A charging order was made in 1982 to secure pounds 20,000 under a judgment given in 1979. The judgment creditor did not seek to enforce the charging order until almost 12 years had elapsed since the making of the charging order. An order for possession was made so as to enforce the order. The debtor tendered a sum sufficient to pay the principal debt but not interest on it. The parties appealed a finding that the creditor was entitled to interest, but only for six years.
Held: The creditor was entitled to interest not limited to six years. A charging order carries a charge to secure interest, whether or not interest is specifically mentioned. Enforcement of a foreign currency judgment by means of a charging order required the judgment debt first to be converted to Sterling before completion of the enforcement by the making of the charging order. Enforcement of a judgment debt by means of a charging order under the Charging Orders Act 1979 is completed when the charging order is made final.
Millett LJ said that, for a judgement to carry judgment interest it is not necessary to say so specifically. Therefore it is also not necessary to mention interest in any Charging Order carrying the judgement into effect for such interest to be added to the security. He continued:-
‘Section 3(4) of the Charging Orders Act 1979 provides that the 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 principle sum but with no mention of interest. Such a charge would carry interest even though there were no words allowing interest on the charge itself. That was decided at first instance in re Drax… which was followed . . in Stoker v Elwell . . The defendant invited us to over rule Stoker . . and re Drax although they have stood unchallenged for nearly a century.
His submission was founded on the well established principle that a Charging Order cannot be given except for an ascertained sum . . It is clear Law for example that a Charging Order cannot be made for untaxed costs. In the present case, of course, the costs were taxed. But it is said by parity of reasoning that it cannot be made to secure future interest since the amount of such interest cannot be ascertained in advance. However, the Charging Orders Act 1979 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 an ascertainable sum for the purpose of the rule in question.
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 section 3(4). I agree with him and do not think it necessary to add anything further on the matter.’
Millett LJ
Times 16-Sep-1996, [1997] 1 WLR 340
Judgments Act 1938 17
England and Wales
Citing:
Appeal from – Ezekiel v Orakpo ChD 4-Nov-1994
The claimant had obtained a charging order to secure a judgment debt, but took no steps to enforce it for more than twelve years. The chargee denied that it could any longer be enforced, and also that the order carried interest when interest had not . .
See Also – Ezekiel v Orakpo CA 1977
A lease had been forfeited for non payment of rent. The lessor then took proceedings for possession. The tenant claimed that the action was invalid because a receiving order had been made against him in the meantime.
Held: The Court rejected . .
Cited by:
Cited – Carnegie v Glessen and Others CA 1-Mar-2005
A dispute had been settled by imposition of a charging order against property expressed in a foreign currency. The claimant now said such an order was not possible, and had been made by mistake correctable under the slip rule.
Held: The Master . .
Applied – Yorkshire Bank Finance Ltd v Mulhall and Another CA 24-Oct-2008
The bank had obtained a judgement against the defendant, and took a charging order. Nothing happened for more than twelve years, and the defendant now argued that the order and debt was discharged.
Held: The enforcement of the charging order . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Land, Limitation
Leading Case
Updated: 02 November 2021; Ref: scu.80429