Close Invoice Finance Ltd v Pile and Another
| Jurisdiction | England & Wales |
| Judge | JUDGE PURLE |
| Judgment Date | 20 May 2008 |
| Neutral Citation | [2008] EWHC 1580 (Ch) |
| Docket Number | Case No: 7BM30543 |
| Court | Chancery Division |
| Date | 20 May 2008 |
[2008] EWHC 1580 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Civil Justice Centre
The Priory Courts
33 Bull Street
Birmingham B4 6DS
His Honour Judge Purle, Q.C. (Sitting as a Judge of the High Court)
Case No: 7BM30543
and
MR. LIDINGTON instructed by Hammonds LLP appeared for the Claimant
MR. COTTLE instructed by Eric Bowes & Co appeared for the Defendants.
This is an application by Close Invoice Finance Ltd which is a judgment creditor of the Defendants to enforce a charging order in respect of the property known as 544 Church Road, Yardley, Birmingham. That property is the family home of the Defendants who live there as husband and wife with an elderly mother and two children, one of whom is a girl, Nicole, in full time education, aged seventeen, I think, and an older boy, Alexander, who is now working for Cancer Research. The judgment upon which the charging order is based is a judgment for £319,000-odd in September 2006 and the final charging order was granted in November 2006.
As of today, the amount outstanding under the judgment is a sum slightly in excess of £125,000 to which I am invited to add the costs of the proceedings, which I am told are £25,000 and which the Claimant perceives to be entitled to add on to its security. So, in round figures, the amount owing is £150,000. There is an up to date valuation on the property, as at 13 th February, of £390,000, though that valuation report itself refers to difficult market conditions and it is common knowledge, of which I take notice, that conditions have not improved since that date and may get worse.
The application for an order for sale is made under CPR 73.10, or, alternatively, under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (which I shall call TOLATA). CPR 73.10(1) provides that, 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.
It is clear that the Claimant is entitled, irrespective of TOLATA, to apply under that provision. The judgment debtors are the two legal and beneficial owners of the property. The other family members claim no interest in it. This is not a case where it is necessary for the Claimant to seek an order for sale of the share of a co-owner. They are co-owners but they both owe the same debt and have the same judgment against them. Nonetheless, Mr. Lidington, who appeared for the Claimant, submitted (correctly) that he could, if necessary, rely upon section 14 of TOLATA because, under that section, any person who is a trustee of land or has an interest in property—and I interpose to say that, as equitable chargee, the Claimant clearly does have an interest in the property – subject to a trust of land may make an application to the court for an order under that section. As the Defendants hold the property upon trust for themselves, the terms of that section are engaged, if they need to be, but I accept Mr. Lidington's submission that he does not need to rely on the section.
The only significance of relying upon CPR 73.10 to the exclusion of section 14 of TOLATA is that, under section 15 of TOLATA, where an order is sought under section 14, then the court has a number of wide ranging factors that it is required to take into account, including, so far as material to the present case, the interests of all those living in the property; that is to say, not just the Defendants.
I was referred to the decision of David Oliver, Q.C., sitting as a deputy judge of the Chancery Division in Pickering v Wells [2002] 2 FLR 798. That was a decision under the predecessor to CPR 73, namely, the Rules of the Supreme Court 1965 Order 88. Mr. Oliver, Q.C. founding himself upon Rule 5(a)(2)(f), concluded that, when exercising its discretion whether to enforce a charging order, the court did not take into effect the welfare or needs of those in occupation. He reached that conclusion because Rule 5(a)(2)(f) required the particulars of every person in possession of the property to be given and required the Applicant to state whether any interests had been noted, such as a Class F land charge or a notice of caution pursuant to the Matrimonial Homes Act 1967 and the like. Mr. Oliver, Q.C. concluded that the rationale behind subparagraph (f) was that the court was concerned to protect all competing proprietary interests in the property so that it could take those into account but did not extend to consideration of the welfare or needs of those in occupation. That subparagraph is not reproduced in CPR 73 as such, though similar provisions are reproduced in the Practice Direction to CPR 73, and, in my judgment, the position is not changed under the new provisions of the CPR.
However, I have to say that I differ from the conclusion that Mr. Oliver, Q.C. reached. It seems to me to be somewhat capricious that, if Mr. Oliver, Q.C. is correct, the court would in the present case be required to take into account the interests of the elderly mother and 2 children if the judgment debt was against only one of the parents (in which case section 15 of TOLATA would be engaged) but not where the judgment debt is against both parents.
I can well understand that, when the only other occupier is the other co-owner, it is a very material factor that that other co-owner is also a judgment debtor. But here the other occupiers are the two children and their grandmother and it seems to me quite senseless that, whether or not their interests are taken into account should depend upon the accident of whether or not the debt is owed jointly by their parents, or only by one of them.
The notes to the White Book, the current edition of the White Book being the 2008 edition, at page 1787 state that section 14 (that is to say, section 14 of TOLATA) is not relevant where the land itself is charged as it will be in a case where the judgment debtor is the sole owner and cites Pickering v Wells. I agree that, strictly speaking, section 14 is not relevant in that situation but, to my mind, the same considerations effectively have to be taken into account in the exercise of the undoubted discretion that the court has under Part 73.10(1). Reliance was also placed on the provisions of the European Convention on Human Rights.
I was pressed with a number of authorities. The first was Barclays Bank PLC v Alcorn [2002] EWCA (Civ) 817, a decision of the Court of Appeal. In that case the issue that arose was whether or not the rights of a mortgagee – and by that I mean a legal mortgagee – to possession was incompatible with Article 8 of the European Convention on Human Rights and Article 1 of the First Protocol. Chadwick LJ, between paragraphs 8 to 10 inclusive, said this:
"8. Article 8 of the European Convention on Human Rights, which is incorporated into domestic law by Schedule 1 to the Human Rights Act 1998, provides that everyone has the right to respect for his private and family life, his home and his correspondence. Article 8.2 provides that there shall be no interference by a public authority—which includes, of course, the court—with the exercise of the Article 8.1 right, except such as is in accordance with the law and is necessary in a democratic society in the interests of, among other things, the economic well-being of the country and the protection of the rights and freedoms of others. Article 1 of the First Protocol is in these terms:
'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.'
A mortgagee, who is proceeding by action to obtain the possession of a dwelling house to which he is entitled by virtue of the estate in the land granted to him by the mortgagor, is, plainly, proceeding in accordance with the law. A fortiori, where he has already obtained a possession order and is seeking to enforce it by the usual process of execution. The question whether it is necessary that he should be given possession so that he can sell the property with vacant possession and repay the mortgage debt is addressed...
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...attention was drawn to two decisions of His Honour Judge Purle QC sitting as a judge of the High Court. In the first decision, Close Invoice Finance Ltd v Pile [2008] EWHC 1580 (Ch), [2008] BPI 1465 he said this: “12. It does seem to me quite plain that, in the exercise of the discretion un......