1)(a).

4.280  The applicant should produce to the court a certificate proving that the funds actually are held in court. A judgment creditor should also produce evidence of his title to the funds, which should usually appear from the proceedings in the cause.1 1

The White Book (Sweet & Maxwell, 2020), vol 1, para 73.13.4.

Service of the application notice/Part 8 claim form 4.281  The application for a stop order relating to funds in court must be served on every person whose interest may be affected by the order applied for and the Accountant General at the Court Funds Office.1  Thus, in addition to serving the Accountant General, the applicant should also serve the application notice on the judgment debtor, any mortgagee or chargee of the funds in court, an assignee of the interest in the funds and any other party with an interest in the funds in court.  The certificate of funds issued by the Accountant General must state particulars of any charges or restraints on the fund of which the Accountant General is aware, which should assist the judgment creditor in ascertaining the relevant parties to be served.2 1 2

CPR 73.12(3). See also COA 1979, s 5(4). Court Funds Rules 1987, r 63(1).

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Service of the stop order 4.282  Anomalously, Pt  73 does not set out the parties on which the stop order (as opposed to the application notice or claim form) should be served.1 However, it would seem that the stop order should be served on the same parties as prescribed in relation to the application notice. 1

As has been noted, COA 1979, s 5(4) states that the rules of court made by virtue of COA 1979, s 5(2) ‘shall prescribe the person or body on whom a copy of any stop order or a stop notice is to be served.’ (Emphasis added)

Effect of a stop order relating to funds in court 4.283  The effect of a stop order over funds held in court is to prohibit the transfer, sale and delivery out, payment or other dealing with the funds (or any part of them) or any income on the funds.1 However, the granting of a stop order by the court does not determine the rights of the parties competing for the funds in court, it merely maintains the status quo. (For this reason it is not necessary to state that a stop order is made ‘without prejudice’ Lucas v Peacock.2) 1 CPR 73.13. 2 (1846) 9 Beav 177.

4.284  As regards the priority acquired by a stop order, the general rule is that the party with the earlier stop order has priority over a party with a later stop order (rather than the date or nature of any underlying charge).1 1

There is considerable case law on how to determine the priority acquired by a stop order and relevant citations are contained in The White Book (Sweet & Maxwell, 2020), vol 1, para 73.13.8.

Funds improperly paid out of court 4.285 In Bath v Bath,1 the Court considered the question of whether a judgment creditor would have a claim against public funds in the event that funds in court which were subject to a stop order were paid out in disregard of a judgment creditor’s rights. In that case, the judgment creditor with an interest in the funds failed to obtain a stop order and the Court did not have to decide the question, thus the Court’s comments are strictly obiter.  However, it is interesting to note that the Court expressed the view that where a judgment creditor’s rights under a stop order were disregarded due to administrative error amounting to negligence, there would be no such right of recourse. In the Court’s view, there would have to have been ‘some act of misfeasance or carelessness attributable to the Paymaster-General himself’ for a cause of action to lie. 1

Bath v Bath [1901] 1 Ch 460.

290  Charging orders Securities – procedure 4.286  A stop order relating to securities (other than securities held in court) may be made on the application of any person claiming to be beneficially entitled to an interest in the securities.1 1 CPR 73.12(1)(b)

4.287  In order to ensure that the stop order drawn up by the court provides the best possible protection for the applicant, the application for a stop order over securities should clearly set out the securities to which it relates, and the name in which the securities stand.  The application should also specify the steps to be prohibited in relation to the securities.1  To obtain the best possible protection, the applicant for a stop order over securities should ask the court to prohibit the registration of any transfer of the securities and the making of any payment by way of dividend, interest or otherwise in respect of the securities.  If the securities are units in a unit trust, the applicant should ask the court to prohibit any acquisition of, or other dealing with, units by any person or body exercising functions under the trust. 1

CPR  73.14 states that the court may prohibit all or any of the steps set out in that rule and it is advisable for the judgment creditor to set out clearly in the application the steps he seeks the court to prohibit.

Service of the application notice/Part 8 claim form 4.288  The application notice or Pt 8 claim form relating to a stop order relating to securities must be served on every person whose interest may be affected by the order applied for and in addition, the person specified in CPR 73.7(7)(f),1 namely: (a) in the case of stock for which the Bank of England keeps the register, the Bank of England; (b) in the case of government stock to which (i) does not apply, the keeper of the register; (c) in the case of stock of any body incorporated within England and Wales, that body; (d) in the case of stock of any body incorporated outside England and Wales or of any state or territory outside the UK, which is registered in a register kept in England and Wales, the keeper of that register; and (e) in the case of units of any unit trust in respect of which a register of the unit holders is kept in England and Wales, the keeper of that register. 1

CPR 73.12(3). See also COA 1979, s 5(4).

Service of the stop order 4.289  The stop order shall specify the securities to which it relates, the name in which the securities stand, the steps which may not be taken, and whether the prohibition applies to the securities only or to the dividends or interest as well.

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4.290  As has been noted, Pt  73 does not set out the parties on which the stop order (as opposed to the application notice or claim form) should be served, but it would seem that the stop order should be served on the same parties as prescribed in relation to the application notice. However, the process of transferring shares or paying a dividend may involve more parties than just the company in which the stock is held. For example, many companies delegate such functions to service providers who keep their registers (for example, Computershare) and the payment of interest on bonds often involves paying agents to pay the interest. In order to ensure the stop order is effective, the judgment creditor should serve the stop order on any person who is likely to play a part in any of the activities prohibited in the order, which may involve serving persons in addition to those set out in CPR 73.7(7)(f). This requires forethought as to how the prohibited activity will be administered in practice.

Effect of a stop order relating to securities 4.291  A stop order relating to securities (other than securities held in court) may prohibit all or any of the following: (a) the registration of any transfer of the securities; (b) the making of any payment by way of dividend, interest or otherwise in respect of the securities; and (c) in the case of units of a unit trust, any acquisition of or other dealing with the units by any person or body exercising functions under the trust.

Variation or discharge of a stop order 4.292  The court has a discretion to discharge or vary a stop order on the application of ‘any person’ claiming to have a beneficial interest in the funds or securities to which a stop order relates.1  Such applications are not therefore confined to the judgment creditor or judgment debtor, but could include, for example, the spouse of a judgment debtor. The application should be made in accordance with Pt 23. The application notice seeking the variation or discharge must be served on the person who obtained the stop order.2 1 CPR 73.15(1). 2 CPR 73.15(2).

Stop notices 4.293  A stop notice is ‘a notice issued by the court which requires a person or body not to take, in relation to securities specified in the notice, any of the steps listed in s 5(5) of the [COA 1979], without first giving notice to the person who obtained the notice’.1 A stop notice cannot be obtained in relation to funds or securities held in court2 (however, a stop order can be obtained in relation to such securities). 1 CPR 73.16(a). See also COA 1979, s 5(1). 2 CPR 73.16(b).

292  Charging orders 4.294  The steps which are prohibited by a stop notice are set out in para 4.290. A stop notice may also (and will, unless the court considers otherwise) be included in a final charging order which relates to securities (other than securities held in court).1 1

CPR 73.17 and CPR 73.10(8).

4.295  A stop notice is different in purpose and effect from a stop order in that it is essentially a temporary measure which has the effect of preventing any dealings in the securities without first giving 14 days’ notice to the person who obtained the order. However, once such notice is given, the person on whom the stop notice is served must not, by reason of the notice alone, refuse to register a transfer of the stock after the 14 day notice period has expired.1 The 14 day period therefore affords the judgment creditor the opportunity of securing his judgment by making an appropriate application to the court within that time-frame. The appropriate application is usually a charging order on the securities. 1

CPR 73.18(2)(b). See further para 4.301.

Procedure 4.296  CPR  73.17(1) provides that ‘The High Court may, on the request of any person claiming to be beneficially entitled to an interest in securities, issue a stop notice’. The application should therefore be made to the High Court. The use of the word ‘may’ in CPR 73.17(1) indicates that the court has a discretion as to whether to issue the stop notice. However, the application will be dealt with without a hearing and CPR 73.17(3) provides that if a court officer considers that the request for a stop notice complies with the requirements of CPR 73.17(2), he ‘will’ issue a stop notice. 4.297  An applicant makes the request for a stop notice on the basis of a claim to be ‘beneficially entitled’ to an interest in the securities.1 The White Book2 observes that ‘[t]here must therefore be a beneficial interest in the stock sought to be affected, comprised in some document or legal instrument in writing’. Written evidence will also need to be filed with the request for a stop notice substantiating the applicant’s claim. 1 CPR 73.17(1). 2 The White Book (Sweet & Maxwell, 2020), vol 1, para 73.17.1.

4.298  A request for a stop notice must be made by filing:1 (a) a draft stop notice; and (b) written evidence which: (i) identifies the securities in question; (ii) describes the applicant’s interest in the securities; and (iii) gives an address for service for the applicant. 1 CPR 73.17(2).

4.299  A  sample form of stop notice is annexed as Appendix B  to the Practice Direction to Pt 73. The stop notice must be addressed to a particular person or body concerned.  For the reasons set out in para  4.290, in order for the stop notice to

Stop orders and stop notices  293

achieve the desired effect, it may be necessary to request more than one stop notice to ensure that every party who may be involved in the activity of which the applicant seeks to have notice is served. Again, this will require forethought before making the application. The name and address of the person claiming to be beneficially entitled to an interest in the securities should then be inserted in the draft notice, followed by the securities concerned and the name(s) in which they stand. Service of the stop notice 4.300  The applicant must serve copies of the stop notice and his written evidence on the person to whom the stop notice is addressed.1 A stop notice takes effect when it is served.2 It remains in force until it is withdrawn or discharged in accordance with CPR 73.20 or CPR 73.213 (see further paras 4.304–4.306). 1 CPR 73.17(4). 2 Ie when it is served in accordance with CPR 73.17(4), see CPR 73.18(1)(a). 3 CPR 73.18(b).

Effect of a stop notice 4.301  A stop notice requires its addressee to take notice that the applicant claims to be beneficially entitled to an interest in the specified securities and requires the addressee to refrain from registering a transfer of the securities or from paying any dividend or interest in respect of the securities (where applicable) without first giving 14 days’ notice to the applicant. 4.302  As noted above, a stop notice does not therefore operate as an absolute prohibition on the addressee from taking those steps. Rather, while a stop notice is in force, the person on whom it is served must not register a transfer of the securities described in the notice or take any other step restrained by the notice without first giving 14 days’ notice to the person who obtained the stop notice.1 However, once he has given the required notice, the person on whom the stop notice has been served must not, by reason only of the notice, refuse to register a transfer or to take any other step, after the 14-day notice period has expired.2 Accordingly, in the absence of any other restriction (resulting from steps taken by the applicant to protect its beneficial interest in the securities in question), the addressee should then register the transfer or take any other relevant steps. 1

CPR 73.18(2)(a). While the CPR contains no stipulation as to the form such notice should take, best practice may be to provide such notice in writing to the address given by the applicant on the stop notice. 2 CPR 73.18(2)(b).

Amendment to stop notice 4.303  If the applicant finds that he has incorrectly described the securities in a stop notice which has been obtained and served he may request an amended stop notice.1 Such request should be made and the amended stop notice served in

294  Charging orders accordance with the procedure set out in CPR 73.17 (see para 4.296–4.299).2 The amended stop notice takes effect when it is served on the addressee.3  During the intervening period the securities in which the applicant had a beneficial interest may have been transferred, and so it is crucial that the original stop notice accurately specifies the securities in question, or that steps are taken to correct the error as soon as possible. 1 CPR 73.19(1). 2 CPR 73.19(1). 3 CPR 73.19(2).

Withdrawal of stop notice 4.304  An applicant who has obtained a stop notice may withdraw it by serving a request for its withdrawal on both the person or body on whom the stop notice was served and the court which issued the stop notice.1 The request must be signed by the person who obtained the stop notice and his signature must be witnessed by a practising solicitor.2  It is unlikely that a judgment creditor applicant would wish to withdraw a stop notice save in circumstances where the judgment debt has been satisfied through other means (for example, payment of the sums owed by the judgment debtor or recourse to other forms of enforcement). 1 CPR 73.20(1) 2 CPR 73.20(2)

Discharge or variation of stop notice 4.305  As with charging orders and stop orders, it is possible for a stop notice to be varied or discharged.  The court has a discretion to make an order varying or discharging the stop notice on the application of any person claiming to be beneficially entitled to the securities to which a stop notice relates.1 Such parties may include not just the judgment debtor but third parties claiming a beneficial interest in the securities. 1 CPR 73.21(1).

4.306  The application must be made to the court which issued the stop notice in question.1 The application should be made in accordance with Pt 23. The application notice should be served on the person who obtained the stop notice.2 1 CPR 73.21(2). 2 CPR 73.21(3).

CHAPTER 5

Writs of control

INTRODUCTION 5.1  A writ of control is a command to a High Court enforcement officer, formerly known as a sheriff, to seize and sell sufficient of a judgment debtor’s goods to satisfy a money judgment and the costs of enforcement. The writ of control was previously known as a writ of fieri facias1 and was more commonly known by its shortened name, the writ of fi fa.2 The enforcement procedure encompassed by the writ of fi fa was the subject of legislative reform in the form of Pt 3 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007). Under the new statutory regime writs of fi fa have been modernised and renamed writs of control.3 From 6 April 2014, it has no longer been possible to obtain a writ of fi fa. The procedure is now known as issuing a writ of control and is governed by the taking control of goods procedure set out in TCEA 2007, Sch 12.4 Accordingly, this chapter sets out the position relating to obtaining a writ of control after 6 April 2014. Transitional provisions5 exist where a writ of fieri facias was issued prior to 6 April 2014. This is dealt with at para 5.10. 1 2 3 4

5

Fieri facias derives from the Latin ‘quod fieri facias de bonis’ meaning ‘which you shall cause to be made of the goods’. Pronounced ‘fy fay’. TCEA 2007, s 62(4). TCEA 2007, s 62. The taking control of goods procedure is the name for the statutory procedure for the taking and selling of goods in accordance with TCEA 2007 and its associated regulations including The Taking Control of Goods Regulations 2013, SI 2013/1894 and The Taking Control of Goods (Fees) Regulations 2014, SI 2014/1. Tribunals, Courts and Enforcement Act 2007 (Consequential, Transitional and Saving Provision) Order 2014, SI 2014/600.

5.2  Writs of control, being the modern form of the writ of fi fa, are the modern form of an ancient remedy. The statutory origins of this form of writ can be traced back as far as the Damages Execution Act 1285.1 Blackstone, writing in the eighteenth century, described a writ of fi fa as follows: ‘THE next species of execution is against the goods and chattels of the defendant; and is called a writ of fieri facias, from the words in it where the sheriff is commanded, quod fieri faciat de bonis,2 that he cause to be made of

296  Writs of control the goods and chattels of the defendant the sum or debt recovered. This lies as well against privileged persons, peers, &c, as other common persons; and against executors or administrators with regard to the goods of the deceased. The sheriff may not break open any outer doors, to execute … this … writ: but must enter peaceably; and may then break open any inner door, belonging to the defendant, in order to take the goods. And he may sell the goods and chattels (even an estate for years, which is a chattel real) of the defendant, till he has raised enough to satisfy the judgment and costs: first paying the landlord of the premises, upon which the goods are found, the arrears of rent then due, not exceeding one year’s rent in the whole. If part only of the debt be levied on a fieri facias, the plaintiff may have a capias ad satisfaciendum3 for the residue.’4 1

2 3

4

The preamble to the Damages Execution Act 1285 suggests that the Act provided for a new method of enforcement which did not previously exist. It states: ‘WHEREAS of late our Lord the King … considering that divers of this Realm were disherited, by Reason that in many Cases, where Remedy should have been had, there was none provided by [the King] nor his Predecessors.’ The Act itself states: ‘WHEN Debt is recovered or knowledged in the King’s Court, or Damages awarded, it shall be from henceforth in the Election of him that sueth for such Debt or Damages, to have a Writ of Fieri facias unto the Sheriff for to levy the Debt of the Lands and Goods; (2) or that the Sheriff shall deliver to him all the Chattels of the Debtor (saving only his Oxen and Beasts of his Plough) and the one half of his Land, until the Debt be levied upon a reasonable Price or Extent. (3) And if he be put out of that Tenement, he shall recover by a Writ of Novel disseisin, and after by a Writ of Redisseisin, if need be.’ See para 5.1, n 1. This dates from a time when the writ directed to the sheriff was written in Latin. Capias ad satisfaciendum was a writ issued after judgment to arrest and imprison a judgment debtor until the judgment creditor’s claim was satisfied: Blackstone’s Commentaries on the Laws of England (Oxford University Press, 17651769), vol 3, pp 414–417. The right to imprisonment for non-payment of debts was largely abolished by the Debtors Act 1869: see Ch 1. Blackstone’s Commentaries on the Laws of England (Oxford University Press, 1765–1769), vol 3, p 417.

5.3  The modern form of writ of control is clearly recognisable from Blackstone’s description, as are the descriptions of the limitations on an enforcement agent’s rights of entry.1 1

See paras 5.147–5.188. Note that the common law and statutory rights to distrain for arrears of rent were abolished pursuant to TCEA 2007, ss 71 and 86 and a new procedure has been put in place (see para 5.13).

5.4  The threat of a writ of control may in itself be enough in some cases to secure payment of a judgment debt. Writs of control are, by their very nature, intrusive and public, involving attendance at a judgment debtor’s home or business premises by an enforcement agent taking control of and selling the judgment debtor’s goods. These factors, together with the fact that many judgments are for smaller sums, are likely connected to the enduring popularity of the writ of control as a method of enforcement.1 1 See 365 Business Finance Ltd v Bellagio Hospitality WB Ltd [2019] EWHC 1920 (QB) at [2] where The Hon Mr Justice Turner remarked ‘The most popular way in which a creditor may seek to enforce a debt is through execution on the debtor’s goods.’

5.5  The antiquarian nature of this method of enforcement attracted both judicial comment and calls for reform.1 Such calls were finally answered with proposals put

Introduction  297

forward in the March 2003 ‘Effective Enforcement’ White Paper.2 The White Paper proposed that the powers and duties of enforcement officers should be codified and the enforcement industry should be subject to far greater regulation. Some of these proposals were implemented by the Courts Act 2003 (CA  2003) and High Court Enforcement Officers Regulations 2004.3  CA  2003 brought about the replacement of sheriffs by High Court enforcement officers, the abolition of the territorial limitations which applied to sheriffs, and drew together various provisions which had previously been scattered across a number of statutes into CA 2003, Sch 7. The reforms continued with the adoption and codification of proposals in TCEA  2007 together with its associated regulations.4  CA 2003, paras 8 to 11 do not apply after 6 April 2014. However, the remainder of CA  2003, Sch  7 continues in force. An enforcement officer has the duties, powers, rights, privileges and liabilities that a sheriff of a county would have had at common law.5 However, in the case of a writ of control these rights are subject to the provisions of TCEA 2007, Sch 12.6 1

2 3 4 5 6

See, eg, the judgment of Judge Roger Cooke at first instance in McLeod v Butterwick [1996] 1  WLR  995 at 997: ‘I  am bound to say that the issues disclosed on this motion are of some fascination, if only to an antiquarian. They reveal the law of execution, as it still is in England and Wales, as based, in many cases, upon very ancient authority. None the worse for that, but some of the principles that emerge and, indeed, the gaps which the law of execution reveals in modern conditions, lead one to hope that it is an area of the law that will sooner rather than later attract the attention of the Law Commission.’ Effective Enforcement: Improved methods of recovery for civil court debt and commercial rent and a single regulatory regime for warrant enforcement agents (March 2003) Cm 5774. SI 2004/400, as amended by SI 2004/673. Including The Taking Control of Goods Regulations 2013, SI 2013/1894 and The Taking of Goods (Fees) Regulations 2014, SI 2014/1. CA 2003, Sch 7, para 4(2). CA 2003, Sch 7, para 4(1A).

5.6  In a move foreshadowing greater regulation, the National Standards for Enforcement Agents (the National Standards) were prepared by the Lord Chancellor’s Department1 in May 2002. The National Standards are aimed at all public and private enforcement agents, the enforcement agencies that employ them, and major creditors who use their services. The National Standards were designed ‘to share, build on and improve existing good practice and thereby to raise the level of professionalism across the whole sector’. While they are not legally binding they may be used as guidance for best practice. 1

Subsequently the Department for Constitutional Affairs and now the Ministry of Justice.

Outline of procedure 5.7  The procedural rules relating to writs of control are found in TCEA 2007, Pt 3 and Sch 12. The procedure in TCEA 2007 is principally supported by The Taking Control of Goods Regulations 20131 (TCG  Regulations) and The Taking Control of Goods (Fees) Regulations 20142 (The Fees Regulations). Parts 83 to 86 were introduced to the Civil Procedure Rules 1998 (CPR) to reflect the new regime and should be read alongside the statutory provisions.3 Although the powers and duties of High Court enforcement officers generally continue to be governed by the common

298  Writs of control law this is subject to TCEA 2007, Sch 12 in the case of a writ conferring power to use the procedure in that schedule.4 Case law preceding the taking control of goods regime remains useful where it remains consistent with the modern legislative framework. 1 SI 2013/1894. 2 SI 2014/1. See also The Certification of Enforcement Agents Regulations 2014, SI 2014/421 and The Tribunals, Courts and Enforcement Act 2007 (Consequential, Transitional and Saving Provision) Order 2014, SI 2014/600. 3 Civil Procedure (Amendment) Rules 2014, SI  2014/407. The rules relating to writs of fi fa, the predecessor to the writ of control, were previously found in the Rules of the Supreme Court 1965 (RSC) Ords 46 and 47.1 (which was preserved in the Civil Procedure Rules 1998, Sch 1). 4 CA 2003, s 99 and Sch 7, para 4(1A).

5.8  A  further reason for the popularity of the writ of control as a method of enforcement may be the relatively straightforward nature of the process. Once a judgment or order for the payment of a sum of money has been given by the court, a writ of control may generally be issued without the permission of the court1 and without prior notice to the judgment debtor. Issue of the writ is, in most cases, simply a matter of producing the correct documents to the court officer of the appropriate court and paying the fee for issue (and in practice many High Court enforcement officers will do this for you if you provide them with a copy of the judgment). The writ will command the enforcement officer to take control of the judgment debtor’s goods and raise from them the sums detailed in the writ in order to pay the judgment creditor. It is important to note that although enforcement officers are so commanded in the writ itself, TCEA 2007, s 63(2) and Sch 12 introduced a system of certified ‘enforcement agents’. Only enforcement agents (as certified or exempt from certification see paras 5.117–5.118) can exercise the powers pursuant to TCEA 2007, Sch 12, para 2(2) to take control and sell goods (unless they are a person acting under the authority of another person who has such a power).2 Thus, it would appear that although enforcement officers will be named on the writ of control they can only enforce writs of control themselves if they are also certificated as an ‘enforcement agent’.3 For this reason on many occasions throughout this chapter, as appropriate, the term an enforcement agent is also used. 1 2

See further paras 5.64–5.81. The Certification of Enforcement Agent Regulations 2014, SI 2014/421 and CPR 84.18 set out the procedure for obtaining a certificate to operate as an enforcement agent. 3 See The White Book (Sweet & Maxwell, 2020), vol 1, para 83.0.5.

5.9  Once the writ has been issued, the enforcement agent must send a notice of enforcement1 to the judgment debtor prior to taking control of the goods. Where the debtor fails to pay the amount due the enforcement agent will subsequently seek to take control of the judgment debtor’s goods by attending premises or locating goods of the debtor on the highway.2 The goods will then be taken into the control of the enforcement agent by securing them or removing them or, more commonly, by entering into a controlled goods agreement which allows the judgment debtor to retain possession of her goods.3 If an arrangement cannot be reached for satisfaction of the judgment debt, the goods will be sold or disposed of to raise the sums detailed in the writ.4 1 2

TCEA 2007, Sch 12, para 7. TCEA 2007, Sch 12, para 9.

Transitional measures  299 3 4

TCEA 2007, Sch 12, para 13(1). The concept of controlled goods agreement is considered at paras 5.214–5.226. TCEA 2007, Sch 12, paras 39-42 and paras 48-49.

TRANSITIONAL MEASURES 5.10  The regime set out in TCEA 2007, Sch 12 does not apply where execution against goods was undertaken before 6 April 2014. TCEA 2007, s 66 provides that where, before the commencement of the Sch 12 procedure, goods have already been distrained, or executed against or made subject to a walking possession agreement (now known as a controlled goods agreement) enforcement will continue under the old regime. Transitional provisions are found in the Tribunals, Courts and Enforcement Act 2007 (Consequential, Transitional and Saving Provision) Order 2014.1 Where such action has not been taken TCEA 2007, Sch 12 procedure will apply (with some adjustment to fees) even if the writ was issued prior to 6 April 2014. 1 SI 2014/600.

Writs of execution 5.11  In addition, the CPR also provide for so called ‘writs of execution’, writs of possession, writs of delivery, writs of sequestration, writs of fieri facias de bonis ecclesiasticis, and any further writ in aid of other writs of execution.1 1 CPR 83.1.

5.12  As has been noted in Chapter 1, this book is concerned with the enforcement of high value, money judgments in the High Court. Writs of possession and delivery are concerned with the recovery of land and goods, respectively, and are considered in outline in Chapter 1.1 Where a judgment creditor is entitled to enforce a judgment in respect of land or property through a writ of possession or writ of delivery, she may also issue a writ of control to enforce payment of any costs or damages awarded under the judgment.2 This chapter concerns the use of writs of control in the enforcement of money judgments. A writ of control is only available in the High Court. In the County Court a warrant of control confers the power to use the taking of goods procedure. 1 As are writs of sequestration, which involve the seizure of a contemnor’s assets. 2 CPR 83.5.

Distress for rent, commercial rent arrears recovery and arrest 5.13  Taking control of goods to satisfy a judgment debt is by no means a unique method of debt enforcement. Distress for rent is an ancient remedy allowing a landlord to seize and sell a tenant’s goods to pay arrears of rent. This common law remedy developed over time and was extended and modified by statute. However, TCEA 2007 abolished the common law right to levy for distress for rent arrears1 as well as the statutory right to levy for both distress for rent arrears and non-payment of rent charge.2 The procedure in TCEA 2007, Sch 12 is now available for use by

300  Writs of control landlords of commercial premises to recover rent due from a tenant. This statutory power is known as commercial rent arrears recovery (CRAR). Detailed analysis of a landlord’s right to use the CRAR procedure is outside the scope of this book but essentially it seeks to rebalance a landlord’s rights with that of other creditors. There were historically similarities between distress for rent and writs of fi fa. Therefore, cases regarding distress for rent can potentially be of assistance in respect of writs of control. Cases concerning the CRAR procedure may also prove to be instructive in relation to the application of certain aspects of TCEA 2007, Sch 12. Cases on arrest can also be of assistance particularly in relation to rights of entry. 1 2

TCEA 2007, s 71. TCEA 2007, Sch 14, para 2(a) and Sch 23, Pt 4.

Judgments where a writ of control is not available 5.14  Where a judgment stipulates payment within a certain time or by a certain date, a writ of control will not be issued until that time has elapsed.1 Where a judgment provides for quantified damages plus costs to be assessed, the creditor can issue a writ of control to enforce payment of the damages (which are known) and may then issue a separate writ of control to enforce payment of the assessed costs.2 1

CPR 83.9(5)(b) states that no writ of control or execution shall be sealed unless the court officer who seals it is satisfied that the period, if any, specified for payment of the judgment debt has expired. CPR 40.11 provides that a party must comply with a judgment or order for the payment of an amount of money (including costs) within 14 days of the date of the judgment or order unless a different rule or the order or judgment specifies otherwise or if the court has stayed the proceedings. 2 CPR 83.5.

WHAT GOODS CAN AN ENFORCEMENT AGENT TAKE? 5.15  There are two central aspects to the process under TCEA 2007, Sch 12: what goods can be subject to the taking control of goods procedure and what amounts to control? The question of what goods can be subject to the taking control of goods procedure is considered first. This will enable a judgment creditor to decide whether a writ of control is a suitable enforcement method. The question of what, as a matter of law, amounts to control is considered at paras 5.190–5.212.

What goods can an enforcement agent take control of? 5.16  At common law, a judgment debtor’s goods and chattels could be taken in execution under a writ of fi fa only if they were capable of sale.1 Statute now provides that an enforcement agent may take control of goods ‘only if they are the goods of the debtor’.2 However, certain goods are exempt (as prescribed in regulations)3 or protected under other enactments4 and generally cannot be taken control of by the enforcement agent. The nature of ‘exempt goods’ is discussed in paras 5.26–5.47. In accordance with TCEA 2007, Sch 12, paras 9–11, an enforcement agent is able to take control of such goods that are situated anywhere in England and Wales,5 either

What goods can an enforcement agent take?  301

on premises the enforcement agent has power to enter under TCEA 2007, Sch 12, or on a highway.6 An enforcement agent may not take control of the goods of the debtor where the debtor is a child or if a child or vulnerable person (whether more than one or both) is the only person present on the premises.7 An enforcement agent may also not take control of goods that are in use at the time the enforcement agent seeks to take control of it if it would likely result in a breach of the peace.8 An enforcement agent is not permitted to take control of goods of a value greater than the amount outstanding (plus any amount for future costs)9 unless there are insufficient goods of a lower value available within a reasonable distance on a highway or in a premises the enforcement agent has a power to enter.10 However, goods will only be considered to be above a particular value if it is, or ought to be, clear to the enforcement agent that they are.11 In the event a third party believes the goods taken control of belong to her, and not the debtor, she may make an application to the court for the issue of ownership to be determined.12 As soon as the enforcement agent receives notice of such an application, the goods in question may not be sold without further direction from the court (see paras 5.265–5.279).13 An enforcement agent cannot take control of trust property in which either the debtor or a co-owner has an interest not vested in possession.14  1 Francis v Nash (1815) Cas T H 53 (giving the example of ‘deeds, writings etc’). Judgments Act 1838, s 12 extended the powers of seizure to ‘Money or Bank Notes, (whether of the Governor and Company of the Bank of England, or of any other Bank or Bankers,) and any Cheques, Bills of Exchange, Promissory Notes, Bonds, Specialties, or other Securities for Money’.   2 TCEA 2007, Sch 12, para 10.   3 TCEA 2007, Sch 12, para 11 and TCG Regulations, regs 4-5.   4 Examples of protection from seizure as given in the Government’s Explanatory notes to TCEA 2007 are: any statutory state or diplomatic immunity; personal property of a trustee pursuant to s 23 of the Trade Union and Labour Relations (Consolidation) Act 1992 and works of art from abroad loaned for temporary exhibitions and protected under TCEA 2007, s 135.   5 TCEA 2007, Sch 12, para 11(a).   6 TCEA 2007, Sch 12, para 9.   7 TCG Regulations, reg 10.   8 TCG Regulations, reg 10(2).   9 TCEA 2007, Sch 12, para 12. 10 TCEA 2007, Sch 12, para 12(2). 11 TCEA 2007, Sch 12, para 12(3). 12 TCEA 2007, Sch 12, para 60. 13 TCEA 2007, Sch 12, para 60(2). 14  TCEA 2007, Sch 12, para 3(2).

5.17  ‘Goods’ are defined in TCEA 2007, Sch 12, para 3, as meaning ‘property of any description, other than land’. Therefore, the property which may be subject to the taking control of goods procedure by a writ of control is extremely wide and, subject to the exceptions, includes any form of personal property regardless of size. Goods must belong to the judgment debtor 5.18  Only goods belonging to the judgment debtor can be taken in execution.1 Goods in the judgment debtor’s premises which are subject to a hire purchase agreement cannot therefore be taken into control (see paras 5.43–5.44). Where a third party makes claim to goods that have been taken into control the matter can be

302  Writs of control resolved by way of a CPR Pt 23 application as provided for by CPR Pt 85 (see paras 5.265–5.279). 1

TCEA 2007, Sch 12, para 10.

Taking control of money and other financial instruments 5.19  Money and other financial instruments can be subject to a writ of control by virtue of TCEA 2007. Money is defined as ‘money in sterling or another currency’ and ‘securities’ includes bills of exchange, promissory notes, bonds, specialties and securities for money.1 1

TCEA 2007, Sch 12, para 3.

Taking control of money 5.20  To be capable of being subject to the taking control of goods procedure, money or banknotes must be in the judgment debtor’s possession1 and not merely payable to her2 or in the hands of a third party or trustee.3 It has recently been confirmed that only physical money, and not bank money, is capable of being taken control of using the procedure in TCEA 2007, Sch 12.4 It was noted in 365 Business Finance Ltd v Bellagio Hospitality WB Ltd, Mr Tanveer Singh Handa5 that although the definition of ‘goods’ in TCEA 2007, Sch 12, para 3(1) was broad enough to include intangible property such as a debt owed by a bank to its customer, the ways of taking control of goods available under TCEA  2007, Sch  12 all involve securing the goods in a particular physical location. Lord Leggatt concluded that the only goods which it is possible to take control of are tangible property or ‘securities’ which are embodied or represented in some tangible form. Thus, an amount credited to a bank account, which is merely a legal obligation and is not represented by any physical object, is not amenable to enforcement by a writ of control. The appropriate method of enforcement in the case of a debt payable to a judgment debtor by a third party is a third party debt order (see Chapter 3). Where money or banknotes have been taken into control that money, or sufficient of it to satisfy the judgment debt, must be paid to the judgment creditor to pay the amount outstanding.6 1 2 3

4 5 6

Robinson v Peace (1838) 7 Dowl 93 at 94. Brown v Perrott (1841) 4 Beav 585. Robinson v Peace (1838) 7 Dowl 93 at 94 (purchase moneys for sale of property paid to a third party to be held for the use of the judgment debtor) and France v Campbell (1841) 9 Dowl 914 (money deposited in court by the judgment debtor in one action cannot be paid to the execution creditor in another action). 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd, Mr Tanveer Singh Handa [2020] EWCA Civ 588. [2020] EWCA Civ 588 at [96]. TCEA  2007, Sch  12, para  50(2)(b). Note, however, that there are two circumstances in which, pursuant to Sch 12, para 37, controlled goods consisting of money must be sold for the best price that can reasonably be obtained. The first is where the money is not of a kind that can be used for paying any of the outstanding amount. The second is where the best price that can reasonably be obtained for the money is more than its value if used as a means of payment. Examples were given by Lord Leggatt in 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd, Mr Tanveer Singh Handa [2020] EWCA Civ 588 at [94]: ‘An example of the former would be cash denominated in a

What goods can an enforcement agent take?  303 foreign currency which cannot be used for paying any of the outstanding amount without being sold in exchange for sterling. An example of the latter might be gold coins or coins that are a collectors’ item which could reasonably be expected to fetch a price greater than their value as currency’. The decision in 365 Business Finance also considers the interpretation of TCEA 2007, Sch 12, para 50(2) (b) and concludes that although bank money cannot be ‘controlled goods’ it can however be regarded as ‘money taken in exercise of the [enforcement] power’ where it is paid to the enforcement agent (eg where a payment is made by credit or debit card or bank transfer to prevent the enforcement agent taking control of goods).

Taking control and disposing of bills of exchange, promissory notes, bonds, specialities or securities for money 5.21  If the goods the enforcement agent has taken control of relate to bills of exchange,1 promissory notes, bonds, specialities2 or securities for money3 (together defined by TCEA 2007, Sch 12, para 3(1) as ‘securities’) then the enforcement agent may hold such securities until they mature.4 The enforcement agent may hold and dispose of securities by realising the sums secured or made payable by them, suing for the recovery of those sums or assigning the right to sue for their recovery.5 The creditor may sue in the name of the debtor, or in the name of any person in whose name the debtor might have sued, for the recovery of any sum secured or made payable by securities, when the time of payment arrives (see para 5.253).6 1

A cheque is a bill of exchange. However, dealings in cheques are heavily restricted by the Cheques Act 1992 which inserted s 81A into the Bills of Exchange Act 1882 to make account payee cheques non-transferable and only valid between the parties.

2

A speciality is an obligation contracted by matter of record or instrument under seal.

3

A life assurance policy has been held not to be a security for money and therefore not capable of seizure under previous legislation: Re Sargent’s Trusts (1879) 7 LR Ir 66.

4

TCEA 2007, Sch 12, paras 47-49 and TCG Regulations, reg 45(1).

5

TCEA 2007, Sch 12, para 48.

6

TCEA 2007, Sch 12, para 49(1).

Trust assets 5.22  Goods held on trust for the judgment debtor cannot generally be taken into control by an enforcement agent.1 However, where the whole beneficial interest in the goods is vested in the judgment debtor a writ of control can be used. TCEA 2007, Sch  12, para  3(2) provides that an enforcement agent cannot take control of trust property in which either the debtor or a co-owner has an interest not vested in possession. As Bailhache J explained in Stevens v Hince:2 ‘The proposition that a judgment creditor could not under a [writ of] fi fa seize chattels in which the judgment debtor had only an equitable interest, though true as a general rule, did not apply… where the whole beneficial interest in the chattels was vested in the judgment debtors. In these circumstances, the judgment debtors were not entitled to rely on the existence of the trust in order to defeat the judgment creditor.’ 1

Caillaud v Estwick (1794) 2 Anst 381.

2 [1914] WN 148.

304  Writs of control Interests in land 5.23  Freehold land clearly falls outside the definition of ‘goods’ that may be subject to the taking control of good procedure.1 However, there is case law to the effect that a debtor’s interest in a lease (ie as lessee or tenant) may be seized and sold under a writ of fi fa (and therefore may also be subject to the new taking control of goods regime under a writ of control).2 This is because historically a lease was classified as a form of personality known as a chattel real.3 1 2 3

TCEA 2007, Sch 12, para 3(1). See, eg, Doe d Westmoreland and Perfect v Smith (1827) 1 Man & Ry KB 137. See further Woodfall on Landlord and Tenant, (Arkose Press, 2016), para 16.178.

5.24  While it may be arguable as to whether the case law on this point remains good law, from a practical perspective the question arises as to how an enforcement agent would ‘take control’ of a lease. Even where control of the demised premises can be effected, if the judgment debtor is not willing to vacate the premises, the practical likelihood of effecting a sale of the leasehold interest without vacant possession may be minimal. For these reasons, a charging order is the preferable method of enforcement against a judgment debtor’s leasehold interest.1 1

See further Ch 4. By contrast where the judgment debtor’s interest is that of landlord and gives her the right to a stream of rental income from a property, equitable execution (which is discussed in Ch 6) may be a useful form of enforcement.

Fixtures 5.25  Certain sorts of property belonging to the judgment debtor may be fixtures, which will have lost their character as chattels and become part of the land. If so, they will not be capable of being taken into control under a writ of control. What constitutes a fixture is a question of land law and is dealt with in detail in specialist works.1 However, one of the main issues is likely to be the degree of physical attachment the property has to the land.2 1 2

Megarry and Wade The Law of Real Property (9th edn, Sweet & Maxwell, 2019), Ch 22. See, eg, Hulme v Brigham [1943] 1 KB 152 where the Court held that printing machines weighing from 9 to 12 tons, but which were secured by their own weight, were chattels rather than fixtures.

Exempt goods 5.26  The following are exempt goods as defined in TCG Regulations, regs 4 and 5: (a) Tools of the trade1 – items or equipment (for example, tools, books, telephones, computer equipment and vehicles) which are necessary for use personally by the debtor in the debtor’s employment, business, trade, profession, study or education. The aggregate value of the items or equipment is not to exceed £1,350; 2 (b) Basic domestic goods3 – such clothing, bedding, furniture, household equipment, items and provisions as are reasonably required to satisfy the basic domestic needs of the debtor and every member of the debtor’s household. A long, nonfinite list then follows. This includes certain furniture, any item or equipment

What goods can an enforcement agent take?  305

(c) (d) (e) (f)

(g) 1 2

3 4 5 6 7 8 9

reasonably required for the medical care of the debtor or any member of the debtor’s household, safety or security of the dwelling-house, sufficient heating and lighting and any item or equipment reasonably required for the care of a person under the age of 18, a disabled person or an older person; Dogs4 – assistance dogs (including guide dogs, hearing dogs and dogs for disabled persons), sheep dogs, guard dogs or domestic pets; Vehicles of disabled persons5 – a vehicle on which a valid disabled person’s badge is displayed because it is used for, or in relation to which there are reasonable grounds for believing that it is used for, the carriage of a disabled person; Emergency vehicles6 – a vehicle (whether in public ownership or not) which is being used for, or in relation to which there are reasonable grounds for believing that it is used for, police, fire or ambulance purposes; Health emergency vehicles7 – a vehicle displaying a valid British Medical Association badge or other health emergency badge because it is being used for, or in relation to which there are reasonable grounds for believing that it is used for, health emergency purposes; Principle home8 – goods which happen also to be the debtor’s or another person’s only or principle home.9 TCG Regulations, reg 4(1)(a). This exemption does not apply where the debt is being enforced under Local Government Finance Act 1988, s 62A; Land Drainage Act 1991, s 54; Water Resources Act 1991, Sch 15, para 12; Finance Act 2008, s 127. See TCG Regulations, reg 4(2). TCG Regulations, reg 4(1)(b). TCG Regulations, reg 4(1)(c). TCG Regulations, reg 4(1)(d). TCG Regulations, reg 4(1)(e). TCG Regulations, reg 4(1)(f). TCG Regulations, reg 5. See para 5.59.

5.27  In respect of the exemption for tools of the trade and domestic items a similar provision applies in respect of a bankrupt under the Insolvency Act 1986.1 1

Insolvency Act 1986, s 283.

Tools of the trade 5.28  It is clear from the wording of TCG  Regulations that a factual assessment of what is ‘necessary’ will have to be made on a case by case basis. The question of what tools and equipment were necessary to a judgment debtor for use by him personally in his business was considered by the Court of Appeal in Toseland Building Supplies Ltd v Bishop t/a Bishop Groundworks1 construing similar provisions2 of SCA 1981, s 138. The question in that case was whether a JCB mechanical digger was exempt from seizure. The evidence adduced indicated that the judgment debtor ran a groundwork business which typically involved digging trenches for the footings of buildings, or digging out and laying a driveway. The judgment debtor owned the JCB and it was used regularly. He claimed that it was essential for him to own a JCB digger because it enabled him to respond very quickly to enquiries that entailed using such a digger during the course of building work and his business would not, from a practical point of view, have been viable if he had to hire a vehicle. There was

306  Writs of control evidence that the judgment debtor personally used the digger but, importantly, there was also evidence that his employees did so. 1 2

Unreported, 28 October 1993, CA. The provision was: ‘such tools, books, vehicles and other items of equipment as are necessary to that person for use personally by him in his employment, business or vocation’.

5.29  On the facts, the Court held that the JCB digger was not ‘for use personally by him in his employment, business or vocation’. As the judge put it at first instance: ‘The idea behind the legislation in my view is and always has been to protect the tools of the trade of the individual worker. In this type of case, involving as it does a vehicle, I can well understand that if, for example, a motorcycle courier of the kind that one sees so frequently these days, who owns his own motorcycle and hires himself out to go and deliver documents in various places, then that motorcycle will be protected. So too would a van owned and driven solely by a person in which he drove about making deliveries in the course of his work as a delivery man.’ However, on the facts of Toseland the JCB was not exempt because it was also used by the judgment debtor’s employees and was not therefore for use by the judgment debtor ‘personally’. 5.30  The Court of Appeal agreed with the judge at first instance. It stressed that the statutory provision was clear and the court should not seek to define the words, which were plain and did not require further elaboration. Rather, the statutory wording should be interpreted in the light of the facts of the particular case. In line with these principles, a disc jockey has been held to be able to claim the tools of the trade exemption for the records, tapes and CDs he uses for his work.1 However, where a judgment debtor owns equipment which is also used by her employees in the course of her business, the exemption is unlikely to apply for the reasons provided in Toseland. 1

Brookes v Harris [1995] 1 WLR 918 at 921. Authorities considering whether equipment fell within the exception in the Insolvency Act 1986, s 283(2)(a) include Wood v Lowe [2015] EWHC 2634 (Ch); Church of Scientology Advanced Organisation Saint Hill Europe and South Africa v Scott [1997] B.P.I.R. 418, and Mikki v Duncan [2017] EWCA Civ 57. See Birdi v Price [2018] EWHC 2943 (Ch) at [58] for useful judicial guidance concerning the application of the similar wording found in the Insolvency Act 1986, s 283(2)(a).

5.31  Now that tools of the trade are subject to an aggregate cap it appears that there is scope for satellite litigation if a debtor only has one tool of the trade (such as a vehicle) which is worth more than the cap. It would seem that an enforcement agent could take such a tool as it would not be exempt, but this remains to be considered by the court. An additional area for satellite litigation will be where a judgment debtor has a variety of tools of the trade (which exceed the cap) how will it be determined what is taken and what is left behind? Burden of demonstrating that goods are exempt 5.32  In considering whether a judgment debtor’s property is exempt the Court of Appeal in Toseland also held that:1

What goods can an enforcement agent take?  307

‘Prima facie all the judgment debtor’s goods are liable to seizure under a writ of fieri facias. If a judgment debtor claims the benefit of a statutory exemption, the burden of showing that the exemption applies rests squarely on him.’ 1

Unreported, 28  October 1993, CA. Followed in Moffat v Lemkin (formerly High Sheriff of Greater  London) (unreported, 24  November 2003). Followed in Birdi v Price [2018] EWHC 2943 (Ch).

5.33  Such provision is logical because there is no way in which a enforcement agent could know what tools are necessary for use by the judgment debtor personally in her employment or business and no way in which she could know what tools are used by her personally.1 CPR Pt 85 sets out the procedure whereby a judgment debtor can make a claim in respect of exempt goods such as tools of the trade or household necessities (see para 5.280). 1

Moffat v Lemkin (formerly High Sheriff of Greater London) (unreported, 24 November 2003).

Household necessities 5.34  The exemption for household necessities provided in TCG  Regulations, reg  4 is unlikely to be relevant in a commercial enforcement context because the judgment creditor will be seeking high value items in satisfaction of her judgment debt. However, the same principles of construction of the statutory provisions on a case-by-case basis as set out in Toseland should apply. Dealing with exempt property 5.35  There is no legal requirement for an enforcement agent to point out to the judgment debtor goods which are likely to be exempt. In Moffat v Lemkin (formerly High Sheriff of Greater London) the judge commented:1 ‘I do not accept that there is any such duty upon the Sheriff to [the judgment debtor] although I do accept that it would, certainly to a layman, be monstrous for a sheriff to sell goods which were likely tools of trade without any warning.’ 1

Unreported, 24 November 2003.

5.36  The steps which should be taken by a judgment debtor who seeks to rely on the statutory ‘exempt goods’ provisions are discussed in paras 5.280– 5.285. 5.37  The National Standards impose a number of requirements on enforcement agents executing writs and warrants of control. These include: not removing anything clearly identifiable as belonging to, or for the exclusive use of, a child, or clearly identifiable as required for the care and treatment of the disabled, elderly or seriously ill, taking reasonable steps to satisfy themselves that the value of the goods seized is proportionate to the value of debt and fees and not taking control or removing goods clearly belonging solely to a third party not responsible for the debt. Where a claim is made, the third party should be given clear instructions on the process required to recover their goods.

308  Writs of control Specific exemptions 5.38  In addition to the exemptions as set out in TCG Regulations, regs 4 and 5 there are a number of specific exemptions which apply in the case of particular types of property. Several of these are considered below.

Bills of sale 5.39  A bill of sale is a document evidencing the sale (an ‘absolute bill’) or grant of security (a ‘security bill’) by an individual over certain sorts of chattel where the seller/chargor still retains possession of the chattel. Their purpose was to create a public register to show where chattels in the possession of one person and apparently owned by her had been sold to, or secured in favour of, another. Bills of sale must be registered and the statutory formalities contained in the Bills of Sales Acts 1878 and 1882 must be carefully followed or the bill may be void. 5.40  Provided the transferee has no notice of the goods being bound by the writ of control goods in which the property has been transferred by means of a bill of sale are protected from the taking control of goods procedure because the transferee will constitute a good faith purchaser for value1 (see paras 5.130–5.139). In practice, bills of sale are rarely encountered because the stringent formalities surrounding their creation are so cumbersome. A judgment debtor who attempts to use a bill of sale as a means of evading execution against her goods is as likely to fall foul of the statutory formalities required to execute and register a bill of sale successfully. 1

TCEA 2007, Sch 12, para 5(2).

5.41  Where a judgment debtor does assert that goods are exempt from the taking control of goods procedure because they have been transferred pursuant to a bill of sale, it will be worth a judgment creditor checking that the formalities have been correctly followed and that the bill of sale has been duly registered since otherwise the bill may well be void. The register of bills of sale is a public register1 and is kept at the Action Department Room in room E10 at the Royal Courts of Justice.2 The register is arranged alphabetically by grantor.3 While the Queen’s Bench Guide at para  23.17.10 provides that ‘Under section 16 of the 1878 Act application may be made to search the register and obtain an office copy or extract of a registered bill of sale. The application is made to a Master. The procedure, and the necessary information to support the application, are the subject of PD8A paras 11A to 4.’ it appears that in practice the court will search the register on receiving a request with no charge being made for the search. A search certificate is £50.4 1 2 3 4

Bills of Sale Act 1878, s 16. Queen’s Bench Guide, para 23.17.2. Bills of Sale Act 1878, s 12. Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, para 10.2.

What goods can an enforcement agent take?  309

Crown 5.42  A writ of control cannot be executed against the Crown to enforce payment of money or costs.1 Instead, a separate procedure exists, which is set out in the Crown Proceedings Act 1947, s 25(1)–(3) (see paras 1.106–1.108). 1

Crown Proceedings Act 1947, s 25(4).

Hire purchase, conditional sales and finance leasing of business equipment1 5.43  Many forms of business equipment are acquired by means of trade finance.1 Common financing techniques include hire purchase,2 conditional sales3 and finance leasing.4 (Similarly, household goods can be purchased on hire purchase agreements, though this is less likely to be relevant in the context of commercial enforcement.) While the commercial and legal terms of hire purchase, conditional sales and finance leasing will differ, what they have in common is that title is either retained by the hirer or seller (or in the case of the finance lessor, title never leaves her) and the contract will typically provide that in the event of execution being levied the agreement will terminate and an immediate right to retake possession arises. Strictly, therefore, hire purchase and other like goods are not ‘exempt’ from the taking control of goods procedure but rather are not available for execution because they do not belong to the judgment debtor (see para 5.18). In any event, it will be important to ascertain the ownership of the type of goods which are commonly subject to financing agreements before levying execution in order to avoid wasted costs of execution or potential liability to the true owner. The use of CPR  Pt  71 proceedings (Orders to obtain information about a judgment debtor’s assets) may assist in this regard. CPR Pt 71 proceedings are described in Chapter 2 as are other means of ascertaining whether goods are subject to hire purchase. 1 2

3

4

See generally Goode Commercial Law (5th edn, Penguin Books, 2016), part 5. A hire purchase contract is an agreement to hire equipment under which the hirer agrees to pay the agreed instalments for the use of the equipment over an agreed term. It typically provides that at the end of the agreed term the hirer has the option, but not the obligation, to purchase the equipment. See Goode Commercial Law (5th edn, Penguin Books, 2016), pp 787–792. A  conditional sale agreement is an agreement for sale under which title is retained by the seller until payment has been made in full or other conditions prescribed in the agreement are met. It differs from hire purchase because the buyer is contractually committed to buy, whereas under a hire purchase agreement she has an option but not an obligation to purchase. See Goode Commercial Law (5th edn, Penguin Books, 2016), pp 785–786. A finance lease is an agreement to hire equipment over a period, usually equivalent to the estimated life of the equipment, in return for ‘rental’ payments. At the end of the finance lease, the lessee will not be permitted to acquire the equipment otherwise it would convert the agreement to one of hire purchase. Instead, the lessor will sell the equipment (which will typically have a small residual value) and will pay or credit any amounts raised against a future transaction. See Goode Commercial Law (5th edn, Penguin Books, 2016), pp 797–810.

5.44  Where an enforcement agent takes control of the goods and sells them with notice of the hirer’s, lessor’s or seller’s interest, she will be liable to the hirer, lessor or seller, as the case may be.1 The statutory protection afforded to an enforcement agent with no notice of the interest of a third party is considered at paras 5.254–5.256. 1

See TCEA 2007, Sch 12, paras 63–64.

310  Writs of control Partnership 5.45  A  writ of control can only be executed against the assets of a partnership where judgment has been entered against the firm.1 Partnership property cannot be taken into control to satisfy the debt of one partner.2 Where there is a dispute as to whether assets are owned by the partnership or an individual partner, proceedings under CPR  Pt  85 (procedure for making a claim to controlled goods) may be necessary (see paras 5.265–5.279).3 1 2 3

Partnership Act 1890, s 23(1) and Peake v Carter [1916] 1 KB 652 at 655. Instead, a judgment creditor of a partner may obtain a charging order on that partner’s interest in the partnership property (Partnership Act 1890, s 23(2)). See, eg, Peake v Carter [1916] 1 KB 652 (CPR Pts 85 and 86 replaced the interpleader regime).

Railway rolling stock and plant 5.46  The Railway Companies Act 1867 exempts certain railway rolling stock and plant used by a railway company1 from the taking control of goods procedure under a writ of control after a railway has been open to public traffic.2 The exemption covers ‘engines, tenders, carriages, trucks, machinery, tools, fittings, materials, and effects constituting the rolling stock and plant used or provided by a company for the purposes of the traffic on their railway, or of their stations or workshops’. The appropriate procedure for enforcement is to seek the appointment of a receiver or manager under the special mechanism provided by the statute.3 1 2 3

See definition in the Railway Companies Act 1867, s 3. Railway Companies Act 1867, ss 4–5. The exemption is for any ‘execution at law or in equity’. Railway Companies Act 1867, s 4.

5.47  Key system assets1 in the London Underground are also exempted by statute from the taking control of goods procedure.2 1 2

Defined in the Greater London Authority Act 1999, s 213. Greater London Authority Act 1999, s 216(4). There is no power to use the procedure in TCEA 2007, Sch 12 to take control of goods coming within the scope of s 216 of the Greater London Authority Act 1999. See TCEA 2007, Sch 13, para 130.

Goods amenable to the taking control of goods procedure 5.48  As has been noted, any goods belonging to the judgment debtor can be taken into control by the enforcement agent where they are not ‘exempt goods’ or subject to any of the specific exemptions. However, in the context of the enforcement of high value judgment debts, particular types of assets are worthy of further consideration. Aircraft 5.49  Aircraft can be taken into the control of an enforcement agent under a writ of control. A copy of the writ of control should be attached both outside the plane and in the cockpit. Taking control of an aircraft can be complicated, not least because

What goods can an enforcement agent take?  311

different parts may have different ownership, some or all of which may be subject to finance leases, charges or mortgages. Although an aircraft is mobile and often inaccessible, the correct procedures set out in TCEA 2007, Sch 12 must be followed. An enforcement agent should ensure that the aircraft does belong to the judgment debtor before attempting to take control of it. The means of identifying aircraft owned by the judgment debtor is considered in Chapter 2. The identification of an enforcement officer with a proven track record of taking control of aircraft is likely to be essential. 5.50  The importance of ensuring that the procedure in TCEA  2007, Sch  12 is followed correctly can be observed in Midtown Acquisitions LP  v Essar Global Fund Ltd and others.1 In Midtown a judgment debt in the sum of US$194,894,474.84 was outstanding and the judgment creditors sought to seize a luxury jet. Having ascertained the whereabouts of the jet the enforcement officer obtained a writ of control and warrant of entry for Lasham Airfield pursuant to TCEA 2007, Sch 12, para 15 (see para 5.149). The enforcement officer subsequently learnt that the aircraft was in fact at Stansted airport. He then went to Stansted Airport and could enter the public part freely. He obtained access airside and to the private part of the airport where the aircraft was. Although he had no warrant entitling him to enter his position was that he was given a ‘licence’ to enter by the relevant staff. He then took various actions to take control of the aircraft. The following day he applied for, and obtained, without notice, a second warrant of entry, this time specifying the address of London Stansted Airport. This included an order to enable access to be gained to the aircraft. The Court considered if the aircraft had been lawfully taken into control given that the warrant of entry specified Lasham Airfield – which was not the correct location. It was held that the judgment creditor could not rely on the permission given by the staff to enter. An enforcement officer cannot properly rely on a writ of control to obtain airside access where there is no warrant of entry entitling such access. Although ‘premises’ (as defined in TCEA 2007, Sch 12, para 3) includes aircraft a warrant was still necessary because to qualify for entry without warrant the debtor has to live or carry on business in the premises (see paras 5.148–5.149). The steps taken to take control of the aircraft were not valid in the circumstances and it was held that the enforcement officer did not have lawful authority to take control of the aircraft simply under the writ of control. 1

[2017] EWHC 2206 (QB).

Farms 5.51  Executing a writ of control over farm goods raises particular issues. Animals can be taken into control under a writ of control. However, in a commercial enforcement scenario, execution is only likely to be worthwhile in the case of a large number of animals or animals of high value. The animals must also be properly looked after which will add to the costs and complexities of enforcement.1 1

The relevant section of the High Court Enforcement Officers Regulations 2004, SI 2004/400, Sch 3, para  5 (now repealed) specifically referred to sums payable in relation to the upkeep of animals whereas its successor, the Fees Regulations, do not. Where the costs of caring for animals is envisaged a sensible approach would be to make an application under CPR 84.14 for the court to allow for exceptional disbursements to be recoverable from the judgment debtor under the Fees Regulations,

312  Writs of control reg 10 (see para 5.302). CPR 84.14(3) clearly envisages that an application may be made without notice prior to goods being taken into control. In the absence of an order an enforcement agent may require an indemnity from the judgment debtor in respect of such costs.

5.52  Crops can be subject to the taking control of goods procedure but it seems this can only be done if they were produced by human labour.1 However, case law reveals some fairly arbitrary distinctions as to what constitutes ‘human labour’. An enforcement agent would appear to be able to take control of corn2 or potatoes3 but not trees4 growing fruit5 or grass6 as these have been held not to be produced by human labour. However, once trees have been felled it seems they can be taken into control.7 Where crops are still growing it would be usual for them to be held under a controlled goods agreement (see para 5.214). They would usually then be removed once harvested. 1 2 3 4 5 6 7

Evans v Roberts (1826) 5 B&C 829. Evans v Roberts (1826) 5 B&C 829 at 840. Evans v Roberts (1826) 5 B&C 829 at 840. Rodwell v Phillips (1842) 9 M&W 501 at 505. Rodwell v Phillips (1842) 9 M&W 501 at 505. Evans v Roberts (1826) 5 B&C 829 at 832. Rodwell v Phillips (1842) 9 M&W 501 at 505.

5.53  The Sale of Farming Stock Act 1816 previously applied special rules where the judgment debtor is a tenant farmer and there exists a covenant or written agreement with the landlord not to remove various produce from the land. This was repealed with the introduction of TCEA 2007.1 1

TCEA 2007, Sch 23(3), para 1.

5.54  Under the Agricultural Credits Act 1928, a farmer may create an agricultural charge over farm stocks and assets. CPR 83.21 has a specific provision dealing with the procedure to be followed before executing a warrant of control against a farmer.1 1 CPR 83.21(3).

5.55  The CPR does not contain an equivalent provision for writs of control (the RSC which were previously applicable also did not contain an equivalent provision). However, an execution creditor takes subject to any charges on the property and so will take subject to an agricultural charge. For this reason, when executing a writ of control against a farmer, a search should be made for charges registered under the Agricultural Credits Act 1928. All agricultural charges must be registered at HM Land Registry1 within seven days, or they will be void against any person other than the farmer.2 Registration constitutes actual notice of the charge to all persons.3 The register is a public register4 and a search can be obtained by completing HM Land Registry form AC6 and sending it to the Agricultural Credits Department at the address specified on the form. The fee for the search is currently 50p per name.5 1 2 3 4 5

Agricultural Credits Act 1928, ss 9(1) and 9(2). Agricultural Credits Act 1928, s 9(1). Agricultural Credits Act 1928, s 9(8). Agricultural Credits Act 1928, s 9(4). Agricultural Credits Fees Order 1985, SI 1985/372, reg 2.

What goods can an enforcement agent take?  313

Clergy 5.56  Where the judgment debtor is a member of the clergy and appears to have no goods against which a writ of control can be executed, a writ of fieri facias de bonis ecclesiasticis can be delivered to the bishop of the judgment debtor’s diocese for execution.1 However, such procedure is unlikely to be relevant in the context of commercial enforcement and is outside the scope of this book. Writs of fieri facias de bonis ecclesiasticis are unique and have not been renamed by TCEA 2007 and are not subject to the new unified procedure set out in TCEA 2007, Sch 12. 1 CPR 83.11.

Goods in bond 5.57  An enforcement agent can take control of goods belonging to the judgment debtor held in England and Wales.1 Goods of the judgment debtor held in warehouses owned by third parties are no exception. Note that prior to TCEA 2007 an enforcement officer would enter third party premises to enforce a writ if they had good reason to believe that goods belonging to the debtor were there. That automatic right has been removed. Gaining entry to the address of a third party to take control of goods can now however be obtained with a warrant (paras 5.148–5.149). 1

TCEA 2007, Sch 12, para 11(a).

5.58  However, practical difficulties may arise in the case of warehouse goods in that they may be subject to a conditional sale or retention of title agreements and may not therefore belong to the judgment debtor (see paras 5.43–5.44). Furthermore, if the warehouse owner is owed any sums by the judgment debtor, she may have a lien over the goods which will allow her to retain possession until she is paid. Goods belonging to the judgment debtor which are subject to a lien by a third party may be subject to the taking control of goods procedure but will remain subject to the lien.1 Practically, therefore, the enforcement agent will be unable to remove them for the purposes of sale as the prospects of achieving a sale may be low where the goods remain subject to the lien. (By contrast, where the judgment debtor has a lien over goods which are owned by a third party, neither the goods nor the lien can be subject to the taking control of goods procedure.)2 1 2

Duncan v Garratt (1824) 1  C  & P  169; Jacobs v Latour (1828) 5 Bing 129 at 132; Proctor v Nicholson (1835) 7 C & P 67; and The Ile de Ceylan [1922] P 256 at 258. Legg v Evans (1840) 6 M&W 36. The lien is a mere personal interest in the goods which cannot form the subject matter of a sale.

Motor vehicles 5.59  Motor vehicles of any type can be subject to the taking control of goods procedure under a writ of control (as can caravans).1 The question of whether a judgment debtor could claim the vehicle is a tool of her trade is considered at paras 5.28–5.33. Before taking control of a vehicle, an enforcement agent will check with DVLA to ascertain the identity of the registered keeper of the vehicle.2 Although the

314  Writs of control registered keeper of a vehicle is not necessarily the owner, it is likely to give a good indication of ownership. In addition, vehicles are often subject to various forms of hire purchase agreement, and if so cannot be subject to a writ of control.3 Appropriate inquiries should therefore be made in this regard.4 1

2 3 4

A caravan would be exempt if it also happened to be the debtor’s or another person’s only or principle home (para 5.26). Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd [1996] 1 QB 764 concerns the seizure of a caravan where the debtor and his family appeared to be living in it. This case was decided prior to the existing exemption concerning principle homes. This restriction presents an interesting lacuna. Where a judgment debtor (or another) lives in the judgment debtor’s caravan as her home the judgment creditor will be unable to take control of it under the TCEA  2007, Sch  12 procedure. The judgment creditor will also be unable to obtain a charging order (Ch 4). A judgment debtor with a number of caravans all rented out to others as the occupants’ main home would be restricted. However, in such a situation the appointment of a receiver may be appropriate to collect rent (Ch 6). This can be contrasted to the situation where a judgment debtor has only one caravan which she lives in herself. Here the judgment creditor’s options appear to be limited as the appointment of a receiver seems unlikely – there would be no outgoings to collect making the appointment seemingly fruitless (para 6.52). For safety reasons a caravan should not be removed when occupied: Cave v Capel (1954) 1 QB 367. Enforcement agents may obtain relevant information from the DVLA database on the basis of ‘reasonable cause’ under the Road Vehicles (Registration and Licensing) Regulations 2002, reg 27. See paras 5.43–5.44. See further, para 2.61.

Machinery 5.60  Machinery in a factory, however large, can be subject to the taking control of goods procedure provided it is a chattel and not a fixture (see para  5.25). If machinery is very large or heavy or both, a specialist enforcement agent with experience of valuing such assets and, if necessary, with the facilities to arrange removal and storage should be consulted. It may also be necessary to apply to consider an auction of the goods to take place on the judgment debtor’s premises (see para 5.248). Ships 5.61  It is possible to proceed against a ship by way of a writ of control1 and an enforcement agent can use the taking control of goods procedure to take control of a ship or a ‘share’ of a ship.2 Where the debtor owns only some of the shares in a ship, the agent can still take control of the ship as a whole and sell just that share.3 Under certain circumstances the master and crew can claim a lien over the ship (commonly for unpaid wages). Some of these liens operate in rem and will take priority over a judgment debtor’s claim to enforcement against a ship, even if already taken into control by an enforcement agent.4 1 2

3 4

The James W Elwell [1921] P 351; The Joannis Vatis (No 2) [1922] P 213; and The Ile de Ceylan [1922] P 256. Merchant Shipping (Registration of Ships) Regulations 1993, SI 1993/3138, Reg 2(5) provides that the property in a ship to be registered in the Register of British Ships shall be divided into 64 ‘shares’. The James W Elwell [1921] P 351 at 368–369. The Ile de Ceylan [1922] P 256 at 258 and contrast The James W Elwell [1921] P 351 at 369–370.

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PROCEDURE FOR OBTAINING A WRIT OF CONTROL 5.62  The procedural rules for obtaining a writ of control are contained in CPR Pt 83. High Court jurisdiction 5.63  A writ of control can only be issued in the High Court. A similar procedure known as a warrant of control is available in the County Court. A writ of control can be obtained using a County Court judgment but the judgment must first be transferred to the High Court. Transfer can often be arranged by sending the judgment to a firm of enforcement officers who offer this service. Many will arrange the transfer and the issue of a writ of control before going on to take control of goods under the writ. Some undertake this service with no charge (although there is a court fee to be paid). Where permission to issue is required 5.64  The general rule is that permission is not needed to issue a writ of control. However, CPR  83.2(3) sets out the circumstances in which a writ of control (as well as writs of execution) may not be issued without the permission of the court. These are: (a) where six years or more have elapsed since the date of the judgment or order; (b) where any change has taken place, whether by death or otherwise, in the parties entitled or liable to the execution under the judgment or order; (c) where the judgment or order is against the assets of the deceased person coming into the hands of her executors or administrators after the date of the judgment or order and it is sought to issue execution on such assets; (d) where any goods sought to be seized under a writ of execution were in the hands of a receiver appointed by the court or a sequestrator; (e) where under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged has been fulfilled (other than where non-compliance with the terms of suspension of enforcement of the judgment or order is the failure to pay money); or (f) where the permission sought is for a writ of control or writ of execution, and that writ is to be in aid of another writ of control or execution. 5.65  Most of the categories set out in CPR  83.2 are relatively self-explanatory. The requirement for permission to issue a writ where a court appointed receiver or sequestrator holds goods is to avoid committing a contempt of court. The requirement for permission where six years or more have elapsed since the date of the judgment warrants further consideration, not least since the identification of assets of value can take years, particularly in a fraud case. Permission to issue a writ of control after six years 5.66  It should be noted at the outset that an application to issue execution more than six years following the date of judgment, or to extend the time for execution,

316  Writs of control has been held not to be time-barred by the Limitation Act 1980, s  24(1) (which prohibits the bringing of an action on a judgment after the expiration of six years).1 The court has a discretion as to whether to grant permission to issue a writ of control. CPR  83.2 gives no guidance as to how the court’s discretion to grant permission to issue a writ of control where more than six years have elapsed since the date of judgment will be exercised. It is, however, clear that obtaining such permission is ‘no mere formality’.2 1

2

National Westminster Bank plc v Powney [1991] Ch  339 at 357, CA; Duer v Frazer [2001] 1 WLR 919; and Lowsley v Forbes [1999] 1 AC 329 at 342, HL. This is because the Limitation Act 1980, s 24(1) is concerned with a fresh action on a judgment. The White Book (Sweet & Maxwell, 2020), vol 1, para 83.2.2.

5.67 In National Westminster Bank v Powney1 the Court of Appeal held that delays in the administration of justice which were outside the control of the parties, such as a delay of two years and ten months which had been necessary to determine an application to set aside, would be proper grounds for the court to grant permission for a fresh writ to be issued outside the six-year period.2 While each case will turn on its own facts, in Duer v Frazer3 the Court held that it:4 ‘would not, in general, extend time beyond the six years save where it is demonstrably just to do so. The burden of demonstrating this should, in my judgment, rest on the judgment creditor. Each case must turn on its own facts but, in the absence of very special circumstances such as were present in National Westminster Bank plc v Powney [1991] Ch 339, the court will have regard to such matters as the explanation given by the judgment creditor for not issuing execution during the initial six-year period, or for any delay thereafter in applying to extend that period, and any prejudice which the judgment debtor may have been subject to as a result of such delay including, in particular, any change of position by him as a result which has occurred. The longer the period that has been allowed to lapse since the judgment the more likely it is that the court will find prejudice to the judgment debtor.’ 1 2

3 4

[1991] Ch 339 at 361362, CA. National Westminster Bank Plc v Powney [1991] Ch  339 at 361–362, CA. Although the case was concerned with a County Court warrant of possession, the relevant County Court rule under consideration by the Court of Appeal (CCR Ord 26, r 5(1)) contained an almost identical provision to CPR 83.2. [2001] 1 WLR 919, QBD. Duer v Frazer [2001] 1 WLR 919 at 925.

5.68  The Court in Duer also found no basis on which a judgment of a foreign court that has been registered in this country should be treated any differently to an English judgment in this regard.1 1

Duer v Frazer [2001] 1 WLR 919 at 925.

5.69  The Court of Appeal revisited the question of the exercise of this discretion in Patel v Singh.1 In that case the judgment creditor had obtained judgment against the judgment debtor on 8 September 1992 and believed the defendant had subsequently moved to Germany and was working there. Six months after she became aware that the defendant was in England, on 1 May 2002, she applied to issue a writ of fi fa (the

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modern form of which is the writ of control) outside the six-year time limit. Peter Gibson LJ, giving the judgment of the Court of Appeal, refused permission:2 ‘In my judgment, therefore, consistently with what this court said in Powney, the court must start from the position that the lapse of six years may, and will ordinarily, in itself justify refusing the judgment creditor permission to issue the writ of execution, unless the judgment creditor can justify the granting of permission by showing that the circumstances of his or her case takes it out of the ordinary. That may be done by showing the presence of something in relation to the judgment creditor’s own position, or, as Sir Anthony Evans suggested in the course of the argument, in relation to the judgment debtor’s position. Thus the judgment creditor might be able to point, for example, to the fact that for many years the judgment debtor was thought to have no money and so was not worth powder and shot but that, on the judgment creditor winning the lottery or having some other change of financial fortune, it has become worthwhile for the judgment creditor to seek to pursue the judgment debtor.’ The Court also pointed out that in accordance with the CPR the exercise of its discretion should be informed by the overriding objective of enabling the court to deal with cases justly. 1 2

[2002]  EWCA CW  1938. See also Good Challenger Navegante S.A. v Metalexportimport SA [2003] EWCA Civ 1668. [2002] EWCA Civ 1938 at [21].

5.70  The fact that the judgment debtor had moved to Germany and since returned was not seen by the Court as an adequate ground for granting permission to issue:1 ‘I can understand that when she discovered Mr Singh had moved to Germany she regarded that as an obstacle to her proceeding on her writ of execution. The obvious thing for her to have done at that point would have been to go to an English solicitor to obtain help. The solicitor would perhaps have advised her to register her judgment in Germany as a signatory, like this country, to the Brussels Convention, and as to the steps that could be taken to discover Mr Singh’s whereabouts in Germany. But, as Mr Crosfill frankly accepted, she appears to have done nothing at all once she discovered that Mr Singh was in Germany.’ 1

[2002] EWCA Civ 1938 at [25].

5.71  The basic message is clear: a judgment should be enforced expeditiously and, if it is not, the judgment creditor will only have herself to blame if the court refuses her permission to issue a writ of control after the initial six-year period. The Court of Appeal’s judgment in Patel would suggest there is effectively a presumption against granting that permission and that, barring court delays, it will be for the judgment creditor to show why the presumption should be rebutted. However, where the judgment creditor can demonstrate that the reason why enforcement had not taken place is because it was thought that the judgment debtor had no assets but that her financial circumstances have since changed, permission is likely to be granted (provided that the reason assets had not been discovered earlier was not attributable to

318  Writs of control a lack of resolve by the judgment creditor to discover them). In any event, a judgment creditor who is approaching the sixth anniversary of the judgment and who wishes to preserve her full rights to enforcement might be better advised to bring a fresh action on the judgment within the six-year limitation period1 to reset the time limit.2 1 2

Limitation Act 1980, s 24(1). Bank of Scotland v Bennett [2004] All ER (D) 417 (Jul).

Where another enactment or rule requires permission 5.72  The specific situations where permission is required to issue a writ of control set out in CPR 83.2 are without prejudice to all other occasions where it has been enacted or rules that provide that a person is required to obtain the permission of the court for the issue of a writ of execution or otherwise to enforce a judgment or order.1 1 CPR 83.2(8).

5.73  There are a number of enactments which require the permission of the court for execution to issue.1 Many of these are unlikely to be relevant in a commercial enforcement scenario.2 However, of particular importance are various provisions of the Insolvency Act 1986, which are considered in Chapter 1 and permission to enforce an award under the Arbitration Act 1996, s 66 (under which permission is only given in a clear case).3 Various rules concerning partnerships also require the court’s permission before execution may issue.4 1

2

3 4

CPR  83.2(b) makes specific reference to the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951, s  2, which protects the interests of persons called up or volunteering for certain naval, military or air force service. However, this is unlikely to be relevant in a commercial enforcement context. Though less likely to be relevant in the context of commercial enforcement, it is worth noting that permission of the County Court to bring enforcement proceedings is needed where the County Court has made an attachment of earnings order to secure the payment of a judgment debt (Attachment of Earnings Act 1971, s 8(2)(b)). Grech v Board of Trade (1923) 16 Ll. L. Rep. 262. See PD 70, para 6A.

Making the application for permission 5.74  An application for permission to issue a writ of control may be made in accordance with CPR  Pt  23.1 However, the application need not be served on the judgment debtor unless the court directs otherwise.2 1 CPR 83.2(4). 2 CPR 83.2(5).

5.75  Although it is not directly stated in CPR 83.2, CPR 83.2(4) makes it clear that evidence in support of the application is required. The following information must be provided:1 (a) identify the judgment or order to which the application relates; (b) in the case of a money judgment, the amount originally due under the judgment or order and if different the amount due at the date the application notice is filed

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(ie any post-judgment interest should be calculated to the date the application is issued); (c) where the judgment or order is over six years old, the reasons for the delay in enforcing the judgment or order; (d) where there has been a change in parties entitled or liable to execution, a description and explanation of this change; (e) where the judgment or order is against the assets of a deceased person and have come into the hands of her executors or administrators after the date of the judgment or order, a statement that a demand to satisfy the judgment or order was made on the person liable to satisfy it and she refused or failed to do so; (f) any other information which is necessary to satisfy the court that the applicant is entitled to proceed to execution on the judgment or order and that the person against whom it is sought to issue execution is liable to execution on it. 1 CPR 83.2(4).

Fee for application for permission to issue 5.76  Where the application for permission to issue is made without notice the fee is £100. Where the court directs that the application must be made on notice, the fee is £255.1 1

The Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1.

Discretion to grant permission 5.77  The court has a discretion to grant permission to issue a writ of control where permission is required. At the hearing, the court can grant or refuse permission or may order a trial of any issue or question which is necessary to determine the rights of the parties.1 Thus, for example, where new evidence which has come to light as to a judgment debtor’s means is disputed, the court may order a ‘mini-trial’ to determine this issue. 1

See also The White Book (Sweet & Maxwell, 2020), vol 1, para 83.2.12.

Costs of the application for permission to issue 5.78  The court has a discretion as to costs.1 A successful judgment creditor may therefore seek an order to recover the costs incurred in connection with the application for permission to issue, particularly where a trial to determine issues between the parties has been necessary. 1 CPR Part 44.

Further application possible if permission refused 5.79  If an application for permission to issue a writ of control is refused, a second application is still possible. However, any subsequent application should not be granted unless it is founded on material which was not before the court on the first application.1 1

WT Lamb & Sons v Rider [1948] 2 KB 331 at 334, CA, per Scott LJ.

320  Writs of control Order for permission lasts one year 5.80  An order granting permission to issue a writ of control is valid for one year.1 Where the writ is not issued within one year after the date of the order granting such permission, the order shall cease to have effect.2 However, the expiration of this order does not preclude the making of a fresh order granting permission for the issue of a writ of control.3 1 CPR 83.2(7A). 2 CPR 83.2(7A)(b). 3 CPR 83.2(7B).

Even where permission is granted, judgment interest limited to six years 5.81  Where execution of a judgment is permitted after the expiry of six years from the date of judgment, the recovery of interest on the judgment debt is limited to six years’ worth of interest.1 1

Lowsley v Forbes [1999] 1 AC 329, HL. See further paras 7.110–7.111.

APPLICATION FOR A WRIT OF CONTROL 5.82  The issue of a writ of control is an administrative process and does not involve a judicial decision.1 Issue of the writ takes place on it being sealed by a court officer. Before a writ is issued a request for its issue must be filed. The request2 must be signed by the person entitled to execution, if acting in person, or by or on behalf of the solicitor of the person entitled to execution.3 The judgment creditor will also need to file a draft writ of control, the judgment or order on which the writ is to issue, or an office copy of it, and, where permission was required for the writ to be issued, the order granting such permission or evidence of the granting of it.4 The requirements for the request and the draft writ of control are considered below. 1 Unless permission to issue is required. 2 On form PF 86. 3 CPR 83.9(3). 4 CPR 83.9(5).

Judgments against a state 5.83  In addition, where judgment on failure to acknowledge service has been entered against a state,1 a writ can only be sealed on evidence that the state has been served in accordance with CPR 40.102 and that the judgment has taken effect.3 1 2

See State Immunity Act 1978, s 14 for the definition of ‘state’. Which provides that where a claimant obtains default judgment on a claim against a state where the state failed to file an acknowledgment of service, the judgment does not take effect until two months after the state has been served with a copy of the judgment and evidence in support of the application to enter default judgment. 3 CPR 83.9(5)(a)(iii).

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Which court? 5.84  The documents listed in para  5.82 (and 5.83 where appropriate) should be filed in the ‘appropriate office.’ This is defined in CPR 83.9(1) as one of the following: (a) where the proceedings in which execution is to issue are in a District Registry, that Registry; (b) where the proceedings are in the Principal Registry of the Family Division, that Registry; (c) where the proceedings are Admiralty proceedings or commercial proceedings which are not in a District Registry, the Admiralty and Commercial Registry; (d) where proceedings are in the Chancery Division, Chancery Chambers; and (e) in any other case, the Central Office of the Senior Courts. Accordingly, the appropriate office for Queen’s Bench Division proceedings is the Central Office of the Senior Courts. 5.85  Both the High Court and County Court have jurisdiction to order the seizure and sale of the judgment debtor’s goods.1 Where the judgment creditor seeks to enforce a County Court judgment for £5,000 or more wholly or partly by execution against goods then the judgment must be enforced in the High Court.2 The £5,000 upper limit is curious because ordinarily only claims with a financial value over £100,000 can be made in the High Court.3 1 2

3

CA 2003, Sch 7 and CCA 1984, s 85. High Court and County Courts Jurisdiction Order 1991, SI  1991/724, art  8(1)(a). Unless the judgment was made in proceedings arising out of an agreement regulated by the Consumer Credit Act 1974, in which case they shall be enforced only in the County Court: High Court and County Courts Jurisdiction Order 1991, SI 1991/724, art 8(1A). High Court and County Courts Jurisdiction Order 1991, SI 1991/724, art 4A.

5.86  Where the judgment creditor seeks to enforce a County Court judgment for less than £600 wholly or partly by execution against goods, it may only be enforced in the County Court.1 Where the judgment creditor seeks to enforce a County Court judgment for amounts greater than £600 but less than £5,000 wholly or partly by execution against goods, it can be enforced in either the High Court or County Court.2 1 2

High Court and County Courts Jurisdiction Order 1991, SI 1991/724, art 8(1)(b). High Court and County Courts Jurisdiction Order 1991, SI 1991/724, art 8(1)(c).

5.87  Proceedings are commonly transferred from the County Court to the High Court for the purpose of enforcement by way of writ of control. The procedure is undertaken by making a request in writing to the County Court using Form N293A. This is a combined certificate of judgment and request for a writ of control.1 The original request will be signed, dated and sealed and returned to the judgment creditor.2 The grant of the certificate will act as an order to transfer the proceedings.3 The judgment debtor will subsequently be notified by the County Court of the transfer.4 The judgment creditor then needs to make a request in writing for the issue of the writ of control to the High Court together with the completed form N293A and the draft writ of control (see para 5.82).5 No fee is payable for the certificate of judgment.

322  Writs of control 1 CPR 40.14A. 2 Note the conditions set out in CPR 83.19 setting out when a request for a certificate of judgment will not be dealt with. 3 CPR 83.19(2). 4 CPR 83.19(3). Form N328 will be used (PD 83, para 5). 5 See the Queen’s Bench Guide, para 23.4.9.

Request 5.88 A request1 for the issue of a writ contains particulars of the writ requested and must be filed with the court.2 For a writ of control the request takes the form of PF  86.3 The request must be signed by or on behalf of the judgment creditor’s solicitor or, if the judgment creditor is acting in person, by her.4 1 Previously known as a praecipe. The language has been modernised. 2 CPR 83.9. 3 This states: ‘Seal a writ of control directed to (a) (name) and enforcement officer authorised to enforce writs of control issued from the High Court, or (b) the enforcement officers authorised to enforce writs of control issued from the High Court for the district of (name) in England and Wales against the (party) (name and address) on a judgment or order of the [High Court dated (date)] [County Court dated (date) sent to the High Court by certificate dated (date)] for the sum of £… . and £ … costs and interest. [Endorsed to levy £ and interest at (rate) per annum from (date) and costs of execution.]’ 4 CPR 83.9(4).

Judgments or orders expressed in foreign currency 5.89  Where the judgment or order is expressed in a foreign currency the request and the draft writ of control1 will require amendment. The Queen’s Bench Guide provides guidance as to how this should be done.2 This derives from Practice Direction (Judgment: Foreign Currency)3 and should also apply in the Chancery Division. 1 2 3

See para 5.102. This applies to English judgments expressed in a foreign currency. Note that where enforcement of a foreign registered judgment is sought, form PF 63 should be used. Queen’s Bench Guide, para 23.4.10. [1976] 1 WLR 83 at 85–86.

5.90  The request should be endorsed with the following certificate: ‘I/We certify that the rate current in London for the purchase of [state the unit of foreign currency in which the judgment is expressed] at the close of business on [state the nearest preceding date to the date of issue of the writ] was [state exchange rate] to the £ sterling and at this rate the sum of [state amount of the judgment debt in the foreign currency] amounts to £ [state the sterling amount of the judgment debt].’ 5.91  The Schedule to the writ should be amended to: (a) show the amount of the judgment or order in the foreign currency at paragraph 1; (b) insert a new paragraph  2 as follows: ‘Amount of the sterling equivalent as appears from the certificate endorsed on the request for issue of the writ £……’; (c) re-number the remaining paragraphs accordingly.

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The writ of control will then be issued for the sterling equivalent of the judgment in foreign currency as appears from the certificate. 5.92  The rate to be used is not specified but the closing rates from the Financial Times and Reuters are commonly used in commercial cases. Draft writ of control 5.93  The draft writ of control should be prepared using the most appropriate of the following Practice Forms:1 Form Type of writ of control Form 53- Writ of control Form 54- Writ of control on order for costs Form 56- Writ of control (of Part) Form 62- Writ of control to enforce Northern Irish or Scottish judgment Form 63- Writ of control to enforce foreign registered judgment 1

CPR PD 83. Form 58 relates to a writ of fieri facias de bonis ecclesiasticis and Form 59 relates to a writ of sequestrari de bonis ecclesiasticis.

5.94  Form 53 is most likely to be used in the context of commercial enforcement. Where judgment has been given but costs remain to be assessed, the judgment creditor may wish to levy for the judgment debt and issue a separate writ of control for her costs once assessed. Where the judgment creditor simply wishes to recover quantified costs (for example, where costs have been awarded in relation to a nonmoney judgment) Form 54 should be used. If goods belonging to the judgment debtor have been taken into control in partial satisfaction of a judgment debt under an earlier writ of control and a further writ of control is sought, Form 56 should be used. The date of the earlier writ and details of the enforcement officer to whom it was addressed should be provided on the form. Where a foreign judgment has been registered for enforcement in England and Wales, Form 63 requires that details of that judgment and the statute pursuant to which it was registered1 be provided. 1

That is under the Administration of Justice Act 1920, the Foreign Judgments (Reciprocal Enforcement) Act 1933 or the Civil Jurisdiction and Judgments Act 1982. See further Ch 1.

5.95  Very little of Form 53 requires amendment. The title heading should be completed to match the title of the original action and where the judgment has been transferred to the High Court from the County Court there is space to insert the date of the certificate of transfer. A writ of control is issued in the name of the monarch and contains an endorsement to this effect.1 The Lord Chancellor acts as witness to the writ of control. The full name of the current Lord Chancellor should be inserted.2 1

2

Form 53 states: ‘ELIZABETH THE SECOND, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Our other realms and territories Queen, Head of the Commonwealth, Defender of the Faith.’ The post of Lord Chancellor remains, despite government proposals to abolish it which were contained in the publication ‘Constitutional Reform: A  Supreme Court for the United Kingdom’ (July 2003). In days gone by this post was usually held for years at a time; in the last 10 years there have, however, been 7 different holders of this office.

324  Writs of control 5.96  The writ should be addressed to an individual enforcement officer or the enforcement officers for a particular district of England and Wales. The choice of enforcement officer is considered further below in paras 5.110–5.113. Should you be unable to choose an individual enforcement officer you should address the writ to ‘The enforcement officers authorised to enforce writs of execution from the High Court who are assigned to the district [enter location] in England and Wales.’ 5.97  The schedule to the draft writ sets out the date and amount of the judgment debt together with any costs and interest less any amounts received by the judgment creditor. If the judgment has been transferred from the County Court to the High Court then interest should be calculated at the County Court rate from the date of the original County Court judgment until the date of the certificate of transfer and the amount inserted at paragraph 5 of the schedule. Post-judgment interest should also be inserted in section A of the schedule (or post-certificate of transfer interest in the case of transferred County Court judgments). In the High Court this is generally at 8% per annum pursuant to the Judgments Act 1838, s 17 and accrues from the date of the judgment on the amount of the sub-total. (Judgment interest is considered in detail in Chapter 7). 5.98  Any payments received by the judgment debtor before the issue of the writ should be entered in paragraph  6 of the schedule so that the amount to be levied is reduced accordingly. If this is not done, it could constitute excessive execution.1 The CPR also requires that any amounts received after the issue of the writ should immediately be notified to the enforcement officer in writing.2 As a precaution, the enforcement officer should also be notified by telephone to ensure that she does not levy excessive execution in the meantime. 1 2

See paras 5.207–5.211. PD 70, para 7.2.

Address(es) for enforcement 5.99  The judgment creditor should set out in the draft writ the address or addresses which the enforcement agent should visit in order to take control of goods. Completion of the draft writ is the opportunity for the judgment creditor to direct the enforcement agent to the location of the judgment debtor’s assets. The judgment creditor should therefore set out the premises where goods of the judgment debtor can be found. Multiple addresses can be entered on to the draft writ of control and information can be supplemented by a letter where necessary. In certain situations a warrant will be required before an enforcement agent enters certain premises to search for and take control of goods (see paras 5.148–5.149). 5.100  Care must be taken when setting out the address or addresses in the draft writ of control. A failure to set out the correct addresses could result in taking control of goods that do not belong to the judgment debtor from an address that an enforcement agent has no authority to enter resulting in costly satellite litigation including potential liability under TCEA 2007, Sch 12, para 66 as well as potential claims from the third party for compensation. Care must therefore be taken in completing the endorsement and the judgment creditor should be certain that goods belonging to the judgment

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debtor are located at the addresses given. Such information could be obtained from the judgment debtor in Part 71 proceedings (see Chapter 2).1 1

See, eg, Morris v Salberg (1889) LR 22 QBD 614, CA (where the solicitor incorrectly stated on the writ of fi fa that the debtor resided at a certain address, which was in fact not his address but that of his father).

5.101  Where the name or address of the debtor (or creditor) in the request for the issue of the writ of control differs from that person’s name or address in the judgment or order sought to be enforced the creditor needs to file a witness statement that satisfies the court officer that the name or address as given in the request is applicable to the person concerned. The creditor or the debtor will be described in the writ as ‘CD of [name and address as given in the request] suing [or sued] as AD of [name and address in the judgment or order]’.1 1 CPR 83.10.

Judgments or orders expressed in a foreign currency 5.102  Where the judgment or order has been expressed in a foreign currency, the schedule to the draft writ of control should also be amended to insert a new paragraph immediately following that stating the amount of the judgment or order in the foreign currency (that is immediately after paragraph 2 of the schedule in Form 53) as follows: ‘3. Amount of the sterling equivalent as appears from the certificate endorsed on the request for issue of the writ £ [ ].’ 5.103  There are special rules concerning judgment interest on judgments expressed in a foreign currency which are considered in Chapter 7. Information 5.104  If the creditor or debtor serves notice on the enforcement officer requiring reasonable information about the execution of a writ, the enforcement officer must send such information to the creditor or debtor within seven days of service of the notice. If this is not provided the party making the request may apply for a court order to direct this.1 It would be expected that in a high value commercial enforcement case there would be ongoing communication between the enforcement officer and the instructing solicitor in any event. In practice, the more sophisticated enforcement businesses allow for enforcement progress to be tracked online or for updates to be obtained by telephone. 1 CPR 83.8.

Fee for the issue of writ of control 5.105  The court fee for issue of a writ of control is £66.1 1

Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, para 7.1.

326  Writs of control Issue of a writ of control 5.106  The writ is issued when it is sealed by a court officer of the appropriate office.1 The writ will not be sealed unless the documents listed in para 5.82 (and 5.83 where appropriate) have been produced to the court.2 In addition, the court officer authorised to seal the writ must be satisfied that the period (if any) specified in the judgment for payment of the judgment debt has expired.3 Every writ of control will bear the date of the day on which it was issued.4 The court seal will indicate the date of issue. 1 CPR 83.9(6). See para 5.87. 2 CPR 83.9(5)(a). 3 CPR 83.9(5)(b). 4 CPR 83.9(6).

Fixed costs 5.107  Where the court grants a writ of control, the judgment creditor will only be entitled to recover her fixed costs. The amount of fixed costs allowed are any court fee1 and a fixed sum in respect of the costs of execution of £51.75.2 Where an application for permission to issue a writ of control is required the costs of this application can also be claimed (see para 5.78). 1 CPR 45.1(4). 2 CPR 45, Table 5.

DELIVERY TO AN ENFORCEMENT OFFICER 5.108  The judgment creditor should deliver the sealed writ to an enforcement officer for execution. CA  2003 divides up England and Wales into districts.1 The districts correspond with the postal areas for England and Wales and are prescribed by statutory instrument.2 A  writ of execution issued from the High Court may be directed:3 ‘(a) if only one enforcement officer is assigned to the district in which the writ is to be executed, to that officer; (b) if two or more enforcement officers are assigned to that district, to those officers collectively; or (c) to a named enforcement officer who, whether or not assigned to that district, has undertaken to execute the writ.’ 1 2

3

CA 2003, Sch 7, para 1. High Court Enforcement Officers Regulations 2004, SI 2004/400, reg 3 and Sch 1. Previously, a sheriff was confined to her ‘bailiwick’ which referred to areas broadly correlating to pre-1974 county boundaries. CA 2003, Sch 7, para 3(1).

Abolition of bailiwicks 5.109  CA 2003 ended the regional monopoly formerly enjoyed by sheriffs since the effect of the above provisions is to grant a judgment creditor complete freedom

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to use any authorised enforcement officer, irrespective of the district to which she is assigned, provided the enforcement officer agrees to enforce the writ. It was formerly the case that a sheriff could only enforce writs of fi fa (the predecessor to the modern writ of control) in her own county or ‘bailiwick.’ The change in the law was intended to widen the choice of enforcement officers available to judgment creditors and increase competition.1 Solicitors will often develop working relationships with certain enforcement officer(s). In the case of a judgment debtor with assets in more than one district, either an enforcement officer assigned to those districts should be chosen or an individual enforcement officer who is willing to enforce in all the required districts.2 1 2

Effective Enforcement White Paper, March 2003, para 48. Some enforcement officers are authorised in all districts and have a nationwide network of agents. A further consequence of the abolition of the bailiwick system is that an enforcement officer, unlike her predecessor the sheriff, has no duty to appoint a deputy resident in London.

Selecting an enforcement officer 5.110  The nature of commercial enforcement work means that taking control of large, delicate or highly valuable assets may be required. Some associations of enforcement officers have nationwide coverage and a network of specialist contractors available who can remove and store large, delicate or highly valuable assets. The liberalisation of the territorial boundaries of enforcement officers has seen the emergence of a number of large commercial operations. Where taking control of the goods is likely to be particularly specialist, the judgment creditor and her advisers should consider which enforcement officer is best resourced to meet the particular demands of the case. A searchable directory of High Court Enforcement Officers is available online at hceoa.org.uk (search by name and by post code). A list is also available in The White Book, 2020, vol 2, Appendix 1. All court offices also have a copy of the directory. A High Court Enforcement Officer’s office can always be telephoned and the case discussed in advance. Key issues to consider will be the areas that the officer covers and the level of experience they have with writs of control and the type of goods being taken into control (particularly if it is envisaged as being unusual), whether the enforcement officer has direct responsibility for the writ, whether the enforcement agents executing the writ on behalf of the enforcement officer are certified, as well as their terms of business including any fee the judgment creditor may be asked to pay. 5.111  The judgment creditor can either direct the writ of control to a particular enforcement officer or specify a district of England and Wales for allocation. Where the execution relates to specialist or high-value assets (such as paintings or a yacht), the judgment creditor will probably wish to choose an individual enforcement officer with appropriate expertise and resources in taking control of such goods. However, where the work is more routine, it may be sufficient for the writ simply to be allocated to an enforcement officer in the appropriate district of England and Wales. 5.112  Alternatively, where no choice as to the enforcement officer is made, a judgment creditor may send the sealed writ to Registry Trust Ltd,1 it will automatically

328  Writs of control allocate it to an enforcement officer for the relevant district using the ‘cab rank principle’. There is no fee charged by the Registry Trust. 1

See www.registry-trust.org.uk/rt-learn-ew/writ-control

5.113  Contact details for Registry Trust Ltd are set out in the Appendix to this chapter.

Authorisation of enforcement officers 5.114  The changes introduced by CA  2003 not only renamed sheriffs as enforcement officers but also changed the appointment arrangements which had been in place since the Sheriffs Act 1887. An enforcement officer must be authorised to act as such by the Lord Chancellor or a person acting on her behalf.1 Enforcement officers are often solicitors although this is not a legal requirement.2 1 2

CA 2003, Sch 7, para 2(1). The enforcement officer will usually have a number of enforcement agents who physically execute writs on her behalf.

5.115  Regulations govern the conditions to be met by individuals seeking to be authorised as enforcement officers and the circumstances in which such authorisation can be terminated.1 An enforcement officer must be an individual.2 She must make a written application for authorisation to act as an enforcement officer, listing detailed information about herself and about her application (including her relevant experience, business plan, relevant insurance policies, membership of professional bodies and policies in relation to the selection and employment of staff). Certain matters will disqualify an individual from acting as an enforcement officer.3 1 2 3

High Court Enforcement Officers Regulations 2004, SI 2004/400. CA 2003, Sch 7, para 2(1). Namely: conviction for a serious criminal offence, unpaid fines, an unsatisfied court judgment, an undischarged bankruptcy, a recent disqualification from acting as a company director, or past or present involvement in any business relating to the purchase or sale of debts: High Court Enforcement Officers Regulations 2004, SI 2004/400, para 4.

5.116  Once an individual has been authorised to act as an enforcement officer she remains under a continuing duty to meet certain requirements, such as completing required training, holding relevant insurance policies, maintaining a separate bank account into which monies recovered are to be paid in and out, and producing annual audited accounts.1 The authorisation to act as an enforcement officer may be terminated at any time by the Lord Chancellor.2 1 2

High Court Enforcement Officers Regulations 2004, SI 2004/400, para 8. On the grounds set out in High Court Enforcement Officers Regulations 2004, SI  2004/400, para 12(2).

Validity and renewal of writ  329

Enforcement agents 5.117  Only an enforcement agent may take control of goods and sell them under an enforcement power.1 TCEA 2007, s 63 requires enforcement agents to acquire a certificate to act as an enforcement agent unless she is exempt pursuant to s 63(3). Thus, it would seem that enforcement officers may only be able to enforce writs of control (issued in their names) if they are certificated as an ‘enforcement agent’.2 If they are not the enforcement officer will have to use a certified enforcement agent to enforce the writ (enforcement officers will commonly use a number of enforcement agents as their agent to execute a writ in any event). 1 2

TCEA 2007, Sch 12, para 2(2). As defined in TCEA 2007, Sch 12, para 2(1). See The White Book (Sweet & Maxwell, 2020), vol 1, para 83.0.5.

5.118  A  person may acquire a certificate to act as an enforcement agent by following the procedure in the Certification of Enforcement Agents Regulations 2014.1 Individuals will only be exempt in limited circumstances.2  A  person may also act as an enforcement agent if acting in the presence and under the direction of an exempt or certified enforcement agent.3 The application is made to the County Court whereby a judge considers the application.4  A  certificate may be issued if the applicant is considered to be a fit and proper person to hold a certificate and possesses sufficient knowledge of the relevant law and procedure. The forms the intended applicant will use must also conform to the standards set out in the schedule to the Certification of Enforcement Agents Regulations.5 The relevant security must be lodged. The applicant must not carry on or be employed by a business involved in buying debts.6 Once issued the certificate is valid for two years.7 1 SI 2014/421. 2 TCEA 2007, s 63(3)-(5). The exemptions are: if they act as a constable, an officer of Revenue and Customs, if they are a person appointed under s 2(1) of the CA 2003 (ie court officers and staff), or they are a person authorised to use the procedure in TCEA 2007, Sch 12 by the Welsh Revenue Authority (or delegated authority), an officer of a government department, or if, for the purposes of an enforcement power conferred by a warrant, the individual is a civilian enforcement officer in relation to the warrant. Civilian enforcement officer is defined in the Magistrates’ Courts Act 1980, s 125A. 3 TCEA 2007, s 63(2)(c). 4 TCEA 2007, s 64(1). 5 SI 2014/421. 6 The Certification of Enforcement Agents Regulations 2014, SI 2014/421, para 3. 7 The Certification of Enforcement Agents Regulations 2014, SI 2014/421, para 7.

VALIDITY AND RENEWAL OF WRIT 5.119  Once issued, a writ of control is valid for 12 months beginning with the date of notice of enforcement (para 5.143).1 Where the writ has not been completely executed by that time the court may order that it be extended once2 for a period of 12 months.3 The court must be satisfied that the applicant has reasonable grounds for not taking control of goods of the debtor during the prescribed period.4 CPR 84.5 sets out the procedure for such an application which can be made by the enforcement agent or the judgment creditor.5 The application should be supported by a witness

330  Writs of control statement which confirms that no previous application for an extension has been made. It should also set out why control has not already been taken of the goods.6 The wording in CPR 84.5(2) suggests that such an application can be made after the expiry of the first 12 months. 1 TCG Regulations, reg 9. 2 TCG Regulations, reg 9(4)(b). 3 TCG Regulations, reg 9(3). 4 TCG Regulations, reg 9(4)(c). 5 TCG Regulations, reg 9(4)(a). 6 CPR 84.5(1).

5.120  The priority of a writ (see paras 5.310–5.317) that has been extended in this way is determined by reference to the date on which it was originally delivered to the enforcement officer.1 The court will consider the effect on priority when deciding whether to allow an extension:2 ‘In such a situation a court dealing with an application for extension would no doubt consider whether it was just that a creditor who had allowed his writ to expire without application should be permitted to retain his priority, for it is necessary to remember that priorities are a matter of equity. That priority is not necessarily lost by a temporary invalidity of a writ is, however, clear.’ 1 CPR 83.4. 2 Bankers Trust Co v Galadari [1987] 1 QB 222 at 226227.

5.121  If the court orders the period of extension the applicant must serve a copy of the extension order on the debtor, on the creditor and on the enforcement officer and the court will endorse on the writ a note of the extension.1 1 CPR 84.5(3).

5.122  If the enforcement agent enters into a repayment arrangement with the debtor for the repayment of the sum outstanding by instalments and the debtor breaches the terms of that repayment arrangement then the 12-month prescribed period will begin again beginning with the date of the debtor’s breach of the arrangement.1 1

TCG Regulations, reg 9(2).

CPR Part 85 application automatically extends a writ 5.123  Where an application is brought pursuant to Part 85 (see paras 5.265–5.290), the validity of the writ of control will be automatically extended until 12 months from the conclusion of the application made under Part 85.1 1 CPR 83.4(7).

EFFECT OF A WRIT OF CONTROL 5.124  The effect of a writ of control on the judgment debtor’s goods is set out in TCEA 2007, Sch 12, para 4 which provides:

Effect of a writ of control  331

‘(1) For the purposes of any enforcement power, the property in all goods of the debtor, except goods that are exempt goods for the purposes of this Schedule or are protected under any other enactment, becomes bound in accordance with this paragraph. (2) Where the power is conferred by a writ issued from the High Court the writ binds the property in the goods from the time when it is received by the person who is under a duty to endorse it.’ For the purposes of TCEA 2007, Sch 12 an ‘enforcement power’ is defined as: ‘a power to use the procedure [in Sch 12] to recover a particular sum’. 5.125  TCEA 2007, Sch 12, para 5 provides: ‘(1) An assignment or transfer of any interest of the debtor’s in goods while the property in them is bound for the purposes of an enforcement power – (a) is subject to that power, and (b) does not affect the operation of this Schedule in relation to the goods, except as provided by paragraph  61 (application to assignee or transferee).’ Thus, from the point at which the writ is received by the person who is under the duty to endorse it, the debtor’s goods are bound for the purposes of recovery under TCEA  2007, Sch  12. However, TCEA  2007, Sch  12, para  5(2) provides that this does not prejudice the title to any of the debtor’s goods that a person acquires in good faith, for valuable consideration and without notice.1 Therefore, an assignment will be subject to the TCEA 2007, Sch 12 procedures unless a person acquires title to bound goods in good faith, for valuable consideration and without notice. An exception is set out at TCEA 2007, Sch 12, para 61 and is dealt with at para 5.131 below. A  thing is to be treated as done in good faith if it is in fact done honestly (whether it is done negligently or not).2 Notice is said to be notice that the writ had been received by the person who was under a duty to endorse it and that the goods remained bound under it.3 1 2 3

TCEA 2007, Sch 12, para 5(2). TCEA 2007, Sch 12, para 5(3). TCEA 2007, Sch 12, para 5(4).

5.126  This provision has a long history. It originates from the Statute of Frauds 1677, s 161 as later modified by the Mercantile Law Amendment Act 1856 (which added the good faith purchaser defence).2 These provisions were replaced by the Sale of Goods Act 1893, s 263 and then SCA 1981, s 1384 which was replaced by CA 2003, Sch 7, para 8.5 The legislative history leading to the enactment of TCEA 2007, Sch 12, paras 4-5 is explored out by Lord Leggatt in 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd, Mr Tanveer Singh Handa.6 The similarity in the wording of earlier versions of the statutory provision to the modern form means that some cases interpreting the statutory predecessors of TCEA 2007, Sch 12, paragraphs 4 and 5 remain relevant. 1

Which provided that: ‘[A] Writ of Fieri facias or other Writ of Execution shall bind the Property of the Goods against whom such Writ of Execution is sued forth, but from the Time that such Writ shall be delivered to the Sheriff, Under-Sheriff or Coroners, to be executed: And for the better Manifestation of the said Time, the Sheriff, Under-Sheriff and Coroners, their Deputies and Agents,

332  Writs of control

2

3

4 5

6

shall upon the Receipt of any such Writ, (without Fee for doing the same) endorse upon the Back thereof the Day of the Month and Year whereon he or they receive the same.’ (Emphasis added) Repealed by the Sale of Goods Act 1893, s 60 and Schedule. Which provided that: ‘No Writ of Fieri facias or other Writ of Execution, and no Writ of Attachement against the Goods of a Debtor, shall prejudice the Title to such Goods acquired by any Person bonâ fide and for a valuable Consideration before the actual Seizure or Attachment thereof by virtue of such Writ; provided such person had not, at the Time when he acquired such Title, Notice that such Writ, or any other Writ by virtue of which the Goods of such Owner might be seized or attached, had been delivered to and remained unexecuted in the Hands of the Sheriff, Under Sheriff, or Coroner.’ (Emphasis added) Which provided that: ‘A writ of fieri facias or other writ of execution against goods shall bind the property in the goods of the execution debtor as from the time when the writ is delivered to the sheriff to be executed; and, for the better manifestation of such time, it shall be the duty of the sheriff, without fee, upon the receipt of any such writ to endorse upon the back thereof the hour, day, month, and year when he received the same. Provided that no such writ shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such person had at the time when he acquired his title notice that such writ or any other writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained unexecuted in the hands of the sheriff.’ (Emphasis added) In s  62(1) ‘property’ was defined as ‘the general property in goods, and not merely a special property’. Repealed by SCA 1981, s 152 and Sch 7. Repealed by CA  2003, s  109(1) and Sch  8, para  264. The wording is almost identical to that in CA 2003. Which provided: ‘(1) Subject to sub-paragraph (2), the writ binds the property in the goods of the execution debtor from the time when the writ is received by the person who is under a duty to endorse it. (2) The writ does not prejudice the title to any goods of the execution debtor acquired by a person in good faith and for valuable consideration. (3) Sub-paragraph (2) does not apply if the person acquiring goods of the execution debtor had notice, at the time of the acquisition, that — (a) the writ, or (b) any other writ by virtue of which the goods of the execution debtor might be seized or attached, had been received by the person who was under a duty to endorse it but had not been executed. (4) Sub-paragraph (2) does not apply if the person acquiring goods of the execution debtor had notice, at the time of the acquisition, that — (a) an application for the issue of a warrant of execution against the goods of the execution debtor had been made to the district judge of a County Court, and (b) the warrant issued on the application — (i) remained unexecuted in the hands of the district judge of the court from which it was issued, or (ii) had been sent for execution to, and received by, the district judge of another County Court and remained unexecuted in the hands of that district judge. (5) In sub-paragraph (1) ‘property’ means the general property in goods (and not merely a special property). (6) For the purposes of sub-paragraph (2) a thing shall be treated as done in good faith if it is in fact done honestly (whether it is done negligently or not). (7) Any reference in this paragraph to the goods of the execution debtor includes anything else of his that may lawfully be seized in execution.’ (Note this provision remains in force, but no longer applies to any writ that confers power to use the procedure in TCEA 2007, Sch 12 – such as writs of control.) [2020] EWCA Civ 588 at [24]–[32].

Writ ‘binds the property in the goods’ 5.127  The fact that a writ of control ‘binds the property in the goods of the debtor’ has been said to refer to the enforcement agent’s legal right to take control of the judgment debtor’s goods to satisfy the amount specified in the writ following her receipt of it.1 Although the judgment debtor continues to own the goods until any sale by the enforcement agent2 and can legally deal with the goods,3 if the judgment debtor transfers her goods while the property in them is bound the goods will be

Effect of a writ of control  333

taken subject to the TCEA 2007, Sch 12 enforcement powers.4 This interpretation was recently endorsed by Lord Leggatt in 365 Business Finance Ltd v Bellagio Hospitality WB Ltd5 where, after setting out the history to TCEA 2007, Sch 12, paras 4-5 he stated: ‘The upshot of this legislative history is that, ever since the enactment of section 15 of the Statute of Frauds in 1677, the relevant statutory provisions have consistently specified the effect of a writ of execution as being to ‘bind the property of the goods’ or ‘bind the property in the goods’ of the debtor from the time when the writ was delivered to the sheriff (or now when it is received by the relevant enforcement officer). This language has been interpreted by the courts to mean that, although the delivery of a writ of execution to the sheriff / enforcement officer does not affect the title to the debtor’s goods, it renders the goods liable to be seized by the officer and sold to satisfy the debt. In accordance with the principle recognised by the House of Lords in Barras v Aberdeen Steam Fishing and Trawling Co Ltd [1933] AC  402, it is to be presumed that, in re-enacting words used in previous statutory provisions which have been the subject of authoritative judicial interpretation, Parliament intended those words to bear that settled meaning: see e.g. Lowe and Potter, Understanding Legislation (2018), para 3.53 and the cases there cited. The applicable statutory provisions have, since 1856, also made it clear that the goods remain subject to the sheriff’s or enforcement officer’s power of seizure and sale until the writ has been executed notwithstanding any transfer of title to the goods, unless the goods are acquired by a person in good faith, for valuable consideration and without notice of the writ (or any other outstanding writ of execution).’ Thus, the right to take control of goods will not prejudice the title to the debtor’s goods that a purchaser acquires in good faith for value without notice.6 (see further paras 5.130–5.139). 1 2

3 4

5 6

Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd [1966] 1 QB 764 at 781, per Edmund Davies J (decided under the Sale of Goods Act 1893, s 26). Payne v Drewe (1804) 4 East 522 at 541; Giles v Grover (1832) 9 Bing 127 at 138139, 141, 158–160, 176–177, 208, 263, 280 and 284; Lucas v Nockells (1833) 10 Bing 151 at 182; Samuel v Duke (1838) 3 M & W 623 at 628–629; Woodland v Fuller (1840) 11 AD & El 859 at 866–868; Re Davies ex p Williams (1872) 7 Ch App 314 at 317; Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd [1966] 1 QB 764 at 775776 (all decided under previous legislation). See the discussion of the authorities and the application to the new statutory regime in TCEA  2007, Sch  12 in 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd, Mr Tanveer Singh Handa [2020] EWCA Civ 588. Re Davies, ex p Williams (1872) 7 Ch App 314 at 317. Payne v Drewe (1804) 4 East 522 at 538–540; Lucas v Nockells (1833) 10 Bing 157 at 182; Samuel v Duke (1838) 3  M  & W  623 at 628–629; Woodland v Fuller (1840) 11 AD & El 859 at 866– 868; McPherson v Temiskaming Lumber Company [1913] AC 145 at 155–156, PC (construing the Ontario Execution Act which was similar to the Sale of Goods Act 1893, s 26 in force in England at the time); Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd [1966] 1 QB 764 at 780–781. See TCEA 2007, Sch 12, para 5(1). [2020] EWCA Civ 588 at [31]-[32]. TCEA 2007, Sch 12, para 5(2).

334  Writs of control ‘Received by the person who is under a duty to endorse it’ 5.128  The writ will bind the property of the judgment debtor from the time it is received by the person who is under a duty to endorse it, ie the enforcement officer.1 An enforcement officer is under a duty to endorse the writ as soon as possible after receiving it.2 Where the writ is directed to two or more enforcement officers (see para 5.108), the endorsement will be made by the individual who is responsible for allocating its execution to one of those officers as soon as possible after receiving it.3 A writ is endorsed simply by writing the date and time that it was received on the back.4 An enforcement officer cannot charge for endorsing a writ.5 The process of endorsement is important not only for determining the time and date at which the writ binds the goods of the judgment debtor but also in determining the priority of a number of writs issued on the same day (see paras 5.310–5.317). 1 2 3 4 5

TCEA  2007, Sch  12, para  4(2). See 365 Business Finance Ltd v Bellagio Hospitality WB  Ltd [2020] EWCA Civ 588. CA 2003, Sch 7, para 7(1). CA 2003, Sch 7, para 7(2). CA 2003, Sch 7, para 7(4). CA 2003, Sch 7, para 7(5).

5.129  The receipt of the writ of control by an enforcement officer is not an event of which, in ordinary circumstances, the judgment debtor or indeed a third party is likely to be aware.1 For this reason, the enforcement agent will usually send notice to the judgment debtor informing her of the writ shortly after receipt. This will most commonly take the form of a notice of enforcement (See para 5.143). Such a notice is a statutory requirement. This serves two purposes. First, it informs the judgment debtor that the goods are bound by the writ and, secondly, it is intended to spur the judgment debtor into paying the judgment debt before the enforcement agent pays a visit. 1

Gladstone v Padwick (1871) LR 6 Exch 203 at 210.

Good faith purchasers 5.130  Clearly, some safeguards are required to protect purchasers who have acquired goods from a judgment debtor having no idea that a writ of control has been issued against the judgment debtor and received by an enforcement officer. Thus, where a party has in good faith and for valuable consideration purchased goods from a judgment debtor, title to those goods will not be prejudiced by the existence of the writ unless the person had notice at the time of the acquisition that a writ had been received by an enforcement officer and that goods remained bound under it.1 For the purposes of this provision, ‘in good faith’ means honestly (whether or not done negligently).2 1 2

TCEA 2007, Sch 12, paras 4–5. TCEA 2007, Sch 12, para 5(3).

5.131  An exception is set out at TCEA  2007, Sch  12, para  61. This paragraph provides that where a purchaser without notice, in good faith, for valuable

Effect of a writ of control  335

consideration, is simply assigned or transferred a beneficial interest in the debtor’s property while they are bound (the judgment debtor might retain the legal title and/ or may continue to hold a beneficial interest in part) the goods will remain subject to the TCEA  2007, Sch  12 powers of enforcement as modified by paragraph  61.1 Paragraph 61 provides that where the enforcement agent knows of the assignment or transfer, or would know if reasonable enquires were made, the assignee or transferee will be treated as if they were a co-owner. As well as the purchaser then being included in various aspects of the taking control of goods procedure (such as the valuation and the sale procedure2) the application of the proceeds of sale are, in such circumstances, distributed first to the assignee or transferee in a manner proportionate to their interest.3 What of the situation where a good faith purchaser without notice acquires title to the property of the judgment debtor while the goods are bound but, for whatever reason, leaves it in the judgment debtor’s possession? (For example, a judgment debtor who has an art gallery sells a painting to the good faith purchaser who has no notice but the purchaser agrees to leave it displayed in the gallery)? In such a case whether title has transferred to the purchaser, placing it beyond the reach of the TCEA 2007, Sch 12 enforcement powers, will be a matter of fact and whether this can be proven. 1 2 3

TCEA 2007, Sch 12, para 61. TCEA 2007, Sch 12, para 61(2). TCEA 2007, Sch 12, para 61(3).

5.132  Prior to the introduction of the TCEA 2007 the protection afforded to good faith purchasers was narrower than it first seemed because it only applied where the writ ‘has not been executed’. This is vividly illustrated by the facts of the leading modernish case of Lloyds and Scottish Finance Ltd v Modern Cars and Caravans (Kingston) Ltd.1 that case was decided applying the Sale of Goods Act 1893, s 26.2 1 2

[1966] 1 QB 764. See para 5.126, n 3.

5.133 In Lloyds and Scottish Finance Ltd the judgment debtor owned a caravan in which he lived with his family. A sheriff’s officer attended the caravan to execute a writ of fi fa. The sheriff’s officer was admitted to the caravan, read the warrant and explained the reason for his visit. The judgment debtor’s wife claimed that she owned the caravan and its contents and signed a form of claim to that effect. Since it was inappropriate to remain in possession, the judgment debtor was asked to sign a walking possession agreement (its modern form being a controlled goods agreement), which he refused to do. The judgment debtor and his wife were told not to move the caravan and were handed a card bearing the name of the sheriff’s officer’s employers on which the sheriff’s officer wrote on the reverse the title of the action and with the words ‘We hold a High Court Execution against you.’ This was held to amount as a matter of law to seizure of the caravan. 5.134  The sheriff’s officer returned a further six times to check the caravan was still there. On the seventh visit, two months after the first visit, he found the caravan had disappeared. In fact the judgment debtor had sold the caravan to the defendants, who were caravan dealers, the day before. Shortly afterwards the defendants sold the caravan to the plaintiffs, a hire-purchase company, who immediately let it out

336  Writs of control on hire-purchase. A few days before that sale, the defendants had learned from the sheriff’s officers of the existence and delivery of the writ of fi fa against the judgment debtor. The sheriff’s officers subsequently traced the whereabouts of the caravan, took possession from the lessee under the hire-purchase contract, and sold it paying the proceeds to the judgment creditors. 5.135  The plaintiffs sued the defendant for breach of warranty because they had stated in the contract of sale that their title to the caravan was unencumbered. On the facts of the case, the loss fell with the defendants because the plaintiffs succeeded in their claim for breach of warranty against them. However, as part of their defence, the defendants had contended that they had acquired good title free of the sheriff’s right of seizure relying on the proviso in the Sale of Goods Act 1893, s 26 that a writ would not prejudice the title of a good faith purchaser for valuable consideration unless at the time of acquisition the purchaser had notice that such a writ ‘had been delivered to and remained unexecuted in the hands of the sheriff’. The essence of their contention was that because there had been no payment of the judgment debt by the judgment debtor or sale by the Sheriff consequent to the writ, the writ remained ‘unexecuted’. Edmund Davies J rejected this contention:1 ‘I propose to deal with this submission briefly. The proviso must of necessity be limited in its operation to the ambit of the section which it qualifies. When, by the opening words of the section, it is provided that “A writ of fieri facias… shall bind ‘the property in the goods of the execution debtor…,” this simply means that on delivery of the writ the sheriff acquires a legal right to seize sufficient of the debtor’s goods to satisfy the amount specified in the writ (Samuel v Duke). The proviso, accordingly, does no more than protect a purchaser of the goods against that right of seizure if the stated conditions are fulfilled. But it has no scope for operation where an actual seizure of the debtor’s goods has already been effected; and where this has occurred, it is immaterial whether or not the purchaser from the debtor had notice of the seizure, or even of the writ. Furthermore, by its wording the proviso relates only to a writ “by virtue of which the goods of the execution debtor might be seized,” and where such an essential step in execution as actual seizure has already been effected, it is, I hold, impossible to regard the writ as one which still “remained unexecuted in the hands of the sheriff.”In my judgment, accordingly, the defendants are not saved by the proviso.’ 1

[1966] 1 QB 764 at 780–781.

5.136  In summary, in the past, where an enforcement officer had received but not executed a writ of fi fa (as it then was), a person who acquired those goods in good faith for valuable consideration and without notice of the writ would acquire good title. However, where the writ of fi fa had been executed by seizure, no person would purchase the goods without them being liable to further seizure by the enforcement officer. 5.137  The relevant wording has now changed with the introduction of TCEA 2007, Sch 12 as the Act no longer refers to the writ remaining ‘unexecuted’. TCEA 2007, Sch 12, paras 4–5 instead refer to property being bound. TCEA 2007, Sch 12, para 6

Effect of a writ of control  337

expressly states that property ceases to be bound when goods are sold, if the property is money when it is used to pay any of the outstanding amount, when the full sum outstanding is paid or when the power to take control of goods ceases to be exercisable for any reason.1 While modern case law2 has supported the historic position relating to when property initially becomes ‘bound’ (and the fact this is a reference to the legal right to seize (or now take control) of goods) TCEA 2007, Sch 12, para 6 appears to have the effect of extending the meaning of ‘bound’. The statutory wording appears to mean that goods now continue to be regarded as ‘bound’ even after they have been taken into control. The reference in TCEA 2007, Sch 12, para 5(1) to goods being transferred or assigned while they are ‘bound’ and the subsequent carve out provision in para 5(2) would seem to pave the way for argument that TCEA 2007, Sch 12 removes the distinction between pre-and post-control in respect of the good faith purchaser without notice. It would appear that TCEA 2007 provides more protection to equity’s darling who appears to now have the ability to take goods free of the TCEA 2007, Sch 12 powers even after goods have been taken into the enforcement agent’s control. It remains to be seen how these statutory provisions will be interpreted. Where a judgment debtor wrongfully interferes with controlled goods and the creditor suffers loss as a result, the creditor may bring a claim against the debtor in respect of the loss.3 However, from a practical perspective where a debtor is already impecunious this may be unwise. An enforcement officer may also have a claim in conversion against a person who has removed the goods from her control.4 1 TCEA 2007, Sch 12, para 6. 2 [2020] EWCA Civ 588. 3 TCEA 2007, Sch 12, para 67. 4 [2020] EWCA Civ 588 at [61].

5.138  Such an interpretation would however appear to be at odds with case law describing the nature of the judgment creditors’ right or interest in the goods after they have been taken into the control of the enforcement agent. This has previously been described in some cases as a form of security. Initially, this was in the context of the Bankruptcy Act 1869 but it was subsequently been interpreted as a more general principle:1 ‘It is very true that the property in goods seized under a fi. fa. remains in the execution debtor until sale: Giles v Grover.2 But it is no less true that after seizure and before sale the execution creditor is as regards those goods in the position of a secured creditor: see ex p Williams3 and Slater v Pinder.4 He had a legal right as against the execution debtor – ie owner of the goods – to have the goods sold and to be paid out of the proceeds of sale.’ 1 2 3

Re Clarke [1898] 1 Ch 336 at 339, CA, per Lindley MR. See also McPherson v Temiskaming Lumber Co Ltd [1913] AC 145 at 155, PC and The James W Elwell [1921] P 351 at 369–370. (1832) 9 Bing 128. (1872) 7 Ch App 314. The Court was construing the Bankruptcy Act 1869, s 12. Sir G Mellish LJ stated at 316–317: ‘The effect of seizure, therefore, is, that upon seizure the sheriff ceases to have merely a right to seize, and acquires a qualified property in the goods like that of a factor who is under advances, and from whom the goods may be claimed back on payment of those advances. This qualified property differs from a mortgage, inasmuch as at law the mortgagee has an absolute title to the property, and the title of the debtor is only in equity; but in this case there is at law a qualified property with a power of sale. The Court of Exchequer held, in Slater v. Pinder, that when the goods have been seized by the sheriff, the creditor has a security upon them. Are we to hold that he has

338  Writs of control

4

a security upon them before they are seized? … A mere right to seize property cannot properly be called a security.’ (1871)  LR  6 Exch 228. The Court was construing the Bankruptcy Act 1869, s  12 and held that a ‘creditor holding a security’ included an execution creditor who has seized before an act of bankruptcy has been committed.

5.139  The exact nature of a judgment creditor’s security interest in the goods once they have been seized has been a matter of some debate1 although in Peck v Craighead it was held to be a security right ‘not unlike a lien’.2 Whether the new wording of TCEA  2007, Sch  12, paras 4–5 will allow an enforcement agent who has taken control of goods to follow them into the hands of equity’s darling and retake possession and sell those goods in order to pay the judgment creditor (though in certain circumstances these rights would be defeated by a judgment debtor’s insolvency) remains to be seen. 1 2

See, eg, Walton ‘Execution Creditors – (Almost) the Last Rights in Insolvency’ (2003) 32 CLWR 179. [1995] 1 BCLC 337 at 341, per M E Mann QC sitting as a deputy judge of the High Court.

Abolition of Crown priority 5.140  The Crown can use any method of enforcement available to a subject.1 Accordingly, the Crown may use any writ of execution, including a writ of control, to enforce a judgment debt. However, TCEA 2007, s 88 abolished Crown priority for writs of control. 1

CPA 1947, s 26(1).

STAGES OF EXECUTION OF A WRIT 5.141  It is convenient to break down the process of executing a writ of control into stages: (a) compliance stage; (b) entry into the premises; (c) taking control of the goods and securing the goods; and (d) sale and disposal stage. 5.142  In summary, the compliance stage is the giving of notice to the debtor that a writ has been issued. Entry is concerned with the rules governing an enforcement agent’s right to go onto premises to take control of the judgment debtor’s goods. Taking control of the goods is concerned with the means by which an enforcement agent may obtain the judgment debtor’s goods. The sale and disposal stage is when goods need to be removed and sold once control is obtained.

NOTICE OF ENFORCEMENT 5.143  Pursuant to TCG Regulations, reg 6, notice of enforcement must be given to the debtor not less than seven clear days before the enforcement agent takes control

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of the debtor’s goods.1 Where that period includes a Sunday, bank holiday, Good Friday or Christmas Day that day does not count in calculating the period.2 The court may order that a specified shorter period of notice may be given to the debtor.3 However, the court may only make such an order if it is satisfied that if the order is not made it is likely that the goods of the debtor will be moved to premises other than relevant premises (see para 5.148) or otherwise disposed of to avoid the goods being taken control of by the enforcement officer.4 Such an application must be made by way of the procedure set out in CPR Pt 235 and may be made without notice.6 It must be accompanied by evidence (either in Part 10 of form N244 or in an accompanying witness statement).7 1 TCG Regulations, reg 6(1). 2 TCG Regulations, reg 6(2). 3 TCG Regulations, reg 6(3) and CPR 84.4. 4 TCG Regulations, reg 6(4). 5 CPR 84.3(2). 6 CPR 84.4(3)(a). 7 CPR 83.4(3)(b).

5.144  TCG  Regulations, reg  7 sets out the required form and content of the notice. The standard form of notice is found in the schedule to the Certification of Enforcement Agents Regulations 2014.1 The notice must be in writing and contain: (a) The name and address of the debtor; (b) The reference number or numbers; (c) The date of notice; (d) Details of the court judgment or order or enforcement power by virtue of which the debt is enforceable against the debtor; (e) The following information about the debt: (i) sufficient details of the debt to enable the debtor to identify the debt correctly; (ii) the amount of the debt including any interest due as at the date of the notice; (iii) the amount of any enforcement costs incurred up to the date of notice; and (iv) the possible additional costs of enforcement if the sum outstanding should remain unpaid as at the date by which payment should be made; (f) How and between which hours and on which days payment of the sum outstanding may be made; (g) A contact telephone number and address at which, and the days on which and the hours between which, the enforcement agent or the enforcement agent’s office may be contacted; and (h) The date and time by which the sum outstanding must be paid to prevent goods of the debtor being taken control of and sold and the debtor incurring additional costs. 1 SI 2014/421.

5.145  Service of the notice of enforcement must be given by post addressed to the debtor at the place, or one of the places, where the debtor usually lives or carries on a trade or business. It may otherwise be sent by fax or other means of electronic communication or by delivery by hand through the letter box of the place, or one of the places, where the debtor usually lives or carries on a trade or business. Where

340  Writs of control there is no letterbox the notice may be affixed at or in a place where it is likely to come to the attention of the debtor. Where the debtor is an individual the notice of enforcement may be served to the debtor personally or where the debtor is not an individual (but is, for example, a company, corporation or partnership), by delivering the notice to the place, or one of the places, where the debtor carries on a trade or business, or the registered office of the company or partnership.1 Notice must be given by the enforcement agent or the enforcement agent’s office.2 If an enforcement notice does not comply with the requirements there will be a risk that it is defective and the enforcement agent will not be able to proceed to take control of the debtor’s goods. 1 2

TCG Regulations, reg 8(1). TCG Regulations, reg 8(2).

5.146  The notice of enforcement will give the judgment debtor seven days to pay the judgment debt in full together with judgment interest, court fees and the initial fee of the enforcement agent.1 It is currently understood from guidance by HMRC and the Government2 that VAT is chargeable on all enforcement fees. There is some continuing debate as to whether this is appropriate and the Ministry of Justice response is awaited. 1 2

The compliance stage fee is £75 (see para 5.294). See Taking Control of Goods (Fees) Regulations 2014: Written question – HL133 (Asked on: 15 October 2019) Asked by Lord Stevenson of Balmacara.

ENTRY INTO PREMISES 5.147  Where payment is not made within the seven days given in the notice an enforcement agent will then attend the debtor’s address(es). The addresses specified in the writ of control will be visited in turn. Prior to the coming into force of TCEA 2007 the rules concerning entry were antiquated and needed clarification and rationalisation. The legislation now clarifies the law in this area and sets out general procedures for entry by an enforcement agent. Under TCEA 2007, an enforcement agent is required to comply with the provisions contained in Sch 12. If an enforcement agent breaches those provisions then the debtor may bring proceedings under Sch 12, para 66. Relevant premises 5.148  TCEA  2007, Sch  12 makes an important distinction between ‘relevant premises’ and ‘specified premises’. TCEA 2007, Sch 12 specifies that an enforcement agent may enter ‘relevant premises’ to search for and take control of goods.1 Relevant premises are premises where the debtor usually lives or carries on trade or business.2 Enforcement agents may enter different3 relevant premises (and re-enter subject to restrictions set out in the TCG Regulations4) without a warrant. 1 2

TCEA 2007, Sch 12, para 14. TCEA 2007, Sch 12, para 14(6). Note if the enforcement agent is acting under the CRAR procedure the only relevant premises are the demised premises (para 14(4)).

Entry into premises  341 3 4

TCEA 2007, Sch 12, para 14(2). TCEA 2007, Sch 12, para 14(3).

Specified premises 5.149  Premises other than ‘relevant premises’ are defined as ‘specified premises’.1 If an enforcement agent applies to the court it may issue a warrant authorising her to enter (and re-enter subject to restrictions set out in the TCG Regulations 2) specified premises to search for and take control of goods.3 Before issuing the warrant the court must be satisfied that all of the following conditions are met:4 (a) an enforcement power has become exercisable; (b) there is reason to believe that there are goods on the premises that the enforcement power will be exercisable to take control of if the warrant is issued; (c) it is reasonable in all the circumstances to issue the warrant. The enforcement agent must provide the court with sufficient evidence and information to satisfy the court that these conditions are met.5 1 2 3 4 5

TCEA 2007, Sch 12, para 15. TCEA 2007, Sch 12, para 15(3). TCEA 2007, Sch 12, para 15(1). See CPR 84.9. TCEA 2007, Sch 12, para 15(2). CPR 84.9(1)(a) and 84.9(2). See BCS Corporate Acceptances Ltd v Terry [2019] EWHC 3133 (QB) for a discussion concerning permission for a warrant pursuant to TCEA 2007, Sch 12, para 15(1) to enter the home of the debtor’s wife where she was estranged from the debtor and he was said to be living in Switzerland.

Mode and timing of entry 5.150  The enforcement agent may enter relevant or specified premises under TCEA 2007, Sch 12, paras 14 or 15 or re-enter under para 16 only by: (a) any door, or any usual means by which entry is gained to the premises (for example, a loading bay to premises where a trade or business is carried on); or (b) any usual means of entry, where the premises are a vehicle, vessel, aircraft, hovercraft, a tent or other moveable structure.1 1

TCG Regulations, reg 20.

5.151  An enforcement agent may enter, re-enter and remain on the premises on any day of the week when searching for or taking control of goods or to inspect controlled goods or to remove goods for sale.1 Generally an enforcement agent may only enter, re-enter or remain on the premises for such purposes after 6am and before 9pm.2 However, where the premises are used (in whole or in part) for business, an enforcement agent may enter, re-enter or remain during any hours when the business is open.3 Further, if the enforcement agent has already, during the permitted hours, entered or re-entered the premises then the enforcement agent may remain if it is reasonably necessary for her to continue to search for, inspect, or remove goods, provided the duration of time spent is reasonable.4 The court may also authorise an enforcement agent to enter, re-enter or remain on premises outside of the usual permitted times where an application is made to the court by the enforcement agent.5

342  Writs of control The power to enter, re-enter and remain is not however permitted if the debtor is a child or where a child and/or vulnerable person is the only person present in the premises when the agent proposes to enter or re-enter.6 1 2 3 4 5 6

TCG Regulations, reg 21. TCG Regulations, reg 22(2). TCG Regulations, reg 22(3). TCG Regulations, reg 22(4). TCG Regulations, reg 22(5). See CPR 84.11. TCG Regulations, reg 23.

Use of force 5.152  TCEA  2007, Sch  12, paras 17 to 22 set out the circumstances in which an enforcement agent may use reasonable force either to enter premises or to do anything for which entry is authorised (both with and without a relevant warrant). A power to use force does not include power to use force against persons.1 1

TCEA 2007, Sch 12, para 24.

5.153  TCEA 2007, Sch 12 makes a distinction between where reasonable force can be used without prior authorisation and where the authority to do so must first be obtained from the court. Under TCEA 2007, Sch 12, the circumstances an enforcement agent can use reasonable force without prior authorisation in respect of a writ of control is confined to: (a) Entry of relevant premises where the enforcement agent reasonably believes that the debtor carries on trade or business under the premises and is acting to recover a sum under a High Court or County Court judgment.1 (b) Re-enter premises under Sch 12, para 16 where the enforcement agent, acting to recover a sum under a High Court or County Court judgment, reasonably believes that the debtor carries on trade or business where goods have already been taken but not removed.2 An enforcement agent can also use reasonable force for re-entry where a controlled goods agreement is in place but the debtor has failed to comply with a payment agreement. Once the debtor has been given notice of the intention of the enforcement agent to enter the premises to inspect the goods or to remove them for storage or sale, the enforcement agent can use reasonable force to enter (see paras 5.222–5.224).3 That said, there is room for argument concerning the construction of the relevant paragraphs of TCEA 2007, Sch 12 concerning when reasonable force may be used and further details are set out at paras 5.156–5.158. 1 2 3

TCEA 2007, Sch 12, para 18A. TCEA 2007, Sch 12, para 19. TCEA 2007, Sch 12, para 19A.

5.154  If there is no automatic right within TCEA  2007, Sch  12 to exercise reasonable force, an enforcement agent may seek a warrant under TCEA  2007, Sch 12, paras 14 or 16 or under a warrant under para 15 from the court to authorise the use, if necessary, of reasonable force to enter the premises or to do anything for

Entry into premises  343

which entry is authorised.1 Where the enforcement agent needs to apply for a warrant to enter specified premises under TCEA 2007, Sch 12, para 15 then a request to be able to use reasonable force can be sought at the same time.2 1 2

TCEA 2007, Sch 12, para 20. TCEA 2007, Sch 12, para 21.

5.155  The court may not issue a warrant for a power to use reasonable force under TCEA 2007, Sch 12, para 20 or include provision under para 21 unless it is satisfied that prescribed conditions are met. Before it issues such a warrant the court must be satisfied that: (a) either – (i) the enforcement agent is attempting to recover a debt enforceable under s 127 of the Finance Act 2008, or, (ii) the premises are premises to which the goods have been deliberately removed in order to avoid control being taken of them; and, (b) there are, or are likely to be, goods of the debtor on the premises of which control can be taken. The enforcement agent must explain to the court: (i) the likely means of entry, and the type and amount of force that will be required to make the entry; and, (ii) how, after entry, the enforcement agent proposes to leave the premises in a secure state. The court will consider all the circumstances including the sum outstanding and the nature of the debt.1 An application is made using the CPR Pt 23 procedure2 and CPR 84.9 applies. 1 TCG Regulations, reg 28. 2 CPR 84.3(2).

5.156  The prescribed conditions for the issue of a warrant was considered in Owen John Oyston v David Asker, SHCE  Limited1 when enforcement agents entered by force one of the judgment debtor’s homes – one of which was an apartment and the other a hall situated on a country estate. While a warrant had been obtained pursuant to TCEA 2007, Sch 12, para 15 to allow entry to the homes (due to the fact that there was concern about whether a warrant was needed to enter the apartment which was located inside a hotel) the enforcement agents did not have a warrant enabling the use of reasonable force. The enforcement agents stopped trying to enter the apartment and instead entered the hall using force. The Court considered the construction of TCEA 2007, Sch 12, paras 182 and 18A3 and whether all three conditions in each paragraph had to be met in order to permit an enforcement agent to use reasonable force to enter premises without a warrant.4 Was meeting just one of the conditions listed therein sufficient? The judgment debtor’s position was that all of the conditions must be met and therefore TCEA 2007, Sch 12, para 18 did not apply, because one of the conditions to be met is that it only applies to warrants of control under s 76(1) of the Magistrates’ Courts Act (Sch 12, para 18(b)). Schedule 12, para 18A did not apply because it only applied to a place where a debtor carries on a trade or business on the premises (as per Sch 12, para 18A(b)). No such business was carried out at the home. The judgment creditor’s position was that the conditions in paras 18 and 18A were to be read as three separate conditions any one of which, if met, would permit an enforcement agent, if necessary, to use reasonable force to enter specified premises. The Court considered TCG  Regulations, reg  28 and noted the conditions set out before a warrant using reasonable force is issued. The regulation limits applications to circumstances relating to the Finance Act 1927, s 127 and where goods may have been deliberately moved.

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[2018] EWHC 608 (QB).

2

TCEA  2007, Sch  12, para  18 permits an enforcement agent to use reasonable force to enter premises pursuant to para 17. It says: ‘This paragraph applies if these conditions are met- (a) the enforcement agent has power to enter the premises under paragraphs 14 or 16 or under a warrant under paragraph 15; (b) he is acting under an enforcement power confirmed by a warrant of control under section 76(1) of the Magistrates’ Courts Act 1980 …; (c) he is entitled to execute the warrant by virtue of section 125(a) civilian enforcement officers or 125(b) approved enforcement agencies of that Act.’

3

TCEA  2007, Sch  12, para  18A permits an enforcement agent to use reasonable force to enter premises pursuant to para 17. It says: ‘This paragraph applies if these conditions are met- (a) the enforcement agent has power to enter the premises under paragraph 14; (b) the enforcement agent reasonably believes that the debtor carries on a trade or business on the premises; (c) the enforcement agent is acting under a writ or warrant of control, issued for the purpose of recovering a sum payable under a High Court or County Court judgment; (d) the sum is not a traffic contravention debt.’

4

TCEA 2007, Sch 12, paras 19 and 19A were not relevant as it was common ground this did not concern a right of re-entry.

5.157  There is serious weight in the submissions of counsel acting for the judgment debtor in Oyston who made the valid point that TCEA 2007, Sch 12, para 18A would not be needed at all if the alternative construction was preferred. This is because the effect of para 18(a) alone would be to give any enforcement agent who had the power to enter premises under paras 14 or 16, or under a warrant under para  15, to do so with reasonable force. That would cover the circumstances contained in para  18A. Paragraphs 18(b) and 18(c) would also not be required. Further, why would an application be made under para  20 (which provides that an application should be made to use reasonable force) if that right is granted anyway by the effect of para17 and sub-para  18(a) together, acting upon a warrant granted pursuant to para  15? While those arguments are highly persuasive the submissions on behalf of the judgment creditor did not lack merit. Namely that High Court enforcement agents’ powers under this statutory scheme would lack purpose if, where a warrant has been obtained under para 15, reasonable force would only be used in the very limited circumstances that would exist if paras 18 and 18A were read as requiring the satisfaction of each of the three conditions contained (that is where the warrant is issued under specified provisions of the Finance Act, where goods have been taken from one premises to the other and so on). It was noted that if paras 18 and 18A had the meaning for which the judgment debtor contended, the enforcement of a warrant would be thwarted effectively by the refusal of somebody to allow enforcement agents access (in this case to specified premises) or if they do not happen to find an open door through which to enter. 5.158  Unfortunately, the Court decided there was a serious issue to be tried and so did not have to come to a conclusion on the matter. Thus, there remains a serious issue to be resolved by the courts concerning when a warrant to use reasonable force is required. If the construction advanced by the judgment creditor in Oyson is correct it would appear to follow that whenever an enforcement agent has a right to enter any ‘relevant premises’ (which includes a debtor’s home under TCEA 2007, Sch 12, para 14), there would also be an automatic right to use reasonable force. This appears to go against the legislative intent and would take a step backwards in terms of the protection of debtors from the aggressive behaviours of enforcement agents that TCEA 2007 was intended to address. Further, and simply, one of the conditions

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in TCEA  2007, para  18A(d) is that the sum is not a traffic contravention debt. It would make little sense if this was a stand-alone condition allowing the use of force. Therefore, while the authors’ favour the construction put forward by the judgment debtor in Oyson it is acknowledged that there appears to be a lacuna in the legislative drafting when it comes to obtaining a warrant to use reasonable force.

The use of force to gain initial entry to the judgment debtor’s house 5.159  The apparent limitations in TCEA 2007, Sch 12 concerning initial access to a judgment debtor’s home with the use of force echoes the long standing principle that ‘every woman’s home is her castle’.1 This means that a judgment debtor has, subject to the right being granted by the court, a privilege against an enforcement agent entering her house without her consent. 1 In R (on the application of Bempoa) v London Borough of Southwark [2002] EWHC 153 (Admin) at [11], a judicial review case considering the enforcement of a possession order in breach of an undertaking, Munby J equated the principle that every man’s house is his castle with ECHR, art 8 and Protocol 1, art 1. See also Semayne’s Case (1604) 5 Co Rep 91a. The creditor’s submissions in Oyston v David Asker, SHCE Limited [2018] EWHC 608 (QB) (paras 5.156–5.158) would destroy this long-standing principle.

5.160  Accordingly, if an enforcement agent makes a request to be allowed to enter the judgment debtor’s house and is refused, she must not use force to gain initial entry to a house. In theory at least this would allow a determined judgment debtor to resist execution indefinitely. In practice, the enforcement agent may keep returning until the judgment debtor allows her in. The enforcement agent may also make an application for a warrant to enable reasonable force to be used if the conditions are met (para 5.155).1 1 See Oyston v David Asker, SHCE Limited [2018] EWHC 608 (QB) for submissions that no warrant would be required and forced entry is permitted. No conclusion was reached by the Court (paras 5.156–5.158 deal with this unlikely proposition further).

5.161  TCG Regulations, reg 20 specifies the access methods that must be used by an enforcement agent (para 5.150). This has clarified the position as to the routes of entry into a premises an enforcement agent may take. Case law relating to what amounts to peaceful entry seemingly would remain instructive despite the introduction of the new regime. Where the outer door of a house is open, the enforcement agent may pass through it to gain access.1 Similarly, where the outer door is unlocked, the enforcement agent may enter provided no force is required.2 However, the use of a locksmith to effect entry is unlawful,3 as would be the use of a landlord’s pass-key.4 If there is a hole in the house itself, for example because there is building work going on, then the enforcement agent may seemingly still use this to enter.5 1 2

3

Semayne’s Case (1604) 5 Co Rep 91a, resolution 4; Kerby v Denby (1836) 1 M & W 336 (an arrest case); and Southam v Smout [1964] 1 QB 308 at 321, CA. Ryan v Shilcock (1851) 7 Exch 72 (a distress case); Nash v Lucas (1867) LR 2 QB 590 at 594 (a distress for rent case); Boyd v Profaze (1867) 16 LT 431 at 432; and Crabtree v Robinson (1885) 15 QBD 312 at 314 (a distress for rent case). McLeod v Butterwick [1998] 1 WLR 1603, CA.

346  Writs of control 4 5

Welch v Kracovsky (1919) 3 WWR 361 (British Columbia CA). Long v Clarke [1894] 1 QB 119 at 121, CA, per Lord Esher MR (a distress case). See also Whalley v Willamson (1836) 7 Car & P 294.

5.162 In Southam v Smout Lord Denning MR provided the following summary:1 ‘It seems to me that the law now is that where… a sheriff’s officer enters by virtue of his warrant to effect civil process, he may not break the door, in the sense that he may not break it physically. If it is locked, bolted or barred, he must not open it: he is forbidden to do so. But if it is open and ajar, or if it is closed and can be opened by the peaceable means of lifting the latch or turning the knob or just by gently pushing, in those circumstances he can lawfully enter because there he is not breaking. The difference between the two cases is this, that in the case where a man locks, bolts or bars his door, he makes it clear that no one is to come in. Whereas if he leaves it open, or if he just shuts it and all that is needed is to turn the handle or lift the latch or give it a push, then he gives an implied invitation to all people who have lawful business to come in.’ Pearson LJ added that peaceable means would not include using a key where the door was locked if there was no authority from the householder to make use of the key.2 1 2

Southam v Smout [1964] 1 QB 308 at 322–323, CA. Southam v Smout [1964] 1 QB 308 at 329, CA.

Gaining initial entry to a judgment debtor’s house through a window 5.163  The Court of Appeal in Southam rationalised the various forms of peaceful entry on the basis of an implied licence granted by a householder to enter on lawful business. It cast doubt on the older authorities which sanction entering a judgment debtor’s home through a window.1 1

Lee v Gansel (1774) 1 Cowp 1 at 5–6 (an arrest case); Boyd v Profaze (1867) 16 LT 431 at 432; Nash v Lucas (1867) LR 2 QB 590 at 594 (a distress for rent case). During argument Lush J pointed out that ‘The ground of holding entry through a closed but unfastened door to be lawful, is, that access through the door is the usual mode of access, and that the licence from the occupier to any one to enter who has lawful business may therefore be implied from his leaving the door unfastened. Entry through a window is not the usual mode of entry, and therefore no such licence can be implied from the window being left unfastened.’ See also Hancock v Austin (1863) 14 CBNS 634; Attack v Bramwell (1863) 3  B&S  520 (a distress case where entry via a fastened window was found unlawful); Nixon v Freeman (1860) 5  H&N  647; American Concentrated Must Corpn v Hendry (1893) 68  LT  742 at 743 (a distress for rent case); Long v Clarke [1894] 1  QB  119; Crabtree v Robinson (1885) 15 QBD 312 and Miller v Tebb (1893) 9 TLR 515, CA (a distress case).

5.164  Pearson LJ in Southam considered that obtaining entry through ‘ordinary means’ would not include going through a window.1 Clerk and Lindsell on Torts concluded from Southam that the authorities on entering through a window were no longer good law.2 However, the point did not arise in Southam so Pearson LJ’s comments remained strictly obiter and, as the editors of Clerk and Lindsell recognised, the leading case on entry through a partially open window3 was not cited to the Court. Professor Beatson in his March 2000 review on bailiff’s law4 considered entering through windows still to be in accordance with the law.5 He went on to

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recommend in his June 2000 Report6 that entry should only be allowed by normal means, which should not include through a window unless it is a French window.7 This approach was generally adopted in TCEA 2007, Sch 128 which provides that access must only be ‘by any door, or any usual means by which entry is gained to the premises’ (see para 5.150). Thus, the present position firmly prevents access by way of an open window. 1 2 3 4 5 6 7 8

Southam v Smout [1964] 1QB 308 at 329, CA. (18th edn, Sweet & Maxwell, 2000), p 871. Crabtree v Robinson (1885) 15 QBD 312 (a distress for rent case). Independent Review of Bailiff Law: A Consultation Paper (March 2000). Independent Review of Bailiff Law: A Consultation Paper (March 2000) p 24. Independent Review of Bailiff Law: Report (June 2000). Beatson Independent Review of Bailiff Law: Report (June 2000) p 36. TCG Regulations, reg 20.

Use of force to gain initial entry to the judgment debtor’s house where entry resisted 5.165  If the judgment debtor physically resists the enforcement agent’s initial entry to her house, it is not lawful for the enforcement agent to effect entry using force, for example, by jamming her foot in the door and forcing it open1 or using an object to jam the door.2 This is because there is no real difference between a door which is momentarily opened but sought to be closed and can only be fully opened by violence, and a door which is shut and which can only be opened by violence.3 1 2 3

Vaughan v McKenzie [1969] 1 QB 557 at 562, DC. Boyd v Profaze (1867) 16 LT 431 at 432 (use of a pair of shears). Vaughan v McKenzie [1969] 1 QB 557 at 562, per Lord Parker CJ, DC.

Goods being used 5.166  TCG  Regulations, reg  10(2) deals with items belonging to the debtor being in use by any person at the time at which the enforcement agent seeks to take control. While taking goods which are being used is not prohibited outright the TCG Regulations expressly provide that an enforcement agent may not take control of such goods where doing so is, in all the circumstances, likely to result in a breach of the peace. Reg 10(3) specifies that ‘in use’ means that the item is in the hands of, or being operated by, the person. This express statutory restriction clarifies the position following historic case law. 1 1 See Sunbolf v Alford (1838) 3 M&W 248 at 254, per Parke B – An enforcement agent cannot take ‘wearing apparel on a man’s person’ and Storey v Robinson (1795) 6 Term Rep 138 (a distress case concerning a horse being ridden).

Use of force to gain initial entry to commercial premises 5.167  As set out above at para 5.153, gaining entry to premises where the debtor carries on a trade or business is usually more straightforward. Care should still, however, be exercised in respect of commercial premises near or in the grounds of a house because they may be defined as a place where the debtor usually lives rendering the use of automatic forcible entry illegal. Examples would be businesses run from a

348  Writs of control building on the grounds of a house or shops which have living accommodation above them.1 1

In the Canadian case Hudson v Fletcher (1909) 12 WLR 15 at 21 it was held to be unlawful entry where the sheriff’s officer forced open one of the outer doors of a store which had an upstairs apartment occupied by the plaintiff. This decision was reached even though there was no access between the living quarters and store and the living quarters were reached by external stairs.

The use of force once inside the judgment debtor’s premises 5.168  Where an enforcement agent is permitted to use reasonable force (either automatically due to the nature of the premises, or a warrant, or due to a breach of a controlled goods agreement) the power extends to ‘do anything for which the entry is authorised’.1 Entry is authorised to search for and take control of goods.2 Therefore, in such circumstances TCEA 2007, Sch 12 expressly provides that reasonable force can continue to be used to search for and take control of goods within the premises. 1 2

TCEA 2007, Sch 12, paras 17, 20(2) and 21(2). TCEA 2007, Sch 12, paras 14 and 15.

5.169  However, if an enforcement agent has lawfully gained entry without using force and in a situation where force is not otherwise permitted (for example, by being granted permission to enter by a home owner) can reasonable force then be used once inside without further permission? Previous case law established that once an enforcement agent had gained entry lawfully she may use force to open any inner doors1 and that similarly, force may be used to open an inner window as it is treated as equivalent to an inner door.2 The original policy reason for this rule was that, provided the outer door is not broken, breaking the inner doors of a house will not expose the inhabitants ‘to insult and violence from without’.3 In Lee v Gansel, an arrest case,4 General Gansel was a lodger renting a number of rooms on two floors in a large house which opened onto a communal staircase. The owner also lived in the house and both men entered the property using a shared front door. General Gansel complained that his arrest was illegal because the officers arresting him had entered peaceably through the front door but had forced entry to his bedroom which, like all the other rooms he rented, opened onto the communal staircase. The Court found that his arrest was legal because the door to his bedroom was an inner door and the use of force to effect entry was legal since any other conclusion would have meant that General Gansel had four outer doors.5 1 2 3 4 5

Lee v Gansel (1774) 1 Cowp 1 at 7. Lloyd v Sandilands (1818) 8 Taunt 250. Lee v Gansel (1774) 1 Cowp 1 at 7, per Lord Mansfield. The case was cited in Hodder v Williams [1895] 2 QB 663 at 666 as applicable to writs of fi fa. Lee v Gansel (1774) 1 Cowp 1 at 8–9, per Lord Mansfield (an arrest case). In the Canadian case of Welch v Kracovsky (1919) 3 WWR 361 the British Columbian Court of Appeal disapproved this aspect of the reasoning on the basis that many modern houses have numerous outer doors because they are often converted into apartments.

5.170  The Court did, however, consider the difficulties associated with defining an inner door and suggested that ‘if what was one house originally comes to be divided into separate tenements, and there is a distinct outer door to each, they

Entry into premises  349

will be separate houses.’1 In other words, where a house has been converted into apartments and there is one outer door and also doors to gain access to individual apartments, the doors used to gain access to the individual apartments will count as outer doors and cannot be opened with force. The same would be true of purpose built apartments.2 1 2

Lee v Gansel (1774) 1 Cowp 1 at 8, per Lord Mansfield (an arrest case). Welch v Kracovsky (1919) 3 WWR 361 (British Columbia CA).

5.171  Further, case law has previously established that once entry has been effected, closets, cupboards and trunks can also be broken open by the enforcement agent while levying execution1 as these are treated as equivalent to inner doors.2 It seems that the enforcement agent need make no prior demand before using force.3 However, while not a legal requirement, there is no reason why she should not do so if the judgment debtor is present and willing to open them. 1 2 3

R v Bird (1679) 2 Show KB 87 and Hutchinson v Birch (1812) 4 Taunt 620 at 625. Hutchinson v Birch (1812) 4 Taunt 620 at 625, per Mansfield CJ. In the arrest case of Ratcliffe v Burton (1802) 3 Bos & P 223, the Court held that a prior demand was necessary before a sheriff who had gained peaceable entry through the front door forced the inner doors of the defendant’s house in search of him when the sheriff was uncertain whether he was in the house. However, in Hutchinson v Birch (1812) 4 Taunt 620, the Court held that this principle did not apply to sheriffs levying execution under a writ of fi fa. At 626 of that judgment Chambre J stated ‘I do not see how execution could proceed, if the officer were to stop between the opening of every drawer and box, to make a fresh demand for the next to be unlocked.’

5.172  Where there is no existing permitted automatic right or warrant to permit the use of reasonable force to ‘enter the premises or to do anything for which the entry is authorised’1 it remains to be seen how the introduction of TCEA 2007, Sch 12 will affect the application of this case law concerning the use of force once inside the premises. While Chambre J’s rationale in Hutchinson v Birch2 continues to be highly practical, arguably the wording of TCEA 2007, Sch 12 gives scope for argument that a warrant is needed to use reasonable force, where entry has been initially permitted but then use of force is needed (say, due to a refusal to co-operate) once inside. This is because TCEA 2007 does not solely cater for a situation where an enforcement agent needs to seek authorisation to enter using reasonable force it also provides that an enforcement agent may seek authorisation to use reasonable force ‘do anything for which entry is authorised’. There would be no need to include this latter provision if force could continue to be exercised lawfully following entry. 1 2

TCEA 2007, Sch 12, para 20(2). See para 5.171, n 2.

5.173  If a luckless enforcement agent becomes locked inside the judgment debtor’s property and there is no-one to open the door to permit her to exit, she may use force to escape.1 No prior demand is necessary on the grounds there is no-one on whom a demand could be made.2 Similarly, she may rescue someone else who has become locked in.3 1 2 3

Pugh v Griffith (1838) 7 Ad & EL 827. Pugh v Griffith (1838) 7 Ad & EL 827. White v Wiltshire (1619) Cro Jac 555.

350  Writs of control Entering third party premises 5.174  Under TCEA 2007, Sch 12 an enforcement agent may only enter relevant premises (unless they have a warrant to search for and take control of goods). Relevant premises are restricted to premises where the debtor usually lives and where the debtor carries on a trade or business.1 Accordingly, the premises of a third party will be ‘specified premises’ and entry to take control of goods will require a warrant to enter them (paras 5.147–5.149). This is even if the third party consents.2 Further, there is no automatic right within TCEA 2007, Sch 12 to exercise reasonable force at the premises of a third party for initial entry and therefore an enforcement agent will need to make an application for a power to use reasonable force.3 Where the enforcement agent applies for a warrant to enter specified premises under TCEA 2007, Sch 12, para 15 a request to be able to use reasonable force can be sought at the same time.4 1 2 3

4

TCEA 2007, Sch 12, para 14. Midtown Acquisitions LP v Essar Global Fund Ltd [2017] EWHC 2206 (QB). TCEA  2007, Sch  12, para  20 and CPR  84.9(1)(b). See comments in Oyston v David Asker, SHCE  Limited [2018]  EWHC  608 (QB) concerning difficulties which may arise in respect of obtaining a warrant in the limited circumstances seemingly available (paras 5.156–5.158). TCEA 2007, Sch 12, para 21(2).

Re-entry 5.175  Where goods on any premises have been taken control of and have not been removed by the enforcement agent the enforcement agent may enter the premises to inspect the goods or to remove them for storage or sale.1 An enforcement agent also has repeated rights of re-entry under TCEA 2007, Sch 12, paras 14 (entry without warrant) and 15 (entry under warrant). An enforcement agent may re-enter the premises on any day of the week.2 1 2

TCEA 2007, Sch 12, para 16. TCG Regulations, reg 21(2).

5.176  However, an enforcement agent is not permitted repeated rights of entry where no, or insufficient goods were found at the premises. TCG Regulations, reg 24 provides that where the enforcement agent, having entered relevant or specified premises under TCEA 2007, Sch 12, paras 14 or 15, has determined that there are no or insufficient goods of the debtor on the premises of which control may be taken the enforcement agent may enter the premises on a second or subsequent occasion only: (a) if the enforcement agent has reason to believe that, since the occasion of the enforcement agent’s last entry, there have been brought on to the premises further goods of the debtor of which control has not yet been, but may be, taken; or (b) where the enforcement agent was prohibited from taking control of particular goods at the time of the original entry by virtue of TCG Regulations, reg 10(2) (goods are in use and breach of the peace would be likely). 5.177  Where goods have been taken into control but have not yet been removed from the premises an enforcement agent may use reasonable force to re-enter a

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relevant or specified premises to enforce a writ of control issued to recover a sum payable under a High court or County Court judgment where the enforcement agent reasonably believes that the premises are used for trade or business.1 1

TCEA 2007, Sch 12, para 19.

5.178  Reasonable force may also be used where the judgment debtor has entered into a controlled goods agreement and had failed to comply with payment provisions if notice is given (see paras 5.222–5.224).1 1

TCEA 2007, Sch 12, para 19A.

5.179  If no automatic right to use reasonable force exists then the enforcement agent may apply to court for a warrant authorising her to use reasonable force to re-enter the premises or to do anything for which entry is authorised.1 However, it appears that the drafting of the conditions which enable re-entry by force in such circumstances are inconsistent. TCEA  2007, Sch  12, para  20 refers to the ability to obtain such a warrant for re-entry under TCEA  2007, Sch  12, para  16. TCG Regulations, reg 28 deals with the issue of a warrant by an enforcement agent to use reasonable force to enter premises. It applies to cases where there is a power to enter under TCEA 2007, Sch 12, paras 14 or 15. No mention is made in reg 28 of a right of re-entry under para 16. However, CPR 84.9(3) sets out the evidence that must be provided for an application for a warrant to enter premises and the conditions that must be satisfied. The rule refers to the need to meet the criteria set out in reg 28 when making such an application under TCEA  2007, Sch  12, para  20(2) (which includes an application to use force to re-enter under TCEA 2007, Sch 12, para 16). Reg 28 is not expressed to apply to Sch 12, para 16 and the conditions as set out in reg 28 are not likely to apply in a re-entry scenario – they relate to debts recoverable under the Finance Act 2008 and or require the premises to be premises to which goods have been deliberately removed to avoid taking control of them. In a re-entry scenario the enforcement agent will be returning to the same premises and the goods will already be under the enforcement agent’s control. To ensure forcible rights of re-entry are preserved, where the premises are not being used for trade or business, it would seem prudent for an enforcement agent to ensure that a controlled goods agreement is entered into if goods are taken into control but are not removed.2 That said a person who prevents entry in such a situation may be committing the offence of obstructing a High Court enforcement officer and this may be highly persuasive in allowing re-entry without the use of force (para 5.186). 1 2

TCEA 2007, Sch 12, para 20(2). For an additional lacuna see also Oyston v David Asker, SHCE Limited [2018] EWHC 608 (QB). If the submissions of the judgment creditor were correct TCEA 2007, Sch 12, para 18(a) would mean that no warrant would be required and forced entry is permitted. No conclusion was reached by the Court (paras 5.156–5.158 deal with this unlikely proposition further).

What are the consequences of an unlawful entry? 5.180  TCEA 2007, Sch 12, para 66 sets out the consequences that apply where an enforcement agent breaches a provision of TCEA 2007, Sch 12 or acts under a writ

352  Writs of control that is defective.1 The breach or defect does not make the enforcement agent, or a person she is acting for, a trespasser2 but the debtor may bring proceedings.3 In the proceedings, the court may order that goods be returned to the debtor.4 The court may also order the payment of damages in respect of loss suffered by the debtor as a result of the breach or of anything done under the defective instrument.5 The court can order that this be paid by the enforcement agent or the person on whom the enforcement power is conferred or the creditor.6 Damages may not be ordered if the enforcement agent acted in the reasonable belief that she was: (a) not breaching a provision of TCEA  2007, Sch  12; or (b) that the instrument was not defective.7 If a debtor wishes to bring proceedings for a breach or where action is taken under a defective instrument she may use the procedure set out in CPR  Pt  23.8 Such an application should include evidence of how the alleged breaches occurred or how the instrument is defective.9 1

Where there has been a breach under TCEA 2007, Sch 12, para 58(3) (further steps taken when debtor has paid the amount outstanding), para 66 is subject to para 59 (TCEA 2007, Sch 12, para 66(9)). 2 TCEA 2007, Sch 12, para 66(2). 3 TCEA 2007, Sch 12, para 66(3). 4 TCEA 2007, Sch 12, para 66(5)(a). 5 TCEA 2007, Sch 12, para 66(5)(b). 6 TCEA 2007, Sch 12, para 66(6). 7 TCEA 2007, Sch 12, para 66(8). 8 CPR 84.3(2). 9 CPR 84.13.

Practice of forced entry 5.181  In practice, an enforcement agent should use a locksmith to assist her in gaining forced entry. Afterwards, she will replace the locks and re-secure the premises. The enforcement agent must leave the premises as effectively secured as she finds them.1 The enforcement agent will invariably seek the approval of the judgment creditor before effecting a forced entry and will seek the judgment creditor’s agreement to pay for the costs of the locksmith to secure the premises on leaving and any other damage caused by the forced entry. The judgment creditor (and her advisers) should ensure that the proposed entry is lawful before providing such sanction otherwise they may also be liable. 1

TCEA 2007, Sch 12, para 30.

Exempt premises 5.182  Certain premises are exempt from execution. Diplomatic privilege 5.183  Execution may not be levied at diplomatic premises1 or at the private residence of a diplomatic agent.2 1 2

Diplomatic Privileges Act 1964, Sch 1, art 22. See further Ch 1. Diplomatic Privileges Act 1964, Sch 1, art 30. See further Ch 1.

Entry into premises  353

Royal and Crown privilege 5.184  Goods at royal residences are exempt from execution1 as are goods at government premises. (Crown immunity is considered in Chapter 1). 1

Winter v Miles (1809) 10 East 578.

Police assistance 5.185  The police must assist an enforcement officer or the person acting under her authority in the execution of a writ if requested to do so.1 Such assistance may be advisable where forcible entry is intended or in other situations in which a breach of the peace is likely. Where a warrant has been obtained which allows for reasonable force (TCEA 2007, Sch 12, paras 20 and 21) the court may require any constable to assist the enforcement agent to execute the warrant.2 1 2

CA 2003, Sch 7, para 5. TCEA 2007, Sch 12, paras 22(2) and 31(3).

Obstruction 5.186  A  person who intentionally obstructs a person lawfully acting as an enforcement agent or intentionally interferes with controlled goods without lawful excuse is guilty of an offence under TCEA 2007, Sch 12 para 68. There is no guidance provided as to what exactly ‘intentionally obstructing’ entails. For example, it is unclear whether a judgment debtor intentionally refusing to allow an enforcement agent access to her home would constitute resisting or obstructing for the purposes of this offence. It is important to note that in respect of this provision the enforcement agent must be acting lawfully and therefore, if the agent is attempting access where they do not have the lawful ability to do so, the person obstructing them would seemingly not be guilty of an offence. Right to remain on the judgment debtor’s premises 5.187  The enforcement agent may enter, re-enter or remain on the premises and take control of goods only within specified times of day1 but may do so on any day of the week.2 She may only do so if the debtor is not a child or if a child or vulnerable person is not the only person present in the premises (See para 5.151).3 1

2 3

TCEA 2007, Sch 12, para 25 and TCG Regulations, reg 22 – generally after 6am and before 9pm. An exception may apply if goods are located at a business premises where trade is conducted outside of the prescribed hours (TCG Regulations, reg 22(3)). TCG Regulations, reg 21(2). TCG Regulations, reg 23.

5.188  The right to remain on the premises is connected to the powers to search for and take control of goods or to inspect them or to remove them for storage and sale.1 The time it takes should be reasonable.2 What constitutes a ‘reasonable time’

354  Writs of control will depend on the nature of the goods and the method by which the enforcement agent takes possession – evidently it may take longer for an enforcement agent to remove goods from the judgment debtor’s premises for storage than for the judgment debtor to sign a controlled goods agreement. Note however, that where goods are on premises (or on a part of the premises) which are not occupied for residential purposes, the enforcement agent may remain on the premises to guard the goods of the debtor of which the enforcement agent has taken control (see para 5.192). 1 2

TCG Regulations, reg 21. See for instance Watson v Murray [1955] 2 QB 1 at 17; Ash v Dawnay (1852) 8 Exch 237; and Reed v Harrison (1778) 2 Wm Bl 1218.

LOCATING GOODS ON A HIGHWAY 5.189  Subject to specific exemptions relating to goods where an enforcement agent should be aware that taking control of them would cause a risk to public health1 an enforcement agent may also take control of goods located on a highway. 1

TCG Regulations, reg 11.

TAKING CONTROL OF GOODS 5.190  The nature of goods that can be subject to the taking of goods procedure by writ of control has been considered at paras 5.15–5.61. This section considers what, as a matter of law, amounts to the taking control of goods by an enforcement agent. 5.191  TCEA 2007, Sch 12, para 13(1) provides that to take control of goods an enforcement agent must do one of the following: (a) secure the goods on the premises on which she finds them; (b) if found on a highway, secure them on a highway, where she finds them or within a reasonable distance; (c) remove them and secure them elsewhere; (d) enter into a controlled goods agreement with the debtor. Securing goods on the premises where they are found 5.192  To secure goods on the premises where they are found an enforcement agent may secure the goods in a cupboard, room, garage or outbuilding.1 Where goods are on premises (or on a part of the premises) which are not occupied for residential purposes the enforcement agent may remain on the premises to guard the goods of the debtor of which the enforcement agent has taken control.2 Goods can also be secured by fitting an immobilisation device (which must be provided by the enforcement agent).3 The goods cannot however be secured in any of these ways if any person (whether or not the debtor) in occupation of the premises, or any part of the premises, would, as a result, be deprived of adequate access to essential facilities, including exempt goods, or adequate means of entering and leaving the premises, including means of emergency entry and escape.4 Goods can also be secured by: (a)

Taking control of goods  355

securing the whole of the premises, where the premises are occupied solely for the purpose of a trade or business; or (b) securing such part of the premises, where the premises are occupied for residential and trade or business purposes, that is occupied solely for the purpose of a trade or business.5 Premises may only be secured in this way if it is not practicable either to secure the goods in any of the other ways or remove them and secure them elsewhere.6 1 2 3 4 5 6

TCG Regulations, reg 16(1)(a). TCG Regulations, reg 16(1)(b). TCG Regulations, reg 16(1)(c). TCG Regulations, reg 16(2). TCG Regulations, reg 16(1)(d). TCG Regulations, reg 16(4).

Securing goods (not vehicles) on the highway or elsewhere 5.193  Save for where the goods being secured are a vehicle on a highway under TCEA 2007, Sch 12, para 13(1)(b),1 where the enforcement agent is securing goods on a highway or elsewhere the enforcement agent may secure goods of the debtor by fitting an immobilisation device.2 Where this is done the enforcement agent must provide the immobilisation device and provide a written warning to the debtor (see para  5.196).3 Certain goods may not be taken into control on the highway if the enforcement agent ought to be aware of a risk that doing so would risk public health.4 1 2 3 4

TCG Regulations, reg 17(3). TCG Regulations, reg 17(1). TCG Regulations, reg 17(2). TCG Regulations, reg 11.

Securing and removing vehicles on the highway 5.194  Where the enforcement agent is proceeding to secure goods found on a highway under TCEA  2007, Sch  12, para  13(1)(b) and the goods to be secured are a vehicle, unless the debtor voluntarily surrenders the keys to the vehicle to the enforcement agent,1 it must be secured by an immobilisation device, provided by the enforcement agent.2 At the time of immobilising the vehicle, the enforcement agent must provide a written warning to the debtor (see para 5.196).3 A vehicle must remain immobilised where it is positioned for a period of not less than 2 hours from the time of immobilisation unless the sum outstanding is paid or an agreement to release the vehicle, on part payment of the sum outstanding, is made between the enforcement agent and the debtor.4 Once that time period has expired the enforcement agent may remove the vehicle to storage.5 Where a vehicle is removed to storage, the enforcement agent must comply with the rules relating to the care of controlled goods.6 Any liability of an enforcement agent (including criminal liability) arising out of her securing goods on a highway under TCEA 2007, Sch 12, para 13 is excluded to the extent that she acted with reasonable care.7 1 2

TCG Regulations, reg 18(2). TCG Regulations, reg 18(3).

356  Writs of control 3 4 5 6 7

TCG Regulations, reg 18(4). TCG Regulations, reg 18(5). TCG Regulations, reg 18(6). TCG Regulations, reg 18(7). TCEA 2007, Sch 12, para 13(2).

Use of force to take control of goods on a highway 5.195  If the enforcement agent applies to the court it may issue a warrant which authorises her to use, if necessary, reasonable force to take control of goods on a highway.1 The court may not issue a warrant unless it is satisfied that prescribed conditions are met.2 The power to use force does not include power to use force against persons.3 To issue a warrant authorising an enforcement agent to use reasonable force in relation to goods on a highway the court must be satisfied that the enforcement agent has explained the type and amount of force that will be required to take control of the goods and that in all the circumstances authorisation ought to be given, having regard to (among other matters) the sum outstanding and the nature of the debt.4 Such an application is made using the procedure set out in CPR Pt 23.5 1 2 3 4 5

TCEA 2007, Sch 12, para 31(1). TCEA 2007, Sch 12, para 31(2). TCEA 2007, Sch 12, para 31(5). TCG Regulations, reg 29(2). CPR 84.3(2) and 84.10.

Immobilisation 5.196  Where the goods are secured by fitting an immobilisation device at the time of immobilising the goods the enforcement agent must provide a written warning to the debtor, signed by the enforcement agent.1 It must be affixed in a prominent position on the immobilised goods.2 The notice must contain the following specified information: (a) that the enforcement agent has immobilised the goods; (b) the date and time of immobilisation; (c) that the goods have been immobilised because the debtor has failed to pay the sum outstanding; (d) a telephone number, which is available 24 hours every day, for enquiries; and (e) the reference number or numbers.3 1 2 3

TCG Regulations, regs 16(3), 17(2)(b), 18(4). TCG Regulations, reg 16(3). TCG Regulations, reg 16(3)(a)-(e).

Care and location of storage when removing goods and while holding securities 5.197  Where goods are removed from a premises or highway, subject to TCG  Regulations, reg  34 (care of controlled goods), the enforcement agent must,

Taking control of goods  357

save in exceptional circumstances, remove the goods and secure them in or at a place which is within a reasonable distance from the place where the goods were taken into control.1 1

TCG Regulations, reg 19.

5.198  TCG  Regulations, reg  34 provides that where the enforcement agent removes controlled goods, other than securities, from premises or a highway where the enforcement agent has found them: (a) the enforcement agent must keep the controlled goods, so long as they remain in the enforcement agent’s control, in a similar condition to that in which the enforcement agent found them immediately prior to taking control of them; (b) the goods must be removed to storage, unless the goods are removed for sale; and (c) the storage must be secure and the conditions of that storage such as to prevent damage to or deterioration of the goods for so long as they remain in the enforcement agent’s control.1 The enforcement agent must not remove controlled goods to a place where there would be at any time a contravention of any prohibition or restriction imposed by or under any enactment.2 1 2

TCG Regulations, reg 34(1)(a)-(c). TCG Regulations, reg 34(2).

5.199  While holding securities, the enforcement agent must ensure each security has the benefit of the same protection in every respect (for example, from damage, destruction, theft or unauthorised or fraudulent interference) as that security had immediately before the enforcement agent took control of it.1 1

TCG Regulations, reg 45(2)

Notice after entry and/or taking control of goods 5.200  After entering the premises an enforcement agent must provide a notice for the debtor giving information about what the enforcement agent is doing.1 If the debtor is on the premises when the enforcement agent is there, the enforcement agent must give her the notice then but otherwise the enforcement agent must leave the notice in a conspicuous place on the premises.2 If the enforcement agent knows that there is someone else at the premises, or that there are other occupiers, that notice must be in a sealed envelope addressed to the debtor.3 Similar provisions apply when an enforcement agent takes control of goods on a highway or enters a vehicle on a highway with the intention of taking control of goods. In such circumstances she must provide a notice for the debtor giving information about what she is doing.4 If the debtor is present at the time the enforcement agent is there, the enforcement agent must give her the notice then.5 If not, the enforcement agent must deliver the notice to any relevant premises (as defined by TCEA 2007, Sch 12, para 14) in a sealed envelope addressed to the debtor.6 1

TCEA 2007, Sch 12, para 28.

358  Writs of control 2 3 4 5 6

TCEA 2007, Sch 12, para 28(4)-(5). TCEA 2007, Sch 12, para 28(6). TCEA 2007, Sch 12, para 33. TCEA 2007, Sch 12, para 33(3). TCEA 2007, Sch 12, para 33(4).

5.201  The form of notice that must be given is prescribed1. Additional requirements are imposed where goods are immobilised or where goods are removed for storage or sale.2 The notice must be in writing, be signed by the enforcement agent3 and contain the following information:4 (a) the name and address of the debtor; (b) the enforcement agent’s name, the reference number or numbers and the date of the notice; (c) that the enforcement agent has done one or more of the following: (i) entered the premises; (ii) taken control of goods on a highway; (iii) entered a vehicle on a highway with the intention of taking control of goods; (d) the address of the premises which the enforcement or entered a vehicle; (e) where a vehicle on a highway has been entered with the intention of taking control of goods, the manufacturer, model, colour and registration mark of that vehicle; and (f) whether or not the enforcement agent has taken control of goods of the debtor and, if so, the location where and the time when control has been taken of the goods; and: (i) a list of the goods of which control has been taken with a description to enable the debtor to identify the goods correctly, including, where applicable: (aa) the manufacturer, model and serial number of the goods; (bb) in the case of a vehicle, the manufacturer, model, colour and registration mark of the vehicle; and (cc) the material, colour and usage, and (where appropriate) any other identifying characteristic, of the goods; (ii) the amount of the sum outstanding as at the date of the notice; (iii) the date and time by which the sum outstanding must be paid to prevent the controlled goods being sold; (iv) how and between which hours and on which days payment of the sum outstanding may be made; and (v) that the controlled goods will be released on payment in full (or may be released on part payment) of the sum outstanding. 1  2  3  4

TCG Regulations, reg 30. TCG Regulations, reg 30(2) as set out in regs 31 and 32. TCG Regulations, reg 30(2). TCG  Regulations, reg  30(2)(a)-(f). The form appears in the schedule to The Certification of Enforcement Agents Regulations 2014, SI 2014/421.

5.202  Such a notice is not required if the enforcement agent is entering premises under TCEA 2007, Sch 12, para 16 to inspect goods of which control has previously been taken and where force is not being used to effect the re-entry.1 1

TCG Regulations, reg 30(3).

Taking control of goods  359

5.203  An enforcement agent does not have to produce multiple identical descriptive lists of goods taken into her control at the same time. Where an inventory of controlled goods is provided (para 5.206) or where a list of controlled goods is produced in conjunction with a controlled goods agreement (para 5.216) the notice required by TCG Regulations, reg 30 does not need to repeat the list (see reg 30(2) (f)(i)) so long as the alternative list is provided at the same time as the notice and the goods of which control has been taken are the same as those referred to in the alternative list.1 1

TCG Regulations, reg 30(4).

5.204  Where goods have been immobilised the notice must also contain the information set out at para 5.196 relating to the written warning on immobilisation.1 There are specific requirements for vehicles found and secured on the highway (see paras 5.194 and 5.195)2 1 2

TCG Regulations, regs 31(1) and 16(3). TCG Regulations, regs 31(2) and 18(4).

5.205  There are also additional notice requirements where goods are removed for storage or sale.1 In such circumstances the form of notice required under TCG  Regulations, reg  30(1) must also contain information that the enforcement agent has removed controlled goods to secure storage or for sale. A list of the goods so removed is also required (where the goods are different to that required by other lists).2 The notice must also include the date of removal of the goods to storage or for sale, the daily or weekly storage charge payable, where the goods are removed to storage, and the procedure for collection on payment of the sum outstanding or on part payment of the sum outstanding where an agreement is made between the enforcement agent and the debtor.3 Where any of this information is not known to the enforcement agent at the time of providing the notice to the debtor the enforcement agent must provide such information, in writing, to the debtor, as soon as reasonably practicable.4 1 2

3 4

TCG Regulations, reg 32. TCG Regulations, reg 32(1)(a). That is the list of goods required under TCG Regulations, reg 30(2) (f)(i) relating to entry/goods taken into control (see para  5.201) or the inventory required by TCEA 2007, Sch 12, para 34 (see para 5.206). TCG Regulations, reg 32(1)(b)-(e). TCG Regulations, reg 32(2).

Inventory of goods of which control has been taken 5.206  As well as the notice after entry and/or taking control of goods if an enforcement agent takes control of goods she must provide an inventory of the goods of which control has been taken as soon as reasonably practicable.1 Where there are co-owners of the goods the enforcement agent must provide the debtor as soon as reasonably practicable with separate inventories of goods owned by the debtor and each co-owner and an inventory of the goods without a co-owner.2 As soon as reasonably practicable the co-owner must also be provided with an inventory as well as the notice after entry and/or taking control of goods.3 The inventory must be in writing and signed by the enforcement agent.4 It may be combined with a controlled

360  Writs of control goods agreement or the notice of entry and/or taking control of goods if the inventory is provided at the same time and the goods which have been taken into control are the same as those listed on those lists.5 The TCG  Regulations set out in full the information that otherwise must be provided in the inventory. 6 1 2 3 4 5

6

TCEA 2007, Sch 12, para 34(1). TCEA 2007, Sch 12, para 34(2). TCEA 2007, Sch 12, para 34(3). TCG Regulations, reg 33(1). TCG Regulations, reg 33(2). That is the list required under TCG Regulations, reg 30(2)(f)(i) relating to entry/goods taken into control (para 5.201) or a controlled goods agreement under reg 15 (see para 5.216). TCG Regulations, reg 33(1)(a)-(e).

‘Excessive’ execution 5.207  The writ of control authorises the enforcement officer to take control of the goods of the judgment debtor authorised by law and to raise from those goods the sums set out in the schedule to the writ. The value of the judgment debtor’s goods may far exceed the sums payable by the judgment debtor under the writ. TCEA 2007, Sch 12, para 12 provides that an enforcement agent may not take control of goods whose aggregate value is more than: (a) the amount outstanding; and (b) an amount in respect of future costs which is calculated in accordance with regulations. The exception to this is set out in TCEA 2007, Sch 12, para 12(2) in that an enforcement agent can take control of goods of a higher value, on a premises or highway, to the extent necessary, if there are not enough goods of a lower value within a reasonable distance on a highway or on a premises that the enforcement agent has the power to enter either under TCEA 2007, Sch 12, para 14 (entry without a warrant in relevant premises) or an existing warrant. Goods are above a given value only if it is or ought to be clear to the enforcement agent that they are.1 Therefore, care needs to be taken by an enforcement agent not to seek to control excessive goods. 1

TCEA 2007, Sch 12, para 12(3).

5.208  Where a writ of control is executed in respect of commercial premises, such as a shop, the stock contained on the premises may well be far more extensive than necessary to satisfy the judgment debt in respect of which the writ was issued. Historically, one way in which enforcement agents sought to address this was by taking possession of all the goods through a walking possession agreement (now a controlled goods arrangement) but agreeing with the judgment debtor that she may continue to trade provided she pay the money taken from such trade less whatever was required for staff wages. 5.209 In Re Dalton (a bankrupt)1 a sheriff’s officer had obtained a signed walking possession agreement in respect of the entire stock of a grocer’s shop and orally agreed that the judgment debtor could continue to trade but that he must not sell any of the goods in the store room in bulk and that if he sold any of them in the ordinary course of business he must replace them.2 1 2

[1963] 1 Ch 336, DC. This is almost like an oral floating charge.

Taking control of goods  361

5.210  The Court of Appeal observed that while such practice appeared common, it should not be followed:1 ‘It appears from the evidence in the present case and from Watson v Murray & Co. Ltd that it is quite common in the case of executions at retail shops for execution to be levied on the entire stock, but with walking possession and permission to continue normal retail trading. Where this initially involves excessive and therefore wrongful and tortious execution, the practice, though perhaps convenient and not really damaging to the debtor, seems to us to be one which should not be followed. An appropriate amount of the stock should be seized. Permission to dip into the seized stock if required for normal trading would of course tend to reduce the value of the execution: but it should not in practice be difficult to put a limit on the value of the amount of such seized stock sold in any day or longer period and to arrange in the course of visits under the walking possession agreement either to receive the proceeds of sale or to replenish the stock by a further levy.’ 1

[1963] 1 Ch 366 at 346.

5.211  If there is considered to be any benefit in allowing the judgment debtor to continue trading, care must be taken in this kind of arrangement otherwise the enforcement agent risks being deemed to have abandoned possession (see paras 5.228–5.230). The practical guidance arising from the Court of Appeal’s judgment in Re Dalton seems to be as follows: (a) if there are more goods than the writ requires, the enforcement agent when preparing her inventory should only identify sufficient goods to meet the full amount due under the writ; (b) the permission to sell the stock should not be for all of the stock noted in the inventory otherwise the enforcement agent will be deemed to have abandoned possession. Instead, a limit to the goods which may be sold in the course of normal trading should be agreed. Any agreement reached should be recorded in a letter which should be counter-signed by the judgment debtor. Alternatively it could be noted on the inventory that stock will change and a note of the agreement on use of stock should be made (again it is helpful for the judgment debtor to sign the inventory); (c) the enforcement agent should return regularly to collect the proceeds of sale or to make further levies to make sure that any new stock is covered by the taking control of goods procedure. It may be sensible, if only for evidential reasons, for a new controlled goods agreement to be signed on each visit and an updated inventory produced. At the very least the original inventory should be updated (and the judgment debtor should again sign); and (d) if it becomes clear from a repeat visit by the enforcement agent that the judgment debtor is clearly not replenishing stock, then the enforcement agent should take the goods physically into her control and remove the stock to be sold. Date and time that goods may be taken into control 5.212  The enforcement agent may take control of goods of the debtor on any day of the week.1 However, there are limitations on the hours for taking control.2

362  Writs of control The enforcement agent may not take control of goods of the debtor before 6am or after 9pm unless: (a) the court orders otherwise;3 or (b) the goods are located on the debtor’s or another person’s premises wholly or partly used to carry on trade or business which are open for the conduct of trade or business outside of those hours. An enforcement agent may also take control of goods outside of these hours to complete taking control of goods where it is reasonably necessary for the enforcement agent to continue to do so (provided that the time spent in taking control is reasonable).4 The National Standards recommend that enforcement agents should carefully consider the appropriateness of undertaking enforcement on any day of religious or cultural observance or during any major religious or cultural festival. Where an enforcement agent needs to take control outside of the permitted hours an application can be made to court using the CPR Pt 23 procedure.5 An enforcement agent may not take control of goods if the debtor is a child or if a child and/or vulnerable person is the only person present in the premises where the goods are located (or where the premises are the goods themselves).6 1 TCG Regulations, reg 12. 2 TCG Regulations, reg 13. 3 TCG Regulations, reg 13(2)(a) and CPR 84.6. 4 TCG Regulations, reg 13(2)(c). 5 CPR 84.3(2). 6 TCG Regulations, reg 10.

SECURING GOODS TAKEN INTO CONTROL 5.213  Historically, an enforcement officer would have retained control over goods by either leaving a guard on the premises (known as ‘close possession’) or physically removing them to be stored at the parish pound pending auction. This practice was inconvenient and added to the costs of the enforcement process. As a result, close possession and removal of goods are now only rarely used and instead widespread use is made of ‘controlled goods’ agreements under which the goods are left in the possession of the judgment debtor provided the judgment debtor agrees not to dispose of them. Controlled goods agreement 5.214  Under a ‘controlled goods agreement’ an agreement is made which provides that the debtor is permitted custody of the goods, acknowledges that the enforcement agent is taking control of them and agrees not to remove or dispose of them nor permit anyone else to do so before the debt is paid.1 TCEA 2007 expressly provides that entering into a controlled goods agreement is one of the methods by which an enforcement agent may take control of goods.2 Where a controlled goods agreement is in place an enforcement agent may re-enter the premises to inspect the goods or remove them for storage or sale.3 1 2 3

TCEA 2007, Sch 12, para 13(4). TCEA 2007, Sch 12, para 13(1)(d). TCEA 2007, Sch 12, para 16.

Securing goods taken into control  363

Form of controlled goods agreement 5.215  A controlled goods agreement may only be entered into by an enforcement agent with a debtor who is not a child or a person, aged 18 or over, who is authorised by the debtor to enter into a controlled goods agreement on the debtor’s behalf or a person in apparent authority who is on the premises, where those premises are used (whether wholly or partly) to carry on a trade or business.1 The enforcement agent also may not enter into a controlled goods agreement with the debtor or another person who it appears (or ought to appear) to the enforcement agent does not understand the effect of, and would therefore not be capable of entering into, such an agreement.2 1 2

TCG Regulations, reg 14(1)(a)-(c). TCG Regulations, reg 14(2).

5.216  The agreement must be in writing1 and signed by the enforcement agent and debtor or other person who is authorised or acting with apparent authority.2 It must contain the following information: 3 (a) the name and address of the debtor; (b) the reference number or numbers and the date of the agreement; (c) the names of the persons entering into the agreement; (d) a contact telephone number and address at which, and the days on which and the hours between which the enforcement agent or the enforcement agent’s office may be contacted; (e) a list of the goods of which control has been taken with a description to enable the debtor to identify the goods correctly, including, where applicable: (i) the manufacturer, model and serial number of the goods; (ii) in the case of a vehicle, the manufacturer, model, colour and registration mark of the vehicle; and (iii) the material, colour and usage, and (where appropriate) any other identifying characteristic of the goods; and (f) The terms of the arrangement entered into between the enforcement agent and the debtor for the repayment, by the debtor, of the sum outstanding. 1 2 3

TCG Regulations, reg 15(2). TCG Regulations, reg 15(2)(a)-(c). TCG Regulations, reg 15(3).

5.217  The list of goods of which control has been taken does not have to be duplicated in the controlled goods agreement if, at the same time as entering into the controlled goods agreement, the debtor has been provided with a list under TCG Regulations, reg 30(2)(f)(i) (notice after entry and/or taking control of goods, see para 5.201) or reg 33(1)(e) (inventory, see para 5.206) and the goods of which control has been taken are the same.1 1

TCG Regulations, reg 15(7).

5.218  The enforcement agent must give a copy of the agreement to the person who signed it at the time of entering it.1 If a person other than the debtor entered into the agreement the enforcement agent must also provide the debtor with a copy of the

364  Writs of control signed agreement by leaving it at a conspicuous place on the relevant or specified premises where the enforcement agent has taken control of the goods.2 It must be left in a sealed envelope addressed to the debtor if the enforcement agent knows that a person other than the debtor is on the premises or if there are other occupiers.3 Where the enforcement agent has taken control of goods on a highway it must be delivered to any relevant premises in a sealed envelope addressed to the debtor.4 1 2 3 4

TCG Regulations, reg 15(4). TCG Regulations, reg 15(5)(a). TCG Regulations, reg 15(6). TCG Regulations, reg 15(5)(b).

5.219  The schedule to the Certification of Enforcement Agents Regulations 20141 includes a standard form controlled goods agreement. It specifies that the debtor may continue to use the goods but that they are under the control of the enforcement agent until the sum outstanding is paid in full. The debtor agrees not to damage or dispose of the goods or allow anyone else to do so. It also notes that if the agreement is not adhered to the goods may be removed or secured (on a commercial site) or removed and sold. 1 SI 2014/421.

What if the judgment debtor refuses to agree to a controlled goods agreement? 5.220  Where a debtor refuses to sign a controlled goods agreement, the enforcement agent can control goods by the other methods set out in TCEA 2007, Sch 12.1 This might involve visiting the judgment debtor’s premises periodically to check the goods have not been moved2 or by physically removing them.3 1 2 3

TCEA 2007, Sch 12, para 13. TCEA 2007, Sch 12, paras 13(1)(a) and 16. TCEA 2007, Sch 12, para 13(1)(c).

5.221  Where the goods are left with the judgment debtor and inspections are made fees, which are recoverable from the judgment debtor, will arise.1 Such visits are also likely to be an unwelcome disturbance to a judgment debtor and these factors may be persuasive in encouraging the judgment debtor to sign the controlled goods agreement. 1

Under the second enforcement stage (see para 5.296).

Re-entry under controlled goods agreement 5.222  TCEA 2007, Sch 12, para 16 provides that where goods have been taken into the enforcement agent’s control but have not been removed by the enforcement agent the premises may be re-entered by the enforcement agent to inspect the goods or to remove them for storage or sale. 5.223  Powers to use reasonable force to re-enter premises or to do anything for which entry is authorised are available where the enforcement agent has taken control of the goods by entering into a controlled goods agreement with the debtor.1

Securing goods taken into control  365

In circumstances where the debtor has failed to comply with any provision in the controlled goods arrangement relating to the payment by the debtor of the debt reasonable force may be used. However, first the debtor should be given a notice of the intention of the enforcement agent to enter the premises to inspect the goods or to remove them for sale and storage.2 The notice must comply with the requirements set out in TCG Regulations3. This provision does not apply where the enforcement agent already has the right to use reasonable force in accordance with TCEA 2007, Sch 12, para 19 which provides that reasonable force can be used when exercising powers under a writ of control to re-enter under TCEA  2007, Sch  12, para  16 where the enforcement agent reasonably believes that the debtor carries on a trade or business on the premises.4 1 2 3 4

TCEA 2007, Sch 12, para 19A. TCEA 2007, Sch 12, para 19A(1)(d). TCEA 2007, Sch 12, para 19A(2). TCEA 2007, Sch 12, para 19A(1)(e). Note this provision is also stated not to apply if TCEA 2007 Sch  12, para  18 applies. If the judgment creditor’s arguments in Oyston v David Asker, SHCE  Limited [2018]  EWHC  608 (QB) were preferred para  18 would apply in the case of reentry relating to a controlled goods agreement. This would mean that there would be no need for para 19A (and its associated notice provisions). The authors’ position is that the conditions listed in paras 18-19A are not stand alone conditions but every condition in each paragraph is to be met (see paras 5.156–5.158).

5.224  The notice required under TCEA  2007, Sch  12, para  19A must be given not less than two clear days before the re-entry by the enforcement agent.1 Where that period includes a Sunday, bank holiday, Good Friday or Christmas Day that day does not count in calculating the period.2 The court may order a shorter period of notice to be given where it is satisfied that, if the order is not made, it is likely that goods of the debtor will be moved to premises other than relevant premises, or otherwise disposed of, in order to avoid the goods being inspected or removed for storage or sale.3 Such an application is to be made using the CPR Pt 23 procedure4 and may be made without notice.5 Notice of the enforcement agent’s intention to reenter premises must be in writing, be signed by the enforcement agent and contain specified information as set out in the TCG Regulations.6 The TCG Regulations set out how the notice must be given by the enforcement agent.7 1 TCG Regulations, reg 25(1). 2 TCG Regulations, reg 25(2). 3 TCG Regulations, reg 25(3)-(4). 4 CPR 84.3(2) 5 CPR 84.8 6 TCG Regulations, reg 26(a)-(j). 7 TCG Regulations, reg 27. The manner in which notice must be given largely echoes that set out at TCG Regulations, reg 8 (notice of enforcement) set out at para 5.145. However, reg 27 does not contain provision for notice to be given by post.

Breach of the controlled goods agreement 5.225  If the judgment debtor breaches the controlled goods agreement and sells her goods the enforcement officer may be able to follow the goods into the hands of subsequent transferees (see paras 5.124–5.139).

366  Writs of control Physical removal and impounding 5.226  Where the judgment creditor believes that the judgment debtor may act in breach of a controlled goods agreement by removal of the goods, serious consideration should be given to physical removal and storage of the goods by the enforcement agent pending sale. While the enforcement agent may be able to retake the goods of which she is in possession under a controlled goods agreement if they are moved or sold, she would first have to locate them, and this may not be possible, particularly where the goods have been removed from the jurisdiction. High value items which can easily be moved, such as jewellery, paintings and antiques, may be at particular risk. If the enforcement agent does locate goods an attempt to retake possession may lead to litigation. The practical message is that prevention may be simpler than cure. 5.227  However, the costs that will be incurred through removal and storage of the goods should be considered carefully because the enforcement agent is entitled to charge the sums actually paid in this regard.1 Where the amount recovered from the judgment debtor is less than the amount outstanding it will reduce the amount applied to the amount owed to the judgment creditor because such sums can be recovered from the proceeds.2 Further, an enforcement agent may require an indemnity from the creditor for such costs should they not be recovered from the proceeds. 1 2

The Taking Control of Goods (Fees) Regulations 2014, SI 2014/1, reg 8(2)(a). The Taking Control of Goods (Fees) Regulations 2014, SI 2014/1, reg 13.

Abandonment 5.228  A judgment debtor may seek to resist enforcement of a writ of control on the grounds that the enforcement agent has abandoned possession of the goods. TCEA  2007, Sch  12 specifies when controlled goods are regarded as abandoned. Controlled goods (other than securities) are abandoned if the enforcement agent does not give the debtor or any co-owner notice of sale (paras 5.239–5.244) as required within the permitted period.1 Where controlled goods are securities they are abandoned where the enforcement agent does not give the debtor or any co-owner the required notice of disposal within the permitted period.2 Such provisions do not generally apply to money.3 1 2 3

TCEA 2007, Sch 12, paras 52–54. TCEA 2007, Sch 12, paras 55–57. TCEA 2007, Sch 12, para 52(b). Money is used for paying any of the outstanding amount unless the best price is more than its value if used in that way (TCEA 2007, Sch 12, para 37(2)).

5.229  If controlled goods are abandoned then, in relation to the enforcement power concerned, the enforcement power ceases to be exercisable and, as soon as reasonably practicable, the enforcement agent must make the goods available for collection by the debtor, if they have been removed from where they were found.1 Where the goods are immobilised, the enforcement agent must on (but not before) collection by the debtor, remove all immobilisation devices from the goods.2 1 2

TCEA 2007, Sch 12, para 54 (goods other than securities) and para 57 (securities). TCG Regulations, reg 47(2).

Payment by the judgment debtor  367

5.230  In relation to the abandonment of goods, other than securities, TCG Regulations set out the form of written notice and the prescribed information that the notice must contain.1 This includes the fact that the controlled goods are abandoned, the reason why they are abandoned, that the goods are available for collection by the debtor and the procedure for the collection of the goods.2 It also must set out that if the debtor fails to collect the goods within 28 days from when the goods were made available for collection, the enforcement agent will make an application to the court for determination of how the uncollected goods are to be disposed of.3 On such an application the court may order that the goods are to be made available for collection by the debtor during a further period of time (to be determined by the court) or that the goods are to be given to a charitable organisation nominated by the court or destroyed (or that a further period of time is first to be ordered followed by such a donation or destruction in the event of non-collection in that extended period).4 If the enforcement agent applies for an order for disposal by way of donation to a charitable organisation or destruction of goods, the enforcement agent must explain in the application why the enforcement agent does not wish the goods to be made available for a further period of collection.5 Such an application is to be made in accordance with the CPR Pt 23 procedure.6 1 TCG Regulations, reg 47. 2 TCG Regulations, reg 47(3) sets out the list of requirements. 3 TCG Regulations, regs 47(3)(g) and 47(5). 4 TCG Regulations, reg 47(6). 5 CPR 84.12(2). 6 CPR 84.3(2).

PAYMENT BY THE JUDGMENT DEBTOR 5.231  It is open to the judgment debtor to make payment of the amount due under the writ at any time. The various notices provided to the debtor during the course of the taking control of goods procedure set out the sums due and how payment may be made and that the failure to do so goods may be sold. 5.232  As a matter of practice, where the judgment creditor consents, the enforcement officer may also agree to accept payment of the judgment debt by instalments. Whether this should be agreed will depend on the circumstances and what available assets the judgment debtor has to satisfy the writ. Where there are insufficient assets to cover the full amount, it may make sense to accept payments by instalments. Human rights arguments may also weigh in favour of this course (see paras 5.332–5.338).

Effect of payment by a judgment debtor 5.233  Once the judgment debtor has paid the amount outstanding all goods cease to be bound.1 Where the debtor pays the amount outstanding2 in full after the enforcement agent has taken control of goods, and before they are sold or abandoned no further step may be taken under the enforcement power concerned.3 Further, if the

368  Writs of control enforcement agent has removed the goods she must as soon as reasonably practicable make them available for collection by the debtor (see para 5.229).4 Where money has been taken into control and used to reduce the sum payable the return of the money is not applicable.5 1 2

3 4 5

TCEA 2007, Sch 12, para 6. See TCEA 2007, Sch 12, para 50(3) being the amount of the debt which remains unpaid (or is agreed to be paid in full satisfaction of the debt by the judgment creditor) and any amounts recoverable in respect of the enforcement agent’s costs). TCEA 2007, Sch 12, para 58(1) and (3). TCEA 2007, Sch 12, para 58(2). TCEA 2007, Sch 12, para 58(4).

5.234  If further steps are taken in respect of the enforcement powers, despite payment in full, an enforcement agent (or a related party)1 will not be liable unless she had notice when the step was taken that the amount was paid in full.2 A person has notice that the amount outstanding has been paid in full if she would have found it out if she had made reasonable enquiries.3 If the step taken is the sale of any of the goods then the purchaser will acquire good title unless, at the time of sale, she or the enforcement agent had notice that the amount outstanding had been paid in full.4 These statutory provisions do not affect any right of the debtor or a co-owner to a remedy against any person other than the enforcement agent or a related party.5 1 2 3 4 5

A related person is any person who acts in exercise of an enforcement power, other than the creditor or enforcement agent (TCEA 2007, Sch 12, para 51(6)). TCEA 2007, Sch 12, para 59. TCEA 2007, Sch 12, para 59(5). TCEA 2007, Sch 12, para 59(4). TCEA 2007, Sch 12, para 59(6).

SALE 5.235  Once control has been taken of the judgment debtor’s goods they must be sold unless the judgment debtor tenders payment to avoid the sale (or the enforcement is suspended or set aside). The enforcement agent is not entitled to hand over the judgment debtor’s goods to the judgment creditor1 nor to keep them herself and pay off the judgment creditor.2 Proceeds from the exercise of an enforcement power must be used to pay the amount outstanding.3 Proceeds may come from the proceeds of the sale of controlled goods (or the disposal where the controlled goods are securities) or money which may have been taken.4 If the proceeds are more than the amount outstanding, the surplus must be paid to the debtor.5 Co-owners must be paid their share of the proceeds first.6 The normal procedure for the sale of goods is by public auction although, with the permission of the court, goods can also be sold by other means. Following sale, the proceeds must be applied in accordance with TCEA 2007, Sch 12, para 50. However, this payment should only be made after a holding period of 14 days to comply with the provisions of the Insolvency Act 1986 (see paras 5.321 and 5.328). 1 2 3

Thomson v Clerk (1596) Cro Eliz 504. Waller v Weedale (1604) Noy 107. TCEA 2007, Sch 12, para 50(1).

Sale  369 4 5 6

TCEA 2007, Sch 12, para 50(2). TCEA 2007, Sch 12, para 50(5). TCEA 2007, Sch 12, para 50(6).

Second hand value 5.236  One practical point to bear in mind is that the second-hand value of most goods is usually only a small percentage of their original purchase price. The contents of the average family home may be unlikely to yield significant sums and there may be human rights objections where the sums raised by the sale of such items are wholly disproportionate to the judgment debt (see paras 5.332–5.338). This is reflected in the National Standards, which provide that enforcement agents should take all reasonable steps to satisfy themselves that the value of the goods impounded in satisfaction of the judgment is proportional to the value of the debt and fees owed. In a commercial enforcement scenario, the judgment creditor is likely to be looking to locate high value items that will yield significant sums when sold. Best price to be obtained 5.237  Controlled goods must be sold or disposed of for the best price that can reasonably be obtained.1 Prior to sale an enforcement agent must make or obtain a valuation of the controlled goods in accordance with TCG regulations or give the debtor, and separately any co-owner, an opportunity to obtain an independent valuation of the goods.2 Where the enforcement agent undertakes the valuation it must be signed by the enforcement agent and be in writing. It must set out the enforcement agent’s name, the reference number or numbers and the date of the valuation and where appropriate, a separate value for each item of goods of which control has been taken.3 Where the enforcement agent obtains the valuation only a qualified, independent valuer may be instructed. The valuer must be instructed to make a written valuation and, where appropriate, to value each item of goods separately.4 In both situations a copy of the written valuation, once made by the valuer, must be given to the debtor and any co-owner.5 1

2 3 4 5

TCEA 2007, Sch 12, para 37(1). TCEA 2007, Sch 12, para 37(2) provides that this does not apply to money that can be used for paying any of the outstanding amount, unless the best price is more than its value if used in that way. See para 5.20 n 6. TCEA 2007, Sch 12, para 36. TCG Regulations, reg 35(2)(a). TCG Regulations, reg 35(3)(a)-(b). TCG Regulations, reg 35(2)(b) and reg 35(3)(c).

Minimum period before sale 5.238  Unless the debtor and any co-owner agree, before a sale of goods1 can take place, a minimum period of seven clear days is required from the time of the removal of the goods.2 An exception to this is where delaying the sale would result in the goods becoming unsaleable or where their value would be extinguished or

370  Writs of control substantially reduced due to their characteristics. In such circumstances the sale may take place on the day after removing the controlled goods.3 Separate (but similar) provisions exist in relation to the disposal of securities and details can be found at para 5.253. 1 2 3

TCEA 2007, Sch 12, paras 39–42 relating to sale of controlled goods do not apply where the goods are securities or if the sale is by exchange of one currency for another (TCEA 2007, Sch 12, para 38). TCEA 2007, Sch 12, para 39(1) and TCG Regulations, reg 37. TCG Regulations, Reg 37(2).

Notice before sale 5.239  Before the sale of goods, other than securities, the enforcement agent must give notice in writing of the date, time and place of the sale to the debtor and any co-owner. 1 The minimum period of notice of the date, time and place of sale is seven clear days before the sale of the goods.2 An exception is that notice may be given on the day before the sale of the goods where the goods would become unsaleable, or their sale value would be extinguished or substantially reduced due to the nature or any characteristic of those goods if the sale were to take place after the usual notice period.3 1 2 3

TCEA 2007, Sch 12, para 40. TCG Regulations, reg 38. TCG Regulations, reg 38(2).

5.240  The form and content of the notice of sale for goods other than securities is specified in TCG Regulations, reg 39. It must contain the following information:1 (a) the name and address of the debtor; (b) the enforcement agent’s name, the reference number or numbers and the date of the notice; (c) the name and address of the co-owner, if any; (d) that the controlled goods may be sold as the debtor has failed to pay the sum outstanding; (e) a list of the controlled goods that may be sold with a description to enable the debtor or the co-owner to identify the goods correctly, including, where applicable: (i) the manufacturer, model and serial number of the goods; (ii) in the case of a vehicle, the manufacturer, model, colour and registration mark of the vehicle; and (iii) the material, colour and usage and (where appropriate) any other identifying characteristic, of the goods; (f) that the sale of the controlled goods is conditional on: (i) an offer to purchase the goods being made; and (ii) the reserve price, if any, on the controlled goods being met; (g) that if the conditions in paragraph (f) are not met the date, time and place of sale will be set out in a further notice; (h) the amount of the sum outstanding as at the date of the notice; (i) the date and time by which the sum outstanding must be paid to prevent the controlled goods being sold;

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(j) how and between which hours and on which days payment of the sum outstanding may be made; and (k) the procedure for collection by or on behalf of the debtor or co-owner of goods of which control has been taken on payment of the sum outstanding or on part payment of the sum outstanding where an agreement is made between the enforcement agent and the debtor. 1

TCG Regulations, reg 39(1)(a)-(k).

5.241  The notice of sale must be given within the permitted period of 12 months beginning on the day on which the enforcement agent takes control of the goods.1 This period may be extended by agreement by the creditor and the debtor prior to the end of the period and more than one extension can be agreed.2 1 2

TCEA 2007, Sch 12, para 40(4) and para 40(5). TCEA 2007, Sch 12, para 40(6) and para 40(7).

5.242  Where conditions of sale are not met, so a new notice of sale is required, any additional notice must be expressed to be a further notice and the minimum notice period must again be met (para 5.239). The required information as set out in para 5.240 must be complied with.1 1

TCG Regulations, reg 39(2).

5.243  A  new notice of sale may need to replace a notice already given by an enforcement agent. This can only be done where the date, time or location of sale is re-arranged and where the same minimum notice period as the notice it replaced is given.1 The new notice must also set out that it is a new notice which replaces the last notice and state the date of the notice it replaces.2 The required information as set out in para 5.240 must be complied with. 1 2

TCG Regulations, reg 39(3)(a)-(b). TCG Regulations, reg 39(3)(c).

5.244  The method of giving the notice of the date, time and place of sale is the method as provided for under TCG  Regulations, reg  8(1) (notice of enforcement prior to taking control of goods – see para 5.145). For this purpose, references in regulation 8(1) to a debtor include a co-owner. 1 1

TCG Regulations, reg 40.

Sale by public auction 5.245  Sale of the judgment debtor’s goods must be made by public auction unless the court orders otherwise.1 The TCG Regulations provide that the court may order sale by private contract, sealed bids, advertisement or such other method as the court considers appropriate.2 1 2

TCEA 2007, Sch 12, para 41(1) and CPR 84.11. TCG Regulations, reg 41(1)(a)-(d).

372  Writs of control Time for the auction to be held 5.246  An enforcement agent should not delay the sale of goods and the sale should take place within a reasonable time. What is reasonable will depend on the circumstances. TCEA  2007, Sch  12 does not specify how soon a sale must take place following the goods being taken into control. Save for limited exceptions there is now a minimum period before sale can take place and notice of sale will first need to be given (paras 5.238–5.239). One week’s delay has previously been held to be unreasonably long where a sheriff received notice of an act of bankruptcy by the judgment debtor and failed to make inquiries to verify the act of bankruptcy.1 Ensuring a sale in a timely manner will be particularly important where the controlled goods are perishable or will depreciate in value. Importantly, an enforcement agent is under an obligation to sell or dispose of controlled goods for the best price that can reasonably be obtained (para 5.247) and goods will be abandoned if the notice of sale is not given within 12 months, beginning of the day when the enforcement agent took control of the goods (para 5.228) so a long stop date for the sale of goods is in place. Further, TCG Regulations, reg 34(1)(a) requires the enforcement agent to keep goods in her control in a similar condition to that in which they were found immediately prior to taking control of them (para 5.198). In Re Sheriff of Essex, Terell v Fisher,2 it was held that delaying execution so as to enable the judgment debtor to continue his business (even though the sheriff believed that doing so would be beneficial as it would better enable the judgment debtor to raise the money to pay judgment debt) could not be justified. If the judgment creditor wishes to allow the judgment debtor to carry on business then a controlled goods agreement might be used (see paras 5.214–5.225). Where the judgment creditor3 (or the judgment debtor4) can show that she has suffered damage as a consequence of an unreasonable delay in the sale, the enforcement officer may be liable to her in damages. 1 2 3 4

Ayshford v Murray (1870) 23 LT 470. (1862) 10 WR 796. Ayshford v Murray (1870) 23 LT 470. Carlile v Parkins (1822) 3 Stark 163.

Best price to be obtained 5.247  An enforcement agent must sell or dispose of controlled goods for the best price that can reasonably be obtained in accordance with TCEA 2007, Sch 12. Case law prior to the introduction of the taking control of goods regime continues to be instructive in relation to the interpretation of this provision. It would appear that the enforcement agent must not conduct the sale so as to prevent the goods fetching such a price as might otherwise be obtained nor will it be acceptable to sell them to the highest bidder if the price is very much below their value.1 Further, if an adequate price cannot be obtained it is suggested the sale should be adjourned.2 1

Keightley v Birch (1814) 3 Camp 521, where the Court found that the sheriff should have waited for ‘a venditioni exponas’, the meaning of which is ‘sell for the best price you can obtain’. This wording has substantially been incorporated into TCEA 2007, Sch 12, para 37. 2 See Edge v Kavanagh (1888) 24 LRI (Ireland) where a sale was set aside on the grounds that the sheriff had not taken reasonable and proper care to advertise the sale and the farm was therefore sold at an undervalue (£5 rather than £600 valuation). As supported by TCG Regulations, reg 39(f) and (g).

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Location of auction 5.248  TCEA  2007, Sch  12, para  43 and TCG  Regulations, reg  42 set out the manner and place of sale. TCG  Regulations, reg  42 provide that a public auction may only be held at a public auction house or an online or internet auction site.1 An enforcement agent cannot generally sell the goods on the judgment debtor’s premises without the debtor’s consent.2 However, there is an important exception for commercial enforcement as a sale may be held on the premises where the goods were found by the enforcement agent if those premises are occupied solely for the purposes of a trade or business.3 Where controlled goods are sold by public auction, the auction must be conducted by a qualified auctioneer or, where the auction takes place online or on an internet auction site, the auction provider must be independent of the enforcement agent.4 1 2 3 4

TCG Regulations, reg 42(1). TCEA 2007, Sch 12, para 43(3). TCG Regulations, reg 42(2). TCG Regulations, reg 43.

Proportionality 5.249  The National Standards1 require enforcement agents to take all reasonable steps to satisfy themselves that the value of goods taken into their control to cover the sum outstanding is proportional to the value of the debt and fees owed. A failure to do so may also be in breach of a judgment debtor’s human rights (see paras 5.332– 5.338). 1

Taking Control of Goods: National Standards – April 2014, para 66.

Sale other than by way of public auction 5.250  Sale other than by public auction requires the permission of the court.1 Only the enforcement agent may apply to the court for a sale to take place other than by public auction.2 The application must be made in accordance with the procedure in CPR Pt 23.3 1 TCEA 2007, Sch 12, para 41(1). 2 TCEA 2007, Sch 12, para 41(2). 3 CPR 84.3(2).

Notice of other execution creditors 5.251  In an application for an order for a sale other than public auction the enforcement agent must state whether she has reason to believe that an enforcement power has become exercisable by another creditor against the debtor or a co-owner.1 Where such a belief is held an application for sale other than by way of public auction must list the name and address of such creditors and an explanation of why the enforcement agent has such a belief.2 If an enforcement agent has such a belief the court will not consider an application for permission to sell other than by public auction until notice of that application has been given to the other execution creditor

374  Writs of control or creditors.3  A  copy of the notice of application and proof that notice has been served on such other creditors not less than 4 days before the day of the hearing is required.4 An execution creditor given notice in this way has a right to be heard on the application for a private sale.5 1 TCEA 2007, Sch 12, para 41(4). 2 CPR 84.11(2)(a). 3 TCEA  2007, Sch  12, para  41(5) (or until the court is satisfied that an enforcement power is not exercisable by the other creditor against the debtor or a co-owner). 4 CPR 84.11(2)(b). 5 CPR 84.11(3).

Sale other than by way of public auction made without leave of the court 5.252 In Crawshaw v Harrison1 a sale of the judgment debtor’s goods took place by private contract with the judgment debtor’s consent but without the leave of the court. This was held valid against a subsequent execution creditor unless set aside by the court. In the words of Wright J: 2 ‘The section [s 145 of the Bankruptcy Act 1883] does not say that … the sale shall be ipso facto void. The sale, it is true, is irregular, and might upon a proper application by any person who is injured by the irregularity be set aside, while it may be that such person would also have an action against the sheriff for his breach of duty. But no steps have been taken in the present case to set the sale aside. The goods, therefore, are not the goods of the debtor, and the plaintiff is not entitled to succeed.’ 1 In Crawshaw v Harrison [1894] 1 QB 79 the Court was considering the Bankruptcy Act 1883, s 145 (now repealed), which provided: ‘Where the sheriff sells the goods of a debtor under an execution for a sum exceeding twenty pounds (including legal incidental expenses), the sale shall, unless the Court from which the process issued otherwise orders, be made by public auction, and not by bill of sale or private contract, and shall be publicly advertised by the sheriff on and during three days next preceding the day of sale’. This provision is similar to the requirements in TCEA 2007, Sch 12, para 41(1)-(2) that ‘The sale must be by way of public auction unless the court orders otherwise’. 2 [1894] 1 QB 79 at 82.

Disposal of securities 5.253  TCEA 2007, Sch 12, paras 47–49 and TCG Regulations, reg 46 deal with the disposal of securities. The enforcement agent may hold such securities until they mature.1 The enforcement agent may hold and dispose of securities by realising the sums secured or made payable by them, suing for the recovery of those sums or assigning the right to sue for their recovery.2 The creditor may sue in the name of the debtor, or in the name of any person in whose name the debtor might have sued, for the recovery of any sum secured or made payable by securities, when the time of payment arrives.3 Before these proceedings are commenced or the securities are otherwise disposed of, the enforcement agent must give notice of the disposal to the debtor and any co-owner.4 The minimum period of notice required is seven clear days.5 The notice must be in writing and signed by the enforcement agent.6 The TCG Regulations set out the required content of the notice7 and the method of giving notice.8 The notice must be given within the permitted period9 and unless

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extended, in writing between the creditor and the debtor before the end of the period, the permitted period is 12 months beginning with the time of payment.10   1   2   3   4   5   6   7   8   9 10

TCEA 2007, Sch 12, paras 47–49 and TCG Regulations, reg 45(1). TCEA 2007, Sch 12, para 48. TCEA 2007, Sch 12, para 49(1). TCEA 2007, Sch 12, para 49(2). TCG Regulations, reg 46(1). TCG Regulations, reg 46(2). TCG Regulations, reg 46(2)-(5). TCG Regulations, reg 46(6). TCEA 2007, Sch 12, para 49(5). TCEA 2007, Sch 12, para 49(6)-(8).

Protection of enforcement agents, related parties and purchasers 5.254  TCEA  2007, Sch  12, para  63 provides a measure of statutory protection to an enforcement agent or related party 1 who sells goods she has taken control of. Liability is excluded to a lawful claimant save for where: (a) at the time of the sale the enforcement agent had notice that the goods were not the debtor’s, or not hers alone; or (b) where before sale the lawful claimant had made an application to the court claiming an interest in the goods. A lawful claimant in relation to TCEA 2007, Sch 12 para 63 is a person who has an interest in them at the time of sale, other than an interest that was assigned or transferred to her while the property in the goods was bound for the purposes of the enforcement power.2 1 2

TCEA 2007, Sch 12, para 51(6) provides that ‘A related party is any person who acts in exercise of an enforcement power, other than the creditor or enforcement agent.’ TCEA 2007, Sch 12, para 63(4).

5.255  Pursuant to TCEA  2007, Sch  12, para  64 any liability of an enforcement agent or related party1 to a lawful claimant for paying over proceeds is also excluded save for where: (a) at the time of the payment she had notice that the goods were not the debtor’s, or not hers alone; or (b) where before that time the lawful claimant had made an application to the court claiming an interest in the goods. A  lawful claimant in these circumstances is a person who has an interest in the goods at the time of sale.2 1 2

TCEA 2007, Sch 12, para 51(6) provides that ‘A related party is any person who acts in exercise of an enforcement power, other than the creditor or enforcement agent.’ TCEA 2007, Sch 12, para 64(4).

5.256  The enforcement agent or a related party1 has notice of something if she would have found it out if she had made reasonable enquiries.2 These restrictions on liability do not affect the liability of a person other than the enforcement agent or a related party and do not apply to the creditor if she is the enforcement agent.3 1 2 3

TCEA 2007, Sch 12, para 51(6) provides that ‘A related party is any person who acts in exercise of an enforcement power, other than the creditor or enforcement agent.’ TCEA 2007, Sch 12, para 65(3). TCEA 2007, Sch 12, para 65(1).

376  Writs of control History of the provision 5.257 In Singh v Kenyan Insurance Ltd1 the Privy Council were asked to consider Kenyan legislation which derived from the Bankruptcy and Deeds of Arrangement Act 1913, s 15. The wording of the 1913 Act was similar in material aspects to those in TCEA 2007 as set out above. Lord Reid, giving the advice of the Privy Council, explained the history of the Bankruptcy and Deeds of Arrangement Act 1913, s 15 and the apparent mischief which it was passed to remedy: ‘In construing section 45(3) it is proper to bear in mind the position before the passing of section 15 of the English Act of 1913, from which it is copied. A  bailiff or other officer was only entitled to seize and sell goods which belonged to the execution-debtor, but it was often difficult for him to ascertain the ownership of goods in the possession of the debtor and he might without negligence sometimes seize and sell goods which did not in fact belong to the debtor. He gave no warranty of title of the goods which he sold. A purchaser could seldom know or ascertain to whom the goods belonged but he had to take the risk of the true owner appearing and recovering the goods from him while he could not recover the price which he had paid for them. This was made clear in Crane & Sons v Ormerod. And the liability of the bailiff or other officer when he made a mistake was made clear in Jelks v Hayward. Section 15 of the 1913 Act must have been enacted to deal with that position … .’ 1 [1954] AC 287, PC.

Goods sold not the property of judgment debtor 5.258  As Lord Reid explained, as a practical matter an enforcement agent will often genuinely not know that goods found in the possession of a judgment debtor may belong to another. A purchaser at an auction is in no better position. 5.259  A purchaser of controlled goods sold by the enforcement agent will generally acquire good title.1 Exceptions will, however, apply if the goods are not the debtor’s at the time of sale, and: (a) where the purchaser, the creditor, the enforcement agent or a related party2 has notice that the goods are not the debtor’s; or (b) a lawful claimant has already made an application to the court claiming an interest in the goods. A lawful claimant in such circumstances, in relation to goods, is a person who has an interest in them at the time of sale, other than an interest that was assigned or transferred to her while the property in the goods was bound for the purposes of the enforcement power.3 1 2 3

TCEA 2007, Sch 12, para 51(1). TCEA 2007, Sch 12, para 51(6) provides that ‘A related party is any person who acts in exercise of an enforcement power, other than the creditor or enforcement agent.’ TCEA 2007, Sch 12, para 51(2)-(7).

5.260  Two principal consequences follow from the modern statutory provisions where an enforcement agent sells goods found in a judgment debtor’s possession in respect of which no claims are made by any other person. The first is that the purchaser acquires good title to the goods sold to her.1 The second is that no claim

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can be made against the enforcement agent (or anyone acting under her authority) for any sale of the goods or for paying over the proceeds prior to the receipt of a claim to the goods unless it can be shown that the enforcement agent had notice or would have had notice had she made reasonable enquiries.2 1 2

TCEA 2007, Sch 12, para 51. TCEA 2007, Sch 12, paras 63–65.

Claim by true owner against judgment debtor 5.261  So far only claims by the true owner of the goods against the enforcement agent and purchaser have been considered. The true owner of the goods may also have claims against the judgment debtor (for allowing the goods to be sold) and the judgment creditor (for receiving the proceeds of sale). Indeed, in Curtis v Maloney1 Denning LJ held that the equivalent provision in the Bankruptcy and Deeds of Arrangement Act 1913, to what is now TCEA 2007, Sch 12, para 65: ‘is to be explained by the anxiety of the draftsman not to deprive the original owner of his remedy against any wrongdoer who had converted the goods before the sale. If it were not for the proviso, the execution creditor might have argued that the original owner’s claim for money had and received was not preserved.’ 1

[1954] AC 287 at 299, PC.

5.262  If a judgment debtor does not inform the enforcement agent that goods she has taken control of belong to another and the goods are subsequently sold pursuant to the writ, she may be liable to the true owner in conversion since in failing to inform the enforcement agent as to the goods’ true ownership she will have dealt with them in a manner inconsistent with their true ownership. However, a right to damages for conversion against a judgment debtor who has just had her goods taken and sold under a writ of control is unlikely to prove an attractive method of seeking to recover any loss. Claim by the true owner against the judgment creditor 5.263  What is likely to be of more value is a claim by the true owner against the judgment creditor in respect of the proceeds of sale for monies had and received. In Jones v Woodhouse1 the plaintiff had let furniture under a hire purchase agreement to the tenant judgment debtor. The furniture belonging to the plaintiff was seized along with other goods belonging to the judgment debtor. All of the furniture and goods were sold at public auction and the proceeds of sale were paid to the defendant, who was the judgment creditor. Even though the plaintiff was informed of the seizure by the judgment debtor some days before the sale, and did nothing about it until after the furniture had been sold, the plaintiff succeeded in an action for money had and received against the defendant judgment creditor.2 However, since only about half the proceeds of sale emanated from the plaintiff’s furniture, the plaintiff’s claim was limited to that amount. 1 2

[1923] 2 KB 117. McCardie J at [1923] 2 KB 117 at 126 considered that the Bankruptcy and Deeds of Arrangement Act 1913, s  15 (a provision similar to that contained in TCEA  2007, Sch  12, para  65(1)) only protected the sheriff and purchaser but not the judgment creditor.

378  Writs of control Insolvency 5.264  The protections set out in TCEA 2007, Sch 12 are expressed to be subject to Insolvency Act 1986, ss 183, 184 and 346. These provisions are concerned with the circumstances in which execution is effective against a bankrupt and a company in liquidation and are considered at paras 5.318–5.330.

CLAIMS TO CONTROLLED GOODS 5.265  After an enforcement agent has taken control of the judgment debtor’s goods, a third party may claim that those goods belong to them rather than the judgment debtor. Claims vary from those by a spouse or a member of the judgment debtor’s family, to claims by a rival creditor of the judgment debtor that the controlled goods are subject to a hire purchase agreement. 5.266  A  procedure set out in TCEA  2007, Sch  12, para  60 and CPR  851 provides a mechanism to deal with these types of disputes. They provide both a mechanism for the resolution of disputes as to the ownership of goods which have been taken subject to the taking control of goods procedure and a means whereby the enforcement agent can obtain a degree of protection from claims for taking possession of the goods. 1

This procedure has replaced the previous mechanism (known as an interpleader previously found in RSC Ord 17). ‘Interpleader claim’ and ‘interpleader claimant’ are now called a ‘claim to controlled goods’ and ‘claimant to controlled goods’ under TCEA 2007.

Receipt of an adverse claim 5.267  The rules actively encourage the parties to agree matters informally between themselves. The enforcement agent essentially acts as a messenger between the creditor and the third party claiming the right to the controlled goods. 5.268  Any person making a claim that goods which have been taken control of are hers and not the debtor’s must give notice to the enforcement agent. The notice must be given as soon as practicable but in any event within seven days of the goods being removed under the exercise of an enforcement power.1 The notice given must include her full name and address and confirm that it is her address for service. She must also list all of the goods in respect of which the claim is made and the grounds of her claim in respect of each item.2 1 CPR 85.4. 2 CPR 85.4(1). Form N358 should be used.

5.269  If a notice of a claim to controlled goods is received, the enforcement agent must, within three days, give notice of the claim to the judgment creditor and any other person making a claim to the controlled goods under CPR 85.4(1).1 1 CPR 85.4(2).

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5.270  The judgment creditor or other claimant to controlled goods then must, within seven days after receiving the notice1 inform the enforcement agent in writing whether she disputes or admits the claim in whole or in part. The enforcement agent must then notify the claimant to the controlled goods in writing, within three days of receiving that notice, whether the claim to controlled goods is admitted or disputed in whole or in part.2 1 CPR 85.4(3). 2 CPR 85.4(4).

5.271  If the judgment creditor admits the claim she will only be liable for the enforcement agent’s fees and expenses incurred prior to receipt of that notice.1 Where the enforcement agent receives a notice that a claim is admitted, the enforcement power ceases to be exercisable in respect of such controlled goods and, as soon as reasonably practicable, the enforcement agent must make the goods available for collection by the claimant to controlled goods if they have been removed from where they were found.2 1 CPR 85.4(5). 2 CPR 85.4(6).

5.272  If the creditor, or any other claimant to controlled goods fails to respond to a notification of a claim to controlled goods within the required period then the enforcement agent may seek the directions of the court and an order preventing the bringing of any claim against her for, or in respect of, her having taken control of any of the goods or having failed so to.1 1 CPR 85.4(7).

5.273  CPR  85.5 sets out the procedure if a creditor or any other claimant to controlled goods to whom a notice of claim to controlled goods was given, gives notice that the claim to controlled goods, or any part of it, is disputed. In such circumstances, where a creditor or any other claimant to controlled goods wishes to maintain their claim to the controlled goods an application must be made. TCEA 2007, Sch 12, para 60(1) enables an application to be made specifically by the person who claims that the goods taken control of are hers and not the debtors. The application must follow the CPR  Pt  23 procedure.1 The application must be supported by a witness statement which specifies any money, describes any goods claimed and the grounds on which the claim to the controlled goods is based together with any supporting documentation.2 The application should be made to the court which issued the writ of control conferring the power to take control of the controlled goods (or, if the power was conferred under an enactment, to the debtor’s home court).3 Where the claim is proceeding in the High Court the application notice and witness statement(s) and exhibits should be served on the creditor, any other claimant to controlled goods which the claimant to controlled goods is aware and the enforcement agent.4 1 CPR 85.3. 2 CPR 85.5(2). 3 CPR 85.5(5). 4 CPR 85.5(3).

380  Writs of control 5.274  Importantly where a creditor disputes a claimant’s claim to controlled goods there is a requirement for that claimant to make certain payments into court when lodging its application. TCEA  2007, Sch  12, para  60(4)(a) requires an amount to be lodged which is equal to that of the value of the goods. As an alternative, the claimant to controlled goods must, immediately upon issuing its application seek a direction from the court that the required payment be a proportion of the value of the goods.1 Such an application should be made on notice to the enforcement agent and the creditor.2 Other amounts may also be required, at prescribed times, in respect of the costs of retaining the goods.3 Where a payment of the value of the goods is made by the claimant to the controlled goods but it is disputed by the enforcement agent any underpayment will be determined by reference to a qualified independent valuer and any underpayment is to be paid within 14 clear days of the valuation being provided to the claimant to the controlled goods.4 The court may direct the enforcement agent to sell or dispose of the goods if the applicant fails to make, or to continue to make, the required payments into court 5 Even where payment is made the court may still direct the enforcement agent to sell or dispose of the goods before the court determines the claimant’s claim to the controlled goods, if it considers it appropriate.6 The proceeds of sale or disposal will then be paid into court.7 If, during the validity of a relevant writ, a person makes an application under CPR  Pt  85 in relation to goods taken into control under that writ, the validity of the writ will be extended until the expiry of 12 months from the conclusion of the proceedings under CPR Pt 85.8 1 TCEA 2007, Sch 12, para 60(4)(a) and CPR 85.5(6). 2 CPR 85.5(6). 3 TCEA 2007, Sch 12, para 60(4)(b). 4 TCEA 2007, Sch 12, para 60(5) and TCG Regulations, reg 49. 5 TCEA 2007, Sch 12, para 60(3). 6 TCEA 2007, Sch 12, para 60(6). 7 TCEA 2007, Sch 12, para 60(7). 8 CPR 83.4(7).

5.275  The application notice will be referred to a master or district judge.1 On receipt of an application for a claim to controlled goods, the master or district judge may2: (a) give directions for further evidence from any party; (b) list a hearing to give directions; (c) list a hearing of the application; (d) determine the amount of the required payments, make directions or list a hearing to determine any issue relating to the amount of the required payments or the value of the controlled goods; (e) stay, or dismiss, the application if the required payments have not been made; (f) make directions for the retention, sale or disposal of the controlled goods; (g) give directions for determination of any issue raised by a claim to controlled goods. 1 CPR 85.5(7). 2 CPR 85.5(8).

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The practical perspective 5.276  Dealing with third party challenges can be a costly form of satellite litigation. While it is important that the judgment creditor is prepared to dispute dubious claims and maintain a healthy cynicism with regards to unidentified parties claiming to own goods, the judgment creditor and her advisers should also take a realistic approach about which of those claims to admit. For example, there is little to be achieved by disputing a bank or financial institution’s claim that goods are subject to hire purchase where evidence of the agreement has been provided. 5.277  TCEA 2007, Sch 12, para 60(1) enables applications to be made specifically by the person who claims that the goods taken control of are hers and not the debtors. It does not refer to applications being made by an enforcement agent. While an enforcement agent can seek directions under CPR  85.4(7) this does not cover the situation where a claimant to controlled goods gives notice of their claim and the creditor disputes it but then the claimant to the controlled goods fails to make the required application to the court under CPR  85.5. An added complication is that there is no time limit imposed in which such an application must be made. It has been recognised that there is therefore a lacuna in the procedure. In such a situation guidance can be found in Celador Radio Ltd v Rancho Steak House Ltd and Riaz v Designer Collection Ltd.1 In these two sets of enforcement proceedings, despite the claimants to the controlled goods being advised that ownership was disputed, and that an application would have to be made under CPR 85.5, no such application was made. 1

[2018] EWHC 219 (QB).

5.278  Master McCloud noted a practice which had developed whereby the creditor’s solicitors would give the claimant to the controlled goods seven days’ notice to make their application under CPR 85.5 stating that if this was not done the enforcement agent would make the application (albeit that the rules do not provide for this). It was observed that the solicitors involved in this case (who may or may not have been typical of the general practice around the country) would then generally ask the judge to make an order allowing 21 days for the third party to issue their application and that thereafter the claimants to the controlled goods be debarred from making such an application or from bringing a claim against the enforcement officer (or her associated parties). It was observed that there was a clear need for enforcement agents to be able to access the court but this approach was dubious jurisdictionally. The Master took a different approach and after considerable analysis it was held that the answer was based in the process of equitable interpleader. The introduction of CPR 85 and revocation of RSC Ord 17 had not abolished the ability of a court of merged equitable and legal jurisdiction to render equitable relief where the black letter law offered none. Equity could still assist absent express statutory abolition of interpleader in equity. Thus, an unless order was made requiring the claimants to the controlled goods to file evidence within 14 days. Failure to do so would result in the claimants to the controlled goods being debarred from relying on evidence of title to contradict

382  Writs of control that put forward by the enforcement officer and title would be declared in default. If not debarred the enforcement officer was to seek directions. Master McCloud also observed that the court could often determine the sum to be paid into court when making such an order. It was observed that enforcement officers might adopt the approach of making an application, supported by evidence setting out the basis for seizure, and evidence from the creditor of the basis for the belief that the ostensible title to the goods is that of the judgment debtor and seeking an unless order in the form broadly as above, leading to a declaration in the event of default.

Jointly owned controlled goods 5.279  Note that if controlled goods are jointly owned between the judgment debtor and a third party the enforcement agent remains entitled to take control of the goods. Co-owners are defined by TCEA 2007 as a person other than the debtor where the enforcement agent knows the person has an interest in the particular goods or would know if she made reasonable enquires.1  A  co-owner must be provided with the required inventory2 (see para  5.206) and the valuation of the controlled goods (para 5.237).3 The co-owner must also be given an opportunity to obtain an independent valuation of the goods.4 A co-owner’s agreement is required to a sale prior to the end of the minimum period5 (para  5.238) and a co-owner must also be given notice of the sale6 (paras 5.239–5.244). Prior to commencing proceedings to recover sums secured or payable by securities or the disposal of securities notice must also be given to any co-owner7 (para  5.253). Where there is a co-owner the proceeds of sale or disposal of goods must first be applied to pay the co-owner her share of the proceeds of those goods proportionate to her interest.8 If there is a dispute about the sum to be paid to a co-owner then the coowner, the enforcement agent or the creditor may make an application9 to the court using the CPR Pt 23 procedure.10 CPR 84.15 sets out the requirements where such an application is made. The court may then determine the amount to be paid to the co-owner.   1   2   3   4   5   6   7   8

TCEA 2007, Sch 12, para 3(1). TCEA 2007, Sch 12, para 34. TCG Regulations, reg 35(2)(b). TCEA 2007, Sch 12, para 36(1)(b). TCEA 2007, Sch 12, para 39. TCEA 2007, Sch 12, para 40. TCEA 2007, Sch 12, para 49(2). TCEA 2007, Sch 12, para 50(6). Note however, that where an interest of the judgment debtor’s goods has been assigned or transferred while the property in the goods is bound for the purposes of an enforcement power, and where the enforcement agent knows, or would know if she made reasonable enquiries, the process that is to be followed and the application of the proceeds of sale is set out in TCEA  2007, Sch  12, para  61. Where the transferee or assignee is a good faith purchaser without notice the proceeds of sale or disposal will be distributed to them first (proportionate to their interest). However, where the assignee or transferee is not equity’s darling they will only be paid any surplus to the amount that is outstanding (proportionate to their interest).   9 TCEA 2007, Sch 12, para 50(7) and the Fees Regulations, reg 15. 10 CPR 84.3(2).

Claims to controlled goods  383

Claims to exempt goods 5.280 CPR Pt 851 also sets out the procedure whereby a judgment debtor can make a claim in respect of exempt goods such as tools of the trade or household necessities2 (see paras 5.26–5.37 for full details). 1 2

CPR 85.8 and 85.9. TCG Regulations, regs 4–5.

5.281  A  judgment debtor making a claim to exempt goods must, as soon as practicable and in any event within seven days of the removal of the goods, give notice in writing of the claim to exempt goods to the enforcement agent who has taken control of the goods or relevant enforcement officer.1 The notice must include: (a) her full name and address and that address is her address for service; (b) a list of all those goods in respect of which she makes such a claim; and (c) the grounds of the claim in respect of each item.2 Upon receiving such a notice the enforcement agent or relevant officer must, within three days, give notice of such a claim to the creditor and any other claimant to the goods subject to enforcement (as described in paras 5.268–5.279).3 Within seven days after receipt of that notice the creditor and any other claimant to the goods subject to enforcement must give notice if they admit or dispute the claim to the exempt goods in whole or in part.4 The enforcement agent or officer must then advise the debtor of this response within three days of receiving that notice.5 1 CPR 85.8(1). 2 CPR 85.8(1)(a)-(c). 3 CPR 85.8(2). 4 CPR 85.8(3). 5 CPR 85.8(4).

5.282  If the claim to exemption is admitted the enforcement power ceases to be exercisable and the right to execute ceases to have effect in respect of such exempt goods.1 As soon as reasonably practicable the enforcement agent or relevant enforcement officer must make the goods available for collection by the debtor if they were removed from where they were found.2 A creditor who gives notice admitting a claim to executed goods will not be liable to the enforcement agent or officer for any fees and expenses incurred by the enforcement agent or officer after receipt of that notice by the enforcement agent or officer.3 1 CPR 85.8(6)(a). 2 CPR 85.8(6)(b). 3 CPR 85.8(5).

5.283  Where any of the parties notified of the notice of claim to executed goods does not give the necessary notice within the required period the enforcement agent can seek the directions of the court by way of an application and can also seek an order preventing the bringing of any claim against her for, or in respect of, having taken control of the goods or having failed to do so.1 1 CPR 85.8(7).

384  Writs of control 5.284  Where the enforcement agent or officer has notified the debtor that the claim to exemption is disputed the debtor must, within seven days of receiving the notice,1 make an application in accordance with the procedure in CPR Pt 23.2 The application must be supported by a witness statement specifying any money and describing any goods claimed. It must set out the grounds upon which the claim to the executed goods is based together with copies of any documentation to support the claim.3 The application and supporting witness statement must be served on the creditor, any other claimant to the executed goods of whom the claimant to the executed goods is aware and the relevant enforcement agent or officer.4 The application will be heard by a master or district judge of a District Registry.5 Such an application must be made to the court that issued the writ of control.6 If, during the validity of a relevant writ, a person makes an application under CPR Pt 85 in relation to goods taken into control under that writ, the validity of the writ will be extended until the expiry of 12 months from the conclusion of the proceedings under CPR Pt 85.7 1 CPR 85.9(2). 2 CPR 85.3. 3 CPR 85.9(2). 4 CPR 85.9(3). 5 CPR 85.9(6). 6 CPR 85.9(5). 7 CPR 83.4(7).

5.285  At the hearing of the application, the court may give directions for further evidence from any party, list a hearing to give directions, list a hearing of the application, make directions for the retention, sale or disposal of the executed goods or give directions for determination of any issue raised by a claim to executed goods.1 1 CPR 85.7.

Powers of the court 5.286  The court has a number of powers to help it resolve applications made under CPR  Pt  85 which are set out at CPR  85.10. In practice, how the court will approach the matter will depend entirely on the nature of the claim. If the claim is clearly spurious the court is likely to deal with it summarily. However, where the claim involves significant factual inquiry, the court is likely to require disclosure and witness statements. Summary disposal 5.287  Where appropriate the court may summarily determine an application.1 1 CPR 85.10(1).

Barring orders 5.288  Where the person making the claim to the goods subject to enforcement or a debtor making a claim to exempt goods fails to attend any hearing, or does appear but fails or refuses to comply with an order made in the proceedings, the

Enforcement agents’ fees  385

court can forever bar her and her successors in title from claiming the goods. If there are several claimants to the goods, the barring order does not affect the rights of the claimants between themselves.1 1 CPR 85.10(2).

Power to sell goods 5.289  Where a claimant to goods subject to enforcement alleges that the goods are held by way of security for a debt the court has the power to order the sale of goods and direct how the proceeds should be dealt with.1 This is particularly useful for any controlled goods which are subject to a charge. 1 CPR 85.10(3).

Disclosure, trials and costs 5.290  The court can order a trial of an application under Pt  85.1 In addition, the court can make any orders it thinks just in connection with such proceedings, including orders for disclosure and further information2 and costs.3 Where the claimant to goods subject to enforcement, or a debtor making a claim to exempt goods, fails to attend the hearing, the court can direct that the costs of the judgment creditor and enforcement agent or officer are assessed by a master, district judge, costs judge or costs officer.4 1 CPR 85.11. 2 CPR 85.10(4). 3 CPR 85.12. 4 CPR 85.12(2).

ENFORCEMENT AGENTS’ FEES 5.291  An enforcement agent is a private sector agent who is remunerated by charging fees. Fees charged are mixture of fixed rate fees based on stages of the taking of goods procedure and additional fees based on a percentage of the sum which is to be recovered. 5.292  In executing the writ, the enforcement agent must take control of sufficient goods to satisfy the amount of the judgment debt, any interest payable, and the enforcement agent’s fees and expenses. Form 53, which contains the standard form writ of control, states that an enforcement officer should take control of goods to raise the sums detailed on the schedule being the judgment debt and its associated costs and interest ‘together with fees and charges to which you are entitled’.

Calculation of fees 5.293  TCEA 2007, Sch 12, para 62, provides for regulations to be made covering what costs may be recovered, how they may be recovered, and how any disputes

386  Writs of control arising from costs may be resolved. The scale of fees payable to an enforcement agent and recoverable from a debtor for taking control of goods under a writ of control is accordingly set out in the Taking Control of Goods (Fees) Regulations 2014 (The Fees Regulations) which came into force on 6 April 2014.1 The Fees Regulations have separate fees depending on whether the goods are taken pursuant to a High Court writ or another enforcement power (such as the CRAR procedure or a warrant of control issued by the County Court).2 Where the process relates to a writ of control the enforcement process is split into four stages and fees are specified in relation to each stage.3 1 SI 2014/1. 2 The Fees Regulations, reg 2(2). 3 The Fees Regulations, reg 6.

5.294  The first stage is the ‘compliance stage’. This stage consists of all activities relating to enforcement from the receipt by the enforcement agent of instructions to use that procedure in relation to a sum to be recovered up to, but not including, the commencement of the first enforcement stage, or, where it applies, the commencement of the second enforcement stage.1 The key activity the enforcement agent will carry out at this stage will be sending the notice of enforcement to the judgment debtor. The fee for the compliance stage is fixed at £75.2 The enforcement process will end here if payment is made in full. 1 2

The Fees Regulations, reg 6(1)(a). The Fees Regulations, Sch 1, Table 2.

5.295  If payment is not made in full at the compliance stage then recovery will move into the ‘first enforcement stage’. This stage gives the debtor the opportunity to make payment or enter into a controlled goods agreement. It relates to all enforcement activities from the first attendance at the premises until the controlled goods agreement is completed or breached.1 The fee payable in respect of this stage is a fixed fee of £190 with an additional fee of 7.5% based on the sum which is to be recovered exceeding £1000.2 Where the enforcement agent and the debtor enter into a controlled goods agreement, at this stage, which the debtor does not breach, only the first enforcement stage fee may be recovered from the debtor.3 1 2 3

The Fees Regulations, reg 6(1)(b). The Fees Regulations, Sch 1, Table 2. The Fees Regulations, reg 4(5)(a).

5.296  Where a debtor does not make payment and does not enter into a controlled goods agreement then the recovery may move into ‘the second enforcement stage’. Where no controlled goods agreement has been entered into, the second enforcement stage applies to all activities relating to enforcement from the first attendance at the premises in relation to the instructions up to, but not including, the commencement of the sale or disposal stage.1 If a controlled goods agreement was entered into but is breached then fees under the second enforcement stage will cover all activities relating to enforcement from the time at which the debtor breaches the agreement up to, but not including, the commencement of the sale or disposal stage.2 The fee payable in respect of this stage is a fixed fee of £495.3

Enforcement agents’ fees  387

Where there has been a breach of a controlled goods agreement or a controlled goods agreement is not entered into, the regulations provide that both the first and second enforcement stage fees may be recovered from the debtor.4 The first enforcement stage fee is recoverable even if the debtor does not enter into a controlled goods agreement notwithstanding that the first enforcement stage did not apply. 5 1 2 3 4 5

The Fees Regulations, reg 6(1)(c)(i). The Fees Regulations, reg 6(1)(c)(ii). The Fees Regulations, Sch 1, Table 2. The Fees Regulations, reg 4(5)(b). If a controlled goods agreement is breached then the matter may proceed directly from enforcement stage 1 to the sale and disposal stage depending on the facts. The Fees Regulations, reg 4(5)(b).

5.297  If goods need to be removed the matter will progress to the sale and disposal stage. This stage comprises of all activities relating to enforcement from the first attendance at the property for the purpose of transporting goods to the place of sale, or from commencing preparation for sale if the sale is to be held on the premises, until the completion of the sale or disposal.1 It also includes any application of the proceeds and provision of the information as may be required by The Fees Regulations, reg 14. The fee payable in respect of this stage is a fixed fee of £525 with an additional fee of 7.5% based on the sum which is to be recovered exceeding £1,000.2 Where the goods against which enforcement is sought are securities, the sale or disposal stage commences with the provision of a notice of disposal in accordance with TCEA 2007, Sch 12, para 49(2).3 1 2 3

The Fees Regulations, reg 6(1)(d). The Fees Regulations, Sch 1, Table 2. The Fees Regulations, reg 6(2).

5.298  The recoverable fees are summarised in the table below: Fee stage

Fixed fee

Compliance stage First enforcement stage Second enforcement stage Sale and disposal stage

£75 £190 £495 £525

Percentage fee (percentage of sum to be recovered exceeding £1,000) 0% 7.5% 0% 7.5%

5.299  The enforcement agent may recover the whole fee provided in the Fee Regulations, Sch  1, for a stage where the amount outstanding is paid after the commencement, but before the completion, of that stage.1 1

The Fees Regulations, reg 4(3).

5.300  The Fees Regulations also provide for the recovery of disbursements by an enforcement agent.1 Storage costs of goods removed from a premises or highway, the cost of hiring a locksmith to gain access and secure premises when using reasonable force and court fees for any applications made by the enforcement agent in relation to her enforcement powers are recoverable provided that they have been reasonably and actually incurred.2 They may be recovered out of proceeds.3

388  Writs of control 1 2 3

The Fees Regulations, regs 8–9. The Fees Regulations, reg 8(2). The Fees Regulations, reg 8(3).

5.301  Disbursements can also be recovered by the enforcement agent in relation to the sale of goods by private sale or auction.1 Where there has been a sale held on premises provided by the auctioneer conducting the sale the enforcement agent may recover, from the debtor, the auctioneer’s commission not exceeding 15% of the proceeds of sale, the auctioneer’s out of pocket expenses and reasonable costs in relation to advertising the sale.2 Where the sale takes place on other premises (for instance, under TCEA 2007, Sch 12, para 43) the enforcement agent may recover from the debtor the auctioneer’s commission (which must not exceed 7.5% of the sum realised by the sale of the goods), the auctioneer’s out of pocket expenses and reasonable costs in relation to advertising the sale.3 If goods are auctioned by way of an internet auction site or sold in a way other than by auction the enforcement agent may recover 7.5% of the sum realised by the sale of the goods 4 1 2 3 4

The Fees Regulations, reg 9. The Fees Regulations, reg 9(2). The Fees Regulations, reg 9(3). The Fees Regulations, reg 9(4).

5.302  The Fee Regulations also permit an enforcement agent to recover exceptional disbursements beyond those set out in paras 5.300–5.301. Where the creditor for whom the debt is recoverable consents, an application may be made by the enforcement agent to the court for an order that she may recover exceptional disbursements associated with the taking control of goods procedure which would not otherwise be recoverable.1 The application must provide evidence that the creditor consents to the application, evidence that the disbursements concerned are necessary for effective enforcement of the sum to be recovered having regard to the circumstances, including the amount to be recovered and the nature and value of the goods which have been taken into control.2 The application, which is made under the procedure in CPR Pt 23,3 can be made on a without notice basis if it is made prior to goods being taken into control.4 1 The Fees Regulations, reg 10. 2 CPR 84.14 and The Fees Regulations, reg 9(2). 3 CPR 84.3(2). 4 CPR 84.14(3).

5.303  The Fees Regulations set out an alternative method of calculating fees and disbursements payable to an enforcement agent who has received instructions to use the taking control of goods procedure in relation to the same debtor but in respect of more than one enforcement power if they can be reasonably be exercised at the same time.1 When establishing whether a power can be reasonably exercised at the same time consideration will be given to whether the goods in relation to all enforcement powers can be taken into control on the same occasion and whether they can be sold or disposed of on the same occasion.2 In such a situation the enforcement agent can recover the fee for the compliance stage in respect of each enforcement power.3 But, in relation to the first and/or second enforcement stage fees, the enforcement agent is restricted to one recoverable fixed fee for each stage regardless of the number of

Enforcement agents’ fees  389

enforcement powers.4 The amount in relation to which the percentage fee for each stage, if any, is to be calculated is the total amount of the sums to be recovered under all of the enforcement powers.5 The enforcement agent must, as far as practicable, minimise the disbursements recoverable from the debtor by dealing with the goods taken into control pursuant to the instructions together and on as few occasions as possible.6 1 2 3 4 5 6

The Fees Regulations, reg 11. The Fees Regulations, reg 11(2). The Fees Regulations, reg 11(3). The Fees Regulations, reg 11(4)(a). The Fees Regulations, reg 11(4)(b). The Fees Regulations, reg 11(5).

5.304  Where a debtor is a vulnerable person then fees and disbursements due in respect of any of the enforcement stages will not be recoverable unless the enforcement agent has, before removing proceeding to remove the goods, given the debtor adequate opportunity to get assistance and advice in relation to the enforcement power.1 1

The Fees Regulations, reg 12.

5.305  The Fees Regulations provide that that such fees and disbursements are payable from proceeds of sale or disposal of controlled goods, or, money taken.1 If these proceeds are less than the amount which is outstanding, being the amount of the debt which remains unpaid (or an amount the creditor has agreed to accept in full satisfaction of the debt) and the fees of the enforcement agent which are recoverable out of the proceeds,2 the available funds will be applied in priority order.3 The fees and expenses owed to an auctioneer followed by the compliance stage fee due to the enforcement agent, are prioritised.4 The remaining proceeds are divided pro rata between the debt and the payment of the enforcement agent’s remaining fees and disbursements (unless the creditor and the enforcement agent are the same person, in which case the remaining fees and disbursements are payable to the enforcement agent before payment of the debt).5 1 2 3 4 5

The Fees Regulations, reg 11(4)(2) and TCEA 2007, Sch 12, para 50(2). TCEA 2007, Sch 12, para 50(3). TCEA 2007, Sch 12, para 50(4) and The Fees Regulations, reg 13. The Fees Regulations, reg 13(2)-(3). The Fees Regulations, reg 13(4)-(6).

5.306  If there is a dispute regarding the amount recoverable under the Fee Regulations this will be determined by the court1 who will assess the amounts recoverable. 1

The Fees Regulations, reg 16 and CPR 84.16.

Responsibility for the fees 5.307  Proceeds from the exercise of an enforcement power are to be used to pay the amount of the debt that remains unpaid (or the amount otherwise agreed

390  Writs of control by the creditor in full satisfaction of the debt) and the costs of enforcement related services.1 1

TCEA 2007, Sch 12, para 50.

5.308  However, not all writs of control proceed as far as sale. Where the taking control of goods procedure results in insufficient proceeds to enable the enforcement agent to recover the compliance fee, that fee of £75 (or the balance of it which remains outstanding) must be paid by the person on whose application the writ was issued.1 In borderline cases an enforcement agent may request a creditor to give an indemnity to cover certain costs it would otherwise be exposed to, such as the cost of removal and storage of the goods. 1

High Court Enforcement Officers Regulations 2004, SI 2004/400, reg 13(3A).

5.309  The fees payable to the enforcement agent become payable at the commencement of each of the stages of the enforcement process and these could be a very significant amount. If upon instructing an enforcement agent the debtor seeks to make payment, she should be directed to make payment to the enforcement agent. If there is no sale of the debtor’s goods, because the debtor pays the judgment debt, the enforcement agent’s fee must still be paid. Further, if a judgment debtor makes payment direct this should be forwarded to the enforcement agent. If the judgment debtor wants to pay the judgment debt, the liability for any fees payable to the enforcement agent should also be expressly agreed as part of any such settlement. The fees should be agreed before settling a figure with the judgment debtor.

PRIORITY OF WRITS 5.310  It sometimes happens that two judgment creditors deliver writs of control in respect of the same judgment debtor to an enforcement officer closely together or even on the same day. The priority of writs of control is determined by reference to the time it is originally received by the person who is under a duty to endorse it.1 This should be simple to determine given that an enforcement officer is obliged to endorse a writ with the time and date of delivery as soon as possible after receiving it.2 If several writs are handed to the enforcement officer at the same time (for example, by one solicitor acting for several judgment creditors) the enforcement officer must execute them simultaneously.3 1 CPR 83.4(5)(a). 2 CA 2003, Sch 7, para 7. 3 Ashworth v Earl of Uxbridge (1842) 12 LJ QB 39.

5.311  365 Business Finance Ltd v Bellagio Hospitality WB Ltd, Mr Tanveer Singh Handa1 is the first authoritative case to consider priority of writs of control under the regime set out in TCEA 2007, Sch 12. The Court considered the rule of priority that applied where two or more enforcement officers received writs for different judgment debts that applied to the same debtor. The Court held that the rule of priority between writs does not depend on who receives the writs concerned. The language in TCEA 2007, Sch 12, para 4(2) had not changed materially from the language used

Priority of writs  391

in previous legislation (see para 5.126) that ‘the writ binds the property in the goods’ from the time when it is received by the person who is under a duty to endorse it. Lord Leggatt remarked: ‘The natural and rational interpretation of how this provision applies where two or more writs are issued is that the enforcement power conferred by a writ is subject to the enforcement power conferred by any writ which has previously been received by the person under a duty to endorse it, whoever that person was. Priority in enforcement is thus determined solely by the chronological order in which the writs are received. It does not depend on the identity of the enforcement officer to whom any of the writs is directed and whether that officer is the same or different from the officer who receives any earlier or later writ’.2 1 [2020] EWCA Civ 588. 2 [2020] EWCA Civ 588 at [53].

5.312  Where a writ has been extended (see para  5.119) its priority shall be determined by reference to the time on which it was originally received by the relevant enforcement officer.1 1 CPR 83.4(5).

5.313  If an enforcement officer executes the writs in the wrong order, a good faith purchaser for valuable consideration without notice of the writ will take good title1 and the money from the sale will pass to the judgment creditor whose writ was executed.2 However, the wronged judgment creditor will have a separate cause of action against the enforcement officer.3 1 2 3

TCEA 2007, Sch 12, para 5. Smallcomb v Buckingham (1697) 1 Salk 320. This point comes out more strongly in the alternative report of the case at 5 Mod 376. Smalcomb v Buckingham (1697) 1 Salkfield 320 and Hunt v Hooper (1844) 12 M&W 664 at 671.

5.314  Where several writs are to be executed against the same judgment debtor, there is no need for an enforcement agent to make separate seizures. The goods will be taken into control for the benefit of all, in order of priority.1 1

Jones v Atherton (1816) 7 Taunt 56.

5.315  If the enforcement officer has been told to suspend execution, as was the case in Hunt v Hooper,1 then the request to suspend will be treated as a withdrawal of the writ and that judgment creditor will lose priority if another writ is delivered before the first is reactivated.2 1 2

(1844) 12 M&W 664 at 673. Smallcomb v Buckingham (1697) 1 Salk 320 (this point comes out more strongly in the alternative report of the case at 5 Mod 376); Hunt v Hooper (1844) 12 M & W 664 at 673; and Bankers Trust Co v Galandari [1987] QB 222 at 227–228 and 229.

5.316  However, what if the suspension is not the judgment creditor’s fault? In Bankers Trust Co v Galandari,1 a lower court set aside the judgment. The judgment creditor therefore instructed the sheriff, who had already taken walking possession (the modern equivalent is the controlled goods agreement) of the defendant’s goods,

392  Writs of control to suspend the execution.2 The judgment was later restored but in the meantime another writ of fi fa (the predecessor to the writ of control) had been delivered to the sheriff in relation to the judgment debtor’s goods. The judgment creditor sought directions from the court as to which writ should take priority. The Court of Appeal held that the priority of the original writ should be restored. In the words of Lord Justice Parker:3 ‘Where, as here, temporary invalidity is in no way due to the fault or voluntary action or inaction of the creditor but to the erroneous decision of the court, I have no doubt that this court should, if it can, ensure that, when the matter is put right, the creditor should not lose the benefit of what he has done under what has been held to be, throughout, a valid judgment.’ 1 [1987] QB 222, CA. 2 CPR 70.6 provides that where a judgment is set aside, any enforcement of the judgment shall cease to have effect unless the court orders otherwise. 3 [1987] QB 222 at 227. See also Kerr LJ at [1987] QB 222 at 229.

5.317  Hunt v Hooper1 was distinguished by the Court on the basis that execution was suspended voluntarily at the request of the judgment creditor rather than involuntarily because of an error made by a lower court. The Court of Appeal went on to offer the following guidance:2 ‘… where the judgment pursuant to which a fieri facias has been issued is set aside, it is the duty of the creditor so to inform the sheriff; that once so informed the sheriff cannot proceed with the execution unless and until the judgment is restored and he has been notified of the fact and that, if in the interim period he has had any dealings with the goods or their proceeds which would have been wrongful as against the creditor had the judgment not been set aside, he is not to be liable to the creditor in respect of such dealings. If a creditor whose judgment has been set aside gives notice to the sheriff that the order to set aside is under appeal and thereafter the sheriff receives for execution another writ in respect of the same goods, he should not, in my view, proceed beyond possession without applying to the court for directions and giving notice to both creditors of such application.’ 1 2

(1844) 12 M&W 664 at 673. [1987] QB 222 at 278.

INSOLVENCY 5.318  Chapter  1 considers generally the interaction between the enforcement and insolvency regimes relating to corporate and individual judgment debtors. This section considers the application of the rules set out in the Insolvency Act 1986 (IA 1986), ss 183, 184, 186 and 346 relating to the ‘completion’ of execution by writ of control for the purposes of winding up and bankruptcy and considers a number of statutory duties imposed on enforcement officers under IA 1986. Although similar provisions apply in the case of both winding up and bankruptcy, the provisions are drafted differently and are therefore considered separately.

Winding up  393

WINDING UP 5.319  Chapter 1 notes that where a judgment creditor has issued execution against the goods of a company, and the company is subsequently wound up, she is not entitled to retain the benefit1 of the execution or attachment against the liquidator unless she has completed the execution before the commencement of the winding up.2 Execution is completed under a writ of control by the seizure and sale of the goods.3 These rules are further refined by a number of specific duties imposed on enforcement officers by IA 1986 with respect to monies received by them under an execution. 1 2 3

The meaning of ‘retain the benefit of the execution’ has been considered in Ch 1. Insolvency Act 1981, s 183(1). The meaning of ‘commencement of winding’ up has been considered in Ch 1. Insolvency Act 1981, s 183(3)(a).

Duties of an enforcement officer under IA 1986, s 184 before sale 5.320 IA 1986, s 184(1)–(2) provides that where a company’s goods are taken in execution and, before their sale or the completion of the execution (by the receipt or recovery of the full amount of the levy), notice in writing1 is served on the enforcement officer that: (a) a provisional liquidator has been appointed; (b) a winding up order has been made; or (c) a resolution for voluntary winding up has been passed; the enforcement officer must, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator. Where this happens, the enforcement officer’s fees are a first charge on the goods or moneys handed over to the liquidator who has a power to sell them or sufficient part of them to satisfy the charge. The insolvency practitioner has a right to insist that the enforcement officer’s bill of costs be subjected to detailed assessment.2 1 2

Insolvency Rules 2016, SI 1986/1925, r 12.57(1)(a). The notice must be delivered by hand or sent by recorded delivery to the enforcement officer charged with the execution. Insolvency Rules 2016, r 12.44(1).

Duties of an enforcement officer under IA 1986, s 184 after sale or receipt of moneys 5.321 IA 1986, s 184(3)–(4) imposes a holding period in respect of any moneys received by an enforcement officer under a writ of control. Where a company’s goods are sold or money is paid in order to avoid sale under a writ of control in respect of a judgment for more than £500, the enforcement officer must deduct the costs of the execution from the proceeds of sale, or the money paid, and retain the balance for 14 days. If within the 14-day period a notice in writing1 is served on the enforcement officer of: (a) a petition for the winding up of the company having been presented; or (b) of a meeting having been called at which there is to be proposed a resolution for voluntary winding up;

394  Writs of control (c) and an order is made or a resolution passed (as the case may be); the enforcement officer must pay the balance to the liquidator, who is entitled to retain it as against the judgment creditor. The insolvency practitioner has a right to insist that the enforcement officer’s bill of costs for the costs be subjected to detailed assessment.2 1 2

Insolvency Rules 2016, r 12.57(1)(b). The notice must be delivered by hand or sent by recorded delivery to the enforcement officer charged with the execution. Insolvency Rules 2016, r 12.44(1).

5.322  IA  1986, s  184(5) grants the court a discretion to set aside the rights conferred on the liquidator under IA 1986, s 184 in favour of the judgment creditor to such extent and subject to such terms as the court thinks fit. In practice, the court is likely to be extremely reluctant to interfere and will wish to ensure that creditors of the same class are treated pari passu. Good faith purchaser 5.323  IA 1986, s 183(2)(b) protects persons who purchase goods of the company in good faith from an enforcement officer by providing that such persons acquire a good title to the goods against the liquidator ‘in all cases’. Other forms of insolvency 5.324  The effect of administration, company voluntary arrangements, restructuring plans, schemes of arrangement, administrative receivership and moratoriums introduced under the Corporate Insolvency and Governance Act 2020 are considered in Chapter 1. BANKRUPTCY 5.325  Chapter  1 notes that where the creditor of any person who is adjudged bankrupt has, before the commencement of the bankruptcy, executed against the goods of that person, that creditor is not entitled to retain the benefit of the execution,1 or any sums paid to avoid it, unless the execution was completed, or the sums were paid, before the commencement of the bankruptcy.2 Execution is completed under a writ of control by seizure and sale of the goods.3 The sale referred to must be a sale under the writ of control and not a sale ordered in respect of proceedings bought under TCEA 2007, Sch 12, para 60 (third party claiming goods).4 Again, these rules are further refined by a number of specific duties imposed on enforcement officers by IA 1986 with respect to monies received by them under execution. 1 2 3 4

The meaning of ‘retain the benefit of the execution’ has been considered in Ch 1. IA 1986, s 346(1). The meaning of ‘commencement of the bankruptcy’ has been considered in Ch 1. IA 1986, s 346(5)(a). Heathcote v Livesley (1887) 19  QBD  285 at 287, per Wills J  (construing the similarly worded Bankruptcy Act 1887, s 45).

Bankruptcy  395

Duties of an enforcement officer under IA 1986 before sale 5.326  IA  1986, s  346(2) provides that if a notice in writing1 is given to the enforcement officer that the judgment debtor has been adjudged bankrupt before the completion of the execution of a writ of control, the enforcement officer must, on request, deliver to the official receiver or trustee of the bankrupt’s estate the goods and any money seized or recovered in part satisfaction of the execution. As with a winding up, the enforcement officer’s costs of the execution are a first charge on the goods or money so delivered and the official receiver or trustee may sell the goods or a sufficient part of them for the purpose of satisfying the charge. 1

Insolvency Rules 2016, r 12.57(1)(c). The notice must be delivered by hand or sent by recorded delivery to the enforcement officer charged with the execution.

Duties of an enforcement officer under IA 1986 after sale 5.327  IA  1986, s  346(3) provides that where an individual’s goods are sold, or money is paid in order to avoid sale, under a writ of control in respect of a judgment for more than £1,000,1 and: (a) before the end of the period of 14 days beginning with the day of the sale or payment the enforcement officer is given written notice2 that a bankruptcy petition has been presented in relation to that person; and (b) a bankruptcy order is or has been made on that petition; the balance of the proceeds of sale or money paid, after deducting the costs of execution, shall be comprised in the bankrupt’s estate in priority to the claim of the judgment creditor. 1 2

This is the amount prescribed under IA 1986, s 346(3) by the Insolvency Proceedings (Monetary Limits) (Amendment) Order 2004, SI 2004/547. Insolvency Rules 2016, r 12.57(1)(d). The notice must be delivered by hand or sent by recorded delivery to the enforcement officer charged with the execution.

5.328  This provision is complemented by IA  1986, s  346(4) which requires enforcement officers to retain any moneys for 14 days beginning with the day of the sale or payment or while there is a pending bankruptcy petition of which she has been given notice. If a bankruptcy order is made on the petition, the enforcement officer must pay the moneys she is holding over to the official receiver or the trustee in bankruptcy. 5.329  IA  1986, s  346(6) grants the court a discretion to set aside the rights conferred on the official receiver or trustee under IA 1986, s 346(1)–(3) in favour of the judgment creditor to such extent and subject to such terms as the court thinks fit. In practice, the court is likely to be extremely reluctant to interfere and will wish to ensure that creditors of the same class are treated pari passu. Good faith purchaser 5.330  The rights conferred by IA  1986, s  346 do not confer any power in the trustee of a bankrupt’s estate to claim goods from a person who has purchased any goods from an enforcement officer in good faith.1 1

IA 1986, s 346(7).

396  Writs of control Other forms of insolvency 5.331  The effect of individual voluntary arrangements and County Court administration orders are considered in Chapter 1.

HUMAN RIGHTS 5.332  With the entry into force of the Human Rights Act 19981 (HRA 1998) the operation of writs of control (and other forms of execution) must be viewed in the light of the provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). 1

On 2 October 2000, SI 2000/1851.

5.333  Entry into a person’s premises, especially in the case of their home, and taking control of goods is a particularly intrusive form of execution and has potential human rights implications under ECHR, art 8 (the right to respect for private and family life and the home) and art  1 of the First Protocol (the right to peaceful enjoyment of possessions). It is important to note, however, that both of these rights are qualified rights. Article 8 provides: ‘(1) Everyone has the right to respect for his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.’ 5.334  Similarly, art 1 of the First Protocol provides: ‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.’ 5.335  In addition, as discussed further in Chapter  1, powerful human rights arguments also operate in favour of the judgment creditor in the context of execution. Enforcement is integral to the judgment creditor’s right to a fair trial under ECHR, art  6.1 Accordingly, consideration of the judgment debtor’s rights under ECHR, art  8(1) and art  1 of the First Protocol must be balanced against the rights of the judgment creditor. 1

Hornsby v Greece (1997) 24 EHRR 250.

Human rights  397

5.336  Strasbourg jurisprudence would indicate that execution by writ of control is not per se in breach of art 8 or art 1 of the First Protocol. In K v Sweden1 an applicant filed a complaint with the European Commission relating to the circumstances in which an enforcement officer had seized her property in execution against unpaid taxes and civil debts owed by the applicant’s former husband. The applicant complained that the enforcement officer had entered her house while she was in hospital, had not informed her in advance, had changed the door lock and had left some of her belongings in disarray in breach of ECHR, art 8. 1

Application 13800/88.

5.337  The Commission found that the matters complained of did constitute an interference with the applicant’s right to respect for her private life and her home within the meaning of ECHR, art 8(1), but that the interference was justified under the terms of ECHR, art  8(2). The Commission observed that ‘in accordance with the law’ referred not simply to the provision being incorporated into domestic law, but rather to it being compatible with the rule of law. Arbitrary interference with the rights safeguarded by art 8 would not be compatible with the rule of law but a law which confers discretion is not itself incompatible, provided the scope of the discretion and the manner of its exercise are sufficiently clear having regard to the legitimate aim of the measure. In this case, the Swedish enforcement legislation was sufficiently precise and the fact that the seizure was subject to review by the courts gave the applicant adequate protection against arbitrary interference. Further, the protection of creditor’s rights was a legitimate aim under art 8(2) and the interference was proportionate to the legitimate aim pursued. The Decision stated: ‘The Commission notes that the bailiff’s duties by their very nature were bound to cause some difficulties for the applicant and it finds that the manner in which the execution was effected would in normal circumstances be considered to be harsh. However, having regard to the circumstances of the present case, in particular the special problems connected with the enforcement of the claims against the applicant’s former husband, the Commission finds that the procedure followed was not only in conformity with Swedish law but could also reasonably be regarded as proportionate to the legitimate aim pursued.’ 5.338  In the case of commercial premises, it is hard to see how ECHR, art  8 arguments could arise. While art 1 of the First Protocol may be relevant, in Gasus Dosier-und Fördertechnik Gmbh v Netherlands1 the European Court of Human Rights found that the grant to tax authorities of a power to recover tax debts against goods owned by certain third parties was not per se incompatible with the requirements of art 1, though the requirements of proportionality must be observed. While that case concerned enforcement by tax authorities rather than private creditors, it too would suggest that the procedure for seizure and sale contemplated by a writ of fi fa is not in breach of art  1 of the First Protocol. However, the Commission’s observations in K v Sweden as to the need for the law to be clear and precise may suggest that reform of the law on entry may be needed, particularly in the case of entry to a judgment debtor’s house through a window, to ensure compatibility with the human rights regime. 1 [1995] ECHR 15375/89.

398  Writs of control REFORM 5.339  TCEA  2007 and its supporting regulations implemented a wide range of reforms. The application of these new rules is still in infancy. To review the reforms the Ministry of Justice published a paper, ‘One year review of Enforcement Agent reforms introduced by the Tribunals, Courts and Enforcement Act 2007’ in April 2018. This post implementation review was to assess if there were any unintended consequences as a result of the reform. The review found that the reforms provided transparency and consistency in the enforcement process, where this was previously lacking. It was noted that a major component of the reforms was a new fixed structure for enforcement fees. The report noted that High Court Enforcement Officers had been particularly successful at compliance stage enforcement (with 10% settling at this stage). 5.340  On 25 November 2018, the Ministry of Justice issued a call for evidence asking for people’s experiences of the 2014 reforms. The Ministry of Justice wanted to hear from people who had been contacted by enforcement agents, enforcement agents, creditors, debt advisers, the judiciary and anybody else with experience of working with enforcement agents. The consultation closed on 17 February 2019. 5.341  A  ‘Bailiffs: Enforcement of debt inquiry’, was launched on 14  December 2018 by the House of Commons Justice Committee to consider the impact of TCEA 2007 enforcement agent reforms, to consider complaints against enforcement agents and the fee structure and if there ought to be an independent regulator for enforcement agents. Two oral evidence sessions were held on 15  January and 26 February 2019. On 11 April 2019, the Committee’s report was published. The key recommendations are that there should be an independent complaints body, to which all complaints about enforcement agents may be escalated, that a separate regulator should be established and that the new regulator should regularly review and make expert recommendations to the Ministry of Justice about the fixed fee structure set out in The Fees Regulations. Fees should be set as low as possible while ensuring the sustainability of the enforcement industry. APPENDIX High Court Enforcement Officers Association Address:

Telephone: Web:

Drake House, Gadbrook Park Northwich Cheshire CW9 7RA 08448 244575 www.hceoa.org.uk

Appendix  399

Registry Trust Ltd Address:

Telephone: Web:

153-157 Cleveland Street London W1T 6QW DX 134211 Tottenham Court Road 2 020 7391 7299 www.registry-trust.org.uk

CHAPTER 6

Appointing a receiver by way of equitable execution

INTRODUCTION 6.1  The appointment of a receiver by way of equitable execution is a form of equitable relief originally devised by the old Courts of Chancery.1 Equitable execution was granted to aid the judgment creditor in enforcing its judgment where the property sought to be used to satisfy the judgment debt could not be reached by normal legal methods of execution,2 such as a writ of fieri facias (the modern form of which is the writ of control)3 or the now abolished writ of elegit.4 As such, it is an example of the equitable maxim ‘equity will not suffer a wrong to be without a remedy’.5 1

2

3 4 5

One of the courts exercising equitable jurisdiction before the Supreme Court of Judicature Acts 1873 and 1875 merged the courts which administered common law and equity into a single Supreme Court all of whose judges had power to administer both law and equity. Para 23.11.1 of the Queen’s Bench Guide states that: ‘Equitable execution is a process which enables a judgment creditor to obtain payment of a judgment debt where the interest of the judgment debtor in property cannot be seized or reached by ordinary execution.’ See Ch 5. See para 6.90, n 1. Snell’s Equity (34th edn, Sweet & Maxwell, 2019), p 93.

6.2  As a rule of thumb, equitable execution is only available where other methods of legal enforcement are not available or are legally or practically difficult. Perhaps the most striking instances of its application are the appointment of a receiver over future debts payable to a judgment debtor or to enforce contractual rights of indemnity which a judgment debtor is refusing to exercise. Neither of these choses in action can be reached through third party debt orders or other forms of enforcement. 6.3  The effect of the order appointing the receiver by way of equitable execution is akin to an injunction restraining the judgment debtor from receiving the receivership property. It also authorises the receiver to collect in the property subject to the order. Neither the receiver nor the judgment creditor appointing her obtains any proprietary interest in the receivership property nor does the appointment make the judgment creditor a secured creditor. The receivership order therefore confers no priority on insolvency.

402  Appointing a receiver by way of equitable execution 6.4  The High Court’s power to appoint a receiver by way of equitable execution derives from Senior Courts Act 1981 (SCA 1981), s 37, which provides: ‘The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.’ 6.5  The bulk of the substantive law relating to equitable execution is found in a large body of case law, much of which was decided towards the end of the nineteenth and start of the twentieth century. Kekewich J referring to his efforts to determine how to apply the legal principles pertaining to equitable execution to a case before him in 1907, lamented that:1 ‘After consulting many authorities and pondering over the matter, I have come to the conclusion that full treatment of this question would require something in the nature of a lecture or treatise, which it is better to avoid unless absolutely necessary. My observations, therefore, do not pretend to be exhaustive. The authorities bearing on the point cannot be said to be wholly satisfactory, and the law must be taken to be still in the making.’ 1

Ideal Bedding Co Ltd v Holland [1907] 2 Ch 157 at 168.

6.6  Although some recent decisions1 have settled some of the more doubtful propositions to be found in the older cases there remains some truth to Kekewich J’s lament about the law relating to equitable execution being ‘still in the making’. 1 Notably Masri v Consolidated Contractors International [2008] EWCA Civ 303.

6.7  The procedural rules relating to the appointment of a receiver by way of equitable execution are set out in the Civil Procedure Rules 1998 (CPR), Pt 69 and the accompanying Practice Direction, which both came into force on 2 December 2002.1 This procedural regime repealed and replaced the Rules of the Supreme Court 1968 (RSC) Ord 30 (Receivers) and RSC Ord 51 (Receivers: Equitable execution).2 1 2

Civil Procedure (Amendment Rules) 2002, SI 2002/2058, r 26 and Sch 7. Civil Procedure (Amendment Rules) 2002, SI 2002/2058, r 36 and Sch 10.

Equitable execution distinguished from other receiverships 6.8  A receiver can be appointed in a variety of circumstances under English law and the appointment of a receiver by way of equitable execution is one type of receivership. However, equitable execution is not an insolvency process and equitable receivership should not be confused with receivers appointed under the insolvency legislation or by a creditor under a charge. Similarly, equitable receivership should not be confused with an interim receiver appointed to preserve assets (who performs a similar function to a freezing injunction except that the receiver physically collects assets to preserve them for any subsequent enforcement steps).1 Equitable execution is about the appointment of a receiver to aid the enforcement of a judgment debt. 1

See generally Commercial Litigation: Pre-Emptive Remedies, (3rd edn, Sweet & Maxwell, 2019), paras A2–356–A2–379.

The nature of a receiver  403

THE NATURE OF A RECEIVER 6.9  The classic judicial exposition on the nature of a receivership generally was given by Sir George Jessel MR in Re Manchester and Milford Railway Co, ex p Cambrian Railway Co:1 ‘A “receiver” is a term which was well known in the Court of Chancery, as meaning a person who receives rents or other income paying ascertained outgoings, but who does not, if I  may say so, manage the property in the sense of buying or selling or anything of that kind. We were most familiar with the distinction in the case of a partnership. If a receiver was appointed of partnership assets, the trade stopped immediately. He collected all the debts, sold the stock-in-trade and other assets, and then under the order of the Court the debts of the concern were liquidated and the balance divided. If it was desired to continue the trade at all, it was necessary to appoint a manager, or a receiver and manager as it was generally called. He could buy and sell and carry on the trade. The same distinction was well known also in the working of mines. If a receiver only was appointed, the working of the mine was stopped, but if it was desired to continue the working of the mine, a receiver and manager was necessary. So that there was a well-known distinction between the two. The receiver merely took the income, and paid necessary outgoings, and the manager carried on the trade or business in the way I have mentioned.’ 1

(1880) 14 Ch D 645 at 653, CA.

6.10  In short, a receiver is appointed merely to collect assets and to pay those outgoings strictly necessary for their upkeep. The issue of whether a receiver by way of equitable execution has a power of sale is considered in para  6.17. By contrast, a manager is appointed where it is desired that the business should continue operating. In spite of the distinction between a receiver and a manager, the two are often conflated. In particular, SCA 1981, s 37 refers only to a ‘receiver’, whereas CPR Pt 69 states that references in its provisions to a ‘receiver’ include a manager.1 1 CPR 69.1(2).

Is a manager by way of equitable execution possible? 6.11  There is no direct authority on the question of whether a judgment creditor applying for equitable execution could ask the court to appoint the receiver as manager of the judgment debtor’s business or contracts to allow the profits to be collected in to satisfy the judgment debt. The fact that a receiver can be appointed manager for one species of receiver does not necessarily mean that the same applies to all receivers, particularly in the case of a receiver appointed by way of equitable execution, which is in many ways a very different creature to other forms of receivership.

404  Appointing a receiver by way of equitable execution 6.12 In Edwards v Picard,1 a case concerning a judgment creditor’s attempts to appoint a receiver over a patent that was not being exploited, Buckley LJ suggested obiter that a manager could not be appointed by way of equitable execution.2 1 2

[1909] 2 KB 903, CA. [1909] 2 KB 903, CA, at 910–911.

6.13  However, in Soinco SACI  v Novokuznetsk Aluminium,1 one of the grounds on which the judgment debtors opposed the judgment creditor’s application for the appointment of a receiver by way of equitable execution to receive payments owed to them under a supply contract was that this would effectively mean that the receiver was there to manage the supply contract for the benefit of the judgment creditors. Colman J found nothing in this point.2 He held:3 ‘I see no reason why this limited function [that is, the appointment of a receiver for the purpose of ascertaining what deliveries were to be made under the supply contract, what payments became due and collecting those payments] would involve the receiver in acting as manager of the supply contract or would impose on him a duty to enforce it.’ 1 [1998] QB 406. 2 [1998] QB 406 at 421. 3 [1998] QB 406 at 411.

6.14  However, he continued that even if, as the judgment debtors contended, the appointment of a receiver would bring the judgment debtor’s business to a standstill:1 ‘Impact on the judgment debtor’s business is not a consideration material to the availability of legal process of execution and there is no reason in principle why it should be introduced as material to the availability of equitable execution.’ In any event, as a practical matter, the fact that the distinction between mere receipt and management may sometimes be blurred should not necessarily preclude the appointment of a receiver by way of equitable execution. 1

[1998] QB 406 at 421.

The nature of a receiver by way of equitable execution 6.15  Clear judicial statements as to the nature of equitable execution are thin on the ground. Sir George Jessel MR gave the following description in Salt v Cooper:1 ‘equitable execution … [is] a mere mode of doing that which the plaintiff asks the Court in every action to do, namely, to realize the debtor’s property so as to produce the sum demanded.’ 1

(1880) 16 Ch D 554 at 552.

6.16 In Bourne v Colodense Ltd,1 Dillon LJ stated the position in these terms: ‘The appointment of a receiver by way, as it is traditionally called, of equitable execution is a form of equitable relief to enforce payment of a judgment debt which the court may grant in the special circumstances of a particular case if,

The nature of a receiver  405

as in the present case, the recovery of the judgment debt by the more usual processes of execution or attachment of debts is not practicable. The remedy is, however, discretionary and it is plain that the court would not appoint a receiver if the court were satisfied that the appointment would be fruitless because there was nothing for the receiver to get in.’ 1 [1985] ICR 291.

6.17  A receiver appointed by way of equitable execution has no power to sell the judgment debtor’s personalty1 or to obtain a charge over it with a view to obtaining an order for sale.2 The effect of an order appointing a receiver by way of equitable execution is considered in paras 6.124–6.139. 1 2

De Peyrecave v Nicholson (1894) 71  LT  255; Flegg v Prentis [1892] 2 Ch  428 at 431 and Ideal Bedding Co Ltd v Holland [1907] 2 Ch 157 at 169. Ideal Bedding Co Ltd v Holland [1907] 2 Ch 157 at 169. However, it should be noted that in the case of land, the court has in the past appointed a receiver by way of equitable execution to bring a claim in the name of a judgment debtor who is refusing to sell his interest in the land in order to force it to do so.

Is equitable execution a form of execution at all? 6.18  Execution is a legal process by which the judgment creditor brings proceedings for its sole benefit to satisfy its judgment in whole or in part.1 Equitable execution is technically a form of equitable relief to allow recovery of a judgment debt rather than a form of execution.2 As Cotton LJ explained in Re Shephard:3 ‘Confusion of ideas has arisen from the use of the term ‘equitable execution.’ The expression tends to error. It has often been used by judges, and occurs in some orders, as a short expression indicating that the person who obtains the order gets the same benefit as he would have got from legal execution. But what he gets by the appointment of a receiver is not execution, but equitable relief, which is granted on the ground that there is no remedy by execution at law; it is a taking out of the way a hindrance which prevents execution at common law. … The obtaining a receivership order is not taking out execution, it is obtaining equitable relief by a subsequent order, which must be made against someone against whom the Court has jurisdiction to make an order.’ 1 2

3

See, eg,  Re a Company (No 0022 of 1915) [1915] 1 Ch 520 at 525. Re Shephard (1889) 43 Ch D 131 at 137–138; Levasseur v Mason & Barry [1891] 2 QB 73 at 77, per Lord Coleridge and 79, per Lord Esher MR; Re Potts [1893] 1 QB 648 at 661; Ideal Bedding Ltd v Holland [1907] 2 Ch 157 at 169; Morgan v Hart [1914] 2 KB 183 at 187–188; Bourne v Colodense [1985] ICR 291 at 302. (1889) 43 Ch D 131 at 135–136.

6.19 In Masri v Consolidated Contractors a judgment debtor sought to resist an application for a receivership order on the ground that the English court had no jurisdiction to make the receivership order as the creditor’s application constituted ‘proceedings concerned with the enforcement of judgments’ within the meaning of art 22(5) of Council Regulation (EC) No 44/2001 which confers exclusive jurisdiction in proceedings on the courts of the state in which the judgment in question is to be enforced. The Court of Appeal rejected this contention, holding that art 22(5) was

406  Appointing a receiver by way of equitable execution only concerned with actual enforcement and that a receivership order was not actual enforcement but only a step which might lead to enforcement. The fact that it was not possible to identify any state where actual execution might take place to which the Regulation applied served to highlight the inapplicability of art 22. 6.20  A  reference to ‘execution’ in a statute1 or document2 may, however, be construed to include equitable execution depending on the context. 1 2

Eg in Re a Judgment Debtor No  2176 of 1938 [1939] 1 Ch  601 at 604 a statutory reference to ‘execution’ was held to include equitable execution. Eg in Blackman v Fysh [1892] 3 Ch 209, CA a clause in a will which referred to ‘taken in execution by any process of law’ was held to include equitable execution.

6.21  It follows from the fact that equitable execution is an equitable remedy that it is discretionary in nature.1 However, this does not mean that the court’s discretion is arbitrary. As Davey LJ put it in Harris v Beauchamp Brothers:2 ‘We should be sorry to limit by construction the beneficial jurisdiction of the Court to grant an injunction or make an order for a receiver where it is “just or convenient” to do so; but we conceive those well-known words do not confer an arbitrary or unregulated discretion on the Court, and do not authorize the Court to invent new modes of enforcing judgments in substitution for the ordinary modes.’ 1 2

Bourne v Colodense [1985] ICR 291 at 302. Harris v Beauchamp Brothers [1894] 1 QB 801 at 809.

THE DEVELOPMENT OF THE MODERN JURISDICTION 6.22  Before the overhaul of the court system brought about by the Supreme Court of Judicature Act 1873 and the Supreme Court of Judicature Act 1875 (the Judicature Acts) the appointment of a receiver was a jurisdiction only exercisable by the Courts of Equity.1 Common law courts had no jurisdiction to appoint receivers and relied upon methods of legal execution such as garnishment (now the third party debt order procedure), the writ of fieri facias (now the writ of control) and the now abolished writ of elegit.2 1

2

Snell’s Equity (34th edn, Sweet & Maxwell, 2019), p 589. The Court of Chancery procedure prior to the Judicature Acts is explained by Sir George Jessel MR in Anglo-Italian Bank v Davies (1878) 9 Ch D 275 at 283: ‘by issuing a writ of elegit, and, without obtaining a return, to file a bill in equity alleging that the Plaintiff had issued his writ of elegit, and that owing to legal impediments it could not be enforced at law, and asking for payment of the judgment debt by means of receiver. According to the practice the application for the receiver was made by interlocutory application before the hearing, and in a proper case it was granted.’ See para 6.90, n 1.

6.23  The Judicature Acts brought about a significant rationalisation of the court system following which all divisions of the High Court were empowered to appoint a receiver by way of equitable execution.1 The Supreme Court of Judicature Act 1873, s 25 made the following provision for the granting of injunctions and the appointment of a receiver:

The development of the modern jurisdiction  407

‘A mandamus or an injunction may be granted or a receiver appointed by an interlocutory Order of the Court in all cases in which it shall appear to the Court to be just or convenient that such Order should be made; and any such Order may be made either unconditionally or upon such terms and conditions as the Court shall think just.’ 1

Harris v Beauchamp Brothers [1894] 1 QB 801 at 808.

6.24  This provision has been re-enacted in amended form over the years1 and is now to be found in SCA 1981, s 37, which is in substantially the same terms (see para 6.4). 1

Supreme Court of Judicature (Consolidation) Act 1925, s 45 repealed Supreme Court of Judicature Act 1873, s 25 and replaced it with: ‘The High Court may grant a mandamus or an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be just or convenient so to do. Any such order may be made either unconditionally or on such terms and conditions as the court thinks just.’ (Emphasis added). This provision was repealed and re-enacted as SCA 1981, s 37.

6.25  In spite of some earlier dicta to the contrary,1 the Supreme Court of Judicature Act 1873, s  25 was restrictively interpreted in a series of decisions of the Court of Appeal, which held that the court would not appoint a receiver where the old Court of Chancery would not have appointed a receiver prior to the Supreme Court of Judicature Act 1873.2 In particular, where legal execution would not have been available because the judgment debtor’s property was not amenable to such process, the Court of Chancery could not have granted equitable relief and so it seemed the post-Judicature Acts court could not do so. 1 In Anglo-Italian Bank v Davies (1878) 9 Ch D 275 at 286 where Sir George Jessel MR stated that: ‘I think that the Act of 1873, sect. 25, sub-sect. 8, has enlarged very much the powers which Courts of Equity formerly possessed of granting injunctions or receivers.’ See also Cotton LJ in the same case at 293, where he states: ‘[u]nder [s 25(8)] … the Court may and does grant receivers when it never could have done so before.’ 2 Holmes v Millage [1893] 1 QB 551 at 557–558, CA; Harris v Beauchamp Brothers [1894] 1 QB 801 at 810, CA; Edwards & Co v Picard [1909] 2 KB 903 at 905, CA; Morgan v Hart [1914] 2 KB 183 at 186 and 191, CA.

6.26  The Court of Appeal decision in Parker v Camden London Borough Council1 questioned the correctness of the principle that the post-Judicature Acts courts were bound by the practices of the Court of Chancery prior to the Judicature Acts. Sir John Donaldson MR held2 that:3 ‘[Counsel for the defendants] retorted by referring to Harris v Beauchamp Brothers [1894] 1  Q.B. 801 and submitting that it was only permissible to appoint a receiver in circumstances in which the Court of Chancery would have done so prior to 1873. For my part I do not accept that the pre-Judicature Act practices of the Court of Chancery or any other court still rule us from their graves’. 1 2 3

[1986] Ch 162. [1986] Ch 162 at 172–173. [1986] Ch  162 at 176 Browne-Wilkinson LJ concurred stating that the jurisdiction to appoint a receiver and manager under SCA 1981, s 37(1) was ‘unlimited’.

408  Appointing a receiver by way of equitable execution 6.27 However, Parker is not determinative of the issue because, as Sir John Donaldson MR made clear, that case was not concerned with a receiver by way of equitable execution but rather the court’s power to appoint a receiver to enforce a landlord’s breach of covenant.1 1

[1986] Ch 162 at 176. It also appears that only Harris v Beauchamp [1894] 1 QB 801 was cited to the Court and not other relevant authorities.

6.28 In Maclaine Watson v International Tin Council,1 the Court had to consider whether it had jurisdiction to appoint a receiver by way of equitable execution over possible indemnity claims by the ITC against its members. Such claims could not be reached by any other form of enforcement available to the judgment creditor.2 However, although he had earlier observed that the statutory provisions of SCA 1981, s  37 did not confer on the court power to appoint a receiver by way of equitable execution in a case where prior to the Judicature Acts no court could have granted such relief,3 Millett J went on to conclude that there was ‘no technical objection’ to the appointment of a receiver by way of equitable execution in respect of the ITC’s indemnity claims (although in the circumstances the order was not made because the judgment creditors had failed to show an arguable case for the claims).4 1 2 3 4

[1988] 1 Ch 1. Millett J’s judgment was expressly approved by the Court of Appeal. A claim to be indemnified by a third party is not amenable to garnishee proceedings (now the third party debt order procedure). [1988] 1 Ch 1 at 17. [1998] 1 Ch 1 at 21.

6.29  The issue of whether the court’s power to appoint a receiver by way of equitable execution was confined to the practice of the Court of Chancery prior to the Judicature Acts arose directly in Soinco SACI v Novokuznetsk Aluminium.1 In that case the judgment creditor sought the appointment of a receiver by way of equitable execution over payments that were due or that may in future have become due under a supply contract. One of the grounds on which the judgment debtors sought to oppose the application was that the pre-Judicature Acts courts could not have made such an appointment. Colman J, having extensively reviewed the authorities, held that he had jurisdiction to appoint a receiver by way of equitable execution and that it was just and convenient that he should do so. There were strong matters of principle in favour of this conclusion, since to conclude otherwise:2 ‘… would involve treating the rules of the Court of Chancery before the Judicature Acts as carved in stone and as expressing immutable principles incapable of development beyond 1873 unless changed by Parliament. This must be wrong in principle. English law has traditionally developed by means of identifying broad but established juridical principles which have been extended incrementally to new factual situations when the interests of justice required such extension. The development of the law relating to Mareva injunctions3 amply demonstrates that this developing process applies to equitable remedies as to any other.’ 1 [1998] QB 406. 2 [1998] QB 406 at 420. 3 Now a freezing injunction.

The development of the modern jurisdiction  409

6.30  Any remaining controversy in this area has now been laid to rest by the decision of the Court of Appeal in Masri v Consolidated Contractors (No 2)1, where a judgment creditor sought an order appointing a receiver in respect of the judgment debtor’s interest in revenues derived from an oil concession. The judgment debtor appealed, contending that the court had no jurisdiction to appoint a receiver in relation to a future debt, Lawrence Collins LJ conducted a thorough review of the authorities and concluded as follows: ‘172. [I]n my judgment the position on the older authorities is, as I  have suggested, that in none of them is the ratio that a receiver cannot be appointed in respect of future debts or future income. There are strong statements in Webb v Stenton (1883) 11 QBD 518 that future income from a trust could be the subject of an order. I accept that the remarks are obiter, but it would be surprising if these judges could express themselves so clearly in this sense in 1883 if there had been an established practice in Chancery prior to 1873 that a receiver by way of equitable execution could not be appointed in respect of future income. If there had been such a rule Holmes v Millage could have been decided very simply on that ground. There would have been no need for the extensive reasoning devoted to the special position of a man’s salary. Lindley LJ identified the question of general importance as being whether a judgment creditor was entitled to a receiver of future earnings. He said that the common law writs of execution did not extend to future income; that charging orders did not apply to wages or other remuneration for personal services; the Court of Chancery did not have the power to restrain a man from earning his living or receiving his earnings. Apart from the passage in Lindley LJ’s judgment referred to above…there is nothing to support such a rule. I agree with Millett J’s conclusion in Maclaine Watson & Co Ltd v International Tin Council (No 1) [1988] Ch 1, at 19, that the ratio of Holmes v Millage was that a man’s salary was not attachable at law or in equity, and that the passage from Lindley LJ’s judgment was not part of the ratio. 173. To the extent that these cases support a principle that equitable execution is only available in relation to assets which are liable to legal execution, they are undermined by the second group of authorities, including Bourne v Colodense, which is binding on this court, and which establish that a receiver may be appointed in respect of a claim to an indemnity and that consequently the jurisdiction is not limited to choses in action which are available for legal execution. 174. In my judgment, therefore, there is no authority binding this court to hold that the jurisdiction is not available in relation to future income from a defined asset. In any event, even if the jurisdiction had not been exercised before 1873, I  do not think that this court is bound by pre-1873 practice to abstain from incremental change.’ 1 [2008] EWCA Civ 303.

410  Appointing a receiver by way of equitable execution THE MODERN JURISDICTION TO APPOINT A RECEIVER BY WAY OF EQUITABLE EXECUTION 6.31  The requirements for the appointment of a receiver by way of equitable execution have recently been further summarised and clarified by the courts. In Cruz City 1 Mauritius Holdings v Unitech Ltd and others,1 Males J, provided helpful modern guidance regarding the requirements for the appointment of a receiver by way of equitable execution giving three statements of general principle: (a) Referring to Dillon LJ’s dicta in Bourne v Colodense:2 The appointment of a receiver by way of equitable execution is a form of equitable relief to enforce payment of a judgment debt which the court may grant in the special circumstances of a particular case if the recovery of the judgment debt, by the more usual processes of execution or attachment of debts, is not practicable. The remedy is, however, discretionary and it is plain that the court would not appoint a receiver if the court were satisfied that the appointment would be fruitless because there was nothing for the receiver to get in. (b) Summarising the dicta in Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others,3 a Privy Council case, where Lawrence Collins LJ summarised the decision in Masri:4 (i) the jurisdiction to appoint a receiver by way of equitable execution permitted of gradual and incremental development, and in particular was not limited to choses in action which were presently available for legal execution. The appointment of a receiver was not limited to such property as might be taken in execution, but to whatever is considered in equity to be assets. (ii) The court was not bound by pre-1873 practice to abstain from incremental development. The jurisdiction could be exercised to apply old principles to new situations. Masri (No 2)5 confirmed or established that: (1) the demands of justice are the overriding consideration in considering the scope of the jurisdiction under section 37(1); (2) the court has power to grant injunctions and appoint receivers in circumstances where no injunction would have been granted or receiver appointed before 1873; (3) a receiver by way of equitable execution may be appointed over an asset whether or not the asset is presently amenable to execution at law; and (4) the jurisdiction to appoint receivers by way of equitable execution can be developed incrementally to apply old principles to new situations. (iii) SCA  1981, s  37(1) does not confer an unfettered power and there are a number of decisions to that effect. (c) In a later Masri decision6 Tomlinson J rejected a submission that an order can only be made if legal, as opposed to equitable, enforcement is impossible, or there exist some special circumstances which practically render it very difficult, if not impossible, for the judgment creditor to obtain the fruits of its judgment by other means. 1 [2014] EWHC 3131 (Comm) at [41]–[44]. 2 [1985] ICR 291. See para 6.16. 3 [2011] UKPC 17. 4 [2009] QB 450. 5 [2009] QB 450. 6 Masri v Consolidated Contractors International Company SAL [2008] EWHC 2492 (Comm) at [17].

The modern jurisdiction to appoint a receiver by way of equitable execution  411

6.32  The requirements for the appointment of a receiver by way of equitable execution therefore can be summarised as follows: (a) there must be some hindrance or difficulty in using the normal processes of execution; and (b) although the property to be the subject of the receivership may be either legal or equitable in nature, it must be capable of assignment and not otherwise inalienable; and (c) the costs of the receivership must be proportionate to the likely recovery; and (d) the court will not appoint a receiver where it is satisfied that such appointment would be fruitless because there is nothing for the receiver to collect in; and (e) the overriding consideration in determining the scope of the court’s jurisdiction is the demands of justice. 6.33  The requirement to have a hinderance or difficulty using the usual processes of execution can arise as: (a) an impossibility of enforcement at law which can be overcome by the appointment of a receiver; or (b) is concerned with situations where, although the asset may as a matter of law be subject to other forms of enforcement, do so would cause hinderance or difficultly in practice. This has often been referred to in dicta as being a need for ‘special circumstances’. These requirements are considered further below. Impossibility of enforcement at law 6.34 In Maclaine Watson v ITC the requirement was expressed to be ‘some … difficulty, arising from the nature of the property, which precludes execution at law but which can be overcome by the appointment of a receiver’,1 that has been variously described in the cases as ‘some legal difficulty in the way of enforcing the usual legal remedy’2 or a ‘hindrance which prevents execution at … law’.3 In essence, what this requirement means is that the property cannot be obtained using the ordinary legal methods of execution, such as a writ of control, third party debt order or a charging order. As Lord Esher MR once put it:4 ‘Is it just or convenient that such an order should be made, when there is available a clear and usual mode of realizing the judgment [at law] by a writ of fi. fa.? I think that, where there is no impediment shewn in the particular case to the realization of the judgment by the ordinary mode of execution at law, it is not shewn to be just or convenient to appoint a receiver and to substitute for the ordinary known practice of execution by fi. fa. another practice, viz., the appointment of a receiver, which to be effectual must be followed by a further order for sale of the goods.’ 1 2 3 4

Maclaine Watson v ITC [1988] 1 Ch 1 at 17 and see also Morgan v Hart [1914] 2 KB 183 at 188. Manchester and Liverpool District Banking Co v Parkinson (1888) 22 QBD 173 at 177. Re Shephard (1889) 43 Ch D 131 at 135–136 and Edwards v Co v Picard [1909] 2 KB 903 at 910. Manchester and Liverpool District Banking Co v Parkinson (1888) 22 QBD 173 at 175.

6.35  Thus, in Soinco SACI  v Novokuznetsk Aluminium1 a receiver by way of equitable execution was appointed in respect of present and future payments due under a supply contract because it was not possible to garnish the future payments2.

412  Appointing a receiver by way of equitable execution In Bourne v Colodense Ltd,3 the Court of Appeal appointed a receiver to bring a claim to enforce an indemnity against legal costs which the judgment debtor was refusing to enforce to meet a costs order made in favour of the judgment creditor on the basis that an indemnity, like a future debt, was not the sort of property amenable to garnishment at law. Such limitations in legal methods of enforcement give rise to the equity entitling the court to appoint a receiver by way of equitable execution to overcome the difficulty. 1 [1998] QB 406. 2 In that case the Court was also influenced by the conduct of the judgment debtors and the company with whom they had contracted under the supply contract, which appeared to be endeavouring to ‘smother’ its indebtedness to the judgment debtors and otherwise behave in such a way as to shield the judgment debtor’s assets from enforcement in England. A receiver was also appointed in respect of future payments in Masri v Consolidated Contractors (No.2) [2008] EWCA Civ 303. 3 [1985] ICR 291.

6.36  Indeed the CPR require that the evidence in support of an application to appoint a receiver by way of equitable execution give details of why the judgment cannot be enforced by any other method.1 1

PD 69, para 4.1(3)(d).

6.37  As will be seen below (paras 6.38–6.48) impossibility is not however a rigid condition. Difficulties or hinderance alone may also be enough support the appointment of a receiver.

‘Special circumstances’ 6.38  The rigidity of the test for the appointment of a receiver was analysed in Masri v Consolidated Contractors International Company SAL.1 In this case, which concerned execution overseas, Tomlinson J did not agree with the submission, based upon comments made by the previous authors in an earlier edition of this book,2 that an applicant for relief must show, when seeking the appointment of a receiver, either that it is necessary, because legal, as opposed to equitable, enforcement is impossible, or there must be some special circumstances justifying appointment such as practically render it very difficult, if not impossible, for the judgment creditor to obtain the fruits of his judgment by other means. He was ‘far from satisfied that the jurisdiction has ever been regarded as rigidly circumscribed.’ 1 2

[2008] EWHC 2492 (Comm). S  Payne, M  Godden, Commercial Enforcement, (2nd edn, Bloomsbury Publishing, 2005), paras 6.29–6.35.

6.39  As observed by Tomlinson J,1 Fry LJ in Manchester and Liverpool District Banking Co. v. Parkinson2 spoke of a receivership order as appropriate where under particular circumstances it was a more convenient mode of procuring satisfaction of the judgment than the usual process of attachment. He also spoke of it being appropriate to appoint a receiver to hold property liable to execution in order to prevent someone making away with it. Fry LJ said, in giving judgment, in reference to the Judicature Act, 1873, s 25:

The modern jurisdiction to appoint a receiver by way of equitable execution  413

‘I do not say that there would have been no jurisdiction to appoint a receiver under that section, if there had been special circumstances in the case rendering it just or convenient to make such an order. It may be, for instance, that an order could be made for appointment of a receiver to hold property liable to execution, to prevent someone making away with it, or to get in debts, where under particular circumstances it was a more convenient mode of procuring satisfaction of the judgment than the usual process of attachment.’ 1 2

[2008] EWHC 2492 (Comm) at [17]. [1888] 22 QBD 173 (CA).

6.40  Further, in Goldschmidt v Oberrheinische Metallwerke1 the judgment debtor was a German manufacturing company with no assets in England other than unknown amounts owed by its English customers. The judgment creditor had no means of ascertaining the particulars of any such debts and therefore could not provide an affidavit in support of an application to garnish the debts. It was not possible to conduct an oral examination of the judgment debtor to ascertain this information as it was not within the jurisdiction. In addition, there was evidence that the judgment debtor was endeavouring to collect in the amounts owed by the judgment debtor company’s English customers to avoid their being available for execution in England. Vaughan Williams LJ, who gave the judgment of the Court, regarded the making of a receivership order as justified under both limbs of the approach of Fry LJ in Manchester and Liverpool District Banking Co. Otherwise, it would have been ‘practically very difficult, if not impossible’ to obtain any fruit of the judgment.2 1 2

[1906] 1 KB 373, CA. [1906] 1 KB 373 at 375.

6.41 In Bourne v Colodense1 receivership was said to be available where recovery of the judgment debt by the more usual processes of execution or attachment of debts is not practicable. 1 [1985] ICR 291.

6.42 In Masri v Consolidated Contractors (No 2) Gloster J held at first instance1 that it was just and convenient to order the appointment of a receiver because it would be extremely difficult for the judgment creditor to locate the oil revenues and take effective steps in relevant jurisdictions to enforce his judgment against them. The Court of Appeal held that she had properly exercised her discretion.2 Lawrence Collins LJ noted3 that Maclaine Watson and Harris v Beauchamp Brothers were authority for the proposition that there needed to be some hindrance arising from the nature of the property which prevented the judgment creditor from obtaining execution at law, but which the appointment of a receiver could overcome. However, as Tomlinson J in the later Masri judgment4 observed, this did not prevent the making of the order in that case. Tomlinson J observed: ‘it is to my mind clear that the Court of Appeal in this case regarded the modern jurisdiction as unconstrained by rigid expressions of principle and responsive to the demands of justice in the contemporary context. In these circumstances it is unrealistic to expect this court to reach a conclusion as to the availability of the remedy different from that reached by the Court of Appeal.’

414  Appointing a receiver by way of equitable execution It was noted that execution of an English judgment overseas, particularly in countries outside the European Community, was ‘always relatively speaking a difficult exercise’. Tomlinson J  was satisfied that it would be practically very difficult for the judgment creditor to enforce his judgment by conventional means against the debtor’s assets abroad. 1 2 3 4

[2007] EWHC 3010 (Comm). [2008] EWCA Civ 303 at [128] and [135]. [2008] EWCA Civ 303 at [167]. [2008] EWHC 2492 (Comm) at [17].

6.43  This position was further explored in Cruz City 1 Mauritius Holdings v Unitech Ltd and others1 where it was succinctly expressed by Males J that the: ‘jurisdiction will not be exercised unless there is some hindrance or difficulty in using the normal processes of execution, but there are no rigid rules as to the nature of the hindrance or difficulty required, which may be practical or legal, and it is necessary to take account of all the circumstances of the case. That was all that was meant by dicta which spoke of the need for “special circumstances”’. 1

[2014] EWHC 3131 (Comm).

6.44  In the Canadian case of Manning Wanless Building Supplies Ltd v Puskas and Flemke1 the Court held that the fact that the collection of monthly rents owed to the judgment debtor would require a series of garnishee applications was enough to appoint a receiver. Similarly, in Soinco SACI  v Novokuznetsk2 a receiver was appointed over future payments under a supply contract. The judgment debtors had sought to argue that one reason an order for the appointment of a receiver by way of equitable execution should not be granted was that there was nothing to stop the plaintiffs applying for a series of garnishee orders as and when the debts became due.3 The Court rejected the judgment debtors’ arguments and made the order.4 1 (1962) 39 WWR 672 (Can). 2 [1998] QB 406. 3 [1998] QB 406 at 411. 4 [1998] QB 406 at 423. The fact that information as to the operation of the supply contract and what payments were due or would become due in future would be unobtainable without an order for the appointment of a receiver by way of equitable execution was one of a number of factors that influenced the Court.

6.45  Arnold J  in UCB  Home Loans Corporation Limited1 held that there were sufficient ‘special circumstances’ rendering it just and convenient to appoint a receiver by way of equitable execution when it would be ‘difficult for the claimant to enforce its judgment by other means’. The appointment of a receiver in this case was the only realistic prospect available to the judgment creditor to enforce its judgment in the short term. 1

[2011] EWHC 851 (Ch).

6.46 In JSC VTB Bank v Skurikhin1 it was held by Christopher Butcher QC, sitting as a Deputy High Court Judge, to be plainly just and convenient for equitable receivers

The modern jurisdiction to appoint a receiver by way of equitable execution  415

to be appointed. It was observed that the demands of justice include promotion of the policy of the law that judgments of the English Court should be complied with and if necessary enforced. Here there was no other obvious practical and realistic means open to the judgment creditor of executing the judgments against the judgment debtor who had failed to disclose his assets worldwide in breach of an order to attend the oral examination of his assets under CPR Pt 71. The judgment creditor knew of no other assets amenable to execution other than those which the receivership order was sought. 1

[2015] EWHC 2131 (Comm).

6.47  Whether there was some hindrance or difficulty in using the normal processes of execution was the key question in VB Football Assets v Blackpool Football Club (Properties) Ltd (formerly Segesta Ltd).1 Over £25 million was owed pursuant to the relevant judgment debt. The judgment debt related to a finding that the judgment debtor had unfairly prejudiced the judgment creditor’s shareholding in Blackpool City Football Club. The assets could be divided into those which related to the operation of the football club and ‘non-footballing assets’. Smith J endorsed the dicta in Cruz City2 and declined to appoint a receiver in respect of the non-footballing assets. He observed:3 ‘It will be just and convenient to appoint a receiver by way of equitable execution when it would be difficult for the claimant to enforce its judgment by other means and where the appointment of a receiver is the only realistic prospect available to the judgment creditor to enforce its judgment in the short term. A receiver will not be appointed if the court is satisfied that the appointment would be fruitless, for example because there is no property which can be reached either in law or equity. However, a receiver may be appointed if there is a reasonable prospect that the appointment will assist in the enforcement of a judgment or award.’ The concern in VB Football Assets was that the application in respect of the ‘nonfootballing assets’ was not supported by sufficient evidence as required by PD  69 (paras 6.105–6.112) An unsuccessful attempt had been made to enforce the judgment by way of charging orders but evidence had not addressed why the orders had not been successful. For example, while there was evidence that there was real property, so there might be income streams that the receiver could capture, the need for the appointment of a receiver by way of equitable execution to secure those revenue streams was not articulated in the substance of the evidence. The application was therefore refused insofar as it related to the non-footballing assets. The position was different in relation to the ‘footballing assets’. 1 2 3

[2019] EWHC 530 (Ch). [2014] EWHC 3131 (Comm). [2019] EWHC 530 (Ch) at [8].

6.48  Thus, although equitable execution will not be allowed by the court simply because it would be a more convenient method of satisfying the judgment debt than the usual methods of legal execution1 it is a relevant consideration. In Cruz City 1 Mauritius Holdings v Unitech Ltd and others2 Males J  observed that the

416  Appointing a receiver by way of equitable execution statutory source of the court’s power to appoint a receiver speaks of what is ‘just and convenient’. On this basis it was ‘impossible to say that convenience is not at least a relevant consideration (albeit not the only one)’. 1 2

Harris v Beauchamp Brothers [1894] 1 QB 801 at 807 and Edwards v Co v Picard [1909] 2 KB 903. [2014] EWHC 3131 (Comm).

Property must be capable of assignment and not otherwise inalienable 6.49  This requirement is considered in relation to the types of assets that can be subject to equitable execution at paras 6.58–6.59.

The costs of the receivership must be proportionate to the likely recovery 6.50  At common law, it is well established that equitable execution should only be granted ‘in cases where the amount of the judgment debt warrants the expense’.1 This is now a procedural requirement for equitable execution. The Practice Direction to Pt 69 states:2 ‘Where a judgment creditor applies for the appointment of a receiver as a method of enforcing a judgment, in considering whether to make the appointment the court will have regard to – (1) the amount claimed by the judgment creditor; (2) the amount likely to be obtained by the receiver; and (3) the probable costs of his appointment.’ 1 2

I v K [1884] WN 63. PD 69, para 5.

6.51  The Practice Direction also requires that the written evidence in support of an application for the appointment of a receiver must give details of the value and likely income of the property it is intended the receiver should get in. These provisions are considered further in the context of the evidence required in support of the application at paras 6.105–6.112.

The court will not appoint a receiver where the court is satisfied that it would be fruitless because there is nothing for the receiver to collect in 6.52  Equity does not act in vain. Therefore, if it appears that to the court that a receiver will not be effective then the court will not appoint one. 6.53 In Cruz City 1 Mauritius Holdings v Unitech Ltd and others1 Males J noted: ‘A receiver will not be appointed if the court is satisfied that the appointment would be fruitless, for example because there is no property which can be

The modern jurisdiction to appoint a receiver by way of equitable execution  417

reached either in law or equity. That is an aspect of the maxim that equity does not act in vain. However, a receiver may be appointed if there is a reasonable prospect that the appointment will assist in the enforcement of a judgment or award. It is unnecessary, and will generally be pointless, for the court to attempt to decide hypothetical questions as to the likely effectiveness of any order. That applies with even greater force where such questions involve disputed issues of foreign law. It is sufficient that there is a real prospect that the appointment of receivers will serve a useful purpose.’ 1

[2014] EWHC 3131 (Comm) at [47(e)] as followed in JSC VTB Bank v Skurikhin [2015] EWHC 2131 (Comm) at [54].

6.54 In Edwards & Co v Picard1 a majority of the Court of Appeal held that a receiver should not be appointed where the judgment creditor sought an order for the appointment of a receiver of all rents, profits and moneys receivable in respect of the judgment debtor’s interest in three English patents in or towards satisfaction of the judgment debts. The judgment debtor had no other property in the jurisdiction. However, there was no evidence before the Court that any licences had been granted in respect of which royalties were receivable or that any business was being carried on by the use of the patents. Vaughan Williams LJ held that the patent merely conferred a right to exclude others from manufacturing in a particular way and using a particular invention. He concluded that there was no property of the patentee judgment debtor for the receiver to receive and that the order should not therefore be made.2 Similarly, Buckley LJ concurred that no order should be made because there was nothing receivable.3 Fletcher Moulton LJ, dissenting, thought that the Court did have jurisdiction to make the order and, while acknowledging that ‘it is true in general that it would not appoint a receiver without a probability that the appointment would be effectual and useful’,4 thought that justice in that case was so strongly on the side of the judgment creditor that the appointment should be made ‘as soon as possible in order that nothing may escape’ the receiver.5 While Fletcher Moulton LJ may have been seeking to push the principle too far, where a patentee has a right to claim damages for patent infringement or a right to fees under the terms of a licence that has been granted, there would appear to be property amenable to equitable execution.6 It seems that the principle that the appointment should not be fruitless is not offended where the property will or may be received in the future, such as where the judgment debtor has a reversionary interest under a will (see para 6.78). 1

2 3

4 5 6

Edwards v Co v Picard [1909] 2 KB 903. See also I v K [1884] WN 63 where Field J held that a receiver should only be granted where ‘there is something for the receiver to receive’ and Bourne v Colodense [1985] ICR 291 at 302, per Dillon LJ: ‘it is plain that the court would not appoint a receiver if the court were satisfied that the appointment would be fruitless because there was nothing for the receiver to get in’. [1909] 2 KB 903 at 906. [1909] 2 KB 903 at 910. However, Buckley LJ’s obiter comments at 910 that a receiver could not sue for infringement of a patent or non-payment of licence fees seem in contradiction to that court’s later decision that a receiver could be appointed to enforce an indemnity claim under an insurance contract. [1909] 2 KB 903 at 908. [1909] 2 KB 903 at 909. However, see the comments of Buckley LJ: [1909] 2 KB 903 at 909–910.

418  Appointing a receiver by way of equitable execution ASSETS AMENABLE TO EQUITABLE EXECUTION 6.55  Because of the nature of equitable execution and the fact that there must be some hindrance or difficulty in using the normal processes of execution the circumstances in which equitable execution will be available are more easily defined negatively rather than positively. The starting point is that if the property can be reached by writ of control, third party debt order or charging order, then this method of enforcement should generally be used in preference to equitable execution.

Interest can be legal or equitable in nature 6.56  A  number of the older authorities state1 or appear to state2 that the court only has jurisdiction to appoint a receiver by way of equitable execution where the judgment debtor holds only an equitable interest in the asset which, if it had been a legal interest, could have been reached by execution at law. This view was firmly rejected by Millett J in Maclaine Watson v International Tin Council3 whose judgment was expressly approved by the Court of Appeal.4 The test was simply ‘that there should be no way of getting at the fund except by the appointment of a receiver’.5 1

2 3 4 5

Anglo-Italian Bank v Davies (1878) 9 Ch D 275 at 285, per Sir George Jessel MR and 289, per Brett LJ; Salt v Cooper (1880) 16 Ch D 544 at 552, per Jessell MR; Holmes v Millage [1893] 1 QB 551 at 555, per Lindley LJ; Cadogan v Lyric Theatre Ltd [1894] 3 Ch 338 at 341, per Lord Herschell LC; Edwards v Co v Picard [1909] 2 KB 903 at 910, per Buckley LJ. See Millett J’s critical analysis of a number of earlier authorities in Maclaine Watson v International Tin Council [1988] 1 Ch 1 at 1921. [1988] 1 Ch 1 at 20–21. [1989] 1 Ch 253 at 270, per Ralph Gibson LJ, 284, per Nourse LJ and 284, per Kerr LJ. [1986] 1 Ch 1 at 20, approving the judgment of Chitty J in Westhead v Riley (1883) 25 Ch D 413.

6.57  In the case of land, it is specifically provided by statute that both legal and equitable interests can be the subject of equitable execution.1 1

See paras 6.89–6.90.

Interest must be capable of assignment 6.58  The property in respect of which an order for equitable execution is sought must be capable of assignment and not otherwise inalienable. This is because a ‘party who gets equitable execution gets nothing more than his judgment debtor can give him’.1 In practical terms, the judgment creditor should enquire whether the property has any statutory, common law or contractual restrictions on assignment which make the property inalienable. If there are such restrictions, it will not be possible for the court to appoint a receiver by way of equitable execution. 1

Ridout v Fowler [1904] 1 Ch 658 at 661, per Farwell J.

6.59  An exhaustive list of the types of property which are not capable of assignment is outside the scope of this book. The following types of property have been found

Assets amenable to equitable execution  419

not to be capable of assignment and therefore not amenable to the appointment of a receiver by way of equitable execution: (a) Pensions: orders for equitable execution in respect of army pensions1 and maintenance payments have been refused on the grounds of non-assignability.2 Many forms of pensions are rendered unassignable by statute.3 (b) Salaries: salaries of public officers are unassignable on public policy grounds at common law4 and there are statutory restrictions on the assignment of armed forces pay5 as well as the wages of seamen.6 Although not explicitly on the basis of lack of assignability, it has been held that a receiver cannot be appointed over future salary.7 The proper mechanism for attaching a judgment debtor’s salary or pension is an attachment of earnings order, which is considered in Chapter 1 (General rules on enforcement of judgments). (c) Contractual restrictions: contractual restrictions on assignability which are binding upon the judgment debtor means that an assignment will not be effective against the other party.8 However, a receiver can be still be appointed over the proceeds because the debtor can be a trustee of the proceeds.9 1

Lucas v Harris (1886) 18  QBD  127 where an attempt was made to appoint a receiver to collect an army pension which by virtue of the now repealed Army Act 1881, s  141 was unassignable. The equivalent modern statutory provisions is the Armed Forces Act 2006, s 356 that renders void, inter alia, any purported assignment of an armed forces pension. The statutory provisions cover not just pensions but, inter alia, any pay, grant or allowances payable to any person in respect of her or any other person’s service in Her Majesty’s Armed Forces. See also Crowe v Price (1889) 22 QBD 429, where the Court of Appeal refused to allow equitable execution where a trustee in bankruptcy had collected pension payments and paid them into court but where the bankruptcy order was later set aside. The Court held that the payments were still pension payments until received by the pensioner and reduced into possession and therefore still unassignable. The position is different once the pension payments have been received by the pensioner and paid into the pensioner’s bank account. In these circumstances the amounts in the pensioner’s bank account have been reduced into possession and lost their character as pension and become part of the pensioner’s ordinary money. Accordingly, the pension payments in the bank account can be garnished in the usual manner: Jones & Co v Coventry [1909] 2 KB 1029, DC. 2 Watkins v Watkins [1896] P 222, CA; Paquine v Snary [1909] 1 KB 688, CA; J Wallis Ltd v Legge [1923] 2  KB  240, CA. See generally Halsbury’s Laws of England (5th edn, LexisNexis, 2017 reissue), vol 13, para 97. 3 These include pensions of public officers. The more obviously relevant examples include: military pensions (see n 1 above); police pensions (Police Pensions Act 1976, s 9); parliamentary pensions (Parliamentary Pensions (Consolidation and Amendment) Regulations 1993, SI  1993/3253, reg R1(1)); civil service superannuation schemes (Superannuation Act 1972, s  5(1)); NHS pensions (National Health Service Pension Scheme Regulations 1995, SI  1995/300, reg T3(1)); judicial pensions (Judicial Pensions (Preservation of Benefits) Order 1995, SI 1995/634, art 7) and clergy pensions (Church of England Pensions Measure 2018, SI 2018/9, reg 34(3)). Guaranteed Minimum Pensions under an occupational pension scheme are unassignable by virtue of Pension Schemes Act 1993, s 159. Occupational pension schemes themselves are also unassignable under Pensions Act 1995, s 91. 4 See Halsbury’s Laws of England (5th edn, LexisNexis, 2017 reissue), vol 13, para 95. 5 See para 6.59, n 3. 6 Merchant Shipping Act 1995, s 34. 7 Holmes v Millage [1893] 1 QB 551. The Court of Appeal decided the case on the basis that future salary could not be reached at law or in equity. 8 Linden Garden Trust v Lenesta Sludge Disposals [1994] 1 AC 85 at 106E-H; Helstan Securities v Hertfordshire County Council [1978] 3 All ER 262. 9 Re Turcan (1888) 40 Ch. D. 5; Linden Garden Trust v Lenesta Sludge Disposals [1994] 1 AC 85.

420  Appointing a receiver by way of equitable execution Residual category 6.60  Assuming therefore that: (a) there is some hindrance or difficulty in using the normal processes of execution; and (b) the judgment debtor’s property is capable of assignment, there is no closed list of assets which potentially can be subject to equitable execution. However, the property must be specifically identified, it is not permissible to ask for a receiver to be appointed over all the judgment debtor’s assets.1 This section focuses on those instances of equitable execution that have come before the courts that are likely to be relevant to a commercial enforcement scenario. Receivers appointed over personalty are dealt with first, followed by a discussion of receivers appointed over land, which are governed by special statutory provisions. 1

PD 69, para 4.1(2).

Receivers over personalty Future payments 6.61  As has been noted, in Soinco SACI v Novokuznetsk1 it was held that future payments to a judgment debtor under a supply contract could be subject to equitable execution. Colman J explained that:2 ‘[t]he function of such a receiver would be to require the [payor under the supply contract3] to pay over to him all sums that become due for payment to [the judgment debtor] under the supply contract as and when they fall due. The receiver would then accumulate the payments up to the amount of the judgment debt and interest and then pay over that amount to the [judgment creditors] in discharge of the judgment debt.’ 1 2 3

[1998] QB 406. Noted (1997) 10(7) Insol Int 53. The decision of Colman J was approved by the Court of Appeal in Masri v Consolidated Contractors (No.2) [2008] EWCA Civ 303. [1998] QB 406 at 410. A company that there was evidence to show was controlled by the same individuals as the judgment debtor: see [1998] QB 406 at 423.

6.62  The judgment creditors’ application for equitable execution was based on the impediments in their ability to satisfy the debt by the use of garnishee proceedings (now third party debt orders). In particular: (a) the judgment creditors had no information as to what sums were or would become due or accruing due under the supply contract or when they would become due or accruing due; (b) garnishee proceedings would only attach debts due or accruing due at the time of the garnishee order nisi (now an interim third party debt order). The judgment creditors’ inability to ascertain when amounts fell due or accruing due precluded them from using garnishee proceedings: if the application was made too soon, they may get nothing; too late, and the judgment debtors may have paid the sums away;

Assets amenable to equitable execution  421

(c) there was evidence that the payor and the judgment debtors were seeking to ‘smother’ the payments due under the supply contract by making advance prepayments which could be set off against the sums payable under the supply contract so as to make the payments owed to the judgment debtor ‘garnishee proof’. 6.63  Colman J had considerable sympathy with the judgment creditors’ submission, that in light of these circumstances, it would be both just and convenient to appoint a receiver for the purpose of ascertaining what payments were due under the supply contract, and he dismissed the judgment debtor’s objection that such appointment would involve the receiver in acting as manager of the supply contract (see paras 6.13–6.14). The bulk of his judgment was devoted to a review of earlier authorities in light of the judgment debtor’s other key objection, namely that the court had no jurisdiction to appoint a receiver by way of equitable execution over future debts because it was bound by the position prior to the Supreme Court of Judicature Act 1873 when the Court of Chancery had no such jurisdiction. As discussed at para 6.29, Colman J eventually rejected this submission and found that there was jurisdiction to appoint a receiver by way of equitable execution to receive future debts as well as debts accruing due at the date of the order. Having concluded thus, he continued:1 ‘… the question that has to be answered is whether future debts have intrinsic characteristics which would justify excluding them from this remedy. In approaching this question it is necessary to keep in mind that the purpose of such a remedy would be to supplement legal process of execution by garnishee proceedings. Since that process does not apply to future debts and since it cannot be commenced in anticipation of debts becoming accruing due at a later stage, there is much to be said for the availability of a remedy which would enable the judgment creditor to acquire information as to future debts to enable him to effect collection from third parties as and when they fell due.’ 1

[1988] QB 406 at 421.

6.64  As has been noted, Colman J  made short shrift of the judgment debtor’s argument that such appointment would bring the judgment debtor’s business to a standstill.1 Similarly, he found little merit in the judgment debtor’s argument that questions of double jeopardy may arise with the payor under the supply contract having to pay the debts twice over, since the receiver’s powers to apply to the court for directions would safeguard the paying party’s position.2 He also felt there were independent positive justifications for making the order sought connected to the development of the Mareva or freezing injunction jurisdiction.3 1 2 3

See para 6.14. [1998] QB 406 at 421–422. [1998] QB 406 at 422.

6.65  The Court of Appeal considered whether future payments to a judgment debtor under a supply contract could be subject to equitable execution in Masri v Consolidated Contractors International (UK) Ltd (No 2).1 After detailed analysis considering the relevant authorities it was held that the High Court had jurisdiction to appoint a receiver by way of equitable execution in respect of future receipts

422  Appointing a receiver by way of equitable execution due to a judgment debtor from a defined asset (see para 6.30). Lawrence Collins LJ concluded: ‘there is no authority binding this court to hold that the jurisdiction is not available in relation to future income from a defined asset’. He went on to state: ‘In my judgment there is no reason why in 2008 the court should not exercise a power to appoint a receiver by way of equitable execution over future receipts from a defined asset. There is no longer a rule, if there ever was one, that an order can only be made in relation to property which is presently amenable to legal execution. There is no firm foundation in authority for a rule that the remedy is not available in relation to future debts. There is no principle which prevents the development of existing authority to extend the remedy to the property which was the subject of the receivership order in this case.’ 1 [2008] EWCA Civ 303.

Future trust payments to a beneficiary 6.66  It was suggested in Webb v Stenton1 that where the judgment debtor was a beneficiary under a trust and was entitled to future income payable half-yearly from trustees, the income could be collected by the appointment of a receiver by way of equitable execution.2 However, Webb v Stenton concerned an application for a garnishee order3 and thus the Court’s comments are strictly obiter. Doubt as to the validity of these remarks were expressed by Colman J in Soinco SACI v Novokuznetsk:4 ‘On the face of it, these remarks in favour of the appointment of a receiver appear to be directly inconsistent with many subsequent Court of Appeal decisions. It may be that they can be explained on the basis that the property in that case consisted of future payments (not yet to be made) by trustees to a beneficiary with a life interest under a will and was therefore of an equitable nature which attracted the equitable remedy in question. Having regard to the fact that in the present case there is no question of the property being of an equitable nature, I do not consider that these remarks have any relevance, if indeed they were correct.’ 1 2 3 4

(1883) 11 QBD 518. (1883) 11 QBD 518 at 519, per Cave J at first instance, 530531, per Fry LJ and 531, per Lindley LJ (concurring). Which was refused on the basis that there was no debt owing or accruing by the trustees when the debt was applied for. [1998] QB 406 at 417.

6.67  However, given the Court’s conclusion in Soinco that payments that became due as a consequence of future payments made under a supply contract should be amenable to equitable execution, it is difficult to see why a right to future income under a non-discretionary trust should not also be so amenable. Indeed case law has since accepted that that property subject to trust or analogous foreign arrangements will be regarded in equity as assets of the judgment debtor if it has the legal right to call for those assets to be transferred to it or to its order, or if it has de facto control

Assets amenable to equitable execution  423

of the trust assets in circumstances where no genuine discretion is exercised by the trustee over those assets.1 1

JSC VTB Bank v Skurikhin [2015] EWHC 2131 (Comm), approving Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others [2011] UKPC 17 and Blight v Brewster [2012] EWHC 165 (paras 6.70–6.71).

6.68  Different considerations are likely to arise where the trust is discretionary, and it should also be borne in mind that the terms of the trust may have provisions forfeiting a beneficiary’s interest in the event that equitable execution is sought in respect of his interest. Indeed, it is reported that in a recent case1 decided by Madam Justice Mangatal in the Grand Court of the Cayman Islands, where the appointment of receivers is the same as that pursuant to SCA 1981, s 37(1), a receiver was not appointed over a debtor’s interest under a discretionary trust. The creditor sought to rely on the decisions in Masri v Consolidated Contractors International (UK) Ltd (No  2)2 and Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others.3 However, in contrast to Tasarruf here there was no evidence of a power of revocation being reserved to the debtor himself. This was a fully discretionary trust and the debtor had no vested proprietary interest that could be regarded as tantamount to continued ownership of the trust assets. 1

Y v R, In the Matter of an application for the Enforcement of an Arbitral Award dated 5 July 2016, judgment delivered 9 January 2018. Referred to in a keynote address of by Honourable Anthony Smellie, Qc, Chief Justice of The Cayman Islands – International Wealth Structuring Forum, Cayman Islands, 28-30  January 2018, International Trusts And Trust Litigation Update. https:// judicial.ky/wp-content/uploads/publications/papers/ChiefJusticesSpeech-InternationalWealthStruct uringForum-Cayman-January28-302018.doc.pdf

2 [2008] EWCA Civ 303. 3 [2011] UKPC 17.

6.69 In Merchant International Company Ltd v Natsionalna Aktsionerna Kompaniia Naftogaz Ukrainy1 the Court considered when contractual rights, or a ‘sufficient expectation’ to receive payment could be subject to equitable receivership. The outstanding judgment sum was US$25 million. The judgment creditor applied for the appointment of a receiver by way of equitable execution over any rights, titles, interest or expectations the judgment debtor had in relation to sums held by a bank which related to notes which the judgment debtor had issued. Under an agency agreement the bank had been appointed to act as the paying agent. US$25 million was the surplus left in the bank after the notes had matured and were redeemed and cancelled by the noteholders. The Court agreed that the contractual arrangements prevented the bank from becoming a debtor to the judgment debtor but the judgment debtor had ‘other rights’ against the bank which it was entitled to exercise and which would result in its obtaining payment of that sum. Those rights could be the subject of receivership. The Court went on to observe that even if the contractual arrangements between the judgment debtor and the bank had successfully prevented the judgment creditor acquiring any legally enforceable rights at all against the bank the judgment debtor nevertheless had a sufficient expectation of being paid by the bank to make it appropriate to appoint a receiver in respect of that application of that expectation. Obiter, after considering detailed submissions on the issue, Mr Stephen Hofmeyr QC, sitting as a Deputy High Court Judge, held:

424  Appointing a receiver by way of equitable execution ‘Whilst I am in no doubt that appointing a receiver on this basis in this case would be an incremental development of the court’s jurisdiction, subject to the final matter to which I will come in a moment,2 I would have little hesitation in doing so. In my view, there is at least a real prospect — and in my view on the facts before me it is a high probability — that the appointment of a receiver in this case will assist in the enforcement of MIC’s judgment. However, as I am not bound to decide this issue, I will leave it to be decided by a court which is faced with the issue directly’.3 This judgment therefore opens up the possibility of a receiver being appointed in a case in which there is a high probability, alternatively, a reasonable prospect, that a third party will pay money or transfer property to the judgment debtor (or to its order) even where the third party has an unfettered discretion whether or not to do so. 1 2 3

[2015] EWHC 1930 (Comm). The ‘final matter’ related to a submission that the court should refuse to make the appointment of a receiver as a matter of discretion. This argument failed. [2015] EWHC 1930 (Comm) at [30].

De facto control 6.70 In Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others1 the Privy Council considered whether the power of revocation of a trust was sufficiently close to the notion of property as to enable the appointment of a receiver by way of equitable execution. The creditor, TMSF, had obtained judgment of US$30 million. TMSF learned that the judgment debtor had established two discretionary trusts in the Cayman Islands, with assets of some US$24 million. For practical purposes the beneficiaries were the debtor and his wife. The debtor had the power of revocation of the trusts, with the consequence that he could re-vest in himself an amount which would satisfy a very large proportion of the judgment debt. Their Lordships concluded that the decisions in Masri (No  2) and its predecessors led to the conclusion that in this case the jurisdiction should be exercised. Their Lordships did not dispense with the requirement for a proprietary interest but the powers of revocation were such that in equity, in the circumstances of a case such as this, the judgment debtor could be regarded as ‘having rights tantamount to ownership’. The interests of justice required that an order be made in order to make effective the judgment. A receiver was appointed over the power of revocation. 1 [2011] UKPC 17.

6.71  Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others1 was later followed by Mr G Moss QC sitting as a Deputy High Court Judge in Blight v Brewster2 where the debtor had a right to elect to drawdown 25% of his Canada Life pension as a tax free sum. The question was whether that right and the 25% could be reached by execution in order to recover the balance or part of the balance of the judgment debt. The argument that:3 ‘The court cannot force the Defendant to make an election that is not in his financial interest and there is no jurisdiction to make any form of mandatory order against the Defendant in these circumstances’ was dismissed. This would work a substantial injustice to the creditor:

Assets amenable to equitable execution  425

‘The idea that the fraudster and forgerer can enjoy an enhanced standard of living at his retirement instead of paying the judgment debt would be a very unattractive conclusion. The Defendant clearly has the means of paying the 25% to the Claimants: all he has to do is to give notice to Canada Life.’ It was observed:4 ‘An order to pay a lump sum is an order of the court and I cannot myself see why in principle the injunction and receivership powers in section 37(1) could not be used in aid of the court order in order to make it effective.’ 1 [2011] UKPC 17. 2 [2012] EWHC 165. 3 [2012] EWHC 165 at [59]. 4 [2012] EWHC 165 at [62].

6.72  In coming to this conclusion, the Court declined to follow Field v Field.1 In that case a husband had defaulted on an order to his former wife and he had a non-assignable right to elect for a lump sum payment under his employer’s pension scheme. The Court concluded in that case that the pension could not be reached by an order requiring the election of a lump sum payment and the appointment of a receiver. The decision was based on the notion that the injunction would be ‘a freestanding enforcement procedure in its own right’. The Privy Council distinguished Field v Field in Tasarruf2 on the basis that it regarded the injunctive relief as not being ‘free-standing’ where it is ancillary to execution. The Court concluded in Blight v Brewster that the reasoning in Field v Field (on the receivership issue) was flawed as it was inconsistent with the reasoning of the Privy Council and created a substantial injustice.3 The position in Blight v Brewster was analogous to the situation faced by the Privy Council. The judgment in Blight v Brewster noted: ‘There appears to me to be a strong principle and policy of justice to the effect that debtors should not be allowed to hide their assets in pension funds when they had a right to withdraw monies needed to pay their creditors.’ The jurisdiction should ‘plainly be exercised’.4 1 2 3 4

[2003] 1 FLR 376. For a critique of the decision, see Gee Commercial Injunctions (6th edn, Sweet & Maxwell, 2016), 571–572. [2011] UKPC 17 at [63]. [2012] EWHC 165 at [68]. [2012] EWHC 165 at [74].

6.73 In JSC VTB  Bank v Pavel Skurikhin & Others1 the judgment creditor was seeking to enforce money judgments which it had obtained against Mr Skurikhin. The sterling equivalent of the judgment sum was in the region of £15 million. The judgment creditor wanted to enforce the judgment debt against three properties in Italy which were held by Pikeville LLP, an English limited liability company. The LLP membership interests were registered in three names who held their membership interests as nominees. The judgment creditor regarded Mr Skurikhin as the beneficial owner of those LLP membership interests. Mr Skurikhin and the members asserted that the true beneficial owner of the LLP membership interests was the Berenger Foundation which was domiciled in Liechtenstein. They contended that Mr Skurikhin

426  Appointing a receiver by way of equitable execution was no more than a discretionary beneficiary of the Foundation, and as such could not be treated as the beneficial owner of the assets of the Berenger Foundation. On the facts it was concluded that Mr Skurikhin had either a right to call for the assets of the Berenger Foundation to be transferred to him, or had de facto control of those assets.2 After considering the judgments in Masri,3 Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Company (Cayman) Ltd and others4 and Blight v Brewster,5 Christopher Butcher QC, sitting as a Deputy High Court Judge agreed with the submission that ‘a receiver by way of equitable execution may be appointed over whatever may be considered in equity as the assets of the judgment debtor’ and that: ‘property subject to trust or analogous foreign arrangements would be regarded in equity as assets of the judgment debtor if he has the legal right to call for those assets to be transferred to him or to his order, or if he has de facto control of the trust assets in circumstances where no genuine discretion is exercised by the trustee over those assets’.6 1 [2015] EWHC 2131. 2 [2015] EWHC 2131 at [48]. 3 [2008] EWCA Civ 303. 4 [2011] UKPC 17. 5 [2012] EWHC 165. 6 [2015] EWHC 2131 at [39].

Refusal to exercise a contractual right 6.74  A  receiver by way of equitable execution can be appointed to enforce a contractual right that the judgment debtor is refusing to exercise.1 This most commonly arises where the judgment debtor has a right under a contract of indemnity and is refusing to exercise this right. 1

Bourne v Colodense [1985] ICR 291, CA; Maclaine Watson & Co v ITC [1988] 1 Ch 1; Allied Irish Bank v Ashford Hotels Ltd [1997] 3 All ER 309, CA.

6.75 In Bourne v Colodense1 the judgment debtor was a trade union member and had, as he was entitled to do under the trade union rules, applied for financial support by the union to bring a claim against his employer. The trade union agreed to give financial support in the litigation and instructed a solicitor to act on his behalf. The claim failed and costs were awarded against the judgment debtor personally but on the understanding that he would be put in funds to pay the costs order by the trade union. The judgment debtor himself had no assets to satisfy the judgment debt and flatly refused to seek reimbursement from the trade union to pay the costs order. 1 [1985] ICR 291.

6.76  The employer judgment creditor applied to appoint a receiver by way of equitable execution to bring proceedings in the name of the judgment debtor to enforce the indemnity for costs or the contractual right which they contended the union had given the judgment debtor. The Court of Appeal held that the judgment debtor had an arguable indemnity or contractual right from his trade union in respect of the costs order made against him and was therefore prepared to uphold the

Assets amenable to equitable execution  427

order appointing the receiver, since if the indemnity or contractual right could be established, this would satisfy the judgment creditor’s costs order.1 1 In Soinco SACI v Novokuznetsk [1998] QB 406 at 419–420 Colman J pointed out that a number of key authorities did not appear to have been cited to the Court in Bourne. However, he declined an invitation from counsel to ignore the case on the basis it was decided per incuriam and in any event referred to the later decision in Maclaine Watson, which gave full consideration to the authorities.

6.77  By statute1 the court has power to make a costs order directly against nonparties to the proceedings, such as the trade union in Bourne, thereby removing the need for recourse to equitable execution in such circumstances. However, Bourne is authority for the wider principle that equitable execution can be used to bring proceedings in the judgment debtor’s name to enforce contractual rights of indemnity in respect of the judgment debtor’s liabilities. This was illustrated in Maclaine Watson & Co v International Tin Council.2 In that case the judgment creditors had obtained a judgment debt of some £6m against the International Tin Council (the ITC). The ITC was a treaty organisation whose members consisted of various states including the UK government. The judgment creditors were seeking to appoint a receiver by way of equitable execution to bring proceedings in the name of the ITC to attempt to enforce an indemnity said to arise from its member states in respect of the judgment debt. A receiver was ultimately refused because any indemnity claim by the ITC was not justiciable before the English courts. However, Millett J, after a full consideration of the authorities, was prepared to treat Bourne as authority for the appointment of a receiver by way of equitable execution to enforce a claim to an indemnity.3 Although the issue did not arise before the subsequent appeal to the Court of Appeal, all members of the Court of Appeal expressly approved the reasoning of Millett J.4 It should also be noted that any claim that the appointment of a receiver by way of equitable execution to enforce the judgment debtor’s claim would be contrary to the rules on maintenance and champerty would be likely to fail since the judgment creditor clearly has a genuine commercial interest in the enforcement of the indemnity.5 1

2 3 4 5

SCA 1981, s 51 and CPR 48.2(1)(a). In Hamilton v Al Fayed (No 2) [2003] 3 QB 1175, at 1203–1204 Hale LJ suggested obiter that a third party costs order is not usually made against a trade union because the expectation is that the trade union will pay voluntarily. Presumably where it does not, as in Bourne v Colodense, the court has a discretion to make a direct costs order against the trade union rather than use the more circuitous route of appointing a receiver by way of equitable execution. In Murphy v Young & Co [1997] 1 WLR 1591 at 1601 Phillips LJ issued guidance on making a costs order under SCA 1981, s 51 against, inter alia, a trade union. On the power to award costs against non-parties generally see Cook on Costs (LexisNexis, 2020). Maclaine Watson & Co v International Tin Council [1988] 1 Ch 1. Maclaine Watson & Co v International Tin Council [1988] 1 Ch 1 at 21. Maclaine Watson & Co v International Tin Council [1989] 1 Ch 253. Bourne v Colodense [1985] ICR 291 at 301–302, per Lawton LJ and 303, per Dillon LJ.

Reversionary interest under a will 6.78  Equitable execution is possible in respect of any capital or income which the judgment debtor may become entitled to in future under a reversionary interest under a will.1 1

Macnicoll v Parnell (1887) 35 WR 773, DC; Fuggle v Bland (1883) 11 QBD 711; Flegg v Prentis [1892] 2 Ch 428; Tyrrell v Painton [1895] 1 QB 202, CA; Ideal Bedding Co Ltd v Holland [1907] 2 Ch 157.

428  Appointing a receiver by way of equitable execution Funds held in court 6.79 In Westhead v Riley,1 Chitty J  appointed a receiver by way of equitable execution over taxed costs which were due to be paid to the judgment debtor from a fund held at court. Such appointment would no longer be necessary as funds standing to the benefit of a judgment debtor in court can now be made available to a judgment creditor using the procedure set out in CPR 72.10.2 Alternatively, a charging order could be sought.3 1 2

3

(1881) 25 Ch D 413. See further Ch  3 (Third party debt orders). While a third party debt order cannot be obtained in respect of such sums, CPR 72.10 provides an alternative method whereby such funds can be paid in satisfaction of a judgment debt. See Ch 4 (Charging orders).

Foreign assets 6.80  The question of whether a receiver by way of equitable execution could be appointed over foreign assets arose directly in Masri v Consolidated Contractors (No  2),1 where the judgment creditor sought to have a receiver appointed over sums due to the judgment debtor in respect of its rights in an oil concession in Yemen. Upholding the decision of Gloster J, the Court of Appeal held that there was nothing objectionable in principle about such an order. The Court rejected the judgment debtor’s argument that the appointment of a receiver amounted to a form of enforcement against assets situated abroad, and that by making such an order the English court would therefore illegitimately infringe the sovereignty of a foreign state. Lawrence Collins LJ pointed out that the appointment of a receiver does not have proprietary effect but operates only in personam. The matters which the court must consider in deciding whether to make such an order are therefore: (a) the connection of the person who is the subject of the order with the English jurisdiction; (b) whether what they are ordered to do is exorbitant in terms of jurisdiction; and (c) whether the order has impermissible effects on foreign parties.2 1 [2008] EWCA Civ 303. 2 [2008] EWCA Civ 303 at [59].

6.81  On the facts, the Court held that the judgment debtor did have a sufficient connection with the jurisdiction because it had submitted to the jurisdiction of the English Court, defended the case on the merits, and had a substantial English judgment outstanding against it. It did not consider that the Court exceeded its jurisdiction by ordering the judgment debtor not to receive the proceeds of oil or by ordering it to cooperate with the receiver. As to the potential effect of the order on third parties, the Court concluded that these did not show that the exercise of the jurisdiction was exorbitant because third parties could be protected by the insertion of a provision equivalent to the Babanaft proviso which is typically included in a worldwide freezing order and which provides that the order is only enforceable against third parties in respect of assets outside the jurisdiction if declared enforceable in the country concerned.

Assets amenable to equitable execution  429

6.82  Lawrence Collins LJ also pointed out that there had been earlier cases in which the English courts had appointed receivers in respect of foreign property. For instance, in Re Maudslay, Sons & Field1 the claimant debenture holders appointed a receiver over the company’s assets which included a debt due to the company by a French firm. When another creditor brought proceedings in France to attach the debt due to the company by the French firm, the debenture holders applied to restrain the French proceedings on the basis that they interfered with the receiver’s possession. Cozens-Hardy J held that there was no contempt:2 ‘So long as the property is within the territorial jurisdiction of the Court, there is no difficulty, at least in theory, in putting the receiver in actual possession. And when the receiver is in possession, the Court does not allow his possession to be interfered with without leave. For example, no judgment creditor of the company would be allowed to levy execution upon the property of the company in England now in the possession of the receivers. It is well settled that the Court can appoint receivers over property out of the jurisdiction. This power, I apprehend, is based upon the doctrine that the Court acts in personam. The Court does not, and cannot attempt by its order to put its own officer in possession of foreign property, but it treats as guilty of contempt any party to the action in which the order is made who prevents the necessary steps being taken to enable its officer to take possession according to the laws of the foreign country. See Keys v Keys, where special directions were given to a receiver as to the best mode of getting in an Indian debt; and Smith v Smith, where it was pointed out that a receiver of property in Jersey and in France would have to recover possession according to the laws of those countries; and in Houlditch v Marquis of Donegal the House of Lords held that the Court of Chancery in Ireland ought to appoint a receiver in a suit instituted to carry into effect a decree of the Court of Chancery in England by which a receiver had been appointed over estates in Ireland. In other words, the receiver is not put in possession of foreign property by the mere order of the Court. Something else has to be done, and until that has been done in accordance with the foreign law, any person, not a party to the suit, who takes proceedings in the foreign country is not guilty of a contempt either on the ground of interfering with the receiver’s possession or otherwise.’ 1

[1990] 1 Ch 602.

2

[1990] 1 Ch 602 at 611–612.

6.83  According to Lawrence Collins LJ in Masri v Consolidated Contractors (No 2):1 ‘[Re Maudslay] shows that more than 100 years ago it was recognised not only that the order is in personam but also that it has no actual effect on the property abroad. It shows not only that the English court may appoint a receiver over foreign property, but it also illustrates why the mere appointment is not a breach of international comity. The fact that the receiver in that case was appointed by the court under a debenture is a distinguishing factor, but not one which meets the fundamental point that the English court may appoint a receiver over foreign property, because the order operates in personam only…

430  Appointing a receiver by way of equitable execution The authorities make it clear that, although there may be special conditions for the appointment of such a receiver, the receiver does not differ in kind from other court-appointed receivers. The expression “by way of equitable execution” refers to the purpose of the appointment, but does not turn it into a process of execution. I accept the submission for Mr Masri that the appointment of a receiver in aid of enforcement is an interim order, and is inherently temporary, pending payment of the judgment. As soon as the judgment has been paid, the receivership will be discharged, whether or not the receivership plays any eventual role in the recovery of payment.’ 1

[2008] EWCA Civ 303 at [66] and [69].

6.84  The Court also confirmed that the position was not affected by the decision of the House of Lords in Société Eram Shipping Co Ltd v Compagnie Internationale de Navigation,1 where it was held that a third party debt order could not be made in respect of a debt situated abroad. This was for the following reasons:2 ‘First, [the appointment of a receiver] is not a proprietary remedy. It does not change the title to the debts, nor impose any charge. Second, the third party is not required by the order to pay the receiver, and there is no question of any discharge of the debts being effected by the order. Third, the consequence is that the third party debtor is not in danger of being compelled to pay twice. Fourth, the only person who is directly subject to the order is CCOG, which is subject to the jurisdiction of the court, and is being ordered to perform certain acts which have a genuine connection with England, namely compliance with an English judgment against it. Fifth, the third party debtors are protected from being put in the position of having to choose between being in contempt and having to dishonour their obligations under the applicable law by the Babanaft provisos in the order. Sixth, the right of the receiver to sue for the debts in a foreign country is limited to cases where his title to sue will be recognised by the foreign court. The essence of the decision in Société Eram so far as it concerns international jurisdiction is that it is wrong for one legal system to reach out and affect title to property in another country (the judgment creditor’s interest in a foreign debt), and, as in the case of attachment of debts, place the citizens of that other country in a position where they may have to pay twice. To do so is an impermissible exercise of extraterritorial jurisdiction. This is not such a case.’ 1 [2004] AC 260. 2 [2008] EWCA Civ 303 at [71]–[72].

6.85  Masri v Consolidated Contractors (No  2)1 was followed in Cruz City 1 Mauritius Holdings v Unitech Ltd and others2 where an application was made for the appointment of receivers by way of equitable execution over the foreign assets of two defendants. Males J noted: ‘It is clear that an order for appointment of a receiver does not confer any proprietary right transferring ownership of the asset in question to the receiver. Rather it operates in personam, having effect as an injunction restraining the judgment debtor from receiving any part of the property which it covers, if

Assets amenable to equitable execution  431

that property is not already in his possession: Masri at [50] to [53]. There is, therefore, no rule preventing the court from making a receivership order by way of equitable execution in relation to foreign assets. Such orders have been made for well over a century, even if not necessarily by way of equitable execution: Masri at [62]. There needs to be a sufficient connection with the English jurisdiction to justify the making of such an order and to satisfy the requirements of comity, but the fact that the order is made with a view to the enforcement of an English judgment or award provides that connection: Masri at [59] to [61]. Because the order operates in personam, what matters is whether the court has personal jurisdiction over the defendant. It is not a bar to the appointment of receivers that the English court’s order will not or may not be recognised by the foreign court where the assets are located… .’3 1 [2008] EWCA Civ 303. 2 [2014] EWHC 3131 at [35]–[40]. 3 [2014] EWHC 3131 at [35]–[36].

6.86  However, an order of the English court should not in general require the defendant to do something which exposes it to a real danger of criminal liability under the law of its home state or the state where the assets are located. A ‘flexible discretionary approach’ will be adopted by the court ‘when faced with a suggestion that compliance with its requirements will involve incrimination under another system of law’.1 That approach involves an assessment by the English court of what is the real risk of prosecution abroad and an exercise of discretion in the light of that assessment. 1

Masri v Consolidated Contractors International Company SAL [2008] EWHC 2492 (Comm) at [26] and Cruz City 1 Mauritius Holdings v Unitech Ltd and others [2014] EWHC 3131 at [39]–[40].

Interest in partnership property 6.87  Where a judgment has been obtained against a partner, it is possible for the judgment creditor to appoint a receiver of that partner’s interest in the partnership property and profits. The Partnership Act 1890 (PA 1890), s 23(2) provides that: ‘The High Court, or a judge thereof, … may, on the application by summons of any judgment creditor of a partner, make an order charging that partner’s interest in the partnership property and profits with payment of the amount of the judgment debt and interest thereon, and may by the same or a subsequent order appoint a receiver of that partner’s share of profits (whether already declared or accruing), and of any other money which may be coming to him in respect of the partnership, and direct all accounts and inquiries, and give all other orders and directions which might have been directed or given if the charge had been made in favour of the judgment creditor by the partner, or which the circumstances of the case may require.’ 6.88  An application for a charging order under PA 1890, s 23(2) must be made in accordance with Pt 231 and every application notice issued and order made on such application must be served on the judgment debtor and on such of her partners as are

432  Appointing a receiver by way of equitable execution within the jurisdiction.2 In practice, the application may be for both a charging order to charge the partner’s share of the partnership property and to appoint a receiver to receive the partnership income. 1 2

PD 73, para 6.2 PD 73, para 6.4. This provision affords the other partners the opportunity to exercise their statutory right to redeem the interest charged or purchase the partnership interest in the event of a sale.

Receivers over land 6.89  Unless land belonging to the judgment debtor has some income stream associated with it, a charging order will normally be the appropriate method of enforcing a judgment against land. Appointing a receiver by way of equitable execution over land is regulated by special statutory rules. 6.90  Historically, receivers could only be appointed over equitable interests in land because legal interests in land could be taken at law by the writ of elegit.1 The Administration of Justice Act 1956 abolished the writ of elegit2 and extended the jurisdiction to appoint a receiver by way of equitable execution in respect of all legal estates and interest in land.3 This is still the position today whereby the provisions in the Administration of Justice Act 1956 concerning receivers were repealed and reenacted by SCA 1981.4 SCA 1981, s 37(4) provides that: ‘The power of the High Court to appoint a receiver by way of equitable execution shall operate in relation to all legal estates and interests in land; and that power— (a) may be exercised in relation to an estate or interest in land whether or not a charge has been imposed on that land under section 1 of the Charging Orders Act 1979 for the purpose of enforcing the judgment, order or award in question; and (b) shall be in addition to, and not in derogation of, any power of any court to appoint a receiver in proceedings for enforcing such a charge.’ 1

2

3 4

A writ of elegit was a form of execution created by the Damages Execution Act 1285 which allowed the sheriff to take ‘all the Chattels of the [judgment] Debtor (saving only his Oxen and Beasts of his Plough) and the one half of his Land’. The writ of elegit was extended to cover all the judgments debtor’s land by the Judgments Act 1838, s 11. Bankruptcy Act 1883, s 146 removed the sheriff’s right to take the goods of the judgment debtor and restricted the writ of elegit to land only. For a historical perspective, see Blackstone’s Commentaries on the laws of England (1765–1769) vol 3, pp 419–420. Administration of Justice Act 1956, s 34(1). Section 34(2) also repealed the Law of Property Act 1925, s 195(1)–(3) and (5) which provided that judgments entered up in SCA 1981 operate as equitable charges on all the land of the judgment debtor. Section 195(3) provided that the judgment creditor had to wait a year from the entering up of judgment before being entitled to enforce the statutory charge and if the judgment debtor became bankrupt before the year was up, the judgment creditor had no priority. A similar regime had also existed under the Judgments Act 1838, ss 11 and 19. Administration of Justice 1956, s 36(1). SCA 1981, s 152(4) and Sch 7.

6.91  In other words, equitable execution can be granted without the need to apply for a charging order and, even where a charging order has been made, the court may also appoint a receiver by way of equitable execution. In practice, the appointment

Assets amenable to equitable execution  433

of a receiver probably has no advantage over a charging order unless there is some periodic income stream or profits associated with the property for the receiver to collect.1 While a receiver by way of equitable execution could be appointed to make an application in the judgment debtor’s name2 under Trusts of Land and Appointment of Trustees Act 1996, s 143 for the sale of the property, this could also be achieved by obtaining an order for sale under a final charging order. In practice, it is likely that where a judgment debtor owns land with an associated income stream the judgment debtor should apply for both a charging order (to charge the judgment debtor’s interest in the land) and an order for appointment of a receiver by way of equitable execution (to obtain the income from the land). 1 2

3

In contrast to a charging order, the appointment of a receiver will not impose a charge on the property and place the judgment creditor in the position of a secured creditor. See paras 6.175–6.178. If the action is brought in the name of the receiver rather than the judgment debtor the receiver will not have sufficient interest under the Trusts of Land and Appointment of Trustees Act 1996, s 14: Stevens v Hutchinson [1953] Ch 299 at 305 where the court was considering the Law of Property Act 1925, s 30 (the predecessor of the Trusts of Land and Appointment of Trustees Act 1996, s 14). Levermore v Levermore [1979] 1 WLR 1277 at 1281–1282 where the court was considering Law of Property Act 1925, s  30 (the predecessor of Trusts of Land and Appointment of Trustees Act 1996, s 14).

Rents 6.92  Where the judgment debtor owns a property in which there are tenants in possession paying rent, a receiver by way of equitable execution would serve a useful purpose by being able to collect the rents which could not otherwise easily be reached. A charging order does not extend to cover income from the land and the third party debt order procedure would require a proliferation of orders after each instalment of rent because it requires a ‘debt due or accruing due to the judgment debtor’ before an order can be made.1 Following the Canadian case of Manning Wanless Building Supplies Ltd v Puskas and Flemke,2 the need for a proliferation of third party debt orders is likely to be grounds for an order for the appointment of a receiver by way of equitable execution. 1 2

See further Chs 3 (Third party debt order) and 4 (Charging orders). (1962) 39 WWR 672 (Can).

6.93 In JSC BTA Bank v Ablyazov1 Hamblen J took a further step and allowed an application by the judgment creditor bank to vary the receivership order that had previously been obtained (prior to judgment in support of a freezing order) in relation to assets of the judgment debtor, Mr Ablyazov, so as to permit the receivers to sell three properties. Mr Ablyazov did not hold the assets in his own name but they were held in an elaborate scheme. His position was that this was to ‘protect him from the unlawful depredations by the President of Kazakhstan’. In due course judgment was obtained and the judgment debt stood at US$3.6 billion. Mr Ablyazov’s application for permission to appeal to the Supreme Court had been dismissed. The properties had previously been found to the criminal standard to be his. By this stage the receivers had been appointed in relation to the properties for a considerable time and had taken a number of steps in relation to them and were in the best position to organise their sale and, at least in relation to one of the properties, the bank was having to pay very substantial ongoing maintenance charges. It was held that:

434  Appointing a receiver by way of equitable execution ‘In this case the bank submits that the circumstances of the case, including practical convenience, avoiding delay, cost and expense and considering whether satisfaction for judgment may be achieved all point to varying the receivership order to include a power of sale. In particular, it is pointed out that the receivers are already in office; that the receivers already have a substantial knowledge of the properties; that they will be in a position to proceed more quickly in terms of marketing and sale than following through the formal procedures of a charging order; that the receivers are already receivers and managers of Mount Properties Limited and of Lafe Technology Limited and by the terms of the order I shall be making, Bensborough Trading Inc as well [these companies being the registered proprietors of the properties]; and that the receivers will be able to use their powers to transfer and sell the properties without the bank needing to make Part 8 claim seeking order for sale, without the need for the court to vest in the bank a legal term of 3,000 years2 in the properties to be sold and without the appointment of a representative of the bank or a bank solicitor as a person to sell the properties. It is pointed out that enabling the receivers to have the power of sale rather than going through the charging order procedure will in fact give the court greater control over the process because the receivers remain accountable to the court. It will also avoid any arguments about any dual role because if, for example pursuant to a charging order, the sale of the properties was entrusted to the receiver, there might be arguments as to the fact that in those circumstances the receiver would be acting on behalf of the bank. It would accordingly be more satisfactory for all matters of sale to be dealt with by the receiver in the context of the existing receivership order and their duties to the court.’ It should be noted in that case that the bank did have an interim charging order and the receivers had made clear that they did not intend to sell prior to that being made final and the Court made that a term of the order. Whether a court would countenance the receivers having a power of sale without the creditor having first obtained a charging order is an open question. 1 2

[2013] EWHC 1361 (Comm). See HM Land Registry: Practice Guide 75: transfer under a chargee’s power of sale (May 2019).

Registering the appointment of a receiver over land 6.94  In order to be effective,1 the order appointing a receiver by way of equitable execution over land should be registered. The land registration system is considered in detail at paras 4.102–4.133 and this section simply deals with the mechanics of registration. The method of protecting an order appointing a receiver over land depends on whether the land is registered or not. 1

Since otherwise a bona fide purchaser without notice could take free of the order.

Unregistered land 6.95  In the case of unregistered land, an application should be made to have the order appointing the receiver registered in the register of writs and order affecting

Limitations of equitable execution  435

land.1 Registration of the order constitutes actual notice of the order irrespective of whether a potential purchaser actually inspects the register.2 Where a charging order has already been obtained and registered under Land Charges Act 1972, s 6, it is not necessary to register an order appointing a receiver by way of equitable execution.3 Where registration is required, the appropriate form for the registration of a writ or order is Land Registry Form K44 and the fee is £1.5 1

2 3 4 5

Land Charges Act 1972, s 6(1)(b). The entry is made against the name of the estate owner or other person whose land is affected by the order: Land Charges Act 1972, s 6(2). The meaning of ‘estate owner’ is considered at paras 4.115–4.116. Law of Property Act 1925, s 198. SCA 1981, s 37(5). This section disapplies Land Charges Act 1972, s 6(4) which would otherwise render the receivership order void as against a purchaser for failure to register the order. The form can be downloaded from the gov.uk website: www.gov.uk/government/publications/writor-order-registration-application-k4 Land Charges Fees Rules 1990, Sch 1.

Registered land 6.96  An application to protect an order appointing a receiver should be made to enter a restriction which ‘is an entry in the register regulating the circumstances in which a registered estate or charge may be the subject of an entry in the register’.1  A  court appointed receiver is entitled to apply for a restriction to be registered2 in Form L3 or N4 of the standard form of restrictions which appear in the Land Registration Rules 2003, Sch 4. Where a restriction is entered on the register, no entry of the type prohibited by the restriction can be made otherwise than in accordance with the terms of the restriction.5 The relevant form for the registration of a receiver is Land Registry Form RX16 and the fee is £20 where submitted electronically (and £40 otherwise).7 1 2 3

4

5 6 7

Land Registration Act 2002, s 40(1). Land Registration Act 2002, s 43(1)(c) and Land Registration Rules 2003, r 93(s). The substance of which provides: ‘No disposition [or specify details] of the registered estate [(other than a charge)] by the proprietor of the registered estate [, or by the proprietor of any registered charge,] is to be registered without a certificate.’ The substance of which provides: ‘No disposition [or specify details] of the registered estate [(other than a charge)] by the proprietor of the registered estate [or by the proprietor of any registered charge] is to be registered without a written consent.’ Land Registration Act 2002, s 41. Land Registration Rules 2003, r 92(1). Land Registration Fee Order 2006, SI 2013/3174, Sch 3, para 1.

LIMITATIONS OF EQUITABLE EXECUTION 6.97  It has been noted that equitable execution generally will not be available when some other method of enforcement can be used without hinderance or difficulty against the judgment debtor’s assets. It also is not possible for equitable execution to be obtained against the Crown.1 Crown Privilege and other general limitations on enforcement are considered in Chapter 1. 1

Crown Proceedings Act 1947, s 25(4).

436  Appointing a receiver by way of equitable execution PRACTICE AND PROCEDURE 6.98  The procedural rules relating to the appointment of a receiver by way of equitable execution are set out in CPR Pt 69 and the accompanying Practice Direction. The provisions of Pt 69 apply to the appointment of equitable receivers as well as a number of other forms of court-appointed receiver. The application for appointment of a receiver by way of equitable execution should be made in accordance with the provisions of CPR Pt 23. When can the court appoint a receiver? 6.99  The court may appoint a receiver before proceedings have started, in existing proceedings, or on or after judgment.1 This chapter is concerned with the appointment of a receiver by way of equitable execution once judgment has been obtained. It follows from the use of the words ‘on or after judgment’ that the judgment creditor may apply for judgment as soon as judgment is given, assuming it is in a position to do so. 1 CPR 69.2(1)(a)–(c).

Which court? 6.100  The jurisdiction to appoint a receiver by way of equitable execution extends to all divisions of the High Court, the Family Court, the Court of Appeal, and the County Court as regards causes of action within the limits of its jurisdiction.1  CPR  Pt  69 contains no provision as to the court in which the application should be made. However, in line with the general rules on applications, the application should be made to the court where the claim was started2 unless the claim has since been transferred, in which case it should be made to the court to which the claim was transferred.3 If an application for an order for appointment of a receiver is made after proceedings to enforce the judgment have begun, it must be made to the court that is dealing with those enforcement proceedings.4 1 See the County Courts Act 1984, s 107. 2 CPR 23.2(1). 3 CPR 23.2(2). 4 CPR 23.2(5).

With or without notice? 6.101  An application to appoint a receiver may be made without notice.1 Generally, the application will be made on notice and the judgment creditor will serve a copy of the application notice and evidence in support on the judgment debtor. However, where the judgment creditor also seeks a related injunction because, for example, it fears dissipation of the judgment debtor’s assets, the application should be made without notice (see paras 6.115–6.116). 1 CPR 69.3.

Practice and procedure  437

Application notice 6.102  An application to appoint a receiver by way of equitable execution should be made by application notice in accordance with CPR Pt 23.1 Part A of the application notice should use wording based on that set out in Form No 82,2 which provides that the application is: ‘… for an order that [a receiver be appointed] [(name and address) be appointed receiver]3 in this claim to receive the rents, profits and moneys receivable in respect of the interest of the (party) in the following property, namely (describe the property) in or towards satisfaction of the moneys and interest due to the (party) under the judgment [or order] in this claim dated (date) and for an order that the costs of this application be paid by the (party) to the (party).’ 1 CPR 23.3(1). 2 CPR 4(1). 3 In most applications for a receiver by way of equitable execution, a named individual should be given. An exception might be where there is evidence of dissipation and a related injunction is sought at the same time making the identification of a named receiver impractical.

6.103  Where a related injunction is sought1 the same application notice must be used for both the application for the receivership order and the injunction.2 1 2

See paras 6.113–6.117. PD 69, para 3.1.

Draft order 6.104  A draft order should usually be included with the application notice.1 Form No 84 is a standard form order2 and seems to be largely based on cases of considerable antiquity.3 In preparing the draft order the judgment creditor should bear in mind that a receiver appointed by way of equitable execution is very much a creature of the court’s order. It is vital that thought is given at an early stage as to what steps the receiver is likely to need to take to secure and collect the judgment debtor’s property and that appropriate provisions are sought in the order. While not every situation can be foreseen in advance, and directions can be sought by the receiver from time to time if needed,4 it will save time and legal costs if the order making the appointment also gives the receiver sensible powers framed with the receivership property in mind. 1 See CPR 23.7(3)(b) and PD 23A, para 12.1; Chancery Guide (2016) para 29.73. 2 CPR 4(1). 3 Similar to the orders reported in Wells v Kilpin (1874) LR 18 Eq 298; Salt v Cooper (1880) 16 Ch D 544 at 545; Levasseur v Mason & Barry [1891] 2 QB 73 at 74; Re Potts [1893] 1 QB 648 at 649; Cadogan v Lyric Theatre [1894] 3 Ch 338 at 344; Holmes v Millage [1893] 1 QB 551 at 551 and Croshaw v Lyndhurst [1897] 2 Ch 154 at 154; Re Marquis of Anglesey [1903] 2 Ch 727 at 728; Re Parbola [1909] 2 Ch 437 at 438; Lord Ashburton v Nocton [1914] 2 Ch 211 at 212. 4 See para 6.165.

What evidence is required in support? 6.105  Paragraphs 4 and 5 of the Practice Direction to CPR Pt 69 provide guidance on the evidence required by the court in support of an application to appoint a

438  Appointing a receiver by way of equitable execution receiver. It should be borne in mind that much of the evidence required is focused on demonstrating that enforcement will not only be effective but cost effective. The application must demonstrate to the court that the enforcement will realise sufficient assets to justify the costs associated with appointing a receiver. General requirements as to evidence in support of an application for a receiver 6.106  The evidence in support of the application must be in writing.1 It must explain the reasons why the appointment is required and give details of the property over which it is proposed the receiver will get in.2 When identifying the property, the evidence should estimate the value of the property and the amount of income it is likely to produce.3 In a commercial enforcement scenario, the amounts at stake are likely to justify the expense of the appointment of a professional valuer (or accountant) depending on the type of receivership property. The court will also require evidence of the identity of the individual being proposed to act as receiver and demonstrating her suitability4 (see paras 6.160–6.163). Finally, if the court is being asked to appoint a receiver without the receiver being required to provide security, certain further evidence is required as to why it is necessary for the court to allow the receiver to act without giving security (see para 6.147). 1 2 3 4

CPR 69.3(b) and PD 69, para 4.1. PD 69, para 4.1(2). PD 69, para 4.1(2)(a)–(b). PD 69, paras 4.2–4.4.

Evidence specific to equitable execution 6.107  In addition to the general evidence required in support of an application for a receiver, there are some specific requirements where the application is to appoint a receiver by way of equitable execution. Para  4.1(3) of the Practice Direction to CPR Pt 69 provides that details must also be given of: (a) the judgment which the applicant is seeking to enforce; (b) the extent to which the debtor has failed to comply with the judgment; (c) the result of any steps already taken to enforce the judgment; and (d) why the judgment cannot be enforced by any other method. 6.108  As regards (a) the judgment should be summarised in the supporting witness statement. The requirement for (b) is directed at determining whether the judgment debtor has taken any steps to satisfy the judgment and, if it has, what those steps are. In most cases this requirement will be satisfied by a statement in the supporting witness statement that the judgment debtor has not paid the judgment debt and that it remains unpaid. Where the judgment debtor has made some payment towards satisfaction of the judgment debt, this should be explained to the court. 6.109  (c) and (d) are directed at demonstrating the difficulty or hinderance in using other enforcement methods. Where other methods of enforcement have been attempted but have failed this will be relevant to the exercise of the court’s discretion and should be fully explained to the court.

Practice and procedure  439

6.110  Paragraph  5 of the Practice Direction to CPR  Pt  69 goes on to explain that the court will have regard to the amount claimed by the judgment creditor, the amount likely to be obtained by the receiver, and the probable costs of the receiver’s appointment in considering whether to make the appointment. There is a clear onus on the judgment creditor to demonstrate to the court that the receivership will not only be effective but that it will justify the cost of appointing a receiver.1 If there is a dispute about any of these matters, the court could order an inquiry before making the appointment. 1

In this respect, the Practice Direction echoes both the overriding objective (CPR  1.1(2)(b), CPR 1.1(c)(i)), and the common law (see para 6.50, n 1).

6.111  As regards the receiver’s likely costs, a quotation should be sought from the proposed receiver. Alternatively, the court should be provided with evidence of the proposed receiver’s hourly rates together with an estimate of the projected time commitments of the receivership. 6.112  It is likely much of the judgment creditor’s evidence will be directed at demonstrating the likely recovery that the judgment creditor expects to be made by the appointment of a receiver. This is where effective use of the methods of obtaining information as to the judgment debtor’s assets discussed in Chapter 2 may be a vital precursor to any application for the appointment of a receiver by way of equitable execution.

Related injunctions and orders 6.113  The court has power to grant a related injunction when it appoints a receiver by way of equitable execution. Where an injunction is sought, the written evidence in support of the application must explain why an injunction is needed. To ensure that committal proceedings are possible if the injunction is breached, a penal notice should be endorsed on the order1 and the order should also be served personally.2 1 2

CPR  81.9, PD  81, para  1 and PD  40B, para  9. Note that from 1  October 2020 reforms will be implemented to CPR Pt 81 (see new CPR 81.4). CPR 81.6. Form PF 141 (witness statement of personal service) should be used for this purpose. Note that from 1 October 2020 reforms will be implemented to CPR Pt 81 (see new CPR 81.5).

6.114  Alternatively, an ancillary order requiring the judgment debtor to disclose documents relating to the receivership property could be made, as was ordered by the court in Soinco. Where such an order is sought, the reasons why this is necessary should be explained. For example, in Soinco1 a recent history of unexplained payments to the judgment debtor, evidence that the judgment debtor was seeking to ‘smother’ the future debts, evidence that the judgment debtor and the payor were controlled by the same family, and the fact that information as to the payments that would become due under the supply contract was otherwise unobtainable, were all factors to which the court had regard in making the disclosure order. 1

[1998] QB 406 at 423.

440  Appointing a receiver by way of equitable execution Injunction pending the hearing of the application 6.115  Where the judgment creditor fears that the judgment debtor may dispose of the property before the receivership application can be heard an application can be made for the appointment of a receiver with an interim injunction restraining the judgment debtor from assigning, charging or otherwise dealing with the property until after the hearing of the receivership application.1 1

See Form No 83 and PD 69, para 3.

6.116  Where an injunction to prevent dissipation of assets is sought, evidence of dissipation should be provided.1 The judgment creditor need not give notice of this application, which will normally be dealt with without a hearing. If the court is satisfied with the evidence an order will be made based on Form No 832 granting an injunction until a hearing can take place in respect of the application for the appointment of a receiver. 1 Lloyd’s Bank Ltd v Medway Upper Navigation Co [1905] 2 KB 359, CA. 2 PD 4.

6.117  Again, to ensure that committal proceedings are possible if the injunction is breached, a penal notice should be endorsed on the order1 and the order should also be served personally.2 1 2

CPR 81.9, PD 81, para 1 and PD 40B, para 9 and PD 40B, para 9.1. Note that from 1 October 2020 reforms will be implemented to CPR Pt 81 (see new CPR 81.4). CPR 81.6. Form PF 141 (witness statement of personal service) should be used for this purpose. Note that from 1 October 2020 reforms will be implemented to CPR Pt 81 (see new CPR 81.5).

Fees 6.118  The fee for issuing an application to appoint a receiver by way of equitable execution is currently £110.1 1

The Civil Proceedings Fees Order 2008, SI 2008/1053, Sch 1, paras 7.3(a), and 8.4(a).

Hearing of the application 6.119  Following service on the judgment debtor of the application notice or, in cases where a related injunction has not been sought, (Form No 83 sets a hearing date and grants an injunction in the meantime), a hearing for consideration of the application will take place. 6.120  At the hearing of the application to appoint the receiver the court will, if it thinks fit, make an order based on Form No 84.1 1 PD 4.

Effect of appointment of a receiver by way of equitable execution  441

Who must be served with the order? 6.121  CPR  69.4 explains who the judgment creditor must serve with the order, namely: (a) the person appointed as receiver; (b) unless the court orders otherwise, every other party to the proceedings; and (c) such other persons as the court may direct. Cross-undertaking in damages 6.122  One matter which may arise at the hearing is whether the judgment creditor should be required to give a cross-undertaking in damages.1 Where a related injunction is sought, a cross-undertaking will be required unless the court orders otherwise.2 However, even where a related injunction is not sought, a cross-undertaking may be sought against the judgment creditor at the hearing of the application to appoint a receiver. 1

2

A cross-undertaking in damages is an undertaking given by an applicant to pay any damages which the respondent(s) (or any third party served with or notified by the order) may later be found by the court to have suffered. See PD 25A, para 5.1 which, by virtue of CPR 25.2(1)(b), would include interim remedies granted after judgment. Form No 83, which sets a hearing date to consider appointing a receiver and grants an injunction in the meantime, contains cross-undertaking wording.

6.123  It is clear from the Court of Appeal decision in Allied Irish Bank v Ashford Hotels Ltd1 that the court has jurisdiction, in appropriate circumstances, to require the judgment creditor to give a cross-undertaking in damages for the benefit of third parties as a condition of appointing a receiver by way of equitable execution. However, it is hard to draw any firm conclusions from this case other than the fact that the court has such jurisdiction. The only general guidance as to the exercise of discretion given by the Court of Appeal was whether it is ‘just to make the order sought’, although it should be noted that even counsel for the parties seeking the cross-undertaking stopped short of contending that a cross-undertaking would be required in every case where a receiver by way of equitable execution is sought. Presumably, in the absence of direct authority the court would be guided by the principles developed in relation to freezing injunctions. The standard form order appointing a receiver by way of equitable execution2 does not contain any sort of cross-undertaking and so would require amendment where such an undertaking is sought. 1 2

[1997] 3 All ER 309, CA. Form No 84.

EFFECT OF APPOINTMENT OF A RECEIVER BY WAY OF EQUITABLE EXECUTION 6.124  An order for equitable execution empowers the receiver to assume control of the property affected and collect the property specified in the order.1 1

Re Dickinson (1888) 22 QBD 187 at 192.

442  Appointing a receiver by way of equitable execution No proprietary effect 6.125  An order appointing a receiver by way of equitable execution operates ‘in personam’ not ‘in rem’.1 That is, it confers upon the judgment creditor purely personal rights against the judgment debtor.2 It puts the receiver in the place of the judgment debtor to receive the money. 1 2

Giles v Kruyer [1921] 3 KB 23 at 25; Re Whiteheart (1971) 116 Sol Jo 75. Stevens v Hutchinson [1953] 1 Ch  299 at 305; Masri v Consolidated Contractors (No.2) [2008] EWCA Civ 303 at [52]–[58].

6.126  The order does not have any proprietary effect and does not give the judgment creditor any rights over the judgment debtor’s property.1 In particular, it does not make the judgment creditor a secured creditor by creating any mortgage, charge2 or lien3 over the judgment debtor’s property. It ‘is simply an uncompleted process to obtain payment of money’.4 The judgment creditor only receives an interest in the judgment debtor’s property when the receiver finally pays the money to the judgment creditor in satisfaction of the judgment debt.5 1 2

3

4 5

Re Potts [1893] 1 QB 648 at 652. Re Potts [1893] 1 QB 648 at 661 and 662; Tyrrell v Painton [1895] 1 QB 202 at 206; Re Marquis of Anglesey [1903] 2 Ch 727 at 730; Ridout v Fowler [1904] 1 Ch 658 at 662; affd CA [1904] 2 Ch 93; Re a Debtor [1909] 1 KB 430 at 434; Re Whiteheart (1971) 116 Sol Jo 75; Allied Irish Bank v Ashford Hotels Ltd [1997] 3 All ER 309 at 313. In Re Whiteheart (1971) 116 Sol Jo 75 it was held obiter that it was arguable that where the order appointing the receiver stated the receiver should receive the moneys ‘in or towards satisfaction’ of the judgment debt that this might create a charge in favour of the judgment creditor once the moneys had been received by the receiver. However, any such charge could not affect the moneys where they are still held by a third party which was the situation that the court was being asked to consider. Re Dickinson (1888) 22 QBD 187 at 190, per Lord Esher MR: ‘How can the possession of a receiver establish a lien in favour of the creditor at whose instance he was appointed? Does the receiver hold the goods so as to give the creditor possession of them? He holds the goods as agent for the Court, not for the creditor. There cannot, therefore, be a possessory lien of the creditor. Is there any other lien? In my opinion the receiver appointed under such an order does not hold the goods for the creditor at all; he holds them for the court in order that it may decide the right to them.’ In the same case at 192 Fry LJ explained that ‘… the order creates no lien on the debtor’s property in favour of the receiver, and it certainly creates none in favour of the judgment creditors, who have no possession of the property.’ Re Potts [1893] 1 QB 648 at 661. Re Potts [1893] 1 QB 648 at 653 and Re Whiteheart (1971) 116 Sol Jo 75.

Receiver takes subject to prior incumbrancers 6.127  The receiver will take possession of the judgment debtor’s property subject to any prior incumbrances.1 The meaning of incumbrance in this context was considered by Romer J in Jones v Barnett,2 where it was held to be a claim, lien or liability attached to the property. This would include prior charges or mortgages over the property. 1

2

Wells v Kilpin (1874)  LR  Eq 298 at 300; Salt v Cooper (1880) 16 Ch D  544 at 554 (trustee in bankruptcy appointed moments before a receiver by way of equitable execution containing the usual prior incumbrancers wording); Searle v Choat (1884) 25 Ch D 723 at 726; Cadogan v Lyric Theatre [1894] 3 Ch 338 at 343, per Lord Herschell LC, 343, per Lindley LJ and 344. [1899] 1 Ch 611 at 620.

Effect of appointment of a receiver by way of equitable execution  443

6.128  The standard order appointing a receiver, Form No 84, which has been granted since at least the 1870s,1 expressly preserves the rights of prior incumbrancers.2 1 2

See para 6.104, n 3. Form No 84 states that: ‘(2) this appointment shall be without prejudice to the rights of any prior incumbrancers upon the said property who may think proper to take possession of or receive the same by virtue of their respective securities or, if any prior incumbrancer is in possession, then without prejudice to such possession.’

6.129  An example of prior incumbrances taking priority is provided by Searle v Choat.1 In that case the judgment creditor obtained an order that the receiver should be appointed to receive the rents and profits of certain leasehold houses. The judgment debtor’s interest in the leases took the form of the equity of redemption in the leases, which had been mortgaged to the plaintiff. The order mirrored the standard form. The plaintiff had previously taken possession in his capacity as mortgagee and instructed the tenants to pay over their rent to him. Subsequently, the receiver served a notice on the tenants requiring the tenants to pay the rents to him. The Court of Appeal held that the receiver should not have acted as he did:2 ‘…I  am of opinion that what was done by the receiver was wrong. He was appointed without prejudice to the rights of prior incumbrancers, and he ought not to have taken possession as against [the plaintiff]. His first notice recites correctly the order appointing him receiver, and he knew that the Plaintiff was a prior incumbrancer, and yet he gives notice to the tenants to pay their rents to him. This notice would entirely prevent any reasonable tenant from paying his rent to [the plaintiff], who as mortgagee in possession, was entitled to receive it. That being so, I think the proceedings of the receiver were wrong and were in violation of his duty and of the rights of the present Plaintiff.’ 1 2

(1884) 25 Ch D 723. (1884) 25 Ch D 723 at 726.

6.130 Similarly, Re Parbola1 a mortgagee had obtained a foreclosure order nisi prior to the judgment creditor obtaining an order for a receiver which was, in accordance with the standard form, subject to the rights of prior incumbrancers. The Court held that the receiver:2 ‘being pro tanto an assignee of the equity of redemption; … must be content to take his interest in the equity of redemption in the state in which he finds it, namely, as bound by the [foreclosure order nisi], and he must redeem on [the redemption date].’ 1 2

[1909] 2 Ch 437. [1909] 2 Ch 437 at 439.

6.131 In Levasseur v Mason & Barry1 the Court considered the question of priority in respect of liens. Some copper belonging to a French company was in the possession of an English company who had a lien upon it. A receiver was appointed over the copper and shortly afterwards the French company became insolvent and liquidators were appointed. The copper was sold, the lien paid, and the balance of the moneys were paid into court. The issue before the Court was who was entitled

444  Appointing a receiver by way of equitable execution to the remainder of the proceeds of sale. Because the copper had been sold and the lien paid, the question of who had priority as between the receiver and the holder of the lien was not a live issue but the Court of Appeal unanimously accepted that the receiver could only have taken the goods once the lien had been satisfied.2 1 2

[1891] 2 QB 73. [1891] 2 QB 73 at 77–78, per Lord Colderidge CJ, 78, per Lord Esher MR and 82, per Fry LJ.

Order operates as an injunction against the judgment debtor 6.132  The order appointing a receiver by way of equitable execution operates as an injunction against the judgment debtor from receiving the property over which the receiver is appointed1 and prevents the judgment debtor from dealing with property to the prejudice of the judgment creditor.2 However, the order appointing a receiver by way of equitable execution is not in fact an injunction,3 it simply has the effect of an injunction. 1

2

3

Re Sartoris’s Estate [1892] 1 Ch 11 at 22; Tyrrell v Painton [1895] 1 QB 202 at 206; Re Marquis of Anglesey [1903] 2 Ch 727 at 731; Ridout v Fowler [1904] 1 Ch 658 at 663–664; affd [1904] 2 Ch 93, CA; Ideal Bedding Ltd v Holland [1907] 2 Ch 157 at 169–170; Re a Debtor [1909] 1 KB 430 at 434; Stevens v Hutchinson [1953] 1 Ch 299 at 305; Allied Irish Bank v Ashford Hotels Ltd [1997] 3 All ER 309 at 313; Masri v Consolidated Contractors (No 2) [2008] EWCA Civ 303 at [53]; Cruz City 1 Mauritius Holdings v Unitech Ltd and others [2014] EWHC 3131 at [35] where referring to Masari at [50] to [53] Males J said ‘It is clear that an order for appointment of a receiver does not confer any proprietary right transferring ownership of the asset in question to the receiver. Rather it operates in personam, having effect as an injunction restraining the judgment debtor from receiving any part of the property which it covers, if that property is not already in his possession.’ Re Marquis of Anglesey [1903] 2 Ch 727 at 731; Tyrrell v Painton [1895] 1 QB 202, CA; Levasseur v Mason and Barry Ltd [1891] 2 QB 73, CA; Re Harrison and Bottomley [1899] 1 Ch 465, CA; Re Debtor, ex p Peak Hill Goldfield Ltd [1909] 1 KB 430, CA; Singer & Co v Fry (1915) 84 LJKB 2025. In Ideal Bedding Ltd v Holland [1907] 2 Ch 157 at 170 Kekewich J declined counsel’s invitation to reject Swinfen Eady J’s comments on this point and ‘venture[d] to think this statement of the law will eventually prove sound’. In Morgan v Hart [1914] 2 KB 183 at 186 Buckley LJ stated that ‘The order [appointing the receiver] has no effect except that which is equivalent to an injunction restraining the debtor from dealing with the [property subject to the order]’. In Soinco SACI v Novokuznetsk [1998] 1 QB 406 at 412 Colman J, while forming no concluded view on the matter, stated: ‘I do not exclude the possibility that injunctive relief … might be devised which would have the effect of curbing what is in substance if not in form an arrangement for the disposal by [the judgment debtor] of assets which would otherwise be available for execution.’ As is evident from the standard form of order (form No 84).

Discharge and set-off 6.133  Since the order appointing a receiver has the effect of an injunction restraining the judgment debtor from receiving the property and from dealing with property to the prejudice of the judgment creditor, the judgment debtor would be breaching the order if it were to continue to accept payments from its debtor or purport to give good discharge.1 The judgment debtor is also prohibited from setting off any debt owed to it by a third party against a debt that it owed to that third party in lieu of taking payment.2 1 2

Re a Debtor, ex p the Peak Hill Goldfield Ltd [1909] 1 KB 430 at 436; Giles v Kruyer [1921] 3 KB 23 at 2627. Re a Debtor, ex p the Peak Hill Goldfield Ltd [1909] 1  KB  430 at 437. See also Soinco SACI  v Novokuznetsk [1997] QB 406 at 412.

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Effect on third parties with notice of the order 6.134  An order appointing a receiver by way of equitable execution only acts like an injunction against the judgment debtor – preventing it from receiving the property over which the receiver is appointed. In Giles v Kruyer1 the Court held that the order does not act like an injunction against third parties, even where the third parties are subsequently notified of the order.2 1 2

[1921] 3 KB 23. Unless this is specifically provided for.

6.135  Giles v Kruyer followed an earlier decision by the Court of Appeal on similar facts.1 The judgment creditor had recovered judgment against the judgment debtor, but as his costs remained unsatisfied he obtained an order for the appointment of a receiver by way of equitable execution in March 1919. The order for the appointment of a receiver by way of equitable execution was made in the absence of the bank where the judgment debtor held an account. In April that year a copy of the order was served on the bank where the judgment debtor had, at the date of service, a sum on deposit. The bank then heard nothing further of the matter and in December 1919 paid to the judgment debtor the amount standing to her credit. The judgment creditor sought an order that the bank should pay to the receiver the amount standing to the judgment debtor’s credit in March 1919 with interest. Greer J refused to make the order:2 ‘I am bound, moreover, not merely by the decision in In re Potts, but by the ratio decidendi of the Court in giving judgment, and I think that decision shows that the order appointing the receivers, made in the absence of the bank, in no way affects the rights or duties of the bank, and that the bank being, if I may so describe it, untouched by the order are entitled, after it is made, to do anything they could have done before it was made, unless indeed steps were taken to make the order binding upon them. The order appointing the receivers is an order inter partes, it is in no sense an order creating rights or duties in rem, and consequently the person in possession of the fund or the debt, as the case may be, is in nowise limited as regards his rights or duties in reference to the debt by the appointment of the receivers. It is quite true, as was pointed out by Mr Bennett on behalf of the plaintiff, that the order operates as an injunction to restrain the defendant from receiving the money, but that is not decisive, because, as is pointed out in In re Potts, the bank are not restrained from paying the money to the defendant; there is no obligation imposed upon them at all; the position is one in which equitable execution has started, but has not gone far enough to affect the rights or duties of the bank. As pointed out by Lord Esher in that case the persons in possession of the fund, over which a receiver had been appointed in their absence, were under no obligation not to pay the fund to the person originally entitled.’ 1 2

Re Potts [1893] 1 QB 648. [1921] 3 KB 23 at 25.

6.136  The Court further held that refusing the order for the bank to pay over the sum again to the judgment creditor was in accordance with justice since the order for

446  Appointing a receiver by way of equitable execution appointment of a receiver by way of equitable execution had been in place for eight months and, rather than having taken any steps to make the order binding on the bank, the judgment creditor had allowed the bank to forget all about it.1 1

[1921] 3 KB 23 at 25.

6.137  The correctness of this decision has been questioned.1 In the more recent case of Allied Irish Bank v Ashford Hotels Ltd2 the Court of Appeal held that the effect of an order for appointment of a receiver by way of equitable execution on third parties who had notice of it was to prevent them discharging any liability that they had to the judgment debtor by payment to the judgment debtor rather than the receiver.3 However, Giles v Kruyer does not appear to have been cited to the Court of Appeal in that case. 1

See, eg, Halsbury’s Laws of England (5th edn, LexisNexis, 2019 reissue), vol 88, para 79.

2

[1997] 3 All ER 309, CA.

3

[1997] 3 All ER 309 at [313–314], CA.

6.138  The Court in Giles v Kruyer placed great store on the fact that the third party bank had not been present at the application for the order for appointment of a receiver by way of equitable execution as the basis for holding that the order should in no way affect the bank’s rights and obligations. While it may seem clear that, absent clear wording, the order should not operate as an injunction so as to place third parties who make payments which are not in accordance with the terms of the order in contempt of court, it seems less clear that the mere fact that a third party was not before the court when an order was made should be a sound basis for holding that that order cannot in any way affect the rights of a party who has notice of it. As has been noted, the standard form of order for appointment of a receiver by way of equitable execution has remained unchanged for well over a hundred years. Amendment to the wording of the standard order to make clear provision for its effect on third parties, as is now the case with the wording of standard form freezing injunctions, would be helpful. 6.139  For the present, the court has power to grant whatever injunction is necessary to prevent third parties receiving property subject to an order for appointment of a receiver by way of equitable execution.1 If there are concerns that a third party may deal with property in such a way as to defeat the order, a related injunction should be sought. 1

Ideal Bedding Ltd v Holland [1907] 2 Ch 157 at 170; Stevens v Hutchinson [1953] 1 Ch 299 at 305; Soinco SACI v Novokuznetsk [1998] 1 QB 406 at 412.

Interference with a receiver1 6.140  A  receiver appointed by way of equitable execution is an officer of the court rather than an agent of the judgment creditor.2 Interference with a receiver in possession of the receivership property is therefore a contempt of court if done without the permission of the court,3 since interference with the court’s officer is

Effect of appointment of a receiver by way of equitable execution  447

treated as an interference with the court itself.4 The interference can be by a party to the proceedings or by a third party.5 1 2 3 4 5

See generally Arlidge, Eady & Smith on Contempt (5th edn, Sweet & Maxwell, 2019), pp 1005– 1007. See also Halsbury’s Laws of England (5th edn, LexisNexis, 2019 reissue), vol 88, paras 92-95. Re Dickinson (1888) 22 QBD 187 at 190. Arlidge, Eady & Smith on Contempt (5th edn, Sweet & Maxwell, 2019), p 1005. Defries v Creed (1865) 34 LJ Ch 607 at 608. Dixon v Dixon [1904] 1 Ch 161 at 163.

6.141  It is well established that interference with a receiver in possession without the court’s prior permission can constitute a contempt of court1 even if the interfering party claims better title than the judgment creditor.2 In Ames v The Trustees of the Birkenhead Docks, interference was stated to include intercepting and preventing payments that the receiver had been appointed to receive:3 ‘There is no question but that this Court will not permit a receiver, appointed by its authority, and who is therefore its officer, to be interfered with or dispossessed of the property he is directed to receive, by anyone, although the order appointing him may be perfectly erroneous; this Court requires and insists that application should be made to the Court, for permission to take possession of any property of distinction (which could not be maintained if it were attempted, which it is not by counsel at the Bar although suggested by the affidavits), that this rule only applies to property actually in the hands of the receiver. If a receiver be appointed to receive debts, rents, or tolls, the rule applies equally to all these cases, and no person will be permitted, without the sanction or authority of the Court, to intercept or prevent payment to the receiver of the debts, rents, or the tolls, which he has not actually received but which he has been appointed to receive.’ 1

2 3

Angel v Smith (1804) 9 Ves Jun 336 at 338; Evelyn v Lewis (1844) 3 Hare 472 at 474; Tink v Rundle (1847) 10 Beav 318; Ward v Smith (1848) 6 Hare 309; Hawkins v Gathercole (1852) 1 Drewry 12 at 17; Defries v Creed (1865) 34 LJ Ch 607 at 608. Evelyn v Lewis (1844) 3 Hare 472 at 474; Hawkins v Gathercole (1852) 1 Drewry 12 at 17; Ranfield v Ranfield (1860) 1 Dr & AM 310 at 314. (1855) 20 Beav 332 at 353. See also Parker v Pocock (1874) 30 LT 458.

6.142  An interference with a receiver can take many forms including: bringing proceedings against the receiver,1 asserting a superior right to the property,2 taking control of goods under a writ of control,3 another judgment creditor applying to appoint a sequestrator,4 and removing property from the land.5 1 2 3 4 5

Angel v Smith (1804) 9 Ves Jun 336 at 338 (a claim for ejectment). Johnes v Claughton (1822) Jac 572. Russell v East Anglican Railway Co (1850) 3 Mac & G  104; Lane v Stern (1862) 3 Giff 629 (concerning a writ of fieri facias – the predecessor to the modern writ of control). Hawkins v Gathercole (1852) 1 Drewry 12 (the modern equivalent would probably be the appointment of a second receiver by way of equitable execution). Fripp v Bridgewater and Taunton Canal Co (1845) 3 WR 356.

6.143  An action will not constitute interference where the right in question was exercised prior to the appointment of the receiver1 or where the right was being asserted at the time of the appointment2 because the appointment will not

448  Appointing a receiver by way of equitable execution affect that right.3 Neither will it constitute a contempt to interfere with property over which a receiver has been appointed where the order makes the appointment conditional on the provision of security and the security has not yet been provided. This is because the receiver cannot be said to have taken possession before giving security.4 1 2 3 4

Defries v Creed (1865) 34 LJ Ch 607 at 608. Johnes v Claughton (1822) Jac 572 (rights of common asserted after the appointment). Evelyn v Lewis (1844) 3 Hare 472 at 474. Edwards v Edwards (1876) 2 Ch D 291 at 296.

6.144  Once a receiver has been appointed, the permission of the court must first be obtained before a right to receivership property is asserted, even if the right is asserted by bringing a claim or making an application to assert the right.1 Where the court has not granted prior permission for the claim to be made, it may grant an injunction to restrain proceedings taken without permission.2 This is the case even where the claimant was unaware of the appointment or where the claimant’s right is clear.3 Accordingly, the appropriate way for a party who considers the order appointing the receiver to have been wrongly obtained to proceed is to apply to set aside the order appointing the receiver, since any other step may constitute interference.4 1 2 3 4

Evelyn v Lewis (1844) 3 Hare 472 at 474; Hawkins v Gathercole (1852) 1 Drewry 12 at 1719; Re Maidstone Palace of Varieties [1908] 2 Ch 283 at 286. Evelyn v Lewis (1844) 3 Hare 472 at 474; Tink v Rundle (1847) 10 Beav 318. Evelyn v Lewis (1844) 3 Hare 472 at 474. Russell v East Anglican Railway Co (1850) 3 Mac & G 104 at 117–118; Ames v The Trustees of the Birkenhead Docks (1855) 20 Beav 332 at 353.

6.145  The sanction for interference as constituting contempt is a fine, imprisonment or sequestration. However, in practice the court does not usually make an order for a committal but orders the interfering party to pay the costs and expenses caused by the improper conduct.1 In addition the court will usually also grant an injunction ordering that the property is returned to the receiver and restraining the party from interfering further2 (or accept an undertaking in lieu).3 1 2 3

Russell v East Anglican Railway Co (1850) 3 Mac & G 104 at 120–121; Lane v Stern (1862) 3 Giff 629 at 632; Perkes v Landon (1988) 15 NSWLR 408 at 412–415 (NSW Sup Ct). Russell v East Anglican Railway Co (1850) 3 Mac & G 104 at 120–121; Ames v The Trustees of the Birkenhead Docks 20 Beav 332 at 354. Hawkins v Gathercole (1855) 1 Drewry 12 at 20.

GENERAL ISSUES RELATING TO RECEIVERSHIP 6.146  The remainder of this chapter considers general issues that apply to any form of receiver, namely: the provision of security, remuneration, who can be appointed receiver, a receiver’s powers and duties, a receiver’s rights to seek directions, and discharge. Such topics are the subject of specialist works and the following sections are intended as an overview.

General issues relating to receivership  449

Provision of security 6.147  Under CPR 69.5 the court has a discretion as to whether or not to require the receiver to provide security. Where the judgment creditor is asking the court to allow the receiver to act without security, the evidence in support of the application must explain why.1 No guidance is given on the exercise of this discretion. 1

PD 69, para 4.1(4).

6.148  The provision of security is a potential expense of equitable execution. CPR 69.5(1) provides: ‘The court may direct that before a receiver begins to act or within a specified time he must either – (a) give such security as the court may determine; or (b) file and serve on all parties to the proceedings evidence that he already has in force sufficient security, to cover his liability for his acts and omissions as a receiver.’ 6.149  The order appointing a receiver will normally give directions regarding security1 and specify the date by which the receiver must give security or file and serve evidence to satisfy the court that security is already in force.2 1 2

PD 69, para 6.2. PD 69, para 7.1.

6.150  The form of the security is different depending on whether the receiver is a licensed insolvency practitioner or not. Licensed insolvency practitioner 6.151  If the receiver is a licensed insolvency practitioner, unless the court directs otherwise, security will be in the form of the bond provided under the Insolvency Practitioner Regulations 20051 and extended to cover the appointment as a court appointed receiver.2 The bond must be in the form prescribed by Sch  2 to the Regulations. Written evidence of the bond, the sufficiency of the bond’s cover and the fact that the bond covers the appointment of the receiver as a court appointed receiver must be filed at court.3 1

2 3

SI  2005/524, Pt III and Sch  2. The regulations relate to the compulsory security requirements applying to licensed insolvency practitioners before they are qualified to act as set out in IA 1986, s  390(3)(a)–(b). Note that from 1 April 2005 the Insolvency Practitioners Regulations 1990, as mentioned in PD 69, were revoked and replaced by SI 2005/524. CPR 69 PD, para 7.2(1). CPR 69 PD, para 7.3(1).

Not a licensed insolvency practitioner 6.152  Where the judgment creditor seeks to appoint someone other than a licensed insolvency practitioner as receiver, security will be required in the form of a guarantee1 entered into with a bank or insurance company2 in a form approved by

450  Appointing a receiver by way of equitable execution the court. The Chancery Division has a declared practice on guarantees (and bonds).3 1 2 3

PD 69, para 7.2(2). PD 69, para 7.3(2). The White Book, (Sweet & Maxwell, 2020), vol 1, para  69.5.1 provides that: ‘In the Chancery Division the executed guarantee i.e. signed by the receiver and sealed by the bank is lodged with the Operational Manager, Rolls Building, Royal Courts of Justice, Rolls Building, 7 Fetter Lane, London EC4A 1NL. It will then be produced to the Master and put on the Court file: similarly, if security is given by bond.’

Date by which security must be provided 6.153  The order appointing a receiver should specify the date by which the receiver must give security or file and serve evidence to satisfy the court that security is already in force.1 The judgment creditor should ensure that this date is a workable one and gives sufficient time for either the evidence of the bond or for the executed guarantee to be filed. 1

PD 69, para 7.1.

Amount of the security 6.154  The CPR do not give any guidance on the amount of security that will be required by the court where security is required. CPR  69.5 simply refers to ‘such security as the court may determine … to cover his acts and omissions as a receiver’, thereby providing the court with a wide discretion to fix the amount of security.1 1

Blackstone’s, Civil Practice: The Commentary, (Oxford University Press, 2020), suggests at para 79.42 that security is usually fixed at twice the annual income, from the property.

Failure to provide security 6.155  A failure by the receiver to give the security determined, or to provide proof that sufficient security is in place, is grounds for the removal of the receiver.1 The rules do not specify what effect the failure to provide security has on the effectiveness of the receivership. However, at common law, where there has been a failure to provide security, the appointment of a receiver is ‘not effectual till the security is given. It is a conditional appointment, and the giving of security is a condition precedent’.2 Until security is given ‘… the title of the receiver was not complete, and he could not give a receipt or obtain the money’.3 However, once the failure to provide security has been corrected by the provision of security, the order relates back to the date on which it was originally made.4 1 CPR 69.5(2). 2 Ridout v Fowler [1904] 1 Ch 658 at 662. 3 Ridout v Fowler [1904] 1 Ch 658 at 662. 4 Re Watkins (1879) 13 Ch D 252 at 260 CA and Ridout v Fowler [1904] 1 Ch 658 at 661.

Remuneration of the receiver 6.156  A  receiver may only charge for her services if the court so directs and specifies the basis for remuneration. The court has a discretion to specify who is

General issues relating to receivership  451

responsible for paying the receiver and the fund or property from which the receiver is to be remunerated.1 The House of Lords (as it then was) has confirmed2 that the function of CPR 69.7 is to set out a procedural code applicable to the generality of receivership of all types. CPR 69.7 did not make (and should not be construed as making) fundamental changes to the general law of receivership. 1 CPR 69.7(1)-(2). 2 Capewell v Customs and Excise Comrs [2007]  UK HL  2, case concerned with receivership in support of restraint orders and confiscation orders under the Criminal Justice Act 1988.

6.157  It has already been noted that the evidence in support of the application requires that the probable costs of the receiver’s appointment be covered. The standard form order suggests that the receiver be limited to a fixed percentage of the judgment amount or amounts collected by the receiver (whichever is less).1 The method of remuneration is something that should be addressed at the application to appoint a receiver and spelt out in the order. 1

See Form No 84, para 6.

6.158  Where the court directs that the amount of the receiver’s remuneration is to be determined by the court, the receiver will only be able to recover remuneration after such determination.1 The receiver, or any other party, can apply at any time for such a determination to take place.2 CPR 69.7(4) sets out the factors that the court will normally use to determine a receiver’s remuneration.3 The Practice Direction to Pt 69 specifies the procedure for determining the receiver’s remuneration. The court has power to refer the determination of the receiver’s remuneration to a costs judge.4 1 CPR 69.7(3)(a) and PD 69, para 9.3. 2 CPR 69.7(3)(b). 3 PD 69, para 9.2. 4 CPR 69.7(5).

Receivership expenses 6.159  Expenses incurred by the receiver are distinct from the receivers’ remuneration. Accordingly, they should be accounted for as part of the receiver’s account for the assets that have been recovered.1 1

PD 69, para 9.6.

Who can be appointed a receiver? 6.160  A receiver must be an individual.1 Accordingly, although a receiver may be a partner or employee of a firm, or a director or employee of a company, the order must appoint a named individual rather than appointing the firm or company itself. The court will require certain particulars of the proposed receiver as part of the evidence required in support of the application. Para  4.2 of the Practice Direction to Pt  69 provides: ‘In addition, the written evidence should normally identify an individual whom the court is to be asked to appoint as receiver (‘the nominee’), and should –

452  Appointing a receiver by way of equitable execution (1) state the name, address and position of the nominee; (2) include written evidence by a person who knows the nominee, stating that he believes the nominee is a suitable person to be appointed as receiver, and the basis of that belief; and (3) be accompanied by written consent, signed by the nominee, to act as receiver if appointed.’ 1 CPR 69.2.

Discretion concerning the nominee 6.161  The court has a discretion as to the identity of the individual proposed to act as receiver.1 If the applicant does not nominate a person to be appointed as receiver, or if the court decides not to appoint the nominee, the court may order that a suitable person be appointed as receiver. Alternatively, the court may direct any party to nominate a suitable individual to be appointed. 1

See PD 69, para 4.3.

Qualifications and disqualifications from acting as receiver 6.162  There are a number of cases concerning receivers which qualify the court’s power to appoint certain individuals as receivers.1 Although in practice qualified insolvency practitioners are often appointed as receivers, there is nothing to preclude the claimant himself being appointed as a receiver, as the standard form of order, Form No 84, illustrates. However, the Court of Appeal has described it as ‘a settled rule that one of the parties to the cause shall not be appointed receiver without the consent of the other party unless a very special case is made’.2 In practice, it is unlikely that the judgment debtor would consent to the judgment creditor being appointed receiver unless it could be persuaded that it would save costs. Given the potential liabilities that could be incurred by a receiver for her acts and omissions, a judgment creditor in a commercial enforcement situation would be well-advised to appoint a professional such as a licensed insolvency practitioner. The appointment of the judgment creditor as receiver would presumably only be appropriate where there are no complex legal steps required before she could collect in the property over which she was being appointed receiver.3 In any event, if the judgment creditor were appointed as receiver, she would not be entitled to remuneration.4 1

See further Picarda, The Law Relating to Receivers, Managers and Administrators (4th edn, Bloomsbury Professional, 2006), Ch 22. 2 Re Lloyd (1879) 12 Ch D 447 at 451, CA, per Sir George Jessel MR. 3 In Allied Irish Bank v Ashford Hotels Ltd [1997] 3 All ER 309, CA, a partner from a city law firm was appointed to act as receiver to enforce an indemnity. 4 Cummins v Perkins [1899] 1 Ch 16 at 18, per Kekewich J. The Court of Appeal upheld Kekewich J’s order but without considering this point.

6.163  Further, the court will not appoint as a receiver an individual who would have a conflict of interest in so acting. An important practical example of this principle is that the claimant’s solicitor may not act as the receiver. The reason behind this was explained by Sir George Jessel MR in Re Lloyd:1

General issues relating to receivership  453

‘It is improper for this simple reason: The duty of the solicitors of the Plaintiff is to check the receiver’s accounts. It is so much their duty that as a general rule no one else does so. The solicitor of the Plaintiff attends on the taking of the receiver’s account. Now, how is it possible that the firm can properly discharge that duty when one of the firm is himself the receiver? It is obviously a case where his interest will conflict with his duty, and that consideration alone, in my opinion, makes the appointment improper …’ 1

Re Lloyd (1879) 12 Ch D 447 at 451 and also 453–454, per Cotton LJ, CA.

Receiver’s powers and duties 6.164  As has been noted, a receiver is a creature of the court order appointing her. The receiver’s powers and duties are largely defined by the terms of the order appointing her. The essential point is that a receiver must have the court’s permission to take almost any step or incur any costs. This reinforces the importance of ensuring that the order appointing the receiver, and any subsequent directions, are adequate for the steps likely to be taken by the receiver. The receiver’s right to seek directions 6.165  If the receiver is in any doubt as to what her powers and duties are, the receiver should seek directions from the court. A receiver may apply to the court at any time for directions to assist her in carrying out her functions as a receiver.1 The application should be made by application notice in accordance with CPR  Pt  232 unless non-contentious, in which case the application can be made by letter (and the court may reply by letter).3 Where directions are given, the court may also direct the receiver to serve the directions and application for directions on any person.4 The receiver is invariably given permission to apply for this purpose.5 1 CPR 69.6(1). 2 PD 69, para 8.1. 3 PD 69, paras 8.2–8.3. The receiver need not serve the letter and reply on the parties unless directed to do so. The court can also direct that a receiver who applies by letter for directions should file and serve an application notice. 4 CPR 69.6(2). 5 See Form No 84, para 9.

Receiver’s accounts 6.166  The court may order a receiver to prepare accounts either by a specified date or at specified intervals.1 Form No 84 provides that: ‘(5) the receiver shall on (date 3 months after the date of order), and at such other times as may be ordered by the Master/District Judge pass his accounts, and shall on (date 4 months after the date of order), and at such further and other times as may be ordered by the Master/District Judge pay the balance or balances appearing due on the accounts, or such part as shall be certified as

454  Appointing a receiver by way of equitable execution proper to be paid, such sums to be paid in or towards satisfaction of what shall for the time being be due in respect of the judgment signed (date) for the sum of £ debt and £ costs, totalling £ .’ 1

CPR 69.8(1) and PD 69, para 10.1.

Inspection of documents relevant to preparation of accounts 6.167  A party served with the accounts may apply for an order permitting it to see any document in the possession of the receiver relevant to the accounts, although it should not do so without first asking for the document to be provided voluntarily.1 If an order for inspection is made, the usual time limit for compliance will be to allow inspection within seven days of being served with the order and for copies to be provided within seven days of receipt of a request (provided the party has undertaken to pay the reasonable cost of making and providing the copy).2 1 2

PD 69, para 10.2. PD 69, para 10.3.

Challenging the accounts 6.168  If the accounts are disputed there is a mechanism for objecting provided for by the rules.1 If necessary an inquiry can be held to resolve disputes about the receiver’s accounts.2 1 CPR 69.8(3)–(6). 2 CPR 69.8 (final unnumbered para) and PD 40.

Non-compliance by the receiver 6.169  If the receiver does not comply with any rule, practice direction or direction of the court, the court can order her to attend a hearing to explain her failure to comply.1 At the hearing, the court may make any order it considers to be appropriate in the circumstances, including: termination of the receiver’s appointment, reducing or entirely disallowing the receiver’s remuneration and ordering the receiver to pay any party’s costs.2 If the receiver’s default is failure to comply with an order to pay a sum of money into court, the court can order interest at any rate it considers appropriate for the time she is in default.3 1 CPR 69.9(1). 2 CPR 69.9(2). 3 CPR 69.9(3).

Termination of the receiver’s appointment 6.170  A receiver can be removed by the court and replaced by another receiver at any time.1 A failure to provide security or satisfy the court that she has such security in place within the time specified by the court is grounds for termination.2 An order terminating the appointment of a receiver may:

General issues relating to receivership  455

(a) require her to pay into court any money held by her; or (b) specify the person to whom she must pay any money or transfer any assets still in her possession; and (c) make provision for the discharge or cancellation of any guarantee given by the receiver as security.3 1 CPR 69.2(3). 2 CPR 69.5(2). 3 CPR 69.11(1).

6.171  Any order terminating the appointment of a receiver must also be served on all parties originally served with the order appointing the receiver.1 1 CPR 69.11(2).

Application for discharge 6.172  A  receiver or any party may apply for the receiver to be discharged on completion of her duties.1 In the case of equitable execution, this will be when all available property has been collected in or the judgment entirely satisfied. The application seeking discharge should be served on all parties originally served with the order appointing the receiver.2 An order discharging the appointment of a receiver may: (a) require her to pay into court any money held by her; or (b) specify the person to whom she must pay any money or transfer any assets still in hers possession; and (c) make provision for the discharge or cancellation of any guarantee given by the receiver as security.3 1 CPR 69.10(2). 2 CPR 69.10(2). 3 CPR 69.11(1).

6.173  Any order discharging the receiver must also be served on all parties originally served with the order appointing the receiver.1 1 CPR 69.11(2).

Costs 6.174  Equitable execution is outside the fixed costs regime under CPR  Part 45.1 Instead, provided the application to appoint a receiver lasts less than a day, the court should be invited to make a summary assessment of the costs at the conclusion of a hearing, which the court is supposed to do unless there is good reason not to.2 Each party who intends to claim costs should prepare a written statement of costs which should follow as closely as possible Form N260.3 The statement must be signed by the party or its legal representative and must be filed at court with copies served on any party from whom recovery of costs is sought. Filing and service must be done as soon as possible and in any event at least 24 hours before the date fixed for the hearing.4 1

CPR 45.1(2)(c) states that CPR, Pt 45 (fixed costs) applies where a judgment creditor has taken steps under Pts 70–73 to enforce a judgment or order. CPR 70.2 provides that the relevant practice direction

456  Appointing a receiver by way of equitable execution

2 3 4

sets out methods of enforcing judgments or orders for the payment of money. One of the methods set out in PD 70, para 1.1(5), is the appointment of a receiver under Pt 69. However, there is no amount of fixed costs provided for equitable execution in the table to CPR 45.6 (fixed enforcement costs). See CPR Pt 44. See also the option of PD 51X and the Summary Assessment Pilot which sets out a new statement of costs (N260A) which may be used in place of N260. General rules about costs are set out in Pt 44 and the accompanying Practice Direction, which should be referred to for the specific provisions.

INTERPLAY WITH THE INSOLVENCY REGIME 6.175  There is no modern authority on the effect of insolvency on a receiver by way of equitable execution. Although IA  1986, ss  183 and 346 both refer to the fact that priority on insolvency in respect of land is achieved by the appointment of a receiver, this would seem to be a hangover from when priority on insolvency in respect of a charging order could only be obtained on the appointment of a receiver.1 1

Re Overseas Aviation Engineering (GB) Ltd [1963] Ch 24, CA. As IA 1986, ss 346(5)(b) and 183(3) (c) recognise, the making of a charging order is now effective to confer priority on insolvency and the appointment of a receiver is no longer necessary.

6.176  The real issue is whether the appointment of a receiver by way of equitable execution falls within IA 1986, ss 183 and s 346 at all. As has already been noted in Chapter 1, IA 1986, ss 183 and 346 have a long history and derive from similar provisions in the various Bankruptcy and Companies Acts. The application of the Bankruptcy Act 1883, s  45 to equitable execution, which is one of the historical antecedents of IA 1986, s 346, was considered in Re Potts.1 In that case, the judgment creditor sought and obtained a receiver by way of equitable execution in respect of Potts’ share of the residuary estate under his mother’s will. Two months later Potts was declared bankrupt on his own petition. The judgment creditor sought a declaration that it was a secured creditor of Potts by virtue of the order for the appointment of a receiver by way of equitable execution and that it had therefore obtained priority over his general creditors on insolvency. At first instance Vaughan Williams J also considered an argument that equitable execution was a form of execution and that it had been completed for the purposes of the Bankruptcy Act 1883, s  45, which provided that: ‘(1) Where a creditor has issued execution against the goods or lands of a debtor, or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy of the debtor, unless he has completed the execution or attachment before the date of the receiving order, and before notice of the presentation of any bankruptcy petition by or against the debtor, or of the commission of any available act of bankruptcy by the debtor. (2) For the purposes of this Act, an execution against goods is completed by seizure and sale; an attachment of a debt is completed by receipt of the debt; and an execution against land is completed by seizure, or, in the case of an equitable interest, by the appointment of a receiver.’ 1

[1893] 1 QB 648.

Interplay with the insolvency regime  457

6.177  Vaughan Williams J  was clearly unimpressed by the judgment creditor’s argument:1 ‘I am of opinion that the applicants are not entitled to the order for which they ask. The case was argued principally with reference [Bankruptcy Act 1883, s  45], and it was contended that equitable execution of the character in this case is execution within the meaning of s 45, and that the execution had been completed, and that under those circumstances the applicants were by the very terms of the section entitled to the benefit of the execution. In my judgment the position of the applicants is not that of creditors who have issued execution within the meaning of the section. I think the section only applies to the cases which are specified in it, and that this is not one of those cases.’ 1

[1893] 1 QB 648 at 650.

6.178  In other words equitable execution fell entirely outside the Bankruptcy Act 1883, s 45. The Court of Appeal upheld the first instance decision and unanimously concurred that a receiver by way of equitable execution did not make the judgment creditor a secured creditor since the order did not amount to a ‘mortgage, charge or lien on the property of the debtor’.1 Given the similarity of the wording of the Bankruptcy Act 1883, s 45 to its modern counterpart, IA 1986, s 346, it seems that bankruptcy will defeat a receiver appointed by way of equitable execution. Since IA 1986, s 183 is in similar terms to IA 1986, s 346, the same should also follow in the case of the winding up of a company. 1

Although the Court of Appeal affirmed the judgment of Vaughan Williams J, it disposed of the case on the basis that a receiver by way of equitable execution did not make the judgment creditor a secured creditor.

CHAPTER 7

Interest on judgments

INTRODUCTION 7.1  Once judgment has been obtained, it may be some time before the judgment debtor makes payment and, where the judgment debtor fails to pay, enforcement proceedings may take months or even years to reach fruition. In order to compensate the judgment creditor for the time during which he has been deprived of the sums owed to him under the judgment, statute provides that interest will accrue on a judgment once it has been given. 7.2  Where the judgment is of high value, the amount of interest which could potentially accrue will be significant. Judgment for these purposes includes costs orders, i.e. awards made in relation to the costs of the litigation itself and the costs associated with enforcing the judgment debt. Provided that the judgment debtor has sufficient assets to meet both the judgment debt and interest, the latter can therefore provide a valuable source of compensation. 7.3  The interest with which this chapter is concerned is the interest that is awarded on High Court judgments. This chapter does not cover interest that can be claimed prior to the commencement of proceedings or arising during the course of proceedings but before judgment is given.1 Neither does this chapter cover interest on judgments in the County Court, to which separate rules apply.2 However, it is worth noting that, with certain exceptions, County Court judgments over £5,000 carry interest at the same rate as High Court judgments.3 1

2

Absent a contractual right to interest a claimant will usually seek to claim interest pursuant to the Senior Courts Act 1981, s 35A, which gives the court a discretion to award interest. By virtue of the Civil Procedure Rules 1998, SI 1998/3132, 16.4(1)-(2), a party wishing to claim interest should specifically plead this claim and the basis for it (ie contract, statute or other basis) is set out in the statement of case. Details of the rate of interest claimed, the time period, the total interest to the date of calculation and the daily rate thereafter should also be included. Judgment interest on County Court judgments is provided for by the County Courts Act 1984, s 74 and the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184. Note that SI 1991/1184 was amended in 2019 by the County Courts (Interest on Judgment Debts) (Amendment) Order 2019, SI 2019/903 which came into force on 27 May 2019.

460  Interest on judgments 3

See the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, paras 2 and 5, which provides that County Court judgments over £5,000 carry interest at the same rate as specified in the Judgments Act 1838, s 17. Prior to 1 July 1991, County Court judgments did not carry interest: see County Courts (Interest on Judgment Debts) Order 1991, para 1(4).

Application to the Crown 7.4  Pursuant to the Crown Proceedings Act 1947 (CPA 1947), s 24(1), judgment debts due from or to the Crown carry interest in the same way as other judgments.1 1

CPA 1947, s 24(1), provides: ‘Section 17 of the Judgments Act 1838 (which provides that a judgment debt shall carry interest) and section 44A of the Administration of Justice Act 1970 (which enables the court to order an appropriate rate for a judgment debt expressed in a currency other than sterling) shall apply to judgment debts due from or to the Crown.’

PERIOD OF INTEREST 7.5  The general rule in respect of interest on High Court judgments is set out in the Judgments Act 1838 (JA 1838), s 17. This section has been amended over time, most recently as part of the Woolf reforms by the Civil Procedure (Modification of Enactments) Order 1998.1 Broadly, the section now provides that all High Court judgments shall carry interest at a rate of 8 per cent per annum unless the court orders otherwise. 1 SI 1998/2940.

7.6  JA 1838, s 17, (as amended) reads: ‘(1) Every judgment debt shall carry interest at the rate of 8 per cent per annum from such time as shall be prescribed by rules of court until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment. (2) Rules of court may provide for the court to disallow all or part of any interest otherwise payable under subsection (1).’ As is explained further in paras 7.70–7.72, the current interest rate on sterling judgment debts (known as the ‘judgment rate’) is 8% per annum. 7.7  The reference in JA 1838, s 17(1), to ‘such time as shall be prescribed by rules of court’ means that this provision must now be read in conjunction with the Civil Procedure Rules 1998 (CPR)1 40.8, which provides: ‘(1) Where interest is payable on a judgment pursuant to section 17 of the Judgments Act 1838 …, the interest shall begin to run from the date that judgment is given unless – (a) a rule in another Part or a practice direction makes different provision; or (b) the court orders otherwise. (2) The court may order that interest shall begin to run from a date before the date that judgment is given.’ 1 SI 1998/3132.

Period of interest  461

7.8  The effect of the amendments to JA  1838, s  17, read with the provisions of CPR  40.8, is to grant the court considerable discretion in the period for which it awards interest and a flexibility that it previously did not have when making awards of interest.1 1 See O’Connor v Amos Bridgman Abattoirs Ltd (1990) Times, 13 April, a decision prior to these amendments, where it was stated (obiter) that it would be better if the court had some discretion under JA 1838, s 17, but that it did not have any such discretion.

7.9  Although CPR 40.8(2) only makes reference to the discretion of the court to order that interest shall run from before judgment, JA 1838, s 17(2) and CPR 40.8(1) (b) appear to grant the court a discretion to order that interest on a judgment shall run from whatever date the court sees fit, whether before or after judgment. This seems to include a discretion to order that interest is not payable at all. 7.10  The court’s discretion under JA  1838, s  17, and CPR  40.8 was considered in Gater Assets Ltd v Nak Naftogaz Ukrainiy,1 Beatson J  declined to exercise his discretion under CPR 40.8 to refuse to award post-judgment interest under JA 1838, s 17, from the date of an order of the English court under the Arbitration Act 1996 (‘AA 1996’), s 101, giving leave to enforce a New York Convention foreign arbitral award where the arbitrators had not themselves made any award of post-award interest. In Loughlin v Singh2 the Honourable Mr Justice Kenneth Parker ordered that the claimant was only entitled to interest at the rate of 8% per annum under JA 1838, s 17 from a date once the amount of damages had crystallised. Before that date interest was awarded at a lower rate under the Senior Courts Act 1981, s 35A. In DuPont Nutrition Biosciences ApS  v Novozymes A/S3 applying CPR  40.8 and JA 1838, s 17 Floyd J ruled that, in the circumstances of that case interest on costs at the judgment rate should run from a date before the date of judgment. 1 2 3

[2008] EWHC 1108 (Comm). [2014] EWHC 912 (Admin). Although note that the Honourable Mr Justice Kenneth Parker did not regard the court as having given a relevant judgment within JA 1838, s 17. [2013] EWHC 483 (Pat).

When is a judgment ‘given’ for the purposes of CPR 40.8? 7.11  CPR 40.7 provides that ‘a judgment or order takes effect from the day when it is given or made, or such later date as the court may specify’. It therefore seems that, unless the court orders otherwise, a judgment is ‘given’ for the purposes of CPR 40.8(1) when it is pronounced in court, and not on the date when the judgment or order is drawn up and sealed, which may be a number of days or even weeks later. Where the court reserves judgment and an advance copy is sent to the parties, judgment will be given on the date that the judgment is actually handed down, and not the date the parties were sent the draft judgment.1 1

Prudential Assurance Co Ltd v McBains Cooper (a firm) [2000] 1 WLR 2000 at 2008, per Brooke LJ, CA.

7.12  CPR 40.2(2)(a) provides that every judgment must ‘bear the date on which it is given or made’. However, as will be seen in paras 7.15 to 7.23, certain types of

462  Interest on judgments judgment and orders have historically created particular problems in determining when interest begins to accrue under JA 1838, s 17. Meaning of ‘judgment debt’ under JA 1838, s 17 7.13  In order for interest to accrue under the provisions of the JA  1838, the judgment must therefore fall within the meaning of ‘judgment debt’.1 The following judgments and orders have all been held to be judgment debts: (a) orders for damages (once assessed);2 (b) consent orders (except Tomlin orders where the payment obligation is in the schedule and not the body of the order);3 (c) orders to make payments by instalments;4 (d) judgments first made on appeal;5 and (e) costs orders.6 1

2 3 4 5 6

Administration of Justice Act 1970, s 44A, which is considered at paras 7.73–7.75, also requires that a non-sterling judgment must be a ‘judgment debt’ within the meaning of JA 1838, s 17 and so the comments in this section apply equally to that section. See paras 7.15–7.18. See paras 7.19–7.22. See para 7.23. See paras 7.26–7.33. See paras 7.34–7.68.

7.14  The type of judgment or order may therefore impact upon the judgment interest which is awarded. In addition, various enactments provide that orders and awards made under them should carry interest at the same rate as under JA 1838, s  17.1  However, these are outside the scope of this book, which is concerned with the enforcement of high value High Court judgments. By way of exception, paras 7.102–7.105 below deal briefly with the interest payable on arbitration awards in light of the prevalence of arbitration as a method of commercial dispute resolution. 1

Examples include Proceeds of Crime Act 2002, s  12 (confiscation orders), Electricity Act 1989, s  27D (penalties imposed on licence holders), and National Lottery Act 1998, s  2(13) (penalties imposed on licence holders).

Orders for damages and judgments determining liability only 7.15  As has been noted, orders for damages once assessed will fall within the meaning of ‘judgment debt’ for the purposes of JA  1838, s  17. Where a claimant succeeds on the issue of liability but the court leaves damages to be assessed, the issue arises of how interest is to be calculated. When does interest cease to run under the Senior Courts Act 1981, s 35A(1)(b) (which applies until ‘the date of judgment’) and begin to run under JA 1838, s 17 (which applies once ‘judgment is given’)? 7.16 In Thomas v Bunn,1 a split trial was ordered in a personal injuries action with liability being agreed or determined first and then, if liability was established, the damages being assessed later. The House of Lords held that interest under JA 1838, s 17 begins to run from the date of the final judgment assessing damages and not

Period of interest  463

from the earlier date of judgment determining liability.2 Lord Ackner explained the Court’s interpretation of the statute as follows:3 ‘… the judgment referred to in section 17 of the Judgments Act 1838 does not relate to an interlocutory or interim order or judgment establishing only the defendant’s liability. The judgment contemplated by that section is the judgment which quantifies the defendant’s liability…’ 1

2

3

[1991] 1 AC 362, HL, in which the House of Lords overruled Borthwick v Elderslie Steamship Co Ltd (No 2) [1905] 2 KB 516, CA, and disapproved the dictum of Eve J in Ashover Fluor Spar Mines Ltd v Jackson [1911] 2 Ch 355 and dicta in Hunt v R M Douglas (Roofing) Ltd [1990] 1 AC 398, HL. It should be noted that this case was decided on the pre-1998 wording of JA 1838, s 17, which provided that judgment debts would carry interest ‘from the time of entering up judgment’, rather than the current provisions, which provide for interest on judgment debts ‘from such time as shall be prescribed by rules of court’. CPR 40.8(1) provides for interest to run from the date on which judgment is given unless another rule of the CPR or a relevant practice direction provides or the court orders otherwise. The position is made express in the County Court by the County Courts (Interest on Judgment Debts) Order 1991, para 2(2), SI 1991/1814, which provides that ‘[i]n the case of a judgment or order for the payment of a judgment debt, … the amount of which has to be determined at a later date, the judgment debt shall carry interest from that later date.’ [1991] 1 AC 362 at 381, per Lord Ackner, HL.

7.17 In Novoship (UK) Ltd v Mikhaylyuk1 it was noted that in Thomas v Bunn there was only one judgment which ordered the defendants to make an identified payment. It was in this context that Lord Ackner said that the wording of JA 1838, s 17 envisaged ‘a single judgment’ which constitutes the judgment debt. Christopher Clarke J held in Novoship this did not mean that when there are two judgments, one for principal and a later one for interest, each of which contains quantified sums, JA 1838 interest could not run under the former until the giving of the latter. It was noted that JA 1838, s 17 and CPR 40.8 require that judgment be given for an identifiable sum on which interest can be calculated. Where judgment is given for the principal sum first, that judgment constitutes a final judgment for a quantified sum, such as Thomas v Bunn holds to be necessary. More recently in Rihan v Ernst & Young Global2 it was held that, where interest is dealt with in a consequential judgment, the effect of CPR 40.8 should be that interest runs from the date of the previous ‘main’ judgment. 1 2

[2013] EWHC 89 (Comm). [2020] EWHC 1380 (QB) at [5]-[6].

7.18  Further, in SAS Institute Inc v World Programming Ltd1 the Court held that Thomas v Bunn established no more than that interest should run only from the date when the party knew how much it had to pay. The Court rejected an argument that Thomas v Bunn was authority for the proposition that interest only begins to run where the judgment itself quantifies the sum which the judgment debtor owes to the judgment creditor. It was held that there is no requirement for a sealed order before interest can run – that would be excessive formalism. Logically, absent some good reason for a deviation from the normal course the interest must run from the date when the party knows how much it has to pay.2 1 2

[2019] EWHC 2496 (Comm). [2019] EWHC 2496 (Comm) at [71].

464  Interest on judgments Consent orders 7.19  With the exception of Tomlin orders, which are discussed next, orders for the payment of money given by consent will accrue interest in the same way as a contested judgment or order for the payment of money. Tomlin orders 7.20  Tomlin orders stay proceedings on the terms of settlement that have been agreed between the parties. They are expressly recognised by CPR  40.6(3)(b) (ii).1 A Tomlin order simply provides that:2 ‘AND the parties having agreed to the terms set out in [the attached schedule] [a [confidential] schedule/agreement dated…….., copies of which are held by the parties’ solicitors/the solicitors for the (party)] [and to there being no order for costs] [AND the solicitors having certified that the only relief sought in this claim/ counterclaim is the payment of money including any interest and costs, and that no ancillary relief has been sought at any stage] IT IS BY CONSENT ORDERED that (1) all further proceedings in this claim be stayed except for the purpose of carrying the terms of the agreement into effect AND for that purpose the parties have permission to apply [without the need to issue fresh proceedings]. (2) [any provision in respect of costs] (unless in preamble)’ As the order itself states, the detailed terms of settlement are set out (or referred to) in a schedule to the order. 1

2

Which refers to ‘an order for the stay of proceedings on agreed terms, disposing of the proceedings, whether those terms are recorded in a schedule to the order or elsewhere’. The predecessor to this rule, RSC Ord 42, r 5A(2)(b)(iii), provided: ‘the stay of proceedings upon terms which are scheduled to the order but which are not otherwise part of it (a “Tomlin order”).’ Chancery Guide 2016, para 22.12.

7.21  The effect of a Tomlin order is to stay the proceedings, which are only kept on foot for the limited purpose of allowing a party to enforce the terms of the schedule of the order under the permission to apply provision. One of the terms agreed in the schedule will usually provide for the payment of a sum of money by one party to the other. However, the schedule to the Tomlin order is simply a record of the contractual terms agreed by the parties and those terms do not themselves form part of the order of the court. Accordingly, they are not enforceable as a judgment debt under JA 1838, s 17.1 1 In Horizon Technologies International Ltd v Lucky Wealth Consultants Ltd [1992] 1 WLR 24 at 29, PC, Sir Maurice Casey described a Tomlin order in the following terms: ‘It is, of course, a feature of [Tomlin orders] that the schedule forming the basis of the stay of proceedings is not part of the order: it is simply a record of the compromise reached between the parties.’

7.22  If one party is not observing the terms agreed between them, the other will need to make an application under the permission to apply provision to give effect

Period of interest  465

to the order.1 If the relevant term is for a party to pay a sum of money to the other, an application must be made for an order for payment of that sum so that judgment can be entered. Once such judgment is obtained, the question arises as to whether interest under JA  1838, s  17 is available for the period between the Tomlin order being made and the subsequent judgment enforcing the Tomlin order.  It follows from the nature of a Tomlin order that judgment interest will only be available from the date on which the judgment ordering payment of the sums agreed in the schedule to the Tomlin order is given. However, the court has a discretion under CPR 40.8 which it might exercise in an appropriate case to vary the period of interest. This might include a period starting before the judgment is given.2 It remains to be seen whether breach of a Tomlin order would be an appropriate basis for the court to exercise this discretion.3 1 2 3

Dashwood v Dashwood [1927] WN 276. CPR 40.8(2). See paras 7.5–7.10. If the obligation to pay a sum of money is contained in the order itself, this should be enforceable as a judgment debt and interest will begin to run in the normal way. It is common to include any costs which require assessment in the body of the order rather than the schedule because the provision for costs would otherwise be unenforceable. Para 22.12 of the Chancery Guide 2016 refers to the order being drawn up with ‘any provision in respect of costs’. Accordingly, JA interest will run on the costs from the date of the Tomlin order.

Payments by instalments 7.23  Where an order is made for payment of a judgment debt by instalments, interest is not payable on any of the instalments until they fall due.  In Caudery v Finnerty1 it was held that interest under JA 1838, s 17, did not accrue on a judgment debt that was ordered by consent to be paid in instalments. However, interest would accrue on outstanding instalments if the instalments were not paid when due.2 1 2

(1892) 61 LJQB 496, DC. The position is made express in the County Court by the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 3, which provides that judgment interest shall not accrue on a judgment debt which, under the terms of the relevant judgment, is not required to be paid until a specified date or is to be paid by instalments until the specified date or, in respect of each instalment, the date on which that instalment falls due.

Specific rules applying to particular forms of judgment DEFAULT JUDGMENTS AGAINST STATES

7.24  Under CPR  40.10 a default judgment does not take effect against a state until two months after service on the state of a copy of the judgment and a copy of the evidence in support of the application for permission to enter default judgment. Interest under JA 1838, s 17, does not, therefore, begin to run until the judgment has taken effect. COUNTY COURT JUDGMENT TRANSFERRED TO HIGH COURT

7.25  As has been noted in Chapter 1, if a judgment in the County Court has been transferred to the High Court for the purposes of enforcement, the judgment will be

466  Interest on judgments treated as a judgment or order of the High Court ‘for all purposes’ under the County Courts Act 1984, s  42(5)(b).1 Therefore following transfer, interest will accrue on the same basis as if the judgment were a High Court judgment (ie under JA 1838, s 17). However, the question arises as to whether judgment interest accrues at the County Court rate up until the date of transfer and at the High Court rate thereafter. At present, this question would appear to be largely academic in the case of sterling money judgments over £5,000 since the rates of interest are identical2 even if they are awarded on different statutory bases.3 In the case of non-sterling money judgments over £5,000, the court’s discretion to award interest at a different rate to that provided for in JA 1838, s 17 is substantially the same in both the County Court and High Court, even though the court’s discretion again derives from different statutory bases but in practice the court will have fixed the rate when entering judgment and transfer up will not change that rate.4 In respect of a County Court judgment for less than £5,000 interest will start to run from the date of the transfer up.5 1 2 3 4 5

Subject to qualifications contained in the County Courts Act 1984, s 42(6), which are not relevant for present purposes. They both carry interest at the rate provided for in JA 1838, s 17. See para 7.3, n 2 and n 3. See para 7.74, n 2. Statutory interest does not generally apply to County Court judgments or orders for less than £5,000. Art 1(2), County Courts (Interest on Judgment Debts) Order, SI 1991/1184.

Judgments made on appeal 7.26  Another important question is the effect on judgment interest of judgment being awarded for the first time on appeal, either in the Court of Appeal or Supreme Court. Court of Appeal 7.27  The cases considered in paras 7.28–7.29 were all decided before the introduction of the CPR. It should therefore be borne in mind that the court now has a much broader discretion in relation to the award of judgment interest than it had previously.1 1

See paras 7.5–7.10.

7.28  As a general rule, where the claimant fails at trial, but obtains judgment for damages on appeal to the Court of Appeal, judgment interest runs from the date of the Court of Appeal decision. In Borthwick v Elderslie Steamship Co Ltd (No 2), 1 Romer LJ held that:2 ‘The judgment in favour of the plaintiff must be treated as of the date on which it was given in the Court of Appeal, subject to the right of that Court to antedate its judgment. That right should, in my opinion, be exercised with caution.’ 1 2

[1905] 2 KB 516, CA. [1905] 2 KB 516 at 521, CA.

Period of interest  467

7.29  Similarly, in Belgian Grain and Produce Co Ltd v Cox & Co (France) Ltd,1 Bankes LJ held:2 ‘If we were to accede to this request, there are very few cases in which we should not be asked to do the same thing. While we have jurisdiction to make the order [that interest runs from a date prior to the judgment of the Court of Appeal], there must be something exceptional to justify it.’3 1 (1919) 1 Ll L Rep 256, CA. 2 (1919) 1 Ll L Rep 256 at 258, CA. 3 In Nykredit Mortgage Bank plc v Edward Erdman Ltd (No 2) [1997] 1 WLR 1627, at 1636, Lord Nicholls approved the observations of Bankes LJ in the context of refusing a claim for the backdating of an order relating to costs.

Supreme Court 7.30  The provisions of the CPR do not apply to appeals heard by the Supreme Court1 and so there is no reason to suppose that pre-1999 cases are diminished in terms of authority. 1

CPR 2.1 provides that the CPR apply to all proceedings in: (a) the County Courts, (b) the High Court and (c) the Civil Division of the Court of Appeal. The Practice Directions for Civil Appeals to the Supreme Court do not deal with awards of interest.

7.31  In the Supreme Court, the crucial factor as to the date from which judgment interest should run is whether or not the ultimately successful party won at first instance. In Nitrate Producers Steamship Co v Short Bros,1 the plaintiffs lost at first instance and in the Court of Appeal but succeeded in the House of Lords (as the Supreme Court then was).  On a subsequent application, the plaintiffs obtained an order from the judge at first instance that interest should run from the date of the first instance decision. The House of Lords held that this approach was wrong. Lord Buckmaster, giving the leading judgment, said:2 ‘… where judgment is for the first time directed to be entered in favour of any litigant party in this House, the date which that judgment will bear must be the date when the order is made. It is, of course, a totally different proposition where the effect of the order here is to restore a judgment of the Court of first instance which has been reversed by the Court of Appeal. In that case the judgment of the Court of first instance is expressly restored and remains standing as from the date when it was pronounced. But in this case there was no judgment until the time it was directed that judgment should be entered and made.’ 1 2

(1922) 12 Ll L Rep 1, HL. (1922) 12 Ll L Rep 1 at 2, HL.

7.32  In summary, the current position from the claimant’s perspective is that judgment interest will run from the decision that was first successful. The position is summarised in the following table:1

468  Interest on judgments Court of first instance Win Lose Lose Win 1

Court of Appeal

Supreme Court

Win Win Lose Lose

Win Win Win Win

When interest runs from First instance Court of Appeal Supreme Court First instance

Different rules apply to costs, which are considered in paras 7.59–7.64.

7.33  As has been noted, however, the CPR introduced a discretion for the High Court and the Court of Appeal to order that interest should run on a judgment from a date other than the date on which the party is first successful.1 1

CPR 40.8(1)(b) and (2). See paras 7.5–7.10.

INTEREST ON COSTS 7.34  Prior to the CPR, the general rule was that interest on costs orders under JA 1838, s 17, began to run from the date when the costs in question were originally ordered, even though the costs had not been taxed.1 This contrasted with the rules regarding interest following judgments on liability only (see paras 7.15–7.18 above), which required damages to have been assessed before interest begins to run.2 1 2

Now detailed assessment: see CPR Pt 47. In relation to the County Court, the County Courts (Interest on Judgment Debts) Order 1991, SI  1991/1184, para  2(2) provides that: ‘[i]n the case of a judgment or order for the payment of a judgment debt, other than costs, the amount of which has to be determined at a later date, the judgment debt shall carry interest from that later date.’ This rule also applied in the case of interim judgments under which one party is ordered to pay costs. See Taylor v Roe [1894] 1 Ch 413.

7.35  The rule was established following the decision of the House of Lords in Hunt v RM Douglas (Roofing) Ltd.1 In Hunt, the House of Lords considered a long line of authority stretching back 150 years to the case of Fisher v Dudding.2 Their Lordships overruled earlier decisions which had favoured the allocatur rule (namely that interest on costs should only run from the date on which they were quantified, ie the date of the taxing master’s or costs officer’s certificate).3 The House of Lords instead concluded that the incipitur rule (namely that interest should run from the date of the costs order) was the more appropriate method of achieving a just outcome.  The incipitur rule found favour primarily because it is the unsuccessful party to the litigation who has caused the costs to be incurred, costs are likely to have been paid by the receiving party before taxation and the incipitur rule should provide a desirable stimulus for the paying party to deal with the taxation and payment of costs efficiently.4 1 [1990] 1 AC 398, HL. 2 (1841) 9 Dowl 872. 3 Specifically, Hunt overruled the Court of Appeal decisions in K  v K  (Divorce Costs: Interest) [1977] Fam 39, CA and in Erven Warnink BV v J Townend & Sons (Hull) Ltd (No 2) [1982] 3 All ER 312, CA. 4 [1990] 1 AC 398 at 415–416, HL.

Interest on costs  469

7.36  The courts have acknowledged that neither the allocatur nor the incipitur rule dealt with the issue of interest on costs satisfactorily. The inconsistency between the rule which applied to interest on costs and the rule which applied to interest on orders for damages following interlocutory judgments was acknowledged by Lord Ackner in his subsequent judgment in Thomas v Bunn1 where he stated:2 ‘I accept that it is an anomaly that an order for payment of costs to be taxed is construed for the purpose of section 17 [of JA 1838] as a judgment debt, even though, before taxation has been completed, there is no sum for which execution can be levied. However, the courts have accepted since its enactment that section 17 does apply to such an order and, for the reasons set out in my speech in Hunt’s case, the balance of justice favours continuing so to treat such an order.’ 1 2

[1991] 1 AC 362, HL. [1991] 1 AC 362 at 380, HL.

CPR 40.8 and CPR 44.2(6)(g) 7.37 Since Hunt’s case was decided there have been statutory changes. At the time of the decision in Hunt JA 1838, s 17 provided for judgment debts to carry interest ‘from the time of entering up the judgment’. When the Civil Procedure Rules were introduced JA 1838, s 17 was amended to provide for interest to run ‘from such time as shall be prescribed by rules of court’ so as to reflect CPR 40.8 (para 7.7 above). The CPR also introduced a new discretion in relation to interest on costs under Pt 44. CPR 44.2 provides that the court has a discretion as to the costs which it awards and CPR 44.2(6)(g) 1 makes the following provision as to interest on costs: ‘The orders which the court may make under this rule include an order that a party must pay – … (g) interest on costs from or until a certain date, including a date before judgment.’ 1

Previously the rule at CPR  44.2(6)(g) was found at CPR  44.3(6)(g) – many of the cases below therefore refer to this historic reference.

7.38  Accordingly, the courts now have a wider discretion to make orders for interest on costs from or until specified dates, including from a date before judgment. The court may make a different order under either CPR 40.8 or CPR 44.2(6)(g). They have similar provisions save that CPR 44.3(6)(g) relates specifically to costs. 7.39  The White Book1 notes that CPR  44.2(6)(g) has a different function to CPR 40.8 insofar as it may apply to costs as judgment debts. CPR 40.8 deals with prescribing the date from which interest on judgment debts should start to run. It observes that CPR 44.2(6)(g) also fulfils a further and different function as to interest on costs. That is compensation for ‘out of pocket costs’. Often a party will have needed to have funded legal costs during the litigation. This can leave a party out of pocket – often for quite some time on potentially significant amounts. A usual order for costs to be assessed will not, without more, compensate a party for the period in

470  Interest on judgments which they have been ‘out of pocket’. Using CPR 44.2(6)(g) a party can seek interest on these incurred costs. Obtaining an order for interest on costs that runs from before the date of judgment is also possible under CPR 40.82 (and there is nothing in the JA 1838 or CPR 40.8 which indicates that such is only to be made in exceptional circumstances – any order should reflect what justice requires).3 However, unlike an award made pursuant to CPR 40.8, where the court makes an award of interest in respect of a period before judgment pursuant to CPR 44.2(6)(g) the rate of interest is at large (and is not restrained by the statutory rate4) and is generally made at a commercial rate. The court appears to consider that its general powers to order interest on costs, including pre-judgment interest is derived from CPR  44.2(6)(g) rather than CPR 40.8.5 1 The White Book (Sweet & Maxwell, 2020), Vol 1, paras 40.8.2 and 44.2.29. 2 See DuPont Nutrition Biosciences ApS  v Novozymes A/S  [2013]  EWHC  483 (Pat) where it was ruled that, in the circumstances of that case, interest on costs at the judgment rate should run from a date before the date of judgment. It was observed at [26], ‘There appears to be a degree of overlap between those two rules, to the extent that in so far as a judgment includes an order for costs, an order can be made under both CPR 40.8 and/or under CPR 44.3(6) [now CPR 44.2(6)].’ 3 Fattal v Walbrook Trustees (Jersey) Ltd [2009] EWHC 1674 (Ch) at [25]–[26] (Christopher Clarke J). 4 Jones v Secretary of State for the Department of Energy and Climate Change [2014] EWCA Civ 363. The relevant principles do not materially differ from those applicable to the award of interest on damages under the Senior Courts Act 1981, s 35A. 5 See for example, Jones v Secretary of State for the Department of Energy and Climate Change [2014] EWCA Civ 363, at [17] and Sharp v Blank [2020] EWHC 1870.

7.40 In Simcoe v Jacuzzi Group UK1 the Court of Appeal bought some clarity and ruled that the normal rule is that interest under CPR  40.8 runs from the date of the costs order (the incipitur date) rather than the date the costs are assessed or agreed. The Court agreed with observations made in Fattal v Walbrook Trustees (Jersey) Ltd2 in which Christopher Clarke J held, in summary terms, that the effect of CPR  40.8 was that: (a) the general rule is that interest on costs runs from the incipitur date; (b) a departure from that general rule is justified if it is ‘what justice requires’; (c) the notion that a departure can only be justified in ‘exceptional’ cases is an unhelpful guide; (d) the primary purpose of an award of interest is ‘to compensate the recipient for [having] been precluded from obtaining a return on [his] money’; (e) ‘[s]ince the payment of solicitors’ costs involves the payment of money which could otherwise have been profitably employed, the overwhelming likelihood is that justice requires some recompense in the form of interest’. The Court added it would discourage too detailed an approach into the facts of the particular case in hand for the purpose of determining the date from which interest should run. There would often be no perfect date, and the decision inevitably would, indeed should, be broad brush. 1 [2012] EWCA Civ 137. 2 [2009] EWHC 1674 (Ch) at [25]–[30].

7.41 In Involnert Management v Aprilgrange1 the Commercial Court had to deal with the date from which interest under JA 1838, s 17 should run on costs payable by the claimant. The Court concluded that interest should run from three months after the date of the costs order. Leggatt J observed that the power in CPR 44.2(6)(g) is

Interest on costs  471

now routinely exercised in the Commercial Court when an order for costs is made following a trial to award interest at a commercial rate from the dates when the costs were incurred until the date when interest becomes payable under JA  1838. Now that such orders could be made, it was observed it was hard to see that the balance of justice still favoured continuing – anomalously – to treat an order for payment of costs to be assessed as a judgment for the purpose of JA 1838, s 17. However, unless and until the Supreme Court departed from its decision in Hunt it remained binding authority. It was noted that the application of the JA 1838 remains a matter of some significance given the low Bank of England based rate compared to the 8% awarded under the JA 1838. 1

[2012] EWCA Civ 137; [2015] EWHC 2834 (Comm).

7.42  Leggatt J helpfully considered a line of recent authority1 in which consideration was given to the date from which interest on costs should run under the JA 1838 and reiterated the principle in Hunt and held that this was the default date for payment of interest to run from. However: (a) There was nothing in JA 1838 or the CPR that expressly or impliedly restricts the power of the court under CPR 40.8(1) to order the interest payable under JA 1838, s 17 to run from a different date. The court has the power to ‘order otherwise’. The essential question is what justice requires. (b) The date from which JA 1838 interest runs should not be deferred simply because it is at a considerably higher rate than commercial rates. (c) Hunt’s case did not prevent the Court from ordering that JA 1838 interest should run from the date when the amount of costs payable is assessed if that is what in current circumstances justice requires. (d) It was not just to make an order under which interest begins to run at the rate appropriate for unpaid judgment debts before the paying party could reasonably be expected to pay the debt. (e) Translating this principle into practice it was desirable to set a date from which JA 1838 interest will run which is based, if possible, on some objective benchmark which does not depend simply on the judge’s general feeling of what length of postponement is fair. 1

Schlumberger Holdings Ltd v Electromagnetic Geoservices AS  [2009]  EWHC  773 (Pat); Colour Quest v Total Downstream [2009]  EWHC  823 (Comm); London Tara Hotel Ltd v Kensington Close Hotel Ltd (Costs) [2011]  EWHC  29 (Ch); Fiona Trust & Holding Corporation v Privalov [2011] EWHC 1312 (Comm); Fattal v Walbrook Trustees (Jersey) Ltd [2009] EWHC 1674 (Ch); Simcoe v Jacuzzi UK Group plc [2012] 1 WLR 2393.

7.43  In Leggatt J’s opinion a reasonable objective benchmark to take was the period prescribed by the rules of court for commencing detailed assessment proceedings. Pursuant to CPR 47.7, where an order is made for payment of costs which are to be the subject of a detailed assessment if not agreed, the time by which detailed assessment proceedings must be commenced (unless otherwise agreed or ordered) is three months after the date of the costs order. Postponing the date from which JA 1838 interest begins to run by three months would generally serve to ensure that the party liable for costs has received the information needed to make a realistic assessment of the amount of its liability before it began to incur interest at the rate applicable to judgment debts for failing to pay that amount. CPR 47.8(3) provides that the court

472  Interest on judgments may disallow all or part of the interest otherwise payable to the receiving party under JA 1838, s 17. There is thus a power to remedy any injustice which may arise in the event that the paying party is not provided with details of the costs claimed within three months of the date of judgment. 7.44  This approach has been applied in practice in subsequent Commercial Court judgments1 concerning interest on costs. It has also been applied by other courts.2 Recently, in Sharp v Blank,3 the Court postponed the application of JA 1838 interest on unpaid costs for four months from the date of the judgment. This was held to be just given the complex circumstances of the case (a case conducted under a group litigation order covering approximately 5,800 claimants). Pre-judgment interest on costs was also awarded in this case pursuant to CPR 44.2(6)(g). 1 2 3

For example, Marathon Asset Management LLP v Seddon [2017] EWHC 479 (Comm). For example, MacInnes v Gross [2017] EWHC 127 (QB). [2020] EWHC 1870 at [28].

7.45  Turning in greater detail to the development of the application of CPR 44.2(6) (g), the Court considered whether to apply CPR 44.3(6)(g) (as it then was) in Amoco (UK) Exploration Co v British American Offshore Ltd (No 2).1 In that case, Langley J noted that the jurisdiction to award interest on costs before judgment derives from and originated with CPR 44.3(6)(g) (now CPR 44.2(6)(g)) and that there was almost no authority on how it should be exercised. It was stated obiter:2 ‘[I]t may well be appropriate, at least in substantial proceedings involving commercial interests of significant importance … that the court should award interest on costs under [CPR 44.3(6)(g)] where substantial sums have inevitably been expended perhaps a year or more before an award of costs is made and interest begins to run on it under the general rule. … I have no difficulty in accepting that costs of such an order [£16m] have had to be financed and paid over a substantial period of time…. I would consider it appropriate in principle to award interest upon such costs from payment to judgment.’ 1 2

[2001] All ER (D) 327 (Nov). Considered in Rambus Inc v Hynix Semiconductor UK Ltd [2004] All ER (D) 587 (Jul). [2001] All ER (D) 327 (Nov) at [10].

7.46  However, the facts of the Amoco (UK) Exploration case were such that the Court did not have to reach a final decision on how the rule would be applied.1 1

The parties were also in litigation on related issues in the courts of Texas and the judge considered that, by making an award under the rule, there was a risk of double recovery.

7.47 In Amec Process and Energy Ltd v Stork Engineers & Contractors BV (No 3),1 Thornton J considered Langley J’s words above and stated: ‘I agree with these sentiments and that they are directly applicable to this case since the costs, although not in the Amoco scale, are still huge in size and much of those costs were incurred many years ago.’ 1

[2002] All ER (D) 48 (Apr).

Interest on costs  473

7.48  The Court went on to ‘adopt a broad brush’ approach and awarded interest on the whole of the costs but only for half of the period of the litigation at a rate of 6%, and judgment rate interest on costs from the date of judgment. 7.49 In Powell v Herefordshire Health Authority1 the defendant health authority admitted negligence in April 1994 and judgment was entered by consent. Quantum was not resolved until June 2001, over seven years later.  Costs were awarded to the claimant on the standard basis and the costs judge concluded that interest on costs should run from April 1994 in accordance with JA 1838, s 17. The defendant appealed. 1

[2003] 3 All ER 253, CA.

7.50  The question therefore arose whether interest on costs should run from the April 1994 judgment, the June 2001 damages assessment, or whether CPR 44.3(6) (g) (as it then was) allowed the costs judge to award interest from some other date. This last possibility had not been raised by either party before the costs judge. The Court of Appeal observed that CPR 44.3(6)(g) gave the costs judge a discretion which enabled him to look at the dates when the costs had been incurred and to come to a conclusion which ‘fitted the justice of the circumstances of the case’.1 However, since the parties had reached agreement on costs, the Court provided no further guidance as to the principles which the court should consider in relation to the exercise of its discretion under this rule. 1

[2003] 3 All ER 253 at 255.

7.51 In Seashore Marine SA v Phoenix Assurance plc, The Vergina (No 3)1, Aikens J considered both the court’s discretion under the CPR to vary the date from which interest under the JA 1838 is to run and the apparent inconsistency of logic applied by the House of Lords in the decisions of Thomas v Bunn2 and Hunt v RM Douglas (Roofing) Ltd.3 The claimant in that case was seeking enhanced interest and indemnity costs, having beaten its Pt 36 offer, and the case contains a detailed analysis of both costs and interest. On the facts of the case, counsel agreed that the Court could make an order using its discretion under the CPR, the net effect of which was that statutory interest under JA 1838 ran on both the principal amount and costs from the date of the judgment on liability. Aikens J stated:4 ‘The effect of the two [House of Lords’] decisions on this case, therefore, would be that the rates of interest awarded under CPR Part 36.21(2) and (3) would run until the date of this judgment (ie July 31, 2001), rather than the one dealing with liability, which I handed down on May 16, 2001. That would make some difference in the interest recoverable by the claimant.  However, Counsel also pointed out that the Court has power to set a date from which interest on a judgment will run under s. 17 of the Judgment Act [sic] that is before the date of the judgment: see CPR  Part 40.8(1)(b) and (2). Furthermore, under CPR  Part 44.3(6)(g), the Court has power to award interest on costs from a date before a judgment.  It was therefore agreed by Counsel on July 31, 2001 that I could make an order that Judgment Act [sic] interest would run from May 16, 2001 on: (i) the principal sum awarded plus interest, including the enhanced CPR  Part 36.21(2) interest; and (ii)

474  Interest on judgments costs, including the pre-judgment interest on costs awarded under CPR Part 36.21(3). After some discussion it was agreed that I should order that, for the purposes of the accrual of interest under s. 17 of the Judgment Act [sic], the date of this judgment would be deemed to be May 16, 2001.  So the order drawn has provided that Judgment Act [sic] interest on the sums identified above will run as from May 16, 2001.’ 1 2 3 4

[2002] 1 Lloyd’s Rep 238. [1991] 1 AC 362. [1990] 1 AC 398. [2002] 1 Lloyd’s Rep 238 at 248.

7.52 In Somatra Ltd v Sinclair Roche & Temperley,1 Morison J  could see no reason why he should not exercise his discretion under CPR 44.3(6)(g) to award the successful claimant interest on its costs ‘to reflect the commercial reality that [the claimants] have lost the use of the money which they otherwise would have been able to spend in earning yet more money’. The judge further ordered that interest should run at the commercial rate of 1% over base rate on the claimant’s costs.2 1 2

[2002] All ER (D) 231 (Oct). The court’s discretion to vary the rate of interest on a judgment debt is discussed at paras 7.76–7.78.

7.53  Morison J’s judgment in Somatra does not deal with the interest period since it does not specify from or until when that interest should have run but it is presumed that Morison J intended interest to run for the period from the date on which the costs had been incurred (costs had been billed and paid on a monthly basis) until the date of judgment. This was substantially the approach taken by the Court of Appeal in exercising its powers under CPR 44.3(6)(g) in Bim Kemi AB v Blackburn Chemicals Ltd (costs),1 where the successful party was awarded interest on its costs at a rate of 1% over base rate from the date of each costs invoice to the date of the trial judgment, with interest to accrue at the judgment rate thereafter. The Court of Appeal’s guidance in the Bim Kemi case was followed by Burnton J in Lloyd v Svenby,2 and Kitchin J in Nova Productions Ltd v Mazooma Games Ltd.3 1 [2003] EWCA Civ 889. 2 [2006] EWHC 576 (QB). 3 [2006] EWHC 189 (Ch). It was also stated that it could not be said that interest on costs should only be awarded in a case that was in some way ‘out of the norm’ as was submitted by the respondent, relying upon Mann J’s observations in Rambus Inc v Hynix Semiconductor UK  Ltd [2004]  EWHC  2313 (Pat). Kitchin J noted that Mann J had not been referred to the Court of Appeal decision of Bim Kemi or to Lindsay J in Douglas v Hello. In Kitchen J’s view, the respondent’s submission could not be accepted: There was no basis for that under CPR, and it would provide an unwarranted fetter on the court’s discretion. Kitchen J noted that this accorded with Laddie J’s approach in IPC Media Ltd v Highbury Leisure Publishing Ltd [2005] EWHC 283 (Ch).

7.54 In Douglas v Hello! Ltd (No  7),1 Lindsay J  also considered Bim Kemi and gave further guidance on the period during which interest on costs should be ordered under CPR 44.3(6)(g): ‘… in principle, it seems to me that the more appropriate dates, when one is seeking to measure the extent to which a party has been out of pocket, would be the dates on which the invoices were actually paid. As to when such interest

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should stop, it seems to me that the appropriate time would be when interest on costs is replaced by judgment interest.’2 1 2

[2004] EWHC 63 (Ch). Lindsay J awarded judgment interest at a rate of base rate plus 1.5%. See also Richards and Purves v I  P  Solutions Group [2016]  EWHC  2599 (QB), where May J  held that pre-judgment interest should run from the date when the costs are incurred until the date the provisions of JA 1838, s 17 became applicable. In O’Neill v Avic International Corp (UK) Ltd [2019] EWHC 374 (QB) it was said that interest usually runs from the date when the costs are paid until judgment. In Sharp v Blank [2020] EWHC 1870 pre-judgment interest on costs was awarded at the Bank of England Base rate from the date of each invoice until the earlier of: (i) payment of such costs; or (ii) the date from which interest at the rate prescribed by JA 1838 becomes payable.

7.55 In Carleton (Earl of Malmesbury) v Strutt & Parker (A  Partnership),1 the receiving party submitted that the intention in awarding interest on costs was generally to compensate the receiving party and that it was therefore appropriate to order interest on costs because the receiving party had incurred substantial interest charges in funding the proceedings. The paying party advanced no point of principle in opposition to this submission. However, it argued that it was not the practice of the court to make such orders. Jack J concluded that there was no bar to an order of interest on costs and that it was appropriate to make the order sought in a case where the receiving party had incurred financing costs in order to finance the litigation.2 1 2

[2008] EWHC 616 (QB). Jack J awarded interest from the date on which the receiving party had paid half the total amount of costs which he had paid to his solicitors. The rate of interest awarded was 2.5% above base rate, which was the rate at which the receiving party had been loaned funds to finance the proceedings. See also for example De Sena v Notaro [2020] EWHC 1366 (Ch) where interest at the rate of 2% above base rate from the several dates of payment of solicitors’ invoices was awarded to cover the cost of a secured loan facility.

7.56  Indeed, the application of the rule in respect of pre-judgment interest on costs has been subsequently clarified in Jones v Secretary of State for Energy and Climate Change1 where Sharp LJ (with whom Gloster and Patten LJJ agreed) said: ‘The power to order interest on costs, including pre-judgment interest on costs is derived from CPR 44.2(6)(g). [ … ] The rule provides that the court may order “interest on costs from or until a certain date, including a date before judgment”. The purpose of such an award is to compensate a party who has been deprived of the use of his money, or who has had to borrow money to pay for his legal costs. The relevant principles do not materially differ from those applicable to the award of interest on damages under section 35A of the Senior Courts Act 1981. The discretion conferred by the rule in respect of pre-judgment interest is not fettered by the statutory rate of interest, under the Judgments Act 1838, but is at large. Ultimately, the court conducts a general appraisal of the position having regard to what is reasonable for both the paying and the receiving parties. This normally involves an assessment of what is reasonable having regard to the class of litigant to which the relevant party belongs, rather than a minute assessment which it would be inconvenient and disproportionate to undertake. In commercial cases the rate of interest is usually set by reference to the short-term cost of unsecured borrowing for the relevant class of litigant, though it is always possible for a party to displace a

476  Interest on judgments ‘rule of thumb’ by adducing evidence, and the rate charged to a recipient who has actually borrowed money may be relevant but is not determinative.’ 1

[2014] EWCA Civ 363 at [17].

7.57  In conclusion, although the incipitur rule that interest on costs should run from the date of the costs order (rather than the date on which costs are assessed) remains the starting assumption when assessing interest on costs orders, the courts have a broad discretion and are increasingly willing to make alternative orders particularly where the costs and time periods involved are sufficiently large and a party has been out of pocket for a significant period of time. As Clarke J  stated in Fattal1 ‘The most important criterion is that any order should reflect what justice requires’. This informs the exercise of discretion. Ultimately for the purposes of enforcement what is important is that unless the order says otherwise the incipitur rule applies. 1

[2009] EWHC 1674 (Ch) at [26].

Delay in applying for detailed assessment 7.58  It should also be noted that a party who delays unnecessarily in bringing detailed assessment proceedings under Pt 74 may have any interest that he would otherwise be entitled to under JA 1838, s 17, disallowed in whole or in part.1 1

CPR 47.8(3) and 47.14(4)(b). In Haji –Ioannou v Frangos [2006] EWHC 279 (Ch) it was confirmed that the possibility or fact of disallowance of interest did not of itself preclude the disallowance of costs.

Costs – reversals in the Court of Appeal and the Supreme Court 7.59  The general principles regarding interest on a judgment debt following reversal on appeal are summarised in the table at paragraph 7.32 above. The question of when interest is to run on costs orders where a decision has been reversed by either the Court of Appeal or the Supreme Court has been considered in a number of pre-CPR cases. At least prior to the CPR, the general rule was that if a decision was reversed in the Court of Appeal, the successful party was entitled to interest on his costs from the date of the Court of Appeal’s decision.  Likewise, if a decision was reversed in the Supreme Court, the successful party was only entitled to interest on his costs from the date of the Supreme Courts’ decision. This has led to some injustice and there are a number of cases in which the courts have tried to circumvent the general rule. 7.60 In Kuwait Airways Corpn v Iraqi Airways Co (No 2),1 the Court of Appeal reversed a decision that had been made in the plaintiff’s favour at first instance. The plaintiffs were ordered to pay the costs of proceedings before both courts.  The defendants, relying on the discretion that the court then had under RSC, Ord 42, r 3(2) to vary the date from which a judgment or order takes effect, sought to obtain interest on those costs from the date of the first instance decision, rather than the date of the Court of Appeal judgment. 1

[1994] 1 WLR 985, CA.

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7.61  The Court of Appeal held that it did have a discretion to backdate its costs order to the date of the judgment at first instance so that interest could be claimed from the date of the judgment at first instance and went on to find that it would ordinarily be just to backdate the part of the order that relates to costs at first instance to the date of the first instance judgment. In this case, however, the Court only partially backdated the order for costs at first instance, having taken into consideration the unusually high interest rates at the time of the first instance decision. 7.62  However, the House of Lords (as the Supreme Court then was) reached the opposite conclusion when their Lordships considered the question of backdating of an order for costs so that judgment interest would run from an earlier date in Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2).1 The plaintiff lenders had been awarded damages at first instance for loss caused by the defendant’s negligent valuation. The Court of Appeal dismissed the defendants’ appeal but the House of Lords allowed it and ordered, among other things, that the plaintiff pay the defendant’s costs in the Court of Appeal on the issue of quantum. 1

[1997] 1 WLR 1627, HL.

7.63  The House of Lords then considered from when interest should run on the defendant’s costs in the Court of Appeal. The House of Lords rejected the defendant’s claim that interest on these costs should run from the date of the Court of Appeal decision and, in doing so, overruled the Court of Appeal’s decision in Kuwait Airways Corpn v Iraqi Airways Co (No 2). The House of Lords concluded that there was no discretion to backdate interest on costs by backdating the date of the order, ‘however desirable it might be for the court to have [such a] power’, since to hold otherwise would allow the Court to do indirectly that which it had no power to do directly.1 1

[1997] 1 WLR 1627 at 1636, per Lord Nicholls.

7.64  However, as has been noted, these cases were all decided before the introduction of the CPR. CPR 44.2(6)(g)1 now appears to give the High Court and the Court of Appeal precisely the discretion that the House of Lords had decided was not available in 1997. 1

See paras 7.37 and 7.57.

Orders for costs of detailed assessment 7.65  Where detailed assessment proceedings are required, costs can be ordered in respect of those proceedings.1 The question then arises as to when interest begins to run on the costs of these proceedings. Interest on the costs of detailed assessment proceedings shall begin to run from the date of the default, interim or final costs certificate, as the case may be or from the date of the distinct costs order in the assessment should the assessing court make such an order at an interim hearing or stage.2 1

CPR  47.20(1) provides that the receiving party is entitled to his costs of the detailed assessment proceedings except where (a) the provisions of any statute, any rule of the CPR or any relevant practice direction provide otherwise; or (b) the court makes some other order in relation to all or

478  Interest on judgments part of the costs of the detailed assessment proceedings. CPR 47.20(3) sets out factors which the court should take into account when deciding whether to make any other order. CPR 47.20(5) notes that the court will usually summarily assess the costs of detailed assessment proceedings at the conclusion of those proceedings. 2 CPR 47.20(6).

Costs following specific procedures1 7.66  In certain circumstances, costs orders are deemed to have been made by the court. These circumstances are set out in CPR 44.9(1), which provides that a costs order will be deemed to have been made on the standard basis where a right to costs arises under: ‘(a) rule 3.7 or 3.7A1 (defendant’s right to costs where claim struck out for nonpayment of fees); (a1) rule 3.7B (sanctions for dishonouring cheque); (b) rule 36.13(1) or (2) (claimant’s entitlement to costs where a Part 36 offer is accepted); (c) rule 38.6 (defendant’s right to costs where claimant discontinues)…’ CPR  44.9(2) clarifies that a deemed order does not arise under paragraph  (1)(b) where a Part 36 offer is accepted before the commencement of proceedings. 1

See further paras 7.79–7.81 on Part 36 offers.

7.67  CPR 44.9(4), which is self-explanatory, provides: ‘Interest payable pursuant to section 17 of the Judgments Act 1838 … on the costs deemed to have been ordered under paragraph  (1) shall begin to run from the date on which the event which gave rise to the entitlement to costs occurred.’

Costs awarded against the Crown 7.68  As noted in Chapter 1, the Crown has certain immunities from enforcement steps being taken against it by virtue of CPA 1947. However, CPA 1947, s 24(2), provides that: ‘Where any costs are awarded to or against the Crown in the High Court, interest shall be payable upon those costs unless the court otherwise orders, and any interest so payable shall be at the same rate as that at which interest is payable upon judgment debts due from or to the Crown.’

RATE OF INTEREST 7.69  The courts’ power to alter the period for which interest is payable has already been noted at paragraphs 7.5–7.10 above. This section considers the rate of interest that applies to the judgment.

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Rate of interest – sterling judgments 7.70  Where the judgment is a sterling judgment, the rate of interest will depend on whether there is a contractual agreement between the parties on the rate of interest which is to run after judgment. In the absence of contractual variation, the statutory rate will apply. 7.71  The interest rate applicable under JA 1838, s 17, now derives from statutory instruments made under the Administration of Justice Act 1970 (AJA 1970), s 44, which provides: ‘The Lord Chancellor may by order made with the concurrence of the Treasury direct that section 17 of the Judgments Act 1838 (as that enactment has effect for the time being whether by virtue of this subsection or otherwise) shall be amended so as to substitute for the rate specified in that section as the rate at which judgment debts shall carry interest such rate as may be specified in the order.’ 7.72  The judgment rate has been amended from time to time by various  orders issued under AJA 1970, s 44. The current rate is fixed at 8% per annum by virtue of the Judgment Debts (Rate of Interest) Order (No 2) 1993.1 The following table sets out the historic rates of interest which have applied under JA 1838, s 17: Judgment date

Rate of Authority interest per annum before 20 April 1971 4% Judgments Act 1838, s 17 post 20 April 1971 7.5% Judgment Debts (Rate of Interest) Order 1971, SI 1971/4912 post 1 March 1977 10% Judgment Debts (Rate of Interest) Order 1977, SI 1977/141 post 3 December 1979 12.5% Judgment Debts (Rate of Interest) Order 1979, SI 1979/1382 post 9 June 1980 15% Judgment Debts (Rate of Interest) Order 1980, SI 1980/672 post 8 June 1982 14% Judgment Debts (Rate of Interest) Order 1982, SI 1982/696 post 10 November 1982 12% Judgment Debts (Rate of Interest) Order 1982, SI 1982/1427 post 16 April 1985 15% Judgment Debts (Rate of Interest) Order 1985, SI 1985/437 post 1 April 1993 8% Judgment Debts (Rate of Interest) Order 1993, SI 1993/564 1 SI 1993/564. 2 This increase was made under AJA  1970, s  44, which implemented the recommendations of the Report of the Committee on the Enforcement of Judgment Debts (Payne Committee Report) (1969) Cmnd 3909.

480  Interest on judgments Rate of interest – judgments expressed in a foreign currency 7.73  Judgments awarded by the English courts can be expressed in a foreign currency.1 Where this is the case, the court has a discretion to alter the rate of judgment interest. The rules are set out in AJA 1970, s 44A,2 which provides as follows: ‘(1) Where a judgment is given for a sum expressed in a currency other than sterling and the judgment debt is one to which section 17 of the Judgments Act 1838 applies, the court may order that the interest rate applicable to the debt shall be such rate as the court thinks fit. (2) Where the court makes such an order, section 17 of the Judgments Act 1838 shall have effect in relation to the judgment debt as if the rate specified in the order were substituted for the rate specified in that section.’ 1 2

See further Ch 1. Inserted by Private International Law (Miscellaneous Provisions) Act 1995, s 1(1).

7.74  Therefore provided the judgment is for a ‘judgment debt’ to which JA 1838, s  17, applies,1 the court may vary the rate of interest which would otherwise normally be awarded under JA  1838, s  17, if the judgment were a judgment expressed in sterling. This discretion was granted to avoid irregularities occurring as a result of the prevailing rate of interest fixed on sterling judgments and a rate which was more appropriate for the foreign currency concerned. If a party believes that a different rate should apply in the case of a non-sterling judgment, it should apply to the court under AJA  1970, s  44A, to vary the rate otherwise applicable under JA 1838, s 17.2 1 2

See paras 7.13–7.25. Similar rules apply to County Court judgments, although the jurisdiction arises under different legislation. Interest on non-sterling County Court judgments is provided for by the County Courts Act 1984, s 74(5A), and the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184. With certain exceptions, the County Courts (Interest on Judgment Debts) Order 1991, para  5(2), provides that, in the case of non-sterling County Court judgments over £5,000, ‘a County Court may order that the rate of interest shall be such rate as the court thinks fit … and, where the court makes such an order, section 17 of the Judgments Act 1838 shall have effect in relation to the judgment debt as if the rate specified in the order were substituted for the rate specified in that section’.

7.75 In Standard Chartered Bank v Ceylon Petroleum Corporation1 judgment was given in US dollars. The judgment creditor sought to persuade the Court that it should not depart from the statutory rate but Mr Justice Hamblen did not agree and it appears that he considered that he should apply the compensatory principle. It was held that the more suitable rate was the US Prime Rate as the successful party had ‘no concern with sterling’.2 In Novoship (UK) Ltd v Mikhaylyuk3 the Court of Appeal awarded interest on a judgment in a foreign currency at a commercial rate rather than at 8%. Pursuant to the discretion under AJA  1970 the Court ordered a JA 1838 rate at three-monthly US LIBOR plus 2.5%, as it is quarter to quarter. In ACLBDD  Holdings v Staechelin4 the Court awarded interest on a judgment sum expressed in US dollars at a rate of 3% above Bank of England base rate. In SAS  Institute Inc v World Programming Ltd5 the Court noted that varying the judgment rate of 8% was not appropriate because the loss was not actually felt in

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dollars by reason of the injured party being a UK based company whose accounts were in sterling. 1 [2011] EWHC 2094 (Comm). 2 [2011] EWHC 2094 (Comm) at [22]. 3 [2014] EWCA Civ 908. 4 [2018] EWHC 428 (Ch). 5 [2019] EWHC 2496 (Comm).

Can the court vary the rate of interest under JA 1838, s 17? 7.76  Other than in the case of non-sterling judgments (as discussed above), the court does not have a discretion to alter the judgment rate.  This could be particularly significant if the statutory rate of interest has increased since the judgment creditor was awarded judgment and the judgment debtor has yet to satisfy some or all of his judgment debt. At the time of writing, the judgment rate had remained unchanged at 8% per annum since 1 April 1993, so, at present, the issue may be largely academic.  However, it may become relevant if the statutory rate changes in future. 7.77  The question of whether the court had a discretion to alter the judgment rate arose in Rocco Giuseppe & Figli v Tradax Export SA.1  Although the Court was considering two arbitration awards in that case, under the provisions of the Arbitration Act 1950 (which was then in force), the awards carried interest at the same rate as a judgment debt.2 At the time the awards were made the judgment rate was 10%. However, the award was not paid until nearly four years later, during which time the judgment rate had subsequently been increased to 12.5% and then 15% by two successive orders made under AJA 1970, s 44. The judgment creditor contended for a construction of the applicable legislation that allowed him to claim the increases in the rates of interest that had occurred in the period between the awards being made and their subsequent payment. 1 2

[1984] 1 WLR 742. Arbitration Act 1950, s. 20. In Rocco Giuseppe & Figli v Tradax Export SA [1984] 1 WLR 742 at 747, Parker J expressly found that the fact he was considering an arbitration award rather than a judgment was irrelevant as the award was to be ‘treated exactly like a judgment’.

7.78  Parker J  held that the applicable judgment rate is the rate specified in the order made under AJA 1970, s 44, which is in force at the date when judgment is given. The court therefore has no power to vary the judgment rate even if a new order under AJA 1970, s 44, alters the judgment rate after judgment has been given. This approach was apparently affirmed by the Court of Appeal in McPhilemy v Times Newspapers Ltd1 which is discussed in para  7.81.  However, as has been noted at para 7.57, the court has often taken a different approach, by exercising its discretion under CPR 44.2(6)(g) to enable it to apply a different rate of interest on costs paid before the date of the costs order. 1

[2002] 1 WLR  934 at 945, per Chadwick LJ, CA. See Secretary of State for the Department of Energy and Climate change v Jeffrey Jones [2014] EWCA Civ 363 at [17].

482  Interest on judgments Can the court vary the judgment rate if a claimant beats a CPR Part 36 offer? 7.79  CPR  Part 36 contains a number of rules about the costs and interest consequences of offers to settle made in the course of litigation.  In particular, CPR 36.17(4) provides that: ‘… the court must, unless it considers it unjust to do so, order that the claimant is entitled to… (a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;…(c) interest on [its] costs at a rate not exceeding 10% above base rate.’ 7.80  CPR  36.17(4) applies where judgment against a defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer.  The question arises as to whether CPR  36.17(4) grants the court a power to vary the rate at which interest is to be awarded in respect of any period after judgment. 7.81 In McPhilemy v Times Newspapers Ltd (No  2),1 the Court of Appeal held that the statutory rate of interest on judgments cannot be altered by the court even when a claimant does better than he proposed in his Part 36 offer.2 The Court of Appeal held that the court has no power under CPR  36.21(2) to make such an order in relation to the payment of interest after judgment and that interest on damages and costs thereafter was payable at the judgment rate. Chadwick  LJ held:3 ‘The power to fix the rate at which interest is payable on judgment debts has been conferred on the Lord Chancellor by section 44 of the Administration of Justice Act 1970 and is exercisable by him with the concurrence of the Treasury. I  can see no reason why Parliament should have intended to confer on the Courts, indirectly through rules made by the Civil Procedure Rule Committee under section 1(1) of the Civil Procedure Act 1997, power to vary in individual cases a rate fixed under the 1970 Act; nor any reason why a power to fix the rate at which interest is payable on judgment debts could be required for the purpose of “securing that the civil justice system is accessible, fair and efficient”: see section 1(3) of the 1997 Act. Nor can I  see why a party who fails to pay a judgment debt, which (ex hypothesi) the Court has ordered that he should pay, should pay more, or less, interest on that debt because, in the litigation which has led to that order, the other party has, or has not, made an offer to which rule 36.21 applies. The point was not addressed at any length in the argument on the cross-appeal, but, for my part, I am not persuaded that the Court has power to make an order under paragraph (2) of rule 36.21 for the payment of interest on the amount of the jury’s award in respect of any period after judgment, or to make an order under paragraph (3)(b) for the payment of interest on costs in respect of any

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period after judgment.… Interest thereafter, on damages and costs, will be payable at the judgment rate, under [JA 1838, s 17], in the ordinary course.’ 1 2

3

[2002] 1 WLR 934, CA. This decision was made under a different Part 36 regime. In particular, the Court of Appeal was considering CPR 36.21 which was then in force to similar effect as the current CPR 36.17(4), but which has now been revoked. [2002] 1 WLR 934 at 945, CA.

Variation by contract? 7.82  Many commercial agreements provide that interest shall be paid at a contractually agreed rate both before and after any judgment.1  The contract may provide for interest to be payable at the same rate post-judgment as applied prejudgment, or may provide for a higher rate of interest to become payable postjudgment. In these circumstances, the question that arises is whether post-judgment interest will run at the contractually agreed rate or at the statutory rate. Whether the contractual rate of interest is awarded or not will depend on the proper construction of the contract. 1

Lord Millett observed in Director General of Fair Trading v First National Bank plc [2002] 1 AC 481 at 505506, HL, that such a term ‘is not only a standard term in non-negotiable loans to consumers, but in commercial loans freely negotiated between parties on equal terms and acting with professional advice. I venture to think that no lawyer advising a commercial borrower would dream of objecting to the inclusion of such a term, which merely reinforces and carries into effect what the parties themselves would regard as the essence of the transaction.’ This case is considered in paras 7.94–7.97.

7.83 In Re European Central Railway Company, ex p Oriental Financial Corpn1 the statutory rate was held to prevail over the contractual rate.  In that case the defendant issued debentures carrying interest at 6%.  The claimant, a debenture holder, brought an action for recovery of the debt and interest and subsequently sought to enforce the judgment obtained. The Court of Appeal held that, following judgment, the original debt had become merged in the judgment, meaning that it no longer existed independently but had become fused with the judgment itself. As a result, the claimant was only entitled to interest at the statutory rate, which at the time was 4%.  Bramwell J  explained that as a result of the Court having entered judgment:2 ‘… the original debt is gone, transit in rem judicatam, a fresh debt is created with different consequences. The judgment is now the charge. There cannot be two debts, one leviable by execution, the other charging the undertaking. There cannot be a charge for more than is due.’ 1 2

(1876) 4 Ch D 33, CA. (1876) 4 Ch D 33 at 38, CA.

7.84  He explained the apparent injustice as follows:1 ‘It is said that it is a hardship upon the Appellants, because they are worse off by reason of their diligence in bringing the action. But they were not compelled to bring the action; they brought it in order to obtain the advantage of an

484  Interest on judgments execution. If, therefore, there has been any hardship, it was not inflicted upon them by the law so as to make us doubt whether the law could be so.’ 1

(1876) 4 Ch D 33 at 38, CA.

7.85 In In Re Sneyd, ex p Fewings1 the Court of Appeal reached similar conclusions. In that case, a mortgage deed contained a covenant by the mortgagor to pay interest at 5% if the principal sum remained unpaid after the date on which the mortgage was due to be redeemed. The Court had held that, as from the date of the judgment, the mortgagee was only entitled to interest at the statutory rate of 4%. The often-quoted dicta of Fry LJ explains the Court’s reasoning:2 ‘When there is a covenant for the payment of a principal sum, and a judgment has been obtained upon the covenant for that sum, it is plain that the covenant is merged in the judgment, and, if there is a covenant to pay interest which is merely incidental to the covenant to pay the principal debt, that covenant also is merged in a judgment on the covenant to pay the principal debt. Of course a covenant to pay interest may be so expressed as not to merge in a judgment for the principal; for instance, if it was a covenant to pay interest so long as any part of the principal should remain due either on the covenant or on a judgment. … [I]n Popple v Sylvester there was an independent covenant for the payment of interest, and I held, as a matter of construction, that that covenant remained in force so long as any principal money could be recovered by the mortgagee in an action for the foreclosure or the redemption of the mortgage. On the other hand, there are cases which shew that, if there is no distinct covenant of that kind to pay interest, the subsidiary covenant for payment of interest falls with the covenant for payment of the principal. That is well illustrated by In re European Central Railway Company…’ 1 2

(1883) 25 Ch D 338, CA. (1883) 25 Ch D 338 at 355–356, CA.

7.86  It is therefore clear that it is possible by express wording to ensure that the covenant to pay interest survives any judgment by agreeing that interest should be paid, as Fry LJ put it, ‘so long as any part of the principal should remain due either on the covenant or on a judgment’. The wording frequently included in covenants to pay interest in loan agreements is ‘as well after as before any judgment’1 or its more modern variant ‘after as well as before any judgment’. This wording is a clear example of a so-called ‘independent covenant’, and will not become merged in a judgment. 1

This was the wording used in the Land Registration Act 1925, s  28(1)(b) (Implied covenants in charges). This section was repealed by the Land Registration Act 2002.

Non-express wording 7.87  In the absence of express wording, the question of whether the interest covenant merges in a judgment is more complex.  It will be a question of fact in each case and the issue turns on the distinction to be drawn between, on the one hand, a covenant to pay interest that is ‘merely incidental’ to the covenant to pay the principal debt and, on the other, an ‘independent covenant’ to pay interest. The House

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of Lords decision in Economic Life Assurance Society v Usborne1 sheds light on this distinction. Their Lordships emphasised in Usborne that the question is purely one of the construction of the relevant documents in each case.2 1 2

[1902] AC 147, HL. The dicta of Fry LJ in Ex p Fewings were approved at 149–150, per the Earl of Halsbury LC. [1902] AC 147 at 150, per the Earl of Halsbury LC and at 151 and 154–155, per Lord Davey, who described the issue of construction as ‘the only question in the case’.

7.88  The facts of Usborne were that the parties had entered into a mortgage containing a covenant to repay the principal on a set date with interest of 5%.  If the principal was not repaid on that date, the mortgagors covenanted to pay interest at a rate of 5% for so long as the principal remained unpaid. The House of Lords held that, on a true construction of the mortgage deed in question, the plaintiff was entitled to retain its security until it had been repaid both the capital and interest at the contractually agreed rate.1 As will be seen, the reference to the retention of security is crucial to the analysis in this case. 1

This reversed the decision of the Master of the Rolls and the Court of Appeal in Ireland on this point in Usborne v Limerick Market Trustees [1900] 1 IR 85.

7.89  Lord Davey drew a distinction between a personal remedy, which is extinguished or merged on judgment,1 and an action on a security. In an action on a security, the construction of the documents is ‘wholly irrelevant’.2 However, in the case of an action on a personal covenant, Lord Davey approved the reasoning3 of the judgment of Fry LJ in Popple v Sylvester 4 (another case in which the courts considered a covenant to pay interest under a mortgage following a judgment) as follows:5 ‘[In Popple] the question had to be considered whether the covenant for the payment of the interest was an independent covenant or a covenant which was merely ancillary to the payment of the principal money, and the learned judge … came to the conclusion that it was an independent covenant which was not merged in or extinguished by the judgment obtained upon the principal covenant. But why did he come to that conclusion? Because the form of the covenant was to pay interest as long as anything was due upon the security. … He said, because something was due upon the security, ergo, that was an independent subsisting covenant. My Lords, that appears to me to put the law upon a very sound and right footing.’ 1 2 3 4 5

[1902] AC 147 at 152, HL. [1902] AC 147 at 152, HL. [1902] AC 147 at 152. It seems that Lord Davey might have entertained some doubts as to whether Fry LJ correctly applied the law to the facts in Popple. (1882) 22 Ch D 98, CA. [1902] AC 147 at 152–153, HL.

7.90  The covenant in Usborne was held to be an independent covenant because, as Lord Davey explained:1 ‘according to the true construction … it is not security to secure the performance of the covenant, but it entitles the mortgagees to sit upon their deeds, as we used to say, or to hold their security until they have been paid every penny of the …

486  Interest on judgments [judgment debt], together with interest measured by what is expressed in the covenant. That is a very different thing from a deed to secure the performance of the covenant.’ 1

[1902] AC 147 at 155, HL.

7.91 Following Usborne, if, on its proper construction, the mortgagee’s security only secures performance of the personal covenants to pay, only the statutory rate of interest will be recoverable by the judgment creditor after judgment has been given. This is because the covenant to repay the principal will cease to exist when it becomes merged in the judgment and so no interest will continue to be payable under the interest covenant. 7.92  By contrast, if, on its proper construction, the mortgagee’s security exists for as long as any sums remain outstanding, the contractually agreed rate of interest will be recoverable by the judgment creditor after judgment has been given.  In those circumstances, the covenant to pay interest cannot be narrowly construed as a covenant to pay interest on sums due under the personal covenant to pay principal which would itself merge with the judgment when it is entered. The covenant to pay interest will therefore be treated as being independent of the covenant to pay principal and will not therefore merge with the judgment. Interest will continue to be payable under the interest covenant until the mortgagee’s security is released by payment of the outstanding balance in full (including interest which has continued to accrue). 7.93  The matter was further considered by the Court of Appeal in London Borough of Ealing v El Isaac.1 Templeman LJ considered the judgment of Lord Davey in Usborne and stated:2 ‘Merger does not apply where there is an independent covenant, nor does it apply to a security as distinct from a contract… It appears, therefore, that merger has a very restricted operation. It does not, as appears from the Usborne case which I have just cited, apply to security. It does not apply to what is said to be an independent covenant and in most mortgages and deeds of borrowing these days care is taken to make the covenant an independent covenant. So that in practice, the number of times on which interest ceases to run from a date of judgment is very small. But on principle and on the authorities, it seems to me the merger doctrine only applies to contracts and covenants.’ 1

2

[1980] 2 All ER  548, CA. The decision in this case was that the doctrine of merger could not contradict a statutory provision (namely, the Housing Act 1969, s 6(14)) which provided for payment of interest until repayment. [1980] 2 All ER 548 at 551-552, CA.

7.94  The issue of a contractually agreed rate of interest was most recently considered by the House of Lords in Director General of Fair Trading v First National Bank plc.1 The bank had a standard term in its regulated consumer credit agreements providing for interest to run at the contractual rate ‘until payment after as well as before any judgment (such obligation to be independent of and not to merge with the judgment).’ 1

[2002] 1 AC 481, HL.

Rate of interest  487

7.95  An agreement was reached between the bank and the judgment debtors of First National Bank to pay their debts by instalments. Interest had not been included in the instalments. However, First National Bank did include in its loan agreement a term stipulating that should the borrower default on his repayments interest would continue to be payable at the contractual rate until any judgment obtained by First National Bank was discharged. A  lender seeking to enforce a regulated consumer credit agreement must sue in the County Court.1 Until the County Courts (Interest on Judgment Debts) Order 1991,2 the County Court lacked power to award interest on any judgment debt and, after such a power was confirmed by that Order, judgments in proceedings to recover money due under regulated consumer credit agreements were expressly excluded from the scope of that power. A lender could only therefore recover post-judgment interest if there was an independent covenant to pay interest in the credit agreement which did not merge with the judgment which was entered against the borrower. Where such a covenant existed, the borrower would remain liable to pay contractual interest after the court had entered judgment and even if the court made an order that the judgment debt should be repaid by instalments.3 The Director General of Fair Trading brought proceedings against the bank to argue that an independent covenant to pay interest after the entering of judgment on a regulated consumer credit agreement was ‘unfair’ under the Unfair Terms in Consumer Contracts Regulations 1994.4 1 2 3 4

Consumer Credit Act 1974, s 141. SI 1991/1184, para 2(3)(a). Consumer Credit Act 1974, s 129. SI 1994/3159. Replaced by the Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083 and superseded by the Consumer Rights Act 2015.

7.96  The House of Lords accepted that a situation where a debtor could pay all the instalments ordered by the court and still face a claim for interest accruing during the payment of those instalments was ‘unacceptable’. It was not, however, ‘unfair’ within the meaning of Unfair Terms in Consumer Contracts Regulations 19941 and judgment was given in favour of the bank. Lord Bingham considered the question of the effect of the wording of the bank’s standard term concerning interest after judgment, and it is worth setting out the relevant passage from the judgment at length:2 ‘The bank’s stipulation that interest shall be charged until payment after as well as before any judgment, such obligation to be independent of and not to merge with the judgment, is readily explicable. At any rate since In re Sneyd; Ex p Fewings (1883) 25 Ch D 338, not challenged but accepted without demur by the House of Lords in Economic Life Assurance Society v Usborne [1902] AC 147, the understanding of lawyers in England has been as accurately summarised by the Court of Appeal in the judgment under appeal [2000] QB 672, 682: “It is trite law in England that once a judgment is obtained under a loan agreement for a principal sum and judgment is entered, the contract merges in the judgment and the principal becomes owed under the judgment and not under the contract. If under the contract interest on any principal sum is due, absent special provisions the contract is considered ancillary to the covenant to pay the principal, with the result

488  Interest on judgments that if judgment is obtained for the principal, the covenant to pay interest merges in the judgment. Parties to a contract may agree that a covenant to pay interest will not merge in any judgment for the principal sum due, and in that event interest may be charged under the contract on the principal sum due even after judgment for that sum.” To ensure that they were able to recover not only the full sum of principal outstanding but also any interest accruing on that sum after judgment as well as before, it became the practice for lenders to include in their credit agreements a term to the effect of the term here in issue.’ 1 SI 1994/3159. 2 [2002] 1 AC 481 at 487–488, HL.

7.97  Lord Millett observed1 that the clause was only necessary because of the ‘artificial’ reading of the covenant to pay interest that the Court of Appeal had reached in Re Sneyd: ‘The substance of the transaction in the present case is self-evident. It is a loan repayable by instalments with interest on the balance from time to time outstanding until the whole of the principal is repaid. The borrower would have no difficulty in understanding this. Nor would he think it unfair. If his attention were drawn to the impugned term, ie that interest should continue to be paid on the outstanding balance after as well as before judgment, he might well be surprised at the need to spell this out, but he would surely not be at all surprised by the fact. It is what he would expect. The term does not affect the substance of the transaction, which is that the borrower should continue to pay interest on the principal from time to time outstanding, nor does it impose any further or unexpected liability upon him not inherent in the basic transaction. It is included only to protect the lender from the (to modern eyes artificial) meaning placed on a covenant to pay interest by the Court of Appeal in In re Sneyd; Ex p Fewings (1883) 25 Ch D 338, where a covenant to pay interest on the balance of the principal sum from time to time remaining unpaid was construed as meaning remaining due under the covenant, so that it fell when the covenant was subsumed in the judgment.’ 1

[2002] 1 AC 481 at 505, HL.

7.98  By way of a more recent example, in Parr v Tiuta International1 the doctrine of merger was considered where, after the repossession and sale of its security, a lender experienced a shortfall. The lender secured a further charging order over a different property based on the amount of the judgment debt plus interest that had accrued at the contractual rate. The lender’s position was that as the debt was secured, there could be no merger and that in any event interest would continue to accrue at the contractual rate. It was held that the construction of the loan agreement concerned, the wording of the charge and the circumstances meant that there was no merger of the contractual right to interest under the loan agreement after judgment was entered following a default to pay by the borrower. The contractual interest provisions continued after judgment and until the charged property was sold. The covenants to pay interest could have been more clearly drafted but the covenant in the

Rate of interest  489

loan agreement to pay the interest and fees on ‘all liabilities which are now or may be at any time hereafter be due’ was wide enough to cover all liabilities whether under the agreement or any subsequent judgment debt. 1

[2016] EWHC 2 (QB).

7.99  In summary, it is clear that it is possible for contracting parties to agree that a different rate of interest from the statutory rate will apply after judgment.  However, the contractually agreed rate of interest will continue to be payable following a judgment where the contract contains a so-called ‘independent covenant’ expressly stating that the contractually agreed rate will prevail after judgment. Where the contract contains no such covenant, the courts will construe the contract to determine whether the contractual rate will continue to be payable after a judgment.  The courts have held that the covenant to pay interest does not merge with the judgment where, on a proper construction of the relevant documents, the security subsists for so long as any sums (including any interest which has accrued) remain outstanding. 7.100  However, the cases discussed above arise in the context of secured debts and subsequent reliance on the security. What is the position on a simple debt claim? There can be no question of asking the court when entering judgment to order a postjudgment rate of higher than 8% (as we have seen above there is no discretion as to rate) so one would be left with a judgment for the debt and two distinct obligations to pay interest under JA 1838, s 17 and under the contract (where the interest paid under s 17 will be credited against the contractual obligation). From an enforcement perspective one may only enforce the judgment and its statutory consequences under JA  1838, s  17. Accordingly, once one has recovered in full the judgment and the JA 1838, s 17 interest that may leave contractual interest still due. That cannot be recovered by enforcement action on the original judgment but will require a fresh action suing on the distinct covenant to pay interest post-judgment. This is practically illustrated by Chubb and another v Dean and another.1 1

[2013] EWHC 1282 (Ch).

Contractually agreed rate lower than the statutory rate 7.101  There is as yet no case law addressing the question of whether a judgment creditor can enforce at the statutory rate where the parties have contractually agreed that a lower rate than the statutory rate will apply after judgment. For the reasons set out above however the statutory rate must prevail.

Interest rate on arbitration awards 7.102  Arbitration is an important method of commercial dispute resolution and is widely employed as an alternative to court proceedings in the commercial sphere. Under English arbitration law, the basic rule regarding the award of interest is party autonomy: the parties are free contractually to agree on the powers of the tribunal as regards the award of interest.1 This could be provided for in the arbitration

490  Interest on judgments agreement itself or under the rules of the arbitration2 incorporated by reference into the arbitration agreement. 1 2

AA 1996, s 49(1). See, by way of example, the LCIA rules, art 26.4.

7.103  Unless otherwise agreed by the parties to the arbitration agreement, the default position is that a tribunal is granted a statutory discretion to award interest on any award or costs under AA 1996, s 49(4), which states: ‘The tribunal may award simple or compound interest from the date of the award (or any later date) until payment, at such rates and with such rests as it considers meets the justice of the case, on the outstanding amount of any award (including any award of interest under sub-s (3) and any award as to costs).’ 7.104  This provision is much broader than was previously the case1 and it is clear that it grants the tribunal an extremely broad discretion to award simple or compound interest2 on any arbitral award or costs and at such rates as it considers to meet ‘the justice of the case’.  Unlike a civil court awarding interest on a judgment debt,3 s 49(4), does not permit a tribunal to award interest on the arbitral award for a period beginning before the date of the award. However, the tribunal has broad powers under AA 1996, s 49(3) to award interest up to the date of the award, which mirror those of the civil courts to award interest prior to judgment.4  1

2 3 4

Previously, the Arbitration Act 1950, s 20 provided that: ‘A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest as from the date of the award and at the same rate as a judgment debt.’ In Timber Shipping Co SA  v London & Overseas Freighters Ltd [1972] AC 1, the House of Lords held that an arbitrator is permitted only to decide whether or not an award should carry interest at the rate applicable to a judgment debt and not to determine the rate at which such interest should be carried. This decision has now been overtaken by the clear wording of AA 1996, s 49(4). Interest is compounded by adding all interest due at that date to the capital sum on which interest is being paid when carrying out the interest calculation. Compare the position under CPR 40.8(2) discussed in para 7.7–7.10. See para 7.3, n 1. See Russell on Arbitration (24th edn, Sweet & Maxwell, 2015), para 6–120.

7.105  Under AA 1996, s 66(1) an arbitral award may, by leave of the court, be enforced to the same effect as if it were a judgment or order of the court.1 Where leave is given, judgment may be entered in terms of the award.2 The award is enforced by a summary procedure set out in CPR Part 62. In order to enforce an award of interest the whole or part of which relates to a period after the date of the award, CPR 62.19 requires the applicant to file a statement giving the following particulars: ‘(a) whether simple or compound interest was awarded; (b) the date from which interest was awarded; (c) where rests were provided for, specifying them; (d) the rate of interest awarded; and (e) a calculation showing – (i) the total amount claimed up to the date of the statement; and (ii) any sum which will become due on a daily basis.’ 1

See Chapter  1. Once judgment is entered on the award, judgment rate interest will start to accrue whether or not the arbitrators made an award of post-award interest: Walker v Rowe [2000] Lloyd’s Rep 116 and Pirtek v Deanswold [2005] 2 Lloyd’s Rep 728 at 734. A similar provision exists for New York

When does interest stop running?  491

2

Convention arbitral awards under the AA 1996, s 101(2). In Gater Assets Ltd v Nak Naftogaz Ukrainiy [2008] EWHC 1108 (Comm), Beatson J held that a judgment entered under s 101 would carry interest at the judgment rate. See also Sonatrach v Statoil Natural Gas LLC [2014] EWHC 875 (Comm). AA 1996, s 66(2).

WHEN DOES INTEREST STOP RUNNING? 7.106  It is clear that interest will stop accruing when the judgment debt is paid in full. This is made clear by JA 1838, s 17(1) which states that ‘[e]very judgment debt shall carry interest at the rate of 8 per cent per annum … until the same shall be satisfied’.1 When only part of the judgment debt is satisfied by taking enforcement steps, it follows that interest will continue to accrue on the unpaid balance until that too is satisfied.2 The question of what a part payment (or recovery) is actually paying (interest or principal) will have implications down the line (as JA 1838 interest is simple). The judgment creditor is entitled to appropriate any payment to sums due to him as he thinks fit in his self-interest (and should ordinarily therefore choose to treat a part payment as a payment of the interest first before starting to reduce the principal) unless the judgment debtor stipulates when making the payment that he is making the payment towards particular sums (and a judgment debtor should therefore stipulate that he is paying off principal) (see para 1.77). A sum received in part-payment following successful enforcement steps is unlikely to come with a stipulation from the judgment debtor as to how it is to be applied but in principle the authors see no conceptual difficulty with a debtor so stipulating but are unaware of any authority on the point. 1

2

A  similar provision applies in the County Court under the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 2(1), which provides that ‘a judgment shall, to the extent it remains unsatisfied, carry interest … from the date on which the relevant judgment was given’. In the County Court, the County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 4, provides that ‘[w]here a judgment creditor takes proceedings in a County Court to enforce payment under a relevant judgment, the judgment debt shall cease to carry interest thereafter, except where those proceedings fail to produce any payment from the debtor in which case interest shall accrue as if those proceedings had never been taken’. Accordingly, enforcement proceedings in the County Court suspend the accrual of judgment rate interest except where those enforcement proceedings do not produce any payment from the judgment debtor.

7.107  Money paid into court and which is ordered to be used in partial satisfaction of a judgment debt will not be considered paid to the judgment creditor until it is received by the judgment creditor from the court.  In Parsons v Mather and Platt Ltd,1 the plaintiff obtained judgment and damages of £400,000 on 21 May 1975. The defendants had already paid £300,000 into court the previous year and the court ordered that this sum be paid out in partial satisfaction of the judgment debt. The defendants paid the remaining £100,000 on 11  June 1975. The £300,000 that had been paid into court was not released to the plaintiff until 10 July 1975. 1

[1977] 1 WLR 855.

7.108  The plaintiff then claimed interest. Much of the argument concentrated on when judgment had been ‘entered up’ but the Court also held that the money paid into court, and directed to be paid in partial satisfaction of a judgment debt, was

492  Interest on judgments not considered paid until it was released to the judgment creditor.1 Accordingly, the defendants were held liable to pay interest on the sum of £300,000 under JA 1838, s 17 from the date of judgment to the date on which the monies were released to the plaintiff by the Court. (Interest also ran, of course, on the sum of £100,000 from 21 May to 11 June.) The Court held that it would also have been unjust to deny the plaintiff interest when he had not actually received payment. Furthermore, the judge noted that ‘the probabilities are … that the interest earned [on the monies held in court between the date of judgment and the date on which the monies were paid out to the plaintiff] will be greater than the statutory interest due’. 1

[1977] 1 WLR 855 at 858-859.

Limitation Act 1980, s 24 7.109  Limitation Act 1980 (LA 1980), s 24 provides: ‘(1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable. (2) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.’ Lowsley v Forbes 7.110  LA 1980, s 24 was considered by the House of Lords in Lowsley v Forbes.1 In that case, the plaintiff had obtained judgment for £70,000 on 2 February 1981. For reasons not relevant to the decision, the defendant then left the country. At the time, the applicable rate of interest for judgment debts was 15%.  By 9  July 1992, the judgment debt had grown to £184,199 if it were correct to allow 11½ years’ interest at the rate of 15% on the judgment debt. However, if only six years’ interest could be claimed, the judgment debt would have been £133,000. 1 [1999] AC 329, HL.

7.111  Lord Lloyd of Beswick, with whom all their Lordships agreed, defined the questions for their Lordships as follows: ‘The first question is whether section 24(1) bars execution of a judgment after six years, or whether it only bars the bringing of a fresh action on the judgment. If the answer is, as the plaintiffs contend, that it only bars a fresh action, the second question is whether, when a judgment is executed after six years, interest on the judgment is limited under section 24(2) to a period of six years before the date of execution.’1 1

[1999] AC 329 at 334, HL.

7.112  The answer to the first question as to the meaning of LA 1980, s 24(1) has already been considered in Chapter  1: their Lordships held that the word ‘action’ referred to the bringing of a fresh action on the judgment but did not refer to execution steps. Accordingly, it is possible to enforce a judgment even if it is more than six years old.

When does interest stop running?  493

7.113  As to the second question (namely whether interest on a judgment is limited under LA 1980, s 24(2) to a period of six years before the date of execution when the judgment is executed after six years), Lord Lloyd of Beswick held:1 ‘With regret, however, I cannot agree with the Court of Appeal on the second question. There would seem to be no reason why the relevant words in section 24(2) “no arrears of interest … shall be recovered” should not be given their ordinary meaning, so as to bar execution after six years in respect of all judgments. It is what the words say. “Recovered” has a broad meaning. It is not confined to recovery by fresh action . . So as to the second question I prefer the decision of Tuckey J, who held that section 24(2) limits recovery [of interest] by way of execution on all judgments to a period of six years, including the judgment in this case.’ 1

[1999] AC 329 at 342, HL.

7.114  Accordingly, the effect of LA  1980, s  24(2) is to allow only six years’ worth of interest on a judgment to be recovered by way of execution. On the facts of Lowsley, the statutory limitation of the plaintiff’s ability to recover interest on the judgment to only six years reduced the amounts that could be recovered from £184,199 to £133,000. Action on a judgment to reset limitation period 7.115  Where the period of six years following a judgment is approaching expiry, the claimant1 should consider what action it can take to protect its position.  The claimant has two options: to enforce the judgment, or to bring a fresh action on the judgment. Whereas the right to enforce can in theory be exercised at any time, albeit with only six years of interest available, the right to bring a fresh action on a judgment expires after six years under LA 1980, s 24(1). The fresh action will be for the original debt plus all interest due on the debt up to that time. If the further judgment is given, the interest due between the date of the original judgment and the new judgment will be incorporated into the new judgment, and interest will run on this combined sum as from the date of the second judgment.2 1 Or defendant where judgment is given on a counterclaim. 2 See ED & F Man (Sugar) Ltd v Haryanto (No 3) (1996) Times, 9 August, CA, in which Leggatt LJ (refusing permission to appeal) rejected the arguments that allowing an action on a judgment was defeating the intention of LA 1980 and that the practice had become obsolete due to the available procedures for execution of a judgment, although he accepted that a court will not give judgment in an action on a judgment if the defendant shows that the action constitutes an abuse of process. For a recent example, see Bank of Scotland v Bennett [2004] EWCA Civ 988, CA in which it was held that it could not be an abuse of process per se to bring an action on a judgment with the object of preserving rights to take bankruptcy proceedings against the judgment debtor in the absence of some other factors which rendered this course of action unjustifiable. However, in that case, the bank accepted that it should not claim more than six years’ of interest and that the judgment debtor would have a limitation defence (under LA 1980, s 24(2)) if they sought to do so. See also Kuwait Oil Tanker Company SAK & Anr v Al Bader & Ors [2008] EWHC 2432 and Habib Bank Limited v Central Bank of Sudan [2014] EWHC 2288 (Comm).

7.116  It should be noted that an entirely different principle applies where a judgment creditor who has obtained a charging order seeks to recover more than six

494  Interest on judgments years’ interest out of the proceeds of enforcing his security. In Ezekiel v Orakpo,1 the plaintiff had obtained a charging order on the defendant’s property having previously obtained judgment for the sum of £20,733.27. After an ‘unexplained lapse’ of 11 years (and nearly 14 years since the judgment itself), the plaintiff sought to enforce the charging order, by which time the interest alone amounted to a sum of over £40,000. The defendant sought to argue that the effect of LA 1980, s 24(2) was to limit the plaintiff to six years’ interest prior to the application to enforce the charge.2 1 2

[1997] 1 WLR 340, CA. The defendant also sought to argue that the plaintiff was limited to six years’ interest prior to the application to enforce the charge by virtue of LA 1980, s 20(5), which states: ‘…no action to recover arrears of interest payable in respect of any sum of money secured by a mortgage or other charge or payable in respect of proceeds of the sale of land, or to recover damages in respect of such arrears shall be brought after the expiration of six years from the date on which the interest became due.’ The Court rejected this argument on the basis that this section was directed at preventing a mortgagee from recovering more than six years’ of interest by an action for arrears of interest. It did not preclude a mortgagee from relying on his security in order to recover the full amount of interest, however old and whether or not statute-barred.

7.117  As is described further in Chapter  4 (Charging Orders), a charging order takes effect as an equitable charge over the judgment debtor’s property and renders the judgment creditor in the position of a secured creditor. Millett LJ, who gave the lead judgment of the Court of Appeal in Ezekiel v Orakpo, noted:1 ‘It is important to recognise at the outset what was the true nature of the plaintiff’s application in 1993. He was not bringing an action upon the judgment debt which he had obtained in 1979. He was not even seeking to enforce execution of that judgment. He did that when he applied for and obtained the charging order in 1982. In 1993 he was a secured creditor with the statutory equivalent of an equitable charge. He was taking action to recover what was due to him, not as a judgment creditor, but as a secured creditor.’ 1

[1997] 1 WLR 340 at 346–347, CA.

7.118  The Court therefore held that a judgment creditor who is seeking to enforce his rights as a secured creditor under a charging order is not seeking to enforce a judgment, that process having come to an end when he obtained the charging order. Millett, LJ held:1 ‘In my judgment neither s 24(2) nor that case2 is relevant to the question which we have to decide, which is whether a secured creditor who holds a charging order can recover more than six years’ interest out of the proceeds of enforcing his security. By doing so, he is not bringing an action on the judgment; nor, is he seeking to enforce the judgment, whether by a process of execution or otherwise. He is enforcing his rights as a secured creditor under the equitable charge which was created by the charging order.’ 1 2

[1997] 1 WLR 340 at 350, CA. This was a reference to the Court of Appeal’s decision in Lowsley v Forbes, in which the judgment debtor also sought to rely to preclude the judgment creditor from recovering more than six years’ interest. Millett LJ rejected this argument on the grounds that Lowsley concerned a different application to that under consideration in Ezekiel, namely an application to bring enforcement proceedings (rather than a judgment creditor taking steps to enforce his rights as a secured creditor under a charging order).

Reform  495

7.119  Accordingly, a judgment creditor who has obtained a charging order can recover more than six years’ interest out of the proceeds of enforcing his security.1 1

The County Courts (Interest on Judgment Debts) Order 1991, SI 1991/1184, para 4(2), carves out charging orders from the more general rule in para 4(1) that judgment interest ceases once successful enforcement steps are taken.

Insolvency of judgment debtor 7.120  If the judgment debtor becomes insolvent after judgment has been given but prior to the judgment being satisfied, the general rule is that judgment interest will cease to run from the commencement date of the formal insolvency proceedings.1 1

Insolvency Rules 2016, r 14.23.

7.121  In the (unlikely) event that there is a surplus of assets remaining after payment in full of the debts proved in the relevant insolvency proceedings, postinsolvency interest will be payable on the judgment debt atthe rate specified in JA 1838, s 17, unless there is contractual agreement to pay a higher rate (in which case the contractual rate will apply).1 1

Insolvency Act 1986, s  189(2), (4) (winding up), Insolvency Rules 2016, r 14.23 (6), (7) (administration) and Insolvency Act 1986, s 328(4)-(5) (bankruptcy).

PRACTICE AND PROCEDURE 7.122  If a judgment creditor wishes to claim statutory interest on a judgment debt, he must include a claim for interest, detailing the amount claimed and the sum on which interest is claimed, the period of interest, and the relevant rate (or rates) of interest, in his application or request to issue enforcement proceedings.1 1

PD 70, para 6.

REFORM 7.123  The Law Commission reported on pre-judgment interest in February 2004.1  The report considered whether Parliament should legislate to facilitate the award of compound interest by the courts, as opposed to the simple interest awards usually made under the present law, and does not concern itself with post-judgment interest, nor is there any indication that the Law Commission plans to address this issue in the future. The argument in favour of compound interest (that it is fairer, particularly where the rate applied is high or where interest is awarded over a lengthy period) would also apply to interest awarded after judgment and it may be that this is an issue which will be addressed by the courts and Parliament in the future. 1

Pre-Judgment Interest on Debts and Damages, Law Com No 287, 23 February 2004.

7.124  The application of a fixed statutory rate of interest in force at the time of judgment as the basis for awarding judgment is a relatively blunt instrument. By

496  Interest on judgments contrast, the recent approach of the courts to pre-judgment awards of interest is to apply a rate which broadly represents the commercial rate. One of the disadvantages of having a fixed rate of interest on judgment debts is that, where this rate is lower than the commercial rate prevailing at any point in time, judgment debtors are in a position where they would be better delaying payment and waiting to see if enforcement steps are taken than taking steps to pay the judgment.  There would appear to be no inherent reason why the flexible approach towards pre-judgment awards could not be applied to calculations of interest post-judgment, possibly by calculating the rate by reference to the Bank of England base rate, with a premium added to encourage prompt compliance with judgments. In its response to the 2004 Law Commission report the Government indicated that there was a case to amend JA 1838, s 17 so that the post-judgment rate could also be set by reference to the Bank of England base rate.1 However, in 2011 the Government’s response document to the consultation paper Civil Law Reform Bill 2009 stated that the reform relating to pre and post-judgment interest on debt and damages would not be taken forward. 2 1 2

The Government Response to the Law Commission Report: Pre-judgment interest on debts and damages, Ministry of Justice (September 2008). Civil Law reform Bill – Response to Consultation, Ministry of Justice (10 January 2011).

7.125  By contrast, the courts’ discretionary powers regarding the period for which interest is awarded on both costs and damages awards create flexibility and it will be interesting to see how the courts continue to develop and apply this discretion in future.

Index

[all references are to paragraph number] A Abandonment writs of control, and, 5.228–5.230 Accounts of receiver challenges to, 6.168 generally, 6.166 inspection of relevant documents, 6.148 ‘Accruing due’ third party debt orders, and, 3.10–3.12 Adjournment of hearing oral examination, and, 2.224–2.226 Administration administrators appointment, 1.151–1.152 generally, 1.152–1.154 powers, 1.155 appointment of administrator in court, 1.151 out-of-court, 1.150 charging orders, 1.156–1.157 dealings with security, 1.155 equitable receivers, 1.164 introduction, 1.148–1.149 third party debt orders, 1.158–1.160 writs of control generally, 1.161–1.163 introduction, 5.324 Administration orders generally, 1.187 writs of control, and, 5.331 Administrative expenses third party debt orders, and, 3.143 Administrative receivers generally, 1.166 priority of floating charge holders, 1.167 writs of control, and, 5.324 Admissibility of illegally obtained evidence case law, 2.104–2.111 improper and unjustified conduct, 2.112 introduction, 2.100 post-CPR, 2.103 pre-CPR, 2.101–2.102 Adverse claims barring orders, 5.288 costs, 5.290

Adverse claims – contd court’s powers, 5.286–5.290 disclosure, 5.290 effect of receipt, 5.267–5.275 exempt goods, and, 5.280–5.285 hearings, 5.290 introduction, 5.265–5.266 jointly owned controlled goods, 5.279 practical effect, 5.276–5.278 sale of goods, 5.289 summary disposal, 5.287 Affidavits oral examination, and generally, 2.163 service, 2.164 travelling expenses, 2.165 Agent for others, monies held as third party debt orders, and, 3.47 Aircraft information about assets, and, 2.58–2.59 writs of control, and, 5.49–5.50 Amendment stop notices, and, 4.303 Ancillary financial relief proceedings charging orders, and, 4.173–4.188 Animals writs of control, and, 5.26 Anti-avoidance insolvency, and, 1.132 Appeals charging orders, and, 4.218 interest on judgments, and Court of Appeal, 7.27–7.29 introduction, 7.26 Supreme Court, 7.30–7.33 stays of execution, and, 1.82–1.85 third party debt orders, and, 3.192 Applications charging orders, and determination, 4.83 fee, 4.82 introduction, 4.68 prescribed form, 4.76–4.81 relevant court, 4.69–4.74 without notice, 4.75

498  Index Applications – contd oral examination, and additional questions from creditor, 2.135– 2.136 application notice, 2.133–2.134 questioning by judge, 2.137–2.138 venue for proceedings, 2.132 stop notices, and, 4.296–4.299 stop orders as to funds in court, and effect, 4.283–4.284 funds improperly paid out, 4.285 generally, 4.278–4.280 service of application notice, 4.281 service of order, 4.282 stop orders as to securities, and generally, 4.286–4.287 service of application notice, 4.288 service of order, 4.289–4.290 third party debt orders, and fee, 3.106 introduction, 3.98 prescribed form, 3.101–3.105 relevant court, 3.99 without notice, 3.100 writs of control, and addresses, 5.99–5.101 draft form, 5.93–5.98 fixed costs, 5.107 foreign currency judgments, 5.89–5.92 information, 5.104 introduction, 5.82 issue, 5.106 praecipe, 5.88–5.92 State immunity, and, 5.83 venue for proceedings, 5.84–5.87 Appointment of receiver by way of equitable execution and see Equitable receivers application notice, 6.102–6.103 cross-undertaking in damages, 6.122–6.123 draft order, 6.104 evidence general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 fees, 6.118 hearings, 6.119–6.120 injunctions and orders effect, 6.132–6.139 generally, 6.113–6.114 pending hearing of application, 6.115–6.117 injunctions against judgment debtors discharge, 6.133 generally, 6.132 set-off, 6.133 third parties with notice of order, 6.134– 6.139 introduction, 6.98 notice, 6.101 overview, 6.7 service of order, 6.121 supporting evidence general requirements, 6.106 introduction, 6.105

Appointment of receiver by way of equitable execution – contd supporting evidence – contd specific requirements, 6.107–6.112 timing, 6.99 venue, 6.100 Appropriate court charging orders, and, 4.69–4.74 order for sale, and, 4.260 third party debt orders, and, 3.99 Appropriation of payments generally, 1.75–1.76 interest, 1.77 Arbitration awards generally, 1.202 interest, and, 7.102–7.105 Arrest taking control of goods, and, 5.13 ‘As and when debt becomes payable’ third party debt orders, and, 3.96 Ascertained sum charging orders, and, 4.22–4.23 Assessed costs charging orders, and, 4.19 Assignment of judgment debt equitable, 1.192–1.193 introduction, 1.189 legal, 1.190–1.191 maintenance and Champerty, 1.194–1.195 Assignment of property equitable receivers, and, 6.58–6.59 Assistance dogs writs of control, and, 5.26 Attachable debts and see Third party debt orders bank accounts foreign currency accounts, 3.46 general, 3.41–3.45 joint debts, 3.48–3.57 monies held as agent for others, 3.47 bills of exchange, 3.24 building society accounts foreign currency accounts, 3.46 general, 3.41–3.45 joint debts, 3.48–3.57 monies held as agent for others, 3.47 Crown debts general, 3.90–3.92 procedure, 3.93–3.95 Crown servants’ wages, 3.61–3.63 debt created after service of interim order, 3.40 debt ‘due or accruing due’, 3.10–3.12 debt owed by third party, 3.9 debt owed to an estate, 3.23 deferred payment, 3.13–3.14 foreign currency accounts, 3.46 foreign debts, 3.72–3.89 future earnings, 3.65 interest in a trust, 3.15–3.22 introduction, 3.9 joint accounts, 3.51–3.57 joint debts, 3.48–3.57 judgment debts, 3.30–3.39 liquidated damages, 3.30

Index  499 Attachable debts – contd money in court, 3.66–3.67 monies held as agent for others, 3.47 pensions, 3.64 rent, 3.25 unascertained debts, 3.26–3.29 unliquidated damages, 3.30 wages Crown servants, of, 3.61–3.63 future earnings, 3.65 generally, 3.58–3.60 pensions, 3.64 Attachment of earnings third party debt orders, and, 3.65 Attachment of earnings order consolidated order, 1.31 earnings, 1.28–1.30 fees, 1.33 interrelation with other enforcement methods, 1.27 introduction, 1.25–1.26 offences, 1.36 procedure, 1.32–1.35 reforms, 1.37–1.38 Attendance at court oral examination, and, 2.140–2.143 B Bailiwicks writs of control, and, 5.109 Bank accounts administrative expenses, 3.143 building society’s obligations, 3.133 disclosure of affiliated entities, 3.135 foreign branches, 3.136 subsidiaries, 3.136 dispute by judgment creditor of notice, 3.145 foreign currency accounts, 3.46 general, 3.41–3.45 information to be disclosed, 3.137–3.142 joint accounts, 3.51–3.57 joint debts, 3.48–3.50 minimum final balance, 3.193 monies held as agent for others, 3.47 search for accounts, 3.134 Bankruptcy charging orders, and, 4.32 execution not complete before commencement ‘completed the execution’, 1.181–1.184 introduction, 1.175–1.176 ‘retain the benefit of the execution, 1.177– 1.180 information about assets, and Individual Insolvency Register, 2.17–2.20 introduction, 2.13 Land Charges Register, 2.14–2.16 interest in home, 4.32 introduction, 1.173–1.174 writs of control, and enforcement officer’s duties after sale, 5.327–5.329 enforcement officer’s duties before sale, 5.326

Bankruptcy – contd writs of control, and – contd good faith purchaser, 5.330 introduction, 5.325 Bankruptcy searches Individual Insolvency Register, 2.17–2.20 introduction, 2.13 Land Charges Register, 2.14–2.16 Bar Council inquiry agents, and, 2.99 Barring orders controlled goods claims, and, 5.288 Beneficial interests charging orders, and chargeable assets, 4.34–4.37 interest in a trust, 4.54–4.59 registration of land held under trust of land, 4.129–4.131 Benevolent societies information about assets, and, 2.62 Bilateral treaty overseas enforcement, and, 1.228 Bills of exchange third party debt orders, and, 3.24 writs of control, and, 5.21 Bills of sale writs of control, and, 5.39–5.41 ‘Binds property in goods of execution debtor’ Crown priority, 5.140 good faith purchasers, 5.130–5.139 introduction, 5.124–5.126 meaning, 5.127 ‘received by person under duty to endorse’, 5.128–5.129 Bonded goods writs of control, and, 5.57–5.58 Bonds writs of control, and, 5.21 Breach of confidence inquiry agents, and, 2.85–2.87 Brexit future enforcement regimes, 1.237–1.240 Brussels Convention and Regulation Brexit, and, 1.237 enforcement of foreign judgments in UK, 1.231 oral examination, and, 2.199–2.222 overseas enforcement of UK judgments, 1.221–1.226 Building societies information about assets, and, 2.62–2.64 Building society accounts administrative expenses, 3.143 building society’s obligations, 3.133 disclosure of accounts affiliated entities, 3.135 foreign branches, 3.136 subsidiaries, 3.136 dispute by judgment creditor of notice, 3.145 foreign currency accounts, 3.46 general, 3.41–3.45 information to be disclosed, 3.137–3.142 joint accounts, 3.51–3.57 joint debts, 3.48–3.50 minimum final balance, 3.193

500  Index Building society accounts – contd monies held as agent for others, 3.47 search for accounts, 3.134 Burden of proof objections to charging orders, and, 4.139–4.142 C Cancellation registration of charging orders, of notice, by, 4.128 pending land action, of, 4.120 restriction, of, 4.132 unregistered land, over, 4.120 writs and orders, of, 4.120 Certificate of judgment Crown privilege, and, 1.106–1.108 Certificate of service charging orders, and, 4.94 third party debt orders, and, 3.114 Champerty assignment of judgment debts, and, 1.194– 1.195 Charging orders administration, and, 1.156–1.157 appeals, 4.218 application for interim order determination, 4.83 fee, 4.82 introduction, 4.68 prescribed form, 4.76–4.81 relevant court, 4.69–4.74 without notice, 4.75 ascertained sum, 4.22–4.23 assessed costs, and, 4.19 bankrupt’s interest in a house, 4.32 certificate of service, 4.94 chargeable property changes to prescribed categories, 4.63–4.65 dividends, 4.50–4.51 finds in court, 4.52–4.53 generally, 4.33–4.34 government stock, 4.46–4.49 introduction, 4.19 judgment debtor’s interest, 4.35–4.37 land, 4.38–4.45 partnership interests, 4.60–4.62 securities, 4.46–4.49 trust interests, 4.54–4.59 unit trusts, 4.46–4.49 constructive trusts, 4.57–4.58 costs, 4.204–4.205 costs of enforcement, 4.28–4.29 Council tax, and, 4.32 court’s powers, 4.18–4.21 Crown, and, 4.66 discharge applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 discretion of court debt not immediately payable, 4.190–4.192 debt payable by instalments, 4.193–4.197

Charging orders – contd discretion of court – contd developments following interim order, 4.155 generally, 4.151–4.154 hardship to creditor, 4.189 introduction, 4.20 personal circumstances of debtor, 4.173– 4.188 Roberts v Kenny, 4.160–4.172 unfair prejudice to creditors, 4.156–4.159 dividends, 4.50–4.51 effect of interim order funds in court, on, 4.100 generally, 4.87–4.88 land, on, 4.101 securities, on, 4.96–4.99 effective date, 4.200–4.203 fee, 4.82 final order appeals, 4.218 costs, 4.204–4.205 discharge, 4.206–4.217 discretion of court, 4.151–4.197 effective date, 4.200–4.203 form, 4.198–4.199 generally, 4.198–4.199 hearing, 4.143–4.150 objections, 4.137–4.142 outline, 4.15 variation, 4.206–4.217 foreign trusts, 4.55–4.56 forms final order, 4.198–4.199 interim order, 4.86 funds in court effect of interim order, 4.100 generally, 4.52–4.53 further consideration of applications, 4.143– 4.146 future, debt payable in discretion of court, 4.190–4.192 generally, 4.32 government stock, 4.46–4.49 hardship to creditor, 4.189 hearings further consideration, 4.143–4.146 trial of issues, 4.147–4.150 Insolvency Act 1986, under, 4.32 insolvency of debtor discharge of order, and, 4.209–4.213 generally, 4.267–4.272 instalments, debt payable by discretion of court, 4.193–4.197 generally, 4.31 interest on judgment, 4.24–4.27 interim order application, 4.68–4.83 discretion of court, 4.84–4.85 effect, 4.87–4.88 effect on securities, 4.96–4.99 effect on funds in court, 4.100 effect on land, 4.101 form, 4.86 outline, 4.14

Index  501 Charging orders – contd interim order – contd service, 4.89–4.95 introduction, 4.1–4.10 judgment debtor’s interest, 4.35–4.37 jurisdiction, 4.18–4.21 land effect of interim order, 4.101 generally, 4.38–4.45 monies in court effect of interim order, 4.100 generally, 4.52–4.53 not immediately payable, debt discretion of court, 4.190–4.192 generally, 4.32 objections to final order burden of proof, 4.139–4.142 category of persons, 4.137 introduction, 4.137–4.138 service of evidence, 4.138 order for sale application of proceeds, 4.265 discretion of court, 4.221–4.223 evidence, 4.261 form, 4.262–4.263 human rights issues, 4.242–4.258 introduction, 4.219 jurisdiction, 4.220 LPA 1925, s 30, under, 4.224–4.230 mechanics of sale, 4.264 outline, 4.16–4.17 procedure, 4.259–4.266 proceeds of sale, 4.265 redemption of charge, 4.266 relevant court, 4.260 TLATA 1996, s 14, under, 4.231–4.241 partnership interests, and generally, 4.60–4.62 introduction, 4.32 personal circumstances of debtor, 4.173–4.188 prescribed form, 4.76–4.81 procedure appeals, 4.218 application for interim order, 4.68–4.82 discharge, 4.206–4.217 final order, 4.137–4.205 interim order, 4.83–4.101 introduction, 4.67 order for sale, 4.218–4.266 outline, 4.11–4.17 registration of order, 4.102–4.136 variation, 4.206–4.217 registration Companies House, at, 4.134–4.136 generally, 4.102–4.104 registered land, 4.121–4.133 unregistered land, 4.105–4.120 registration of notice agreed form, in, 4.126–4.127 beneficial interest in land under trust, 4.129–4.131 cancellation, 4.128 generally, 4.124–4.125 introduction, 4.122–4.123

Charging orders – contd registration of notice – contd outline applications, 4.133 unilaterally, 4.126–4.127 registration of order over registered land generally, 4.121–4.122 notice, by, 4.124–4.131 outline applications, 4.133 restriction, by, 4.132 type of entry, 4.123 registration of order over unregistered land cancellation, 4.120 generally, 4.105 pending action, as, 4.106–4.110 writ or order, as, 4.111–4.119 registration of pending land action cancellation, 4.120 effect, 4.109 fee, 4.110 generally, 4.106–4.108 practice and procedure, 4.110 registration of restriction cancellation, 4.132 introduction, 4.122–4.123 outline applications, 4.133 registration of writs and orders cancellation, 4.120 effect, 4.118 generally, 4.111 name of estate owner, against, 4.115–4.117 practice and procedure, 4.119 sole owners, 4.112 trusts in land, affecting, 4.113–4.114 relevant court generally, 4.69–4.72 more than one asset, 4.74 more than one judgment against debtor, 4.73 resulting trusts, 4.57–4.58 securities effect of interim order, 4.96–4.99 generally, 4.46–4.49 service of interim order certificate, 4.94 civil partners, 4.92 effect, 4.95 land, in respect of, 4.92 recipients, 4.89–4.91 spouses, 4.92 time limits, 4.93 setting aside applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 solicitor’s costs, and, 4.32 stop notices amendment, 4.303 application procedure, 4.296–4.299 discharge, 4.305–4.306 effect, 4.301–4.302 generally, 4.293–4.295 introduction, 4.273–4.275 ‘prescribed securities’, 4.274

502  Index Charging orders – contd stop notices – contd purpose, 4.275 service, 4.300 variation, 4.305–4.306 withdrawal, 4.304 stop orders application as to funds in court, 4.278–4.285 application as to securities, 4.286–4.291 discharge, 4.292 generally, 4.276 introduction, 4.273–4.275 ‘prescribed securities’, 4.274 procedure, 4.277 prohibited steps, 4.276 purpose, 4.275 service, 4.282 variation, 4.292 trial of issues, 4.147–4.150 trust interests beneficial interest, 4.54 constructive trusts, 4.57–4.58 foreign trusts, 4.55–4.56 legal interest, 4.59 resulting trusts, 4.57–4.58 trustee in bankruptcy, and, 4.32 unfair prejudice to creditors, 4.156–4.159 unit trusts, 4.46–4.49 variation applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 without notice, 4.75 Cheque, payment by interim third party debt orders, and, 3.118– 3.119 Civil Aviation Authority (CAA) information about assets, and, 2.58–2.59 Civil Enforcement Review and see ‘Effective Enforcement’ (White Paper, 2003) charging orders, and, 4.9 generally, 1.204–1.212 introduction, 1.6 joint accounts, and, 3.55 third party debt orders, and, 3.55 Civil liability of inquiry agents breach of confidence, 2.85–2.87 copyright, 2.84 introduction, 2.76 privacy, 2.87 private nuisance, 2.83 trespass, 2.77–2.82 Civil partners charging orders, and generally, 4.40–4.43 service of interim order, 4.92 Civil Procedure Rules (CPR) generally, 1.10 review, 1.205–1.207 Clergy writs of control, and, 5.56

Commercial property State immunity, and, 1.113–1.114 Commercial rent arrears recovery (CRAR) taking control of goods, and, 5.13 Committal generally, 1.18 oral examination, and hearing, 2.233–2.234 introduction, 2.227–2.228 suspended committal order, 2.229–2.232 warrant for committal, 2.235 Companies House available information companies, 2.270 LLPs, 2.271 information about assets, and, 2.29 registration of charging orders, and, 4.134– 4.136 Companies, information about common law rights of inspection, 2.37–2.38 Companies House, 2.29 company accounts, 2.30 company books and records, 2.37–2.38 company charges, 2.32–2.34 company insolvency information, 2.31 introduction, 2.28 other sources, 2.39 statutory records, 2.35–2.36 Company officers oral examination, and, 2.144 Company voluntary arrangements (CVAs) generally, 1.165 writs of control, and, 5.324 Computer misuse inquiry agents, and, 2.92 Conditional sale writs of control, and, 5.43–5.44 Consent orders interest, and, 7.19 Consolidated attachment of earnings order earnings, 1.28–1.30 generally, 1.31 procedure, 1.32–1.36 Constructive trusts charging orders, and, 4.57–4.58 Consular immunity generally, 1.121 Contempt imprisonment, 1.14 sequestration, 1.15–1.18 Contingent events third party debt orders, and, 3.31–3.39 Controlled goods adverse claims barring orders, 5.288 costs, 5.290 court’s powers, 5.286–5.290 disclosure, 5.290 effect of receipt, 5.267–5.275 exempt goods, and, 5.280–5.285 hearings, 5.290 introduction, 5.265–5.266 jointly owned controlled goods, 5.279 practical effect, 5.276–5.278

Index  503 Controlled goods – contd adverse claims – contd sale of goods, 5.289 summary disposal, 5.287 agreement breach, 5.225 form, 5.215–5.219 introduction, 5.214 re-entry, 5.222–5.224 refusal by debtor to agree, 5.220–5.221 barring orders, 5.288 costs, 5.290 court’s powers barring orders, 5.288 costs, 5.290 disclosure, 5.290 introduction, 5.286 sale of goods, 5.289 summary disposal, 5.287 disclosure, 5.290 effect of receipt, 5.267–5.275 exempt goods, and, 5.280–5.285 goods amenable to taking control procedure aircraft, 5.49–5.50 belong to judgment creditor, 5.18 bonded goods, 5.57–5.58 clergy, 5.56 exempt goods, 5.26–5.47 farms, 5.51–5.55 financial instruments, 5.21 fixtures, 5.25 generally, 5.48 ‘goods’, 5.17 interests in land, 5.23–5.24 introduction, 5.15–5.17 machinery, 5.60 money, 5.19–5.20 motor vehicles, 5.59 ships, 5.61 trust assets, 5.22 vehicles, 5.59 hearings, 5.290 introduction, 5.265–5.266 jointly owned controlled goods, 5.279 practical effect, 5.276–5.278 renewal of writ, and, 5.123 sale best price to be obtained, 5.237 introduction, 5.235 minimum period, 5.238 notice to debtor and co-owner, 5.239– 5.244 other than by public auction, 5.250–5.252 public auction, by, 5.245–5.249 second hand value, 5.236 securities, of, 5.253 statutory protection for enforcement officers, related parties and purchasers, 5.254– 5.264 timing, 5.237 sale other than by public auction introduction, 5.250 notice to execution creditors, 5.251 without leave of court, 5.252

Controlled goods – contd sale by public auction best price, 5.247 introduction, 5.245 proportionality, 5.249 timing, 5.246 venue, 5.248 sale of goods held as security for a debt, 5.289 sale of securities, 5.253 summary disposal, 5.287 validity of writs of control, and, 5.123 Convention regime enforcement of foreign judgments in UK, 1.231 oral examination, and, 2.199–2.222 overseas enforcement of UK judgments, 1.221–1.226 Co-owned land charging orders, and generally, 4.40–4.43 TLATA 1996, s 14, under, 4.231–4.241 Copyright inquiry agents, and, 2.84 Costs charging orders, and, 4.204–4.205 controlled goods claims, and, 5.290 detailed assessment, and, 7.65 equitable receivers, and generally, 6.174 proportionality, 6.50–6.51 interest on judgments, and Crown, against, 7.68 delay in detailed assessment, 7.58 discretion of court, 7.37–7.57 generally, 7.34–7.36 reversal on appeal, 7.59–7.64 specific procedures, 7.66–7.67 oral examination, and, 2.259–2.261 third party debt orders, and, 3.194–3.200 writs of control, and, 5.78 Costs of enforcement charging orders, and, 4.28–4.29 Council tax charging orders, and, 4.32 Counterclaims third party debt orders, and, 3.158–3.162 County court judgments information about assets, and, 2.24–2.27 Court administration orders generally, 1.187 Credit unions information about assets, and, 2.62 Criminal liability of inquiry agents data protection, 2.89–2.90 interception of communications, 2.93 introduction, 2.88 misuse of computers, 2.92 proceeds of crime, 2.95 protection from harassment, 2.91 theft, 2.94 Criminal offences harassment of debtors, 1.124 Cross claims stays of execution, and, 1.92

504  Index Cross-undertaking in damages equitable receivers, and, 6.122–6.123 Crown charging orders, and, 4.66 equitable receivers, and, 6.97 interest, and, 7.4 oral examination, and, 2.153 writs of control, and, 5.42 Crown debts general, 3.90–3.92 procedure, 3.93–3.95 Crown priority generally, 5.140 Crown privilege certificate of judgment, 1.106–1.108 ‘Crown’, 1.103 entry onto premises, and, 5.184 introduction, 1.102 nature of immunity, 1.104–1.105 Crown property writs of control, and, 5.42 Crown servants’ wages third party debt orders, and, 3.61–3.63 D Damages equitable receivers, and, 6.122–6.123 interest, and, 7.15 Data Disclosure Orders (DDOs) generally, 1.209 oral examination, and, 2.264–2.268 Data protection inquiry agents, and, 2.89–2.90 Debt ‘due or accruing due’ third party debt orders, and, 3.10–3.12 Deferred payment third party debt orders, and, 3.13–3.14 Delivery of writs of control to enforcement officers allocation to officer, 5.111 authorisation of officers, 5.114–5.116 enforcement agents, as, 5.117–5.118 introduction, 5.108–5.109 selection of officers, 5.110–5.113 Detailed assessment interest on costs, and, 7.65 Diplomatic immunity generally, 1.115–1.120 Diplomatic premises entry onto premises, and, 5.183 Directions equitable receivers, and, 6.165 Disability vehicles writs of control, and, 5.26 Discharge charging orders, and applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 equitable receivers, and, 6.172–6.173 injunctions restraining debtor pending appointment of receiver, and, 6.133

Discharge – contd stop notices, and, 4.305–4.306 stop orders, and, 4.292 Disclosure bank accounts, and affiliated entities, 3.135 foreign branches, 3.136 subsidiaries, 3.136 controlled goods claims, and, 5.290 information about assets and see Information about judgment debtors contact details, 2.269 inquiry agents, 2.66–2.124 introduction, 2.1–2.6 oral examination, 2.125–2.268 public sources, 2.7–2.65 oral examination, and and see Oral examination documents to be produced, 2.184–2.192 third party debt orders, and, 3.1 Discretion of court charging orders, and debt not immediately payable, 4.190–4.192 debt payable by instalments, 4.193–4.197 developments following interim order, 4.155 generally, 4.151–4.154 hardship to creditor, 4.189 introduction, 4.20 personal circumstances of debtor, 4.173– 4.188 Roberts v Kenny, 4.160–4.172 unfair prejudice to creditors, 4.156–4.159 order for sale, and, 4.221–4.223 third party debt orders, and double jeopardy, 3.172–3.176 equity, and, 3.171 insolvency of judgment debtor, 3.177–3.183 introduction, 3.167–3.170 writs of control, and, 5.77 Dispute by judgment creditor third party debt orders, and, 3.145 Distress introduction, 1.24 taking control of goods, and, 5.13 Dividends charging orders, and, 4.50–4.51 Divorce proceedings charging orders, and, 4.173–4.188 Dogs writs of control, and, 5.26 Domestic goods writs of control, and, 5.26 Double jeopardy third party debt orders, and, 3.172–3.176 Driver and Vehicle Licensing Agency (DVLA) information about assets, and, 2.60 Dun & Bradstreet information about assets, and, 2.43 E Earnings attachment of earnings, and, 1.28–1.30 Effective date charging orders, and, 4.200–4.203

Index  505 ‘Effective Enforcement’ (White Paper, 2003) attachment of earnings orders, and, 1.37– 1.38 charging orders, and generally, 4.9 order for sale, 4.257–4.258 Civil Enforcement Review, and, 1.207– 1.208 information about assets, and, 2.6 introduction, 1.6 joint bank accounts, and, 3.55–3.56 oral examination, and, 2.263–2.267 order for sale, and, 4.257–4.258 third party debt orders, and, 3.55 writs of control, and, 5.5 Elegit, writ of charging orders, and, 4.3 E-mail interception, and, 2.93 Emergency vehicles writs of control, and, 5.26 Enforcement agents background, 5.5 delivery of writs of control to enforcement officers, and, 5.117–5.118 duties after sale, 5.321–5.322 duties before sale, 5.320 entry into premises commercial premises, 5.167–5.173 Crown privilege, 5.184 diplomatic premises, 5.183 effect of unlawful entry, 5.180 exempt premises, 5.182–5.184 force, 5.152–5.173 government premises, 5.184 homes, 5.159–5.166 introduction, 5.147 method, 5.150 obstruction of enforcement agent, 5.186 overview, 5.141–5z-142 police assistance, 5.185 practice, 5.181 re-entry, 5.175–5.179 relevant premises, 5.149 remaining on premises, 5.187–5.188 Royal residences, 5.184 specified premises, 5.149 third party premises, 5.174 timing, 5.151 use of force, 5.152–5.173 fees calculation, 5.293–5.306 generally, 5.291–5.292 responsibility for, 5.307–5.309 obstruction, 5.186 protection against claims claim by true owner against creditor, 5.263 claim by true owner against debtor, 5.261– 5.262 goods not property of debtor, 5.258–5.260 historical background, 5.257 insolvency, 5.264 introduction, 5.254–5.256

Enforcement agents – contd winding up, and duties after sale, 5.321–5.322 duties before sale, 5.320 introduction, 5.319 Enforcement officers delivery of writs of control to allocation, 5.111 authorisation, 5.114–5.116 enforcement agents, as, 5.117–5.118 introduction, 5.108–5.109 selection, 5.110–5.113 Enforcement of judgments administration administrators, 1.152–1.154 administrator’s powers, 1.155 appointment of administrators, 1.151– 1.152 charging orders, 1.156–1.157 equitable receivers, 1.164 introduction, 1.148–1.149 third party debt orders, 1.158–1.160 writs of control, 1.161–1.163 administration orders, 1.187 administrative receivers generally, 1.166 priority of floating charge holders, 1.167 appointment of receiver by way of equitable receivers and see Equitable receivers administration, 1.164 appropriation of payments generally, 1.75–1.76 interest, 1.77 arbitration awards, 1.202 assignment of judgment debt equitable, 1.192–1.193 introduction, 1.189 legal, 1.190–1.191 maintenance and Champerty, 1.194–1.195 attachment of earnings order consolidated order, 1.31 earnings, 1.28–1.30 introduction, 1.25–1.27 procedure, 1.32–1.36 reforms, 1.37–1.38 bankruptcy execution not complete before commencement, 1.175–1.184 introduction, 1.173–1.174 Brexit, and, 1.237–1.240 charging orders and see Charging orders administration, 1.156–1.157 committal, 1.18 company voluntary arrangements, 1.165 Consular immunity, 1.121 contempt imprisonment, 1.14 sequestration, 1.15–1.18 corporate debtors, 1.133–1.167 court administration orders, 1.187 criminal offences harassment of debtors, 1.124

506  Index Enforcement of judgments – contd Crown privilege certificate of judgment, 1.106–1.108 ‘Crown’, 1.103 introduction, 1.102 nature of immunity, 1.104–1.105 diplomatic immunity, 1.115–1.120 distress, 1.24 equitable receiver and see Equitable receivers administration, 1.164 foreign judgments 1920 and 1933 Acts, 1.232–1.233 common law, 1.234–1.235 Convention regime, 1.231 introduction, 1.230 UK internal convention, 1.236 freezing injunctions, 1.59–1.62 future regimes, 1.237–1.240 general rules freedom to use methods, 1.11 introduction, 1.10 multiple proceedings, 1.12 non-parties, 1.13 harassment of debtors, 1.124 House of Lords judgments, 1.199–1.201 human rights, 1.125–1.130 immunities Consular, 1.121 Crown privilege, 1.102–1.108 diplomatic, 1.115–1.120 international organisations, 1.123 introduction, 1.96–1.97 State, 1.109–1.114 imprisonment, 1.14 injunctions to restrain judgment debtor from leaving the jurisdiction, 1.63–1.67 insolvency, and administration, 1.148–1.164 administration orders, 1.187 administrative receivers, 1.166 bankruptcy, 1.173–1.186 company voluntary arrangements, 1.165 conclusion, 1.188 corporate debtors, 1.133–1.167 court administration orders, 1.187 individual debtors, 1.172–1.187 introduction, 1.132 moratorium, 1.168–1.171 overview, 1.1–1.4 winding up, 1.134–1.147 interest, 1.21 interim receivers generally, 1.68–1.69 in aid of enforcement, 1.70 international organisations immunity, 1.123 introduction, 1.1–1.2 judgment summons, 1.23 location of debtor’s assets, 1.215–1.216 money judgments attachment of earnings order, 1.25–1.38 distress, 1.24 introduction, 1.19 judgment summons, 1.23

Enforcement of judgments – contd money judgments – contd writs of execution, 1.20–1.22 moratorium, 1.168–1.171 multiple proceedings, 1.19 non-parties, and, 1.20 overseas bilateral treaty, 1.228 Brexit, and, 1.219–1.220 Convention regime, 1.221–1.226 European Enforcement Order, 1.227 introduction, 1.217 law of the state, 1.229 regimes, 1.218 Regulation regime, 1.221–1.226 payment after commencement of enforcement, 1.74 payments into court, 1.131 post-Brexit regime, 1.237–1.240 pre-CPR authorities, 1.213–1.214 procedures in aid of freezing injunctions, 1.59–1.67 interim receivers, 1.68–1.70 introduction, 1.57–1.58 stop notices, 1.72–1.73 stop orders, 1.71 receiver by way of equitable receivers and see Equitable receivers administration, 1.164 reform proposals Civil Enforcement Review, 1.204–1.212 introduction, 1.203 restraining a debtor from leaving the jurisdiction, 1.63–1.67 restrictions Consular immunity, 1.121 Crown privilege, 1.102–1.108 diplomatic immunity, 1.115–1.120 international organisations, 1.123 introduction, 1.96–1.97 limitation, 1.98–1.101 State immunity, 1.109–1.114 sequestration, 1.15–1.18 set aside judgment, and, 1.78–1.79 standalone moratorium, 1.168–1.171 State immunity agreement by state, 1.112 commercially-used property, 1.113–1.114 generally, 1.109–1.111 stays of execution, and appeals, 1.82–1.85 introduction, 1.80–1.81 operation of law, by, 1.95 post-judgment occurrences, 1.93–1.94 Supreme Court, 1.86 writs of control, 1.87–1.92 stop notices, 1.72–1.73 stop orders, 1.71 Supreme Court judgments, 1.199–1.201 third party debt orders and see Third party debt orders administration, 1.158–1.160 time for payment foreign currency judgments, 1.6–1.8

Index  507 Enforcement of judgments – contd time for payment – contd generally, 1.5 transfer of proceedings between county court hearing centres, 1.56 county court to High Court, 1.46–1.55 High Court to county court, 1.40–1.45 introduction, 1.39 tribunal awards, 1.196–1.198 winding up execution after commencement, 1.146 execution after making of order, 1.147 execution not complete by commencement, 1.137–1.145 introduction, 1.134 stay on presentation of petition, 1.135– 1.136 writs of control and see Writs of control administration, 1.161–1.163 stays of execution, 1.87–1.92 writs of delivery, 1.22 writs of execution delivery, 1.22 introduction, 1.20 possession, 1.21 writs of possession, 1.21 writs of sequestration, 1.14–1.18 Entry onto premises Crown privilege, 5.184 diplomatic premises, 5.183 effect of unlawful entry, 5.180 exempt premises diplomatic premises, 5.183 generally, 5.182 government premises, 5.184 Royal residences, 5.184 force enter commercial premises, 5.167–5.173 gain initial entry to home, 5.159–5.166 generally, 5.152–5.158 force to enter commercial premises initial entry, 5.167 once inside premises, 5.168–5.173 force to gain initial entry to home generally, 5.159–5.162 goods being used, 5.166 through a window, 5.163–5.164 where entry resisted, 5.165 government premises, 5.184 introduction, 5.147 method, 5.150 obstruction of enforcement agent, 5.186 overview, 5.141–5z-142 police assistance, 5.185 practice, 5.181 re-entry, 5.175–5.179 relevant premises, 5.148 remaining on premises, 5.187–5.188 Royal residences, 5.184 specified premises, 5.149 third party premises, 5.174 timing, 5.151

Entry onto premises – contd use of force enter commercial premises, 5.167–5.173 gain initial entry to home, 5.159–5.166 generally, 5.152–5.158 Equitable assignment judgment debts, and, 1.192–1.193 Equitable charge charging orders, and, 4.2 Equitable receivers accounts challenges to, 6.168 generally, 6.166 inspection of relevant documents, 6.148 administration, and, 1.164 appointees discretion of court, 6.161 disqualifications, 6.162–6.163 generally, 6.160 qualifications, 6.162–6.163 appointment application notice, 6.102–6.103 cross-undertaking in damages, 6.122–6.123 draft order, 6.104 evidence, 6.105–6.112 fees, 6.118 hearings, 6.119–6.120 injunctions and orders, 6.113–6.117 introduction, 6.98 notice, 6.101 overview, 6.7 service of order, 6.121 supporting evidence, 6.105–6.112 timing, 6.99 venue, 6.100 assets amenable to execution assignable interest, 6.58–6.59 introduction, 6.55 legal or equitable interest, 6.56–6.57 personalty, 6.61–6.93 residual category, 6.60 assignment of property, and, 6.49 availability, 6.2 compliance with court rules, etc., 6.169 costs generally, 6.174 proportionality, 6.50–6.51 court’s power, 6.4 cross-undertaking in damages, 6.122–6.123 Crown, 6.97 de facto control, 6.70–6.73 difficulty arising from nature of property, 6.34–6.37 directions, 6.165 discharge of appointment, 6.172–6.173 discharge of debt, and, 6.133 distinction from receiverships, 6.8 draft order, 6.104 effect of appointment generally, 6.124 injunction against judgment debtor, 6.132– 6.139 introduction, 6.3 no proprietary effect, 6.125–6.126

508  Index Equitable receivers – contd effect of appointment – contd subject to prior incumbrancers, 6.127–6.131 effectiveness, 6.52–6.54 enforcement of contractual right, 6.74–6.77 evidence general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 expenses of receivership, 6.159 fees, 6.118 fixed costs, 6.174 foreign assets, 6.80–6.86 funds in court, 6.79 future payments, 6.61–6.65 future trust payments to beneficiary, 6.66–6.69 hearings, 6.119–6.120 historical background, 6.22 impossibility of enforcement at law, 6.34–6.37 income from land, 6.89–6.91 injunctions effect of appointment, 6.132–6.139 generally, 6.113–6.114 pending hearing of application, 6.115–6.117 injunctions against judgment debtors discharge, 6.133 generally, 6.132 set-off, 6.133 third parties with notice of order, 6.134– 6.139 insolvency, and, 6.175–6.178 interference with, 6.140–6.145 introduction, 6.1–6.7 jurisdiction development, 6.22–6.30 modern requirements, 6.31–6.54 limitations of legal enforcement, and, 6.34– 6.37 limits, 6.97 managers, and, 6.11–6.14 nature equitable receivership, 6.15–6.17 introduction, 6.9–6.10 managers, 6.11–6.14 nature of equitable execution, 6.18–6.21 partnership property interest, 6.87–6.88 personalty de facto control, 6.70–6.73 enforcement of contractual right, 6.74–6.77 foreign assets, 6.80–6.86 funds in court, 6.79 future payments, 6.61–6.65 future trust payments to beneficiary, 6.66–6.69 income from land, 6.89–6.91 partnership property interest, 6.87–6.88 rents, 6.92–6.93 reversionary interest under will, 6.78 powers and duties accounts, 6.166–6.168 compliance with court rules, etc., 6.169 introduction, 6.164 right to seek directions, 6.165 practice and procedure, 6.7

Equitable receivers – contd receivership, and, 6.8 registration of appointment introduction, 6.94 registered land, 6.96 unregistered land, 6.95 remuneration, 6.156–6.158 rents, 6.92–6.93 requirements assignable property, 6.49 costs proportionate to likely recovery, 6.50–6.51 difficulty arising from nature of property, 6.34–6.37 effectiveness, 6.52–6.54 impossibility of enforcement at law, 6.34–6.37 introduction, 6.31–6.33 limitations of legal enforcement, 6.34– 6.37 ‘special circumstances’, 6.38–6.48 reversionary interest under will, 6.78 security amount, 6.154 failure to provide, 6.155 introduction, 6.147–6.150 licensed insolvency practitioners, 6.151 non-licensed persons, 6.152 timing, 6.153 service of order, 6.121 set-off, and, 6.133 ‘special circumstances’, 6.38–6.48 supporting evidence general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 termination of appointment discharge, 6.172–6.173 introduction, 6.170–6.171 timing, 6.99 venue, 6.100 Equity third party debt orders, and, 3.171 Estate, debt owed to an third party debt orders, and, 3.23 Estate owner registration of charging orders, and, 4.115– 4.117 European Convention on Human Rights order for sale, and, 4.242–4.258 European Enforcement Order overseas enforcement, and, 1.227 Evidence charging orders, and, 4.77–4.81 equitable receivers, and general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 order for sale, and, 4.261 stop notices, and, 4.297–4.299 stop orders, and, 4.280 third party debt orders, and, 3.101–3.105 Executors third party debt orders, and, 3.23

Index  509 Exempt goods taking control of goods, and bills of sale, 5.39–5.41 burden of proof, 5.32–5.33 conditional sale equipment, 5.43–5.44 Crown property, 5.42 dealings with, 5.35–5.37 finance leasing equipment, 5.43–5.44 generally, 5.26–5.27 hire purchase equipment, 5.43–5.44 household necessities, 5.34 introduction, 5.16 partnerships, 5.45 railway rolling stock and plant, 5.46–5.47 tools of the trade, 5.28–5.31 Expenses equitable receivers, and, 6.159 Extraterritorial orders and see Foreign debts third party debt orders, and, 3.89 F Failure to comply interim third party debt orders, and, 3.146–3.148 oral examination, and committal hearing, 2.233–2.234 introduction, 2.227–2.228 perjury, 2.240–2.244 suspended committal order, 2.229–2.232 truthfulness of answers, 2.236–2.239 warrant for committal, 2.235 Fair trial, right to oral examination, and, 2.253 order for sale, and, 4.243 Farms writs of control, and, 5.51–5.55 Fees charging orders, and, 4.82 enforcement agents, and calculation, 5.293–5.306 generally, 5.291–5.292 responsibility for, 5.307–5.309 equitable receivers, and, 6.118 oral examination, and, 2.139 third party debt orders, and, 3.106 writs of control, and applications, 5.107 issue, 5.105 permission to issue, 5.76 Final charging order appeals, 4.218 costs, 4.204–4.205 debt not immediately payable, 4.190–4.192 debt payable by instalments, 4.193–4.197 discharge applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 discretion of court debt not immediately payable, 4.190–4.192 debt payable by instalments, 4.193–4.197 developments following interim order, 4.155

Final charging order – contd discretion of court – contd generally, 4.151–4.154 hardship to creditor, 4.189 introduction, 4.20 personal circumstances of debtor, 4.173– 4.188 Roberts v Kenny, 4.160–4.172 unfair prejudice to creditors, 4.156–4.159 effective date, 4.200–4.203 form, 4.198–4.199 generally, 4.198–4.199 hardship to creditor, 4.189 hearing, 4.143–4.150 insolvency of debtor, 4.209–4.213 objections burden of proof, 4.139–4.142 category of persons, 4.137 introduction, 4.137–4.138 service of evidence, 4.138 outline, 4.15 personal circumstances of debtor, 4.173–4.188 unfair prejudice to creditors, 4.156–4.159 variation applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 Final third party debt orders appeals, 3.192 costs, 3.194–3.200 discretion of court double jeopardy, 3.172–3.176 equity, and, 3.171 insolvency of judgment debtor, 3.177–3.183 introduction, 3.167–3.170 effect, 3.185–3.189 form, 3.184 hearing, 3.163–3.166 objections by third party, 3.150–3.153 overview, 3.7–3.8 setting aside, 3.190–3.191 Finance leasing writs of control, and, 5.43–5.44 Financial instruments writs of control, and, 5.21 Fixed costs equitable receivers, and, 6.174 writs of control, and, 5.107 Fixtures writs of control, and, 5.25 Floating charge holders administrative receivers, and, 1.167 Force, use of enter commercial premises initial entry, 5.167 once inside premises, 5.168–5.173 gain initial entry to home generally, 5.159–5.162 goods being used, 5.166 through a window, 5.163–5.164 where entry resisted, 5.165 introduction, 5.152–5.158

510  Index Foreign branches interim third party debt orders, and, 3.136 Foreign currency bank accounts third party debt orders, and, 3.46 Foreign currency judgments interest, and, 7.73–7.75 time for payment, and, 1.6–1.8 writs of control, and, 5.89–5.92 Foreign debts court’s approach extraterritoriality, 3.89 situs of debt, 3.85–3.88 extraterritoriality, 3.89 generally, 3.72–3.84 introduction, 3.4 situs of debt, 3.85–3.88 Foreign judgments, enforcement of 1920 and 1933 Acts, 1.232–1.233 common law, 1.234–1.235 Convention regime, 1.231 introduction, 1.230 oral examination, and, 2.207–2.222 UK internal convention, 1.236 Foreign trusts charging orders, and, 4.55–4.56 Former officers of company oral examination, and, 2.145–2.148 Forms charging orders, and final order, 4.198–4.199 interim order, 4.86 order for sale, and, 4.262–4.263 third party debt orders, and final order, 3.184 interim order, 3.108 Freedom of information information about judgment debtor’s assets, and, 2.7 Freezing injunctions charging orders, and, 4.51 generally, 1.59–1.62 injunctions in aid, 1.63–1.67 third party debt orders, and, 3.57, 3.89 Friendly societies information about assets, and, 2.62–2.64 Funds in court charging orders, and effect of interim order, 4.100 generally, 4.52–4.53 stop orders, and effect, 4.283–4.284 funds improperly paid out, 4.285 generally, 4.278–4.280 service of application notice, 4.281 service of order, 4.282 third party debt orders, and, 3.66 Future, debt payable in charging orders, and discretion of court, 4.190–4.192 generally, 4.32 Future receipts third party debt orders, and earnings, 3.65 pensions, 3.64

Future receipts – contd third party debt orders, and – contd rent, 3.25 unearned salary, 3.58 unpaid fees, 3.59 G Garnishee proceedings third party debt orders, and, 3.3 Good faith purchasers bankruptcy, and, 5.330 winding up, and, 5.323 writs of control, and, 5.130–5.139 ‘Goods’ writs of control, and, 5.17 Government premises and see Crown privilege entry onto premises, and, 5.184 Government stock charging orders, and, 4.46–4.49 H Hague Choice of Court Agreements Convention Brexit, and, 1.238 Hague Judgments Convention Brexit, and, 1.240 Harassment of debtors criminal offences, and, 1.124 inquiry agents, and, 2.91 Hardship charging orders, and creditor’s hardship, 4.189 debtor’s hardship, 4.173 third party debt orders, and, 3.126–3.131 Health emergency vehicles writs of control, and, 5.26 Hearings charging orders, and, 4.143–4.146 controlled goods claims, and, 5.290 equitable receivers, and, 6.119–6.120 oral examination, and adjournment, 2.224–2.226 documents to be produced, 2.184–2.192 introduction, 2.166 questions about foreign assets, 2.193– 2.206 questions by court officer, 2.167–2.171 questions by judge, 2.172–2.173 scope of questions, 2.174–2.183 third party debt orders, and, 3.163–3.166 High value goods aircraft, 2.58–2.59 introduction, 2.51–2.52 ships Lloyd’s Register, 2.56–2.57 tracking, 2.57 UK Ship Register, 2.53–2.55 vehicles DVLA, 2.60 HPI Limited, 2.61 Hire purchase writs of control, and, 5.43–5.44 HM Land Registry information about assets, and, 2.46–2.49

Index  511 House of Lords appeals enforcement of judgments, and, 1.199–1.201 Household necessities writs of control, and, 5.34 Housing associations information about assets, and, 2.62–2.64 HPI Limited information about assets, and, 2.61 Human rights charging orders, and order for sale, 4.242–4.258 personal circumstances of judgment debtor, 4.184 generally, 1.125–1.130 inquiry agents, and, 2.74 introduction, 1.7 oral examination, and fair trial, 2.253 introduction, 2.252 respect for family and private life, 2.254– 2.258 order for sale, and, 4.242–4.258 writs of control, and force to gain initial entry, 5.159 gaining initial entry through a window, 5.164 generally, 5.332–5.338 payment by instalments, 5.232 proportionality, 5.249 second hand value, 5.236 I Illegally obtained evidence case law, 2.104–2.111 improper and unjustified conduct, 2.112 introduction, 2.100 post-CPR, 2.103 pre-CPR, 2.101–2.102 Immunities Consular, 1.121 Crown privilege, 1.102–1.108 diplomatic, 1.115–1.120 international organisations, 1.123 introduction, 1.96–1.97 State, 1.109–1.114 Impounding goods writs of control, and, 5.226–5.227 Imprisonment non-payment of debts, and, 1.14 Improper and unjustified conduct admissibility of evidence, and, 2.112 Index Map search information about assets, and, 2.45 Individual Insolvency Register information about assets, and, 2.17–2.20 Individual voluntary arrangements writs of control, and, 5.331 Industrial and provident societies information about assets, and, 2.62–2.64 Inequitable third party debt orders, and, 3.171 Information about judgment debtor’s assets aircraft, 2.58–2.59 bankruptcy searches Individual Insolvency Register, 2.17–2.20

Information about judgment debtor’s assets – contd bankruptcy searches – contd introduction, 2.13 Land Charges Register, 2.14–2.16 benevolent societies, 2.62 building societies, 2.62–2.64 Civil Aviation Authority (CAA), 2.58–2.59 companies common law rights of inspection, 2.37–2.38 Companies House, 2.29 company accounts, 2.30 company books and records, 2.37–2.38 company charges, 2.32–2.34 company insolvency information, 2.31 introduction, 2.28 other sources, 2.39 statutory records, 2.35–2.36 Companies House information companies, 2.270 LLPs, 2.271 contact details, 2.269 credit unions, 2.62 Dun & Bradstreet, 2.43 Driver and Vehicle Licensing Agency (DVLA), 2.60 friendly societies, 2.62–2.64 high value goods aircraft, 2.58–2.59 introduction, 2.51–2.52 ships, 2.53–2.57 vehicles, 2.60–2.61 housing associations, 2.62–2.64 HPI Limited, 2.61 Index Map search, 2.45 Individual Insolvency Register, 2.17–2.20 industrial and provident societies, 2.62–2.64 inquiry agents and see Inquiry agents admissibility of illegally obtained evidence, 2.100–2.112 civil liability, 2.76–2.87 criminal liability, 2.88–2.95 introduction, 2.66–2.68 legal risk, 2.75 loss of privilege, 2.113–2.124 means used to acquire information, 2.69– 2.74 professional conduct, 2.96–2.99 insolvency, and bankruptcy searches, 2.13–2.20 insolvency searches, 2.21 introduction, 2.10–2.12 internet, 2.8 introduction, 2.1–2.6 land Index Map search, 2.45 introduction, 2.44 registered land, 2.46–2.49 unregistered land, 2.50 Land Charges Register, 2.14–2.16 limited liability partnerships, 2.40–2.42 Lloyd’s Maritime Intelligence Unit, 2.57 Lloyd’s Register, 2.56–2.57

512  Index Information about judgment debtor’s assets – contd mutual societies, 2.62–2.64 oral examination and see Oral examination adjournment of hearing, 2.224–2.226 application, 2.132–2.138 costs, 2.259–2.261 creditor’s affidavit, 2.163–2.165 failure to comply with order, 2.227– 2.244 fee, 2.139 foreign enforcement proceedings, 2.207– 2.222 generally, 2.125 hearing, 2.166–2.206 introduction, 2.126–2.129 limitations on procedure, 2.245–2.258 order to attend court, 2.140–2.143 persons to be examined, 2.144–2.153 procedure, 2.130–2.226 reform, 2.262–2.268 service of order, 2.154–2.160 subsequent hearings, 2.223 travelling costs, 2.161–2.162 partnerships, 2.65 public sources companies, 2.28–2.39 Dun & Bradstreet, 2.43 insolvency searches, 2.10–2.21 internet, 2.8 introduction, 2.7–2.9 land, 2.44–2.50 limited liability partnerships, 2.40–2.42 registers of judgments, 2.24–2.27 search engines, 2.8 social media, 2.8 Register of Judgments, Fines and Orders, 2.24–2.27 registered land, 2.46–2.49 registers of judgments, 2.24–2.27 search engines, 2.8 ships Lloyd’s Register, 2.56–2.57 tracking, 2.57 UK Ship Register, 2.53–2.55 social media, 2.8 UK Ship Register, 2.53–2.55 unregistered land, 2.50 vehicles DVLA, 2.60 HPI Limited, 2.61 working men’s clubs, 2.62 Injunctions equitable receivers, and effect of appointment, 6.132–6.139 generally, 6.113–6.114 pending hearing of application, 6.115–6.117 freezing injunctions, and and see Freezing injunctions generally, 1.59–1.67 interim receivers, and and see Interim receivers generally, 1.68–1.70

Injunctions – contd judgment debtors, against discharge, 6.133 generally, 6.132 set-off, 6.133 third parties with notice of order, 6.134– 6.139 restraining debtor from leaving the jurisdiction, 1.63–1.67 Inquiry agents admissibility of illegally obtained evidence case law, 2.104–2.111 improper and unjustified conduct, 2.112 introduction, 2.100 post-CPR, 2.103 pre-CPR, 2.101–2.102 breach of confidence, 2.85–2.87 civil liability breach of confidence, 2.85–2.87 copyright, 2.84 introduction, 2.76 privacy, 2.87 private nuisance, 2.83 trespass, 2.77–2.82 copyright, 2.84 criminal liability data protection, 2.89–2.90 interception of communications, 2.93 introduction, 2.88 misuse of computers, 2.92 proceeds of crime, 2.95 protection from harassment, 2.91 theft, 2.94 data protection, 2.89–2.90 interception of communications, 2.93 introduction, 2.66–2.68 judicial attitudes, 2.71 legal risk, 2.75 loss of privilege case law, 2.117–2.123 generally, 2.113–2.116 inquiries abroad, 2.124 means used to acquire information, 2.69–2.74 misuse of computers, 2.92 privacy, 2.87 private nuisance, 2.83 proceeds of crime, 2.95 professional conduct Bar Council guidance, 2.99 generally, 2.96–2.98 SRA guidance, 2.99 protection from harassment, 2.91 theft, 2.94 trespass, 2.77–2.82 Insolvency administration administrators, 1.152–1.154 administrator’s powers, 1.155 appointment of administrators, 1.151–1.152 charging orders, 1.156–1.157 equitable receivers, 1.164 introduction, 1.148–1.149 third party debt orders, 1.158–1.160 writs of control, 1.161–1.163

Index  513 Insolvency – contd administration orders, 1.187 administrative receivers generally, 1.166 priority of floating charge holders, 1.167 bankruptcy execution not complete before commencement, 1.175–1.184 introduction, 1.173–1.174 bankruptcy searches, 2.13–2.20 charging orders, and discharge of order, and, 4.209–4.213 generally, 4.267–4.272 CIGA 2020 moratorium, 1.168–1.171 restructuring plans, 1.165 company voluntary arrangements, 1.165 conclusion, 1.188 corporate debtors administration, 1.148–1.164 administrative receivers, 1.166 company voluntary arrangements, 1.165 introduction, 1.133 winding up, 1.134–1.147 court administration orders, 1.187 equitable receivers, and, 6.175–6.178 individual debtors administration orders, 1.187 bankruptcy, 1.173–1.186 introduction, 1.172 information about assets, and bankruptcy searches, 2.13–2.20 insolvency searches, 2.21 introduction, 2.10–2.12 interest, and, 7.120–7.121 introduction, 1.132 moratorium, 1.168–1.171 overview, 1.1–1.4 restructuring plans, 1.165 schemes of arrangement, 1.165 third party debt orders, and discretion of court to make order, 3.177– 3.183 generally, 3.201–3.202 winding up execution after commencement, 1.146 execution after making of order, 1.147 execution not complete by commencement, 1.137–1.145 introduction, 1.134 stay on presentation of petition, 1.135– 1.136 writs of control, and administration, 5.324 administration orders, 5.331 administrative receivership, 5.324 bankruptcy, 5.325–5.331 CVAs, 5.324 introduction, 5.318 IVAs, 5.331 winding up, 5.319–5.323 Insolvency Act 1986 charging orders, and, 4.32

Instalments, debt payable by charging orders, and discretion of court, 4.193–4.197 generally, 4.31 interest, and, 7.23 writs of control, and, 5.232 Interception of communications inquiry agents, and, 2.93 Interest and see Interest on judgments appropriation of payments, and, 1.77 charging orders, and, 4.24–4.27 damages, and, 7.15–7.18 Interests in land writs of control, and, 5.23–5.24 Interest in a trust charging orders, and beneficial interest, 4.54 constructive trusts, 4.57–4.58 foreign trusts, 4.55–4.56 legal interest, 4.59 resulting trusts, 4.57–4.58 third party debt orders, and, 3.15–3.22 Interest on judgments arbitration awards, 7.102–7.105 charging orders, and, 4.24–4.27 consent orders, 7.19 contractual variation of rate generally, 7.82–7.86 lower than statutory rate, 7z-101 non-express wording, 7.87–7.100 costs, and Crown, against, 7.68 delay in detailed assessment, 7.58 discretion of court, 7.37–7.57 generally, 7.34–7.36 reversal on appeal, 7.59–7.64 specific procedures, 7.66–7.67 costs of detailed assessment, and, 7.65 county court judgment transferred, 7.25 Crown, 7.4 date judgment ‘given’ appeals, 7.26–7.33 generally, 7.11–7.12 ‘judgment debt’, 7.13–7.25 default judgment against State, 7.24 foreign currency judgments, 7.73–7.75 insolvency of judgment debtor, 7.120– 7.121 instalment payments, 7.23 introduction, 7.1–7.3 judgment on appeal Court of Appeal, 7.27–7.29 introduction, 7.26 Supreme Court, 7.30–7.33 ‘judgment debt’ consent orders, 7.19 county court judgment transferred, 7.25 default judgment against State, 7.24 generally, 7.13–7.14 instalment payments, 7.23 liability only, 7.15–7.18 Tomlin orders, 7.20–7.22 liability only orders, 7.15–7.18

514  Index Interest on judgments – contd limitation issues charging orders, and, 7.116–7.119 introduction, 7.109–7.114 judgment to reset limitation period, 7.115 period date judgment ‘given’, 7.11–7.33 date stops running, 7.106–7.108 generally, 7.5–7.10 limitation issues, 7.109–7.119 practice and procedure, 7.122 rate arbitration awards, 7.102–7.105 foreign currency judgments, 7.73–7.75 introduction, 7.69 sterling judgments, 7.70–7.72 variation, 7.76–7.101 reforms, 7.123–7.125 sterling judgments, 7.70–7.72 Tomlin orders, 7.20–7.22 transferred judgment, 7.25 variation of rate contract, by, 7.82–7.101 generally, 7.76–7.78 non-express wording, 7.87–7.100 Part 36 offers, and, 7.79–7.81 Interest on securities charging orders, and, 4.50–4.51 Interference equitable receivers, and, 6.140–6.145 Interim charging orders applications determination, 4.83 fee, 4.82 introduction, 4.68 prescribed form, 4.76–4.81 relevant court, 4.69–4.74 without notice, 4.75 appropriate court, 4.69–4.74 discretion of court debt not immediately payable, 4.190–4.192 debt payable by instalments, 4.193–4.197 developments following interim order, 4.155 generally, 4.151–4.154 hardship to creditor, 4.189 introduction, 4.20 personal circumstances of debtor, 4.173– 4.188 Roberts v Kenny, 4.160–4.172 unfair prejudice to creditors, 4.156–4.159 effect, 4.87–4.88 effect on securities, 4.96–4.99 effect on funds in court, 4.100 effect on land, 4.101 fee, 4.82 form, 4.86 hardship to creditor, 4.189 outline, 4.14 personal circumstances of debtor, 4.173–4.188 prescribed form, 4.76–4.81 relevant court, 4.69–4.74 service certificate, 4.94 civil partners, 4.92

Interim charging orders – contd service – contd effect, 4.95 land, in respect of, 4.92 recipients, 4.89–4.91 spouses, 4.92 time limits, 4.93 unfair prejudice to creditors, 4.156–4.159 without notice, 4.75 Interim receivers generally, 1.68–1.69 in aid of enforcement, 1.70 Interim third party debt orders available determinations, 3.164 bank’s and building society’s obligations administrative expenses, 3.143 disclosure of accounts held with affiliated entities, 3.135 disclosure of accounts held with foreign branches, 3.136 disclosure of accounts held with subsidiaries, 3.136 dispute by judgment creditor of notice, 3.145 information to be disclosed, 3.137–3.142 introduction, 3.133 search for accounts, 3.134 certificate of service, 3.114 debt created after service, 3.40 debt paid by cheque before service, 3.118– 3.119 discharge, 3.164 effect of service debt paid by cheque before service, 3.118– 3.119 introduction, 3.115–3.117 obligation to pay, and, 3.122–3.125 revocation of account holder’s instructions, 3.120–3.121 form, 3.108 hardship, and, 3.126–3.131 introduction, 3.107 non-compliance by third party, 3.146–3.148 obligation to pay, and, 3.122–3.125 overview, 3.6 revocation of account holder’s instructions, 3.120–3.121 service certificate, 3.114 effect, 3.115–3.125 generally, 3.109–3.113 third party’s obligations banks and building societies, 3.133–3.143 disclosure of accounts, 3.135–3.136 introduction, 3.132 other third persons, 3.144 search for accounts, 3.134 International organisations immunity, and, 1.123 Internet information about judgment debtor’s assets, and, 2.8 Interpleader and see Controlled goods introduction, 5.265

Index  515 Inventory of goods notice of taking control, and, 5.206 Issue writs of control, and, 5.106 J Joint bank accounts third party debt orders, and, 3.51–3.57 Judgment debtor’s interest charging orders, and, 4.35–4.37 Joint debts third party debt orders, and, 3.48–3.50 Jointly owned land charging orders, and, 4.40–4.43 Judgment debtor’s assets and see Information about judgment debtors contact details, 2.269 inquiry agents, 2.66–2.124 introduction, 2.1–2.6 oral examination, 2.125–2.268 public sources, 2.7–2.65 Judgment debts contingent events, 3.31–3.39 generally, 3.30 interest, and consent orders, 7.19 county court judgment transferred, 7.25 default judgment against State, 7.24 generally, 7.13–7.14 instalment payments, 7.23 liability only, 7.15–7.18 Tomlin orders, 7.20–7.22 Judgment summons generally, 1.23 Jurisdiction charging orders, and, 4.18–4.21 order for sale, and, 4.220 third party debt orders, and, 3.3 L Land charging orders, and effect of interim order, 4.101 generally, 4.38–4.45 information about assets, and Index Map search, 2.45 introduction, 2.44 registered land, 2.46–2.49 unregistered land, 2.50 writs of control, and, 5.23–5.24 Land Charges Register information about assets, and, 2.14–2.16 Land Registry information about assets, and, 2.46–2.49 Law of Property Act 1925, s 30 order for sale, and generally, 4.224–4.228 moratorium before possession, 4.229–4.230 Legal assignment judgment debts, and, 1.190–1.191 Legal interest in a trust charging orders, and, 4.59 Legal risk inquiry agents, and, 2.75

Life interests third party debt orders, and, 3.15 Limitation interest, and charging orders, and, 7.116–7.119 introduction, 7.109–7.114 judgment to reset limitation period, 7.115 restrictions, and, 1.98–1.101 Limited liability partnerships (LLPs) information about assets, and, 2.40–2.42 Liquidated damages third party debt orders, and, 3.30 Lloyd’s Maritime Intelligence Unit information about assets, and, 2.57 Lloyd’s Register information about assets, and, 2.56–2.57 Location of debtor’s assets and see Overseas enforcement generally, 1.215–1.216 London Gazette administration orders, and, 1.154 company voluntary arrangements, and, 1.168 information about judgment debtor’s assets, and, 2.12 Loss of privilege case law, 2.117–2.123 generally, 2.113–2.116 inquiries abroad, 2.124 Lugano Convention Brexit, and, 1.239 enforcement of foreign judgments in UK, 1.231 oral examination, and, 2.199–2.222 overseas enforcement of UK judgments, 1.221–1.226 M Machinery writs of control, and, 5.60 Maintenance and Champerty assignment of judgment debts, and, 1.194– 1.195 Manager equitable receivers, and, 6.11–6.14 Mareva injunctions and see Freezing injunctions generally, 1.59 Matrimonial home charging orders, and, 4.173–4.188 order for sale, and, 4.227 Misuse of computers inquiry agents, and, 2.92 Money writs of control, and, 5.19–5.20 Money judgments attachment of earnings order consolidated order, 1.31 earnings, 1.28–1.30 introduction, 1.25–1.27 procedure, 1.32–1.36 reforms, 1.37–1.38 distress, 1.24 introduction, 1.19 judgment summons, 1.23

516  Index Money judgments – contd writs of execution delivery, 1.22 introduction, 1.20 possession, 1.21 Monies in court charging orders, and effect of interim order, 4.100 generally, 4.52–4.53 stop orders, and effect, 4.283–4.284 funds improperly paid out, 4.285 generally, 4.278–4.280 service of application notice, 4.281 service of order, 4.282 third party debt orders, and, 3.66–3.67 Moratorium order for sale, and, 4.229–4.230 Motor vehicles writs of control, and, 5.59 Multi-jurisdictional banking operations third party debt orders, and, 3.4 Multiple proceedings generally, 1.12 Mutual societies information about assets, and, 2.62–2.64 N National Savings Bank third party debt orders, and, 3.90 Non-compliance interim third party debt orders, and, 3.146– 3.148 Non-parties generally, 1.13 Not immediately payable, debt charging orders, and discretion of court, 4.190–4.192 generally, 4.32 Notices charging orders, and, 4.75 private sale, and, 5.251 registration of charging orders, and agreed form, in, 4.126–4.127 beneficial interest in land under trust, 4.129–4.131 cancellation, 4.128 generally, 4.124–4.125 introduction, 4.122–4.123 outline applications, 4.133 unilaterally, 4.126–4.127 taking control of goods, and enforcement, 5.143–5.146 excessive execution, 5.207–5.211 generally, 5.200–5.205 inventory of goods, 5.206 third party debt orders, and, 3.100 Nuisance inquiry agents, and, 2.83 O Objections charging orders, and burden of proof, 4.139–4.142

Objections – contd charging orders, and – contd category of persons, 4.137 introduction, 4.137–4.138 service of evidence, 4.138 third party debt orders, and, 3.150–3.153 Obtaining information about judgment debtor’s assets and see Information about judgment debtors contact details, 2.269 inquiry agents, 2.66–2.124 introduction, 2.1–2.6 oral examination, 2.125–2.268 public sources, 2.7–2.65 Operation of law stays of execution, and, 1.95 Oral examination additional questions from judgment creditor, 2.135–2.136 adjournment of hearing, 2.224–2.226 applications additional questions from creditor, 2.135– 2.136 application notice, 2.133–2.134 questioning by judge, 2.137–2.138 venue for proceedings, 2.132 committal proceedings hearing, 2.233–2.234 introduction, 2.227–2.228 suspended committal order, 2.229–2.232 warrant for committal, 2.235 company officers, 2.144 costs, 2.259–2.261 creditor’s affidavit generally, 2.163 service, 2.164 travelling expenses, 2.165 Crown, 2.153 documents to be produced, 2.184–2.192 failure to comply with order committal hearing, 2.233–2.234 introduction, 2.227–2.228 perjury, 2.240–2.244 suspended committal order, 2.229–2.232 truthfulness of answers, 2.236–2.239 warrant for committal, 2.235 fair trial, 2.253 fee, 2.139 foreign enforcement proceedings, and, 2.207– 2.222 former officers of company, 2.145–2.148 generally, 2.125 hearing adjournment, 2.224–2.226 documents to be produced, 2.184–2.192 introduction, 2.166 questions about foreign assets, 2.193–2.206 questions by court officer, 2.167–2.171 questions by judge, 2.172–2.173 scope of questions, 2.174–2.183 human rights fair trial, 2.253 introduction, 2.252 respect for family and private life, 2.254–2.258

Index  517 Oral examination – contd introduction, 2.126–2.129 limitations on procedure human rights, 2.252–2.258 introduction, 2.245 privilege against self-incrimination, 2.246– 2.251 order to attend court, 2.140–2.143 partnerships, 2.152 perjury, 2.240–2.244 persons to be examined company officers, 2.144 Crown, 2.153 former officers of company, 2.145–2.148 introduction, 2.144 partnerships, 2.152 unincorporated associations, 2.149–2.151 privilege against self-incrimination, 2.246– 2.251 procedure adjournment of hearing, 2.224–2.226 applications, 2.132–2.138 creditor’s affidavit, 2.163–2.165 fee, 2.139 foreign enforcement proceedings, 2.207– 2.222 hearing, 2.166–2.206 introduction, 2.130–2.131 limitations on, 2.245–2.258 order to attend court, 2.140–2.143 persons to be examined, 2.144–2.153 service of order, 2.154–2.160 subsequent hearings, 2.223 travelling costs, 2.161–2.162 questions by court officer, 2.167–2.171 questioning by judge application, 2.137–2.138 hearing, at, 2.172–2.173 reform, 2.262–2.268 respect for family and private life, 2.254–2.258 self-incrimination, 2.246–2.251 service of order affidavits, 2.164 generally, 2.154–2.160 subsequent hearings, 2.223 travelling expenses affidavits, 2.165 generally, 2.161–2.162 truthfulness of answers, 2.236–2.239 unincorporated associations, 2.149–2.151 venue for proceedings, 2.132 Order for sale application of proceeds, 4.265 discretion of court, 4.221–4.223 evidence, 4.261 form, 4.262–4.263 human rights issues, 4.242–4.258 introduction, 4.219 jurisdiction, 4.220 LPA 1925, s 30, under generally, 4.224–4.228 moratorium before possession, 4.229–4.230 mechanics of sale, 4.264 outline, 4.16–4.17

Order for sale – contd procedure, 4.259–4.266 proceeds of sale, 4.265 redemption of charge, 4.266 relevant court, 4.260 TLATA 1996, s 14, under, 4.231–4.241 Overriding objective illegally obtained evidence, and, 2.110 introduction, 1.213 permission to issue writs of control after six years, and, 5.69 third party debt orders, and, 3.162 Overseas enforcement of UK judgments bilateral treaty, 1.228 Brexit, and, 1.219–1.220 Convention regime, 1.221–1.226 European Enforcement Order, 1.227 generally, 1.217 introduction, 1.215–1.216 law of the state, 1.229 regimes, 1.218 Regulation regime, 1.221–1.226 P Partnerships charging orders, and generally, 4.60–4.62 introduction, 4.32 information about assets, and, 2.65 oral examination, and, 2.152 writs of control, and, 5.45 Payment after commencement of enforcement generally, 1.74 Payment by judgment debtor effect, 5.233–5.234 generally, 5.231 instalments, 5.232 Payments into court generally, 1.131 Peaceful enjoyment of possessions writs of control, and, 5.334 Penal notices oral examination, and, 2.143 Pending land action, registration of cancellation, 4.120 effect, 4.109 fee, 4.110 generally, 4.106–4.108 practice and procedure, 4.110 Pensions third party debt orders, and, 3.64 Perjury oral examination, and, 2.240–2.244 Permission to issue writs of control after six years, 5.66–5.71 another enactment or rules makes requirement, 5.72–5.73 application, 5.74–5.81 costs, 5.78 discretion, 5.77 duration, 5.80 fee, 5.76 further application on refusal, 5.79 interest restriction, 5.81

518  Index Permission to issue writs of control – contd introduction, 5.64–5.65 procedure, 5.74–5.75 Personal circumstances of debtor charging orders, and, 4.173–4.188 Personal representatives third party debt orders, and, 3.23 Police assistance entry onto premises, and, 5.185 Post interception, and, 2.93 Prescribed form charging orders, and, 4.76–4.81 third party debt orders, and, 3.101–3.105 Prescribed securities stop notices, and, 4.274 Personalty de facto control, 6.70–6.73 enforcement of contractual right, 6.74–6.77 foreign assets, 6.80–6.86 funds in court, 6.79 future payments, 6.61–6.65 future trust payments to beneficiary, 6.66– 6.69 income from land, 6.89–6.91 partnership property interest, 6.87–6.88 rents, 6.92–6.93 reversionary interest under will, 6.78 Pretext calls inquiry agents, and, 2.69 Principal home writs of control, and, 5.26 Priority writs of control, and, 5.310–5.317 Privacy inquiry agents, and, 2.87 Private life, right to respect for oral examination, and, 2.254–2.258 order for sale, and, 4.244 writs of control, and, 5.333 Private nuisance inquiry agents, and, 2.83 Private sale introduction, 5.250 notice to execution creditors, 5.251 without leave of court, 5.252 Privilege against self-incrimination oral examination, and, 2.246–2.251 Privilege, loss of case law, 2.117–2.123 generally, 2.113–2.116 inquiries abroad, 2.124 Procedures in aid of enforcement freezing injunctions generally, 1.59–1.62 injunctions in aid, 1.63–1.67 interim receivers, 1.68–1.70 introduction, 1.57–1.58 stop notices, 1.72–1.73 stop orders, 1.71 Proceeds of crime inquiry agents, and, 2.88 Proceeds of sale order for sale, and, 4.265

Professional conduct inquiry agents, and Bar Council guidance, 2.99 generally, 2.96–2.98 SRA guidance, 2.99 Prohibited steps stop notices, and, 4.294 stop orders, and, 4.276 Promissory notes writs of control, and, 5.21 Protection from harassment criminal offences, and, 1.124 inquiry agents, and, 2.91 Protection of enforcement agents, related parties and purchasers claim by true owner against creditor, 5.263 claim by true owner against debtor, 5.261– 5.262 goods not property of debtor, 5.258–5.260 historical background, 5.257 insolvency, 5.264 introduction, 5.254–5.256 Protection of property order for sale, and, 4.244–4.245 Public auction sales best price, 5.247 introduction, 5.245 proportionality, 5.249 timing, 5.246 venue, 5.248 R Railway rolling stock and plant writs of control, and, 5.46–5.47 Rate of interest arbitration awards, 7.102–7.105 contractual variation generally, 7.82–7.86 lower than statutory rate, 7z-101 non-express wording, 7.87–7.100 foreign currency judgments, 7.73–7.75 introduction, 7.69 sterling judgments, 7.70–7.72 variation contract, by, 7.82–7.101 generally, 7.76–7.78 non-express wording, 7.87–7.100 Part 36 offers, and, 7.79–7.81 Receiver by way of equitable execution and see Equitable receivers accounts challenges to, 6.168 generally, 6.166 inspection of relevant documents, 6.148 administration, and, 1.164 appointees discretion of court, 6.161 disqualifications, 6.162–6.163 generally, 6.160 qualifications, 6.162–6.163 appointment application notice, 6.102–6.103 cross-undertaking in damages, 6.122–6.123 draft order, 6.104

Index  519 Receiver by way of equitable execution – contd appointment – contd evidence, 6.105–6.112 fees, 6.118 hearings, 6.119–6.120 injunctions and orders, 6.113–6.117 introduction, 6.98 notice, 6.101 overview, 6.7 service of order, 6.121 supporting evidence, 6.105–6.112 timing, 6.99 venue, 6.100 assets amenable to execution assignable interest, 6.58–6.59 introduction, 6.55 legal or equitable interest, 6.56–6.57 personalty, 6.61–6.93 residual category, 6.60 assignment of property, and, 6.49 availability, 6.2 compliance with court rules, etc., 6.169 costs generally, 6.174 proportionality, 6.50–6.51 court’s power, 6.4 cross-undertaking in damages, 6.122–6.123 Crown, 6.97 de facto control, 6.70–6.73 difficulty arising from nature of property, 6.34–6.37 directions, 6.165 discharge of appointment, 6.172–6.173 discharge of debt, and, 6.133 distinction from receiverships, 6.8 draft order, 6.104 effect of appointment generally, 6.124 injunction against judgment debtor, 6.132– 6.139 introduction, 6.3 no proprietary effect, 6.125–6.126 subject to prior incumbrancers, 6.127–6.131 effectiveness, 6.52–6.54 enforcement of contractual right, 6.74–6.77 evidence general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 expenses of receivership, 6.159 fees, 6.118 fixed costs, 6.174 foreign assets, 6.80–6.86 funds in court, 6.79 future payments, 6.61–6.65 future trust payments to beneficiary, 6.66–6.69 hearings, 6.119–6.120 historical background, 6.22 impossibility of enforcement at law, 6.34–6.37 income from land, 6.89–6.91 injunctions effect of appointment, 6.132–6.139 generally, 6.113–6.114 pending hearing of application, 6.115–6.117

Receiver by way of equitable execution – contd injunctions against judgment debtors discharge, 6.133 generally, 6.132 set-off, 6.133 third parties with notice of order, 6.134– 6.139 insolvency, and, 6.175–6.178 interference with, 6.140–6.145 introduction, 6.1–6.7 jurisdiction development, 6.22–6.30 modern requirements, 6.31–6.54 limitations of legal enforcement, and, 6.34– 6.37 limits, 6.97 managers, and, 6.11–6.14 nature of equitable execution, 6.18–6.21 nature of receiver equitable receivership, 6.15–6.17 introduction, 6.9–6.10 managers, 6.11–6.14 partnership property interest, 6.87–6.88 personalty de facto control, 6.70–6.73 enforcement of contractual right, 6.74–6.77 foreign assets, 6.80–6.86 funds in court, 6.79 future payments, 6.61–6.65 future trust payments to beneficiary, 6.66–6.69 income from land, 6.89–6.91 partnership property interest, 6.87–6.88 rents, 6.92–6.93 reversionary interest under will, 6.78 powers and duties accounts, 6.166–6.168 compliance with court rules, etc., 6.169 introduction, 6.164 right to seek directions, 6.165 practice and procedure, 6.7 receivership, and, 6.8 registration of appointment introduction, 6.94 registered land, 6.96 unregistered land, 6.95 remuneration, 6.156–6.158 rents, 6.92–6.93 requirements assignable property, 6.49 costs proportionate to likely recovery, 6.50–6.51 difficulty arising from nature of property, 6.34–6.37 effectiveness, 6.52–6.54 impossibility of enforcement at law, 6.34–6.37 introduction, 6.31–6.33 limitations of legal enforcement, 6.34–6.37 ‘special circumstances’, 6.38–6.48 reversionary interest under will, 6.78 security amount, 6.154 failure to provide, 6.155

520  Index Receiver by way of equitable execution – contd security – contd introduction, 6.147–6.150 licensed insolvency practitioners, 6.151 non-licensed persons, 6.152 timing, 6.153 service of order, 6.121 set-off, and, 6.133 ‘special circumstances’, 6.38–6.48 supporting evidence general requirements, 6.106 introduction, 6.105 specific requirements, 6.107–6.112 termination of appointment discharge, 6.172–6.173 introduction, 6.170–6.171 timing, 6.99 venue, 6.100 Redemption of charge order for sale, and, 4.266 Re-entry entry onto premises, and, 5.175–5.179 walking possession agreement, and, 5.222– 5.224 Register of Judgments, Fines and Orders generally, 2.24–2.27 Registered land charging orders, and generally, 4.121–4.122 notice, by, 4.124–4.131 outline applications, 4.133 restriction, by, 4.132 type of entry, 4.123 information about assets, and, 2.46–2.49 registration of appointment of receiver, and, 6.96 Registers of judgments generally, 2.24–2.27 Registration of appointment of receiver introduction, 6.94 registered land, 6.96 unregistered land, 6.95 Registration of charging orders Companies House, at, 4.134–4.136 generally, 4.102–4.104 notice, by agreed form, in, 4.126–4.127 beneficial interest in land under trust, 4.129–4.131 cancellation, 4.128 generally, 4.124–4.125 introduction, 4.122–4.123 outline applications, 4.133 unilaterally, 4.126–4.127 pending land action, of cancellation, 4.120 effect, 4.109 fee, 4.110 generally, 4.106–4.108 practice and procedure, 4.110 registered land, over generally, 4.121–4.122 notice, by, 4.124–4.131 outline applications, 4.133

Registration of charging orders – contd registered land, over – contd restriction, by, 4.132 type of entry, 4.123 restriction, of cancellation, 4.132 introduction, 4.122–4.123 outline applications, 4.133 unregistered land, over cancellation, 4.120 generally, 4.105 pending action, as, 4.106–4.110 writ or order, as, 4.111–4.119 writs and orders, of cancellation, 4.120 effect, 4.118 generally, 4.111 name of estate owner, against, 4.115–4.117 practice and procedure, 4.119 sole owners, 4.112 trusts in land, affecting, 4.113–4.114 Removal of goods seized writs of control, and, 5.226–5.227 Remuneration equitable receivers, and, 6.156–6.158 Renewal of writs of control CPR Part 35 applications, 5.123 generally, 5.119–5.122 Rent third party debt orders, and, 3.25 Requests writs of control, and foreign currency judgments, 5.89–5.92 generally, 5.88 Restrictions registration cancellation, 4.132 introduction, 4.122–4.123 outline applications, 4.133 Restructuring plans insolvency, and, 1.165 Resulting trusts charging orders, and, 4.57–4.58 Revocation of account instructions interim third party debt orders, and, 3.120–3.121 Right to respect for private life oral examination, and, 2.254–2.258 order for sale, and, 4.244 writs of control, and, 5.333 Royal residences entry onto premises, and, 5.184 S Salaries third party debt orders, and Crown servants, 3.61–3.63 future earnings, 3.65 generally, 3.58–3.60 pensions, 3.64 Sale of controlled goods best price to be obtained, 5.237 introduction, 5.235 minimum period, 5.238 notice to debtor and co-owner, 5.239–5.244

Index  521 Sale of controlled goods – contd other than by public auction introduction, 5.250 notice to execution creditors, 5.251 without leave of court, 5.252 protection for enforcement agents, related parties and purchasers claim by true owner against creditor, 5.263 claim by true owner against debtor, 5.261– 5.262 goods not property of debtor, 5.258–5.260 historical background, 5.257 insolvency, 5.264 introduction, 5.254–5.256 public auction, by best price, 5.247 introduction, 5.245 proportionality, 5.249 timing, 5.246 venue, 5.248 second hand value, 5.236 securities, of, 5.253 timing, 5.237 Sale of goods held as security controlled goods claims, and, 5.289 ‘Scatter gun’ approach third party debt orders, and, 3.105 Schemes of arrangement insolvency, and, 1.165 Search engines information about judgment debtor’s assets, and, 2.8 Search for accounts third party debt orders, and, 3.134 Second hand value sale of seized goods, and, 5.236 Securing goods taken into control abandonment, 5.228–5.230 close possession, 5.213 controlled goods agreement breach, 5.225 form, 5.215–5.219 introduction, 5.214 re-entry, 5.222–5.224 refusal by debtor to agree, 5.220–5.221 introduction, 5.213 physical removal, 5.226–5.227 Securities charging orders, and effect of interim order, 4.96–4.99 generally, 4.46–4.49 stop notices, and, 4.274 stop orders, and generally, 4.286–4.287 service of application notice, 4.288 service of order, 4.289–4.290 writs of control, and, 5.21 Security by receiver amount, 6.154 failure to provide, 6.155 introduction, 6.147–6.150 licensed insolvency practitioners, 6.151 non-licensed persons, 6.152 timing, 6.153

Seizure of goods see Taking control of goods Self-incrimination, privilege against oral examination, and, 2.246–2.251 Sequestration generally, 1.15–1.18 Service equitable receivers, and, 6.121 interim charging orders, and certificate, 4.94 civil partners, 4.92 effect, 4.95 land, in respect of, 4.92 recipients, 4.89–4.91 spouses, 4.92 time limits, 4.93 interim third party debt orders, and certificate, 3.114 effect, 3.115–3.125 generally, 3.109–3.113 oral examination, and affidavits, 2.164 generally, 2.154–2.160 stop notices, and, 4.300 stop orders, and, 4.282 Set aside judgment enforceability, 1.78–1.79 Set-off equitable receivers, and, 6.133 third party debt orders, and, 3.158–3.162 Setting aside charging orders, and applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 third party debt orders, and, 3.190–3.191 Sheriffs and see Enforcement officers generally, 5.5 Ships information about assets, and Lloyd’s Register, 2.56–2.57 tracking, 2.57 UK Ship Register, 2.53–2.55 writs of control, and, 5.61 Social media information about judgment debtor’s assets, and, 2.8 Sole owners registration of charging orders, and, 4.112 Solicitor’s costs charging orders, and, 4.32 Solicitors Regulation Authority (SRA) inquiry agents, and, 2.99 Specialties writs of control, and, 5.21 Speculative applications third party debt orders, and, 3.102 State immunity agreement by state, 1.112 commercially-used property, 1.113–1.114 generally, 1.109–1.111

522  Index State immunity – contd interest on default judgment, 7.24 writs of control, and, 5.83 Stays of execution appeals, 1.82–1.85 introduction, 1.80–1.81 operation of law, by, 1.95 post-judgment occurrences, 1.93–1.94 Supreme Court, 1.86 writs of control, 1.87–1.92 Stock and see Securities charging orders, and, 4.46–4.49 Stop notices amendment, 4.303 application procedure, 4.296–4.299 discharge, 4.305–4.306 effect, 4.301–4.302 generally, 4.293–4.295 introduction, 4.273–4.275 overview, 1.72–1.73 ‘prescribed securities’, 4.274 prohibited steps, 4.294 purpose, 4.295 service, 4.300 variation, 4.305–4.306 withdrawal, 4.304 Stop orders application as to funds in court effect, 4.283–4.284 funds improperly paid out, 4.285 generally, 4.278–4.280 service of application notice, 4.281 service of order, 4.282 application as to securities generally, 4.286–4.287 service of application notice, 4.288 service of order, 4.289–4.290 discharge, 4.292 generally, 4.276 introduction, 4.273–4.275 overview, 1.71 ‘prescribed securities’, 4.274 procedure funds in court, 4.278–4.285 introduction, 4.277 securities, 4.286–4.291 prohibited steps, 4.276 purpose, 4.275 service, 4.282 variation, 4.292 ‘Subject to prior equities’ third party debt orders, and, 3.96 Summary disposal controlled goods claims, and, 5.287 Supreme Court enforcement of judgments, and, 1.199–1.201 stays of execution, and, 1.86 T Taking control of goods care of goods removed, 5.197–5.199 controlled goods agreements, and breach, 5.225

Taking control of goods – contd controlled goods agreements, and – contd form, 5.215–5.219 generally, 5.214 introduction, 5.191 re-entry, 5.222–5.224 refusal by debtor to agree, 5.220–5.221 date and time, 5.212 excessive execution, 5.207–5.211 highway, on non-vehicles, 5.193 use of force, 5.195 vehicles, 5.194 immobilisation, 5.196 introduction, 5.190–5.191 inventory of goods, 5.206 location of goods removed, 5.197–5.199 methods, 5.191 nature of goods subject to procedure, 5.190 notice after entry excessive execution, 5.207–5.211 generally, 5.200–5.205 inventory of goods, 5.206 securing goods introduction, 5.191 not on highway, 5.193 on highway, 5.194 on premises where found, 5.192 securing vehicles on highway generally, 5.194 introduction, 5.191 use of force, 5.195 storage of goods removed, 5.197–5.199 timing, 5.212 trading issues, 5.207–5.211 Taxes Crown priority, and, 5.109 Telephone calls interception, and, 2.93 Termination of appointment of receivers discharge, 6.172–6.173 introduction, 6.170–6.171 Theft inquiry agents, and, 2.94 Third party debt orders administration, and, 1.158–1.160 administrative expenses, 3.143 agent for others, monies held as, 3.47 appeals, 3.192 application by judgment creditor fee, 3.106 introduction, 3.98 prescribed form, 3.101–3.105 relevant court, 3.99 without notice, 3.100 ‘as and when debt becomes payable’, 3.96 attachable debts bank accounts, 3.41–3.57 bills of exchange, 3.24 building society accounts, 3.41–3.57 Crown debts, 3.90–3.95 debt created after service of interim order, 3.40 debt ‘due or accruing due’, 3.10–3.12

Index  523 Third party debt orders – contd attachable debts – contd debt owed to an estate, 3.23 deferred payment, 3.13–3.14 foreign debts, 3.72–3.89 interest in a trust, 3.15–3.22 introduction, 3.9 judgment debts, 3.30–3.39 liquidated damages, 3.30 money in court, 3.66–3.67 rent, 3.25 unascertained debts, 3.26–3.29 unliquidated damages, 3.30 wages, 3.58–3.65 available determinations at hearing, 3.164 bank accounts foreign currency accounts, 3.46 general, 3.41–3.45 joint debts, 3.48–3.57 monies held as agent for others, 3.47 bank’s obligations administrative expenses, 3.143 disclosure of accounts held with affiliated entities, 3.135 disclosure of accounts held with foreign branches, 3.136 disclosure of accounts held with subsidiaries, 3.136 dispute by judgment creditor of notice, 3.145 information to be disclosed, 3.137–3.142 introduction, 3.133 search for accounts, 3.134 bills of exchange, 3.24 building society accounts foreign currency accounts, 3.46 general, 3.41–3.45 joint debts, 3.48–3.57 minimum final balance, 3.193 monies held as agent for others, 3.47 building society’s obligations administrative expenses, 3.143 disclosure of accounts held with affiliated entities, 3.135 disclosure of accounts held with foreign branches, 3.136 disclosure of accounts held with subsidiaries, 3.136 dispute by judgment creditor of notice, 3.145 information to be disclosed, 3.137–3.142 introduction, 3.133 search for accounts, 3.134 costs, 3.194–3.200 counterclaim by third party, 3.158–3.162 Crown debts general, 3.90–3.92 procedure, 3.93–3.95 Crown servants’ wages, 3.61–3.63 debt created after service of interim order, 3.40 debt ‘due or accruing due’, 3.10–3.12 debt owed to an estate, 3.23 deferred payment, 3.13–3.14 disclosure, and, 3.1

Third party debt orders – contd disclosure of accounts affiliated entities, 3.135 foreign branches, 3.136 subsidiaries, 3.136 discretion of court double jeopardy, 3.172–3.176 equity, and, 3.171 insolvency of judgment debtor, 3.177–3.183 introduction, 3.167–3.170 dispute by judgment creditor of notice, 3.145 double jeopardy, and, 3.172–3.176 equity, and, 3.171 executors, and, 3.23 failure to comply with interim order, 3.146– 3.148 fee, 3.106 final order appeals, 3.192 costs, 3.194–3.200 discretion of court, 3.167–3.183 effect, 3.185–3.189 form, 3.184 hearing, 3.163–3.166 objections by third party, 3.150–3.153 overview, 3.7–3.8 setting aside, 3.190–3.191 foreign currency bank accounts, 3.46 foreign debts court’s approach, 3.85–3.89 extraterritoriality, 3.89 generally, 3.72–3.84 introduction, 3.4 situs of debt, 3.85–3.88 future earnings, 3.65 hardship payment orders, 3.126–3.131 hearing of application, 3.163–3.166 insolvency of judgment debtor discretion of court, 3.177–3.183 generally, 3.201–3.202 interest in a trust, 3.15–3.22 interim orders available determinations, 3.164 certificate of service, 3.114 debt paid by cheque before service, 3.118– 3.119 discharge, 3.164 effect of service, 3.115–3.125 form, 3.108 hardship, and, 3.126–3.131 introduction, 3.107 non-compliance by third party, 3.146–3.148 obligation to pay, and, 3.122–3.125 overview, 3.6 revocation of account holder’s instructions, 3.120–3.121 service, 3.109–3.114 third party’s obligations, 3.132–3.145 introduction, 3.1–3.4 joint accounts, 3.51–3.57 joint debts, 3.48–3.50 judgment debts contingent events, 3.31–3.39 generally, 3.30

524  Index Third party debt orders – contd liquidated damages, 3.30 monies held as agent for others, 3.47 money in court, 3.66–3.67 multi-jurisdictional banking operations, 3.4 objections to final order by third party, 3.150– 3.153 overriding objective, and, 3.162 pensions, 3.64 person other than judgment debtor having claim to money, 3.154–3.157 prescribed form, 3.101–3.105 procedural regime, 3.3 procedure application by judgment creditor, 3.98– 3.106 hardship payment orders, 3.126–3.131 interim order, 3.107–3.125 introduction, 3.97 overview, 3.7–3.8 refusal to make order double jeopardy, 3.172–3.176 equity, and, 3.171 insolvency of judgment debtor, 3.177–3.183 introduction, 3.167–3.170 relevant court, 3.99 rent, 3.25 ‘scatter gun’ approach, 3.105 search for accounts, 3.134 set-off by third party, 3.158–3.162 setting aside, 3.190–3.191 ‘subject to prior equities’, 3.96 third party’s obligations banks and building societies, 3.133–3.143 disclosure of accounts, 3.135–3.136 introduction, 3.132 other third persons, 3.144 search for accounts, 3.134 trial of issues, 3.165–3.166 unascertained debts, 3.26–3.29 unliquidated damages, 3.30 wages Crown servants, of, 3.61–3.63 future earnings, 3.65 generally, 3.58–3.60 pensions, 3.64 ‘within the jurisdiction’, 3.68–3.71 without notice, 3.100 Third party premises entry onto premises, and, 5.174 Time for payment foreign currency judgments, 1.6–1.8 generally, 1.5 TLATA 1996, s 14 order for sale, and, 4.231–4.241 Tomlin orders interest, and, 7.20–7.22 Tools of the trade writs of control, and, 5.28–5.31 Transfer of proceedings between county court hearing centres, 1.56 county court to High Court enforcement, for, 1.47–1.49 introduction, 1.46

Transfer of proceedings – contd county court to High Court – contd limitations, 1.55 writs of control, 1.50–1.54 High Court to county court, 1.40–1.45 interest, and, 7.25 introduction, 1.39 Travelling costs oral examination, and affidavits, 2.165 generally, 2.161–2.162 Trespass inquiry agents, and, 2.77–2.82 Trial of issues charging orders, and, 4.147–4.150 Tribunal awards generally, 1.196–1.198 Trust assets writs of control, and, 5.22 Trust income third party debt orders, and, 3.15–3.22 Trust, interest in a charging orders, and beneficial interest, 4.54 constructive trusts, 4.57–4.58 foreign trusts, 4.55–4.56 legal interest, 4.59 resulting trusts, 4.57–4.58 third party debt orders, and, 3.15–3.22 writs of control, and, 5.22 Truthfulness of answers oral examination, and, 2.236–2.239 Trustee in bankruptcy charging orders, and, 4.32 order for sale, and, 4.226 Trustees third party debt orders, and, 3.15–3.22 Trusts of land registration of charging orders, and, 4.113– 4.114 U UK Ship Register information about assets, and, 2.53–2.55 Unascertained debts third party debt orders, and, 3.26–3.29 Unauthorised access to computers inquiry agents, and, 2.92 Unearned fees third party debt orders, and, 3.59 Unearned salary third party debt orders, and, 3.58 Unfair prejudice to creditors charging orders, and, 4.156–4.159 Unincorporated associations oral examination, and, 2.149–2.151 Unit trusts charging orders, and, 4.46–4.49 Unliquidated damages third party debt orders, and, 3.30 Unregistered land charging orders, and cancellation, 4.120 generally, 4.105

Index  525 Unregistered land – contd charging orders, and – contd pending action, as, 4.106–4.110 writ or order, as, 4.111–4.119 information about assets, and, 2.50 V Validity of writs of control CPR Part 35 applications, 5.123 generally, 5.119–5.122 Variation charging orders, and applicants, 4.208 introduction, 4.206–4.207 procedure, 4.214–4.217 subsequent insolvency of debtor, 4.209– 4.213 stop notices, and, 4.305–4.306 stop orders, and, 4.292 Vehicles information about assets, and DVLA, 2.60 HPI Limited, 2.61 writs of control, and exempt goods, 5.26 goods amenable to procedure, 5.59 Venue for proceedings equitable receivers, and, 6.100 oral examination, and, 2.132 writs of control, and, 5.84–5.87 Vienna Convention 1963 consular immunity, and, 1.121 W Wages third party debt orders, and Crown servants, 3.61–3.63 future earnings, 3.65 generally, 3.58–3.60 pensions, 3.64 Walking possession agreements transitional measures, 5.10 Warrant for committal oral examination, and, 2.235 Winding up execution after commencement, 1.146 execution after making of order, 1.147 execution not complete by commencement ‘commencement of the winding up’, 1.140–1.141 ‘completed the execution’, 1.142–1.144 historical background, 1.145 introduction, 1.137–1.138 ‘retain the benefit of the execution, 1.139 introduction, 1.134 stay on presentation of petition, 1.135– 1.136 writs of control, and enforcement officer’s duties after sale, 5.321–5.322 enforcement officer’s duties before sale, 5.320 good faith purchaser, 5.323 introduction, 5.319

Withdrawal stop notices, and, 4.304 ‘Within the jurisdiction’ third party debt orders, and, 3.68–3.71 Without notice charging orders, and, 4.75 third party debt orders, and, 3.100 Working men’s clubs information about assets, and, 2.62 Writs and orders, registration of cancellation, 4.120 effect, 4.118 generally, 4.111 name of estate owner, against, 4.115–4.117 practice and procedure, 4.119 sole owners, 4.112 trusts in land, affecting, 4.113–4.114 third party debt orders, and, 3.165–3.166 Writs of control abandonment, 5.228–5.230 administration generally, 1.161–1.163 introduction, 5.324 administration orders, 5.331 administrative receivership, 5.324 adverse claims barring orders, 5.288 costs, 5.290 court’s powers, 5.286–5.290 disclosure, 5.290 effect of receipt, 5.267–5.275 exempt goods, and, 5.280–5.285 hearings, 5.290 introduction, 5.265–5.266 jointly owned controlled goods, 5.279 practical effect, 5.276–5.278 sale of goods, 5.289 summary disposal, 5.287 aircraft, 5.49–5.50 applications addresses, 5.99–5.101 draft form, 5.93–5.98 fixed costs, 5.107 foreign currency judgments, 5.89–5.92 information, 5.104 introduction, 5.82 issue, 5.106 requests, 5.88–5.92 State immunity, and, 5.83 venue for proceedings, 5.84–5.87 arrest, 5.13 bankruptcy enforcement officer’s duties after sale, 5.327–5.329 enforcement officer’s duties before sale, 5.326 good faith purchaser, 5.330 introduction, 5.325 bills of exchange, 5.21 bills of sale, 5.39–5.41 binds property in goods of execution debtor Crown priority, 5.140 good faith purchasers, 5.130–5.139 introduction, 5.124–5.126

526  Index Writs of control – contd binds property in goods of execution debtor – contd meaning, 5.127 ‘received by person under duty to endorse’, 5.128–5.129 bonded goods, 5.57–5.58 bonds, 5.21 care of goods removed, 5.197–5.199 claims to controlled goods barring orders, 5.288 costs, 5.290 court’s powers, 5.286–5.290 disclosure, 5.290 effect of receipt, 5.267–5.275 exempt goods, and, 5.280–5.285 hearings, 5.290 introduction, 5.265–5.266 jointly owned controlled goods, 5.279 practical effect, 5.276–5.278 sale of goods, 5.289 summary disposal, 5.287 clergy, 5.56 close possession, 5.213 commercial rent arrears recovery, 5.13 company voluntary arrangements, 5.324 conditional sale equipment, 5.43–5.44 controlled goods agreement breach, 5.225 form, 5.215–5.219 introduction, 5.214 re-entry, 5.222–5.224 refusal by debtor to agree, 5.220–5.221 Crown priority, 5.140 Crown property, 5.42 delivery to enforcement officers allocation to officer, 5.111 authorisation of officer, 5.114–5.116 enforcement agents, as, 5.117–5.118 introduction, 5.108–5.109 selection of officer, 5.110–5.113 distress for rent, 5.13 draft form, 5.93–5.98 effect ‘binds property in goods of execution debtor’, 5.127 Crown priority, 5.140 good faith purchasers, 5.130–5.139 introduction, 5.124–5.126 ‘received by person under duty to endorse’, 5.128–5.129 enforcement agents’ fees calculation, 5.293–5.306 generally, 5.291–5.292 responsibility for, 5.307–5.309 entry into premises commercial premises, 5.167–5.173 Crown privilege, 5.184 diplomatic premises, 5.183 effect of unlawful entry, 5.180 exempt premises, 5.182–5.184 force, 5.152–5.173 government premises, 5.184 homes, 5.159–5.166

Writs of control – contd entry into premises – contd introduction, 5.147 method, 5.150 obstruction of enforcement agent, 5.186 overview, 5.141–5z-142 police assistance, 5.185 practice, 5.181 re-entry, 5.175–5.179 relevant premises, 5.149 remaining on premises, 5.187–5.188 Royal residences, 5.184 specified premises, 5.149 third party premises, 5.174 timing, 5.151 use of force, 5.152–5.173 excessive execution, 5.207–5.211 exempt goods bills of sale, 5.39–5.41 burden of proof, 5.32–5.33 conditional sale equipment, 5.43–5.44 Crown property, 5.42 dealings with, 5.35–5.37 finance leasing equipment, 5.43–5.44 generally, 5.26–5.27 hire purchase equipment, 5.43–5.44 household necessities, 5.34 introduction, 5.16 partnerships, 5.45 railway rolling stock and plant, 5.46– 5.47 tools of the trade, 5.28–5.31 farms, 5.51–5.55 fees applications, 5.107 enforcement agents, 5.291–5.309 issue, 5.105 permission to issue, 5.76 finance leasing equipment, 5.43–5.44 financial instruments, 5.21 fixed costs, 5.107 fixtures, 5.25 foreign currency judgments, 5.89–5.92 good faith purchasers, 5.130–5.139 ‘goods’, 5.17 goods amenable to procedure aircraft, 5.49–5.50 belong to judgment creditor, 5.18 bonded goods, 5.57–5.58 clergy, 5.56 exempt goods, 5.26–5.47 farms, 5.51–5.55 financial instruments, 5.21 fixtures, 5.25 generally, 5.48 ‘goods’, 5.17 interests in land, 5.23–5.24 introduction, 5.15–5.17 machinery, 5.60 money, 5.19–5.20 motor vehicles, 5.59 ships, 5.61 trust assets, 5.22 vehicles, 5.59

Index  527 Writs of control – contd highway, on locating goods, 5.189 non-vehicles, 5.193 use of force, 5.195 vehicles, 5.194 hire purchase equipment, 5.43–5.44 household necessities, 5.34 human rights, and force to gain initial entry, 5.159 gaining initial entry through a window, 5.164 generally, 5.332–5.338 payment by instalments, 5.232 proportionality, 5.249 second hand value, 5.236 immobilisation, 5.196 impounding goods seized, 5.226–5.227 individual voluntary arrangements, 5.331 information, 5.104 insolvency administration, 5.324 administration orders, 5.331 administrative receivership, 5.324 bankruptcy, 5.325–5.331 CVAs, 5.324 introduction, 5.318 IVAs, 5.331 winding up, 5.319–5.323 interests in land, 5.23–5.24 interpleader, 5.265 introduction, 5.1–5.6 inventory of goods, 5.206 issue, 5.106 location of goods highway, on, 5.189 storage after removal, 5.197–5.199 machinery, 5.60 money, 5.19–5.20 motor vehicles, 5.59 nature, 5.11–5.12 notices of enforcement, 5.143–5.146 partnerships, 5.45 payment by judgment debtor effect, 5.233–5.234 generally, 5.231 instalments, 5.232 permission to issue after six years, 5.66–5.71 another enactment or rules makes requirement, 5.72–5.73 application, 5.74–5.81 costs, 5.78 discretion, 5.77 duration, 5.80 fee, 5.76 further application on refusal, 5.79 interest restriction, 5.81 introduction, 5.64–5.65 procedure, 5.74–5.75 priority, 5.310–5.317 private sale of controlled goods introduction, 5.250 notice to execution creditors, 5.251 without leave of court, 5.252

Writs of control – contd procedure application, 5.82–5.107 introduction, 5.62 jurisdiction, 5.63 outline, 5.7–5.9 permission to issue, 5.64–5.81 promissory notes, 5.21 protection for enforcement agents, related parties and purchasers claim by true owner against creditor, 5.263 claim by true owner against debtor, 5.261– 5.262 goods not property of debtor, 5.258–5.260 historical background, 5.257 insolvency, 5.264 introduction, 5.254–5.256 public auction of controlled goods best price, 5.247 introduction, 5.245 proportionality, 5.249 timing, 5.246 venue, 5.248 railway rolling stock and plant, 5.46–5.47 reform proposals generally, 5.339–5.341 introduction, 5.5 removal of goods seized, 5.226–5.227 renewal CPR Part 35 applications, 5.123 generally, 5.119–5.122 requests foreign currency judgments, 5.89–5.92 generally, 5.88 sale of controlled goods introduction, 5.235 minimum period, 5.238 notice to debtor and co-owner, 5.239–5.244 other than by public auction, 5.250–5.252 public auction, by, 5.245–5.249 protection for enforcement officers, related parties and purchasers, 5.254–5.264 second hand value, 5.236 securities, of, 5.253 timing, 5.237 sale of goods held as security for a debt, 5.289 securing goods introduction, 5.191 not on highway, 5.193 on highway, 5.194 on premises where found, 5.192 securing goods taken into control abandonment, 5.228–5.230 close possession, 5.213 controlled goods agreement, 5.214–5.225 introduction, 5.213 physical removal, 5.226–5.227 securing vehicles on highway generally, 5.194 introduction, 5.191 use of force, 5.195 securities, 5.21 ships, 5.61 specialties, 5.21

528  Index Writs of control – contd stages of execution entry into premises, 5.147–5.188 introduction, 5.141–5.142 notices of enforcement, 5.143–5.146 securing goods taken into control, 5.213– 5.230 taking control of goods, 5.190–5.212 State immunity, and, 5.83 stays of execution, 1.87–1.92 suitable goods aircraft, 5.49–5.50 belong to judgment creditor, 5.18 bonded goods, 5.57–5.58 clergy, 5.56 exempt goods, 5.26–5.47 farms, 5.51–5.55 financial instruments, 5.21 fixtures, 5.25 generally, 5.48 ‘goods’, 5.17 interests in land, 5.23–5.24 introduction, 5.15–5.17 machinery, 5.60 money, 5.19–5.20 motor vehicles, 5.59 ships, 5.61 trust assets, 5.22 vehicles, 5.59 taking control of goods date and time, 5.212 excessive execution, 5.207–5.211 introduction, 5.190 methods, 5.191 notice of, 5.200–5.211 securing goods on premises or highway, 5.192–5.199 time of application, 5.14 tools of the trade, 5.28–5.31 transfer of proceedings, and, 1.50–1.55

Writs of control – contd transitional measures, 5.10 trust assets, 5.22 use of force to enter commercial premises initial entry, 5.167 once inside premises, 5.168–5.173 use of force to enter home generally, 5.159–5.162 goods being used, 5.166 initial entry through a window, 5.163–5.164 initial entry where entry resisted, 5.165 validity CPR Part 35 applications, 5.123 generally, 5.119–5.122 vehicles, 5.59 venue for proceedings, 5.84–5.87 winding up enforcement officer’s duties after sale, 5.321–5.322 enforcement officer’s duties before sale, 5.320 good faith purchaser, 5.323 introduction, 5.319 Writs of delivery generally, 1.22 Writs of elegit charging orders, and, 4.3 Writs of execution delivery, 1.22 introduction, 1.20 possession, 1.21 Writs of fieri facias And see Writs of control generally, 5.1 transitional measures, 5.10 Writs of possession generally, 1.21 Writs of sequestration generally, 1.15–1.18