Ezekiel v Orakpo

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE MILLETT,LORD JUSTICE PHILLIPS,LORD JUSTICE NEILL
Judgment Date03 July 1996
Judgment citation (vLex)[1996] EWCA Civ J0703-1
Date03 July 1996
Docket NumberCHANI 94/1652 and 0002/B

[1996] EWCA Civ J0703-1

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CHANCERY DIVISION

(Mr Justice Carnwath)

Royal Courts of Justice

Strand

London WC2

Before:

Lord Justice Neill

Lord Justice Millett

Lord Justice Phillips

CHANI 94/1652 and 0002/B

Freddy Jacob Ezekial
Plaintiff
and
Ifoloma Orakpo
Defendant

MR N PRIMOST (Instructed by Avi Lehrer, WC1X OAP) appeared on behalf of the Plaintiff

The Defendant appeared in person

1

( )

2

Wednesday, 3rd July 1996

LORD JUSTICE MILLETT
3

In August 1979 the plaintiff obtained judgment against the defendant for a sum which was later assessed at £20,733.27 together with costs to be taxed. The costs were duly taxed. In March 1982 the plaintiff obtained a Charging Order absolute on the defendant's property. This charged the property with the payment to the plaintiff of £20,695.85. That sum was described as the balance shown by the relevant certificates of the amount due to the plaintiff in respect of the judgment debt and the taxed costs, after deducting what the plaintiff had already recovered before the date of the Charging Order. The Charging Order made no mention of interest on the judgment debt.

4

On 5th March 1993, after an unexplained lapse of eleven years from the date of the Charging Order and nearly fourteen years since the judgment itself, the plaintiff applied to the Master for an order enabling him to enforce the Charging Order. According to the calculations made by the plaintiff's solicitors in January 1990, the total sum then owing to the plaintiff inclusive of interest was over £47,000. By September 1994 interest alone had reached a sum in excess of £42,000, and the total sum inclusive of interest was in excess of £75,000.

5

On 17th June 1993 the Master ordered that the plaintiff be given possession of the property, that the property be sold and that the conduct of the sale be committed to the plaintiff's solicitors. The defendant's appeal against the Master's order was dismissed by his Honour Judge Rich QC sitting as a High Court Judge of the Queen's Bench Division, and leave to appeal from his order was refused by the Court of Appeal. The main ground of the appeal was that the claim to enforce the Charging Order was barred by section 24(1) of the Limitation Act 1980 (which provides that no action shall be brought upon any judgment after the expiration of six years from the date on which the judgment becomes enforceable). Leave to appeal was refused on the ground that the application was not to enforce the judgment, but to enforce the Charging Order which, as Lord Justice Staughton commented, "had a life of its own".

6

At that stage the amount recoverable under the Charging Order was not in issue. Subsequently, however, the defendant applied for an Order under Order 50, rule 7 and section 3(5) of the Charging Orders Act 1979 to vary or discharge the Charging Order. Order 50, rule 7 provides that:

"(1) On the application of the judgment debtor or any other person interested in the subject matter of the charge, the Court may, at any time, whether before or after the order is made absolute, discharge or vary the order on such terms (if any) as to costs or otherwise as it thinks just."

7

Subsection (2) refers to the common case—

"Where an application is made for the discharge of the Charging Order in respect of the judgment debtor's land, on the ground that a judgment debt has been satisfied…."

8

That was the ground upon which the defendant applied to discharge the Charging Order in the present case. The basis of his application was that he had tendered a sum of £28,574.27 which was more than sufficient to satisfy the judgment debt. But of course it was not nearly enough to satisfy the plaintiff's claim for interest and the costs of enforcing the security. The defendant submitted that the plaintiff's Charging Order was security for the judgment debt only and not for interest or for the costs of enforcing the security. Alternatively, he submitted the plaintiff could not recover more than six years' interest by virtue of section 24(2) of the Limitation Act 1980 (which provides that no 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).

9

The judge held (1) that the plaintiff's security did extend to interest on the judgment debt even though there was no express reference to interest in the Charging Order, but (2) that the effect of section 20(5) of the Limitation Act 1980 was to limit the amount of interest which the plaintiff could recover under the Charging Order to six years' arrears of interest. The defendant appeals from the first ruling and the plaintiff from the second. As will appear, in my opinion both questions are covered by authority binding on this court.

10

Before dealing with the two appeals which are now before us, however, I should notice a preliminary objection taken by the defendant in his respondent's notice. He claims that Order 46, rule 2 requires a judgment creditor to obtain the leave of the court before issuing execution, and that, no such leave having been first obtained, the Master had no jurisdiction to make the order for possession and sale. There are two difficulties with this argument. First, this very point was argued before Judge Rich and rejected by him in a judgment from which this court refused leave to appeal. I am told that this point was not argued before the Court of Appeal when the defendant applied for leave to appeal. If it was, it could not be repeated now. If it was not, then it was decided by Judge Rich against the defendant in 1993, and the defendant is long out of time for appealing. Secondly, however, it is in any event in my opinion a bad point. Order 46, rule 2 provides:

"(1) A writ of execution to enforce a judgment or order may not issue without the leave of the Court in the following cases, that is to say:-

(a) where six years or more have elapsed since the date of the judgment or order."

11

There follow four other paragraphs dealing with other situations. A "writ of execution" is defined by Order 46, rule 1, which provides:

"In this Order unless the context otherwise requires, 'writ of execution' includes a writ of fieri facias, a writ of possession, a writ of delivery, a writ of sequestration and any further writ in any of the aforementioned writs."

12

It is true that the definition is inclusive rather than exhaustive, but what is noticeable is that every single writ described in rule 1 is a writ which is issued by the court on the application of the plaintiff without any hearing by a judicial officer of any kind. The writ is issued by a clerk in the office on being supplied with a copy of the judgment. The situations described in rule 2 are all situations where the writ of execution ought not to issue as of right without some further consideration by the court, because in every situation there mentioned some further investigation is called for. It is plain, therefore, that the whole object of the rule is that, in certain relevant situations, the court should have an opportunity to investigate before the writ of execution should issue.

13

Applications for garnishee or Charging Orders are not within the mischief of the rule, because application has to be made to the court in order to obtain the order sought. There is therefore an opportunity for the court to investigate the matter. Accordingly, there is no reason to treat an application for a Charging Order as an application for a writ of execution or to enlarge the definition in rule 1 to include it. In the present case, however, we are yet one further stage down the road. The application in 1993 for an order for possession and sale was not an application for a Charging Order let alone for a writ of execution, but an application to enforce a Charging Order previously made.

14

The defendant cited a number of authorities to us in support of his argument. In most of them the question was whether the court's leave was required before a judgment creditor or his assignee could issue execution by fi.fa. or judgment summons. The only case called to our attention which has any bearing on Charging Orders was In re Overseas Aviation Engineering (G.B.) Ltd [1963] 1 Ch. 27, a decision of this court. That case decided that the obtaining and enforcing of a Charging Order was a process of execution within the meaning of section 325 of the Companies Act 1948 and was not complete, for the purpose of prevailing against the liquidator of an insolvent company, until a receiver was appointed or the security was sold. In my judgment that case has no bearing on the present, where the question does not depend on the meaning of execution in the Companies Act for a particular statutory purpose, but whether an application for possession or sale under an existing Charging Order is an application for the issue of a writ of execution for the purpose of the Rules of the Supreme Court. In my judgment it is not. I should note, by way of completeness, that the decision In re Overseas Aviation was a decision of the majority of this court, Russell LJ entering a powerful dissent. It was later reversed by sections 183 and 346 of the Insolvency Act 1986. Since then a judgment creditor may retain the benefit of a Charging Order against the trustee in bankruptcy or liquidator, provided that the Order was made absolute before the commencement of the bankruptcy or winding-up. However, as I say, the case itself has no relevance to the question which we have to decide. Accordingly, for the reasons I have mentioned, I would reject the arguments raised by the defendant in his respondent's notice.

15

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    ...of interest including those which may have become statute-barred: see Re Howell's Application [1972] Ch 509 at p513; Ezekiel v Orakpo [1997] 1 WLR 340 CA at p347, and Yorkshire Bank Finance v Mulhall [2008] EWCA Civ 1156, [2009] 1 P&CR 16 CA. 53 It is convenient to consider initially Mr......
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    ...one recent decision of the courts. A decision of central importance to this case is that of the Court of Appeal in Ezekiel v Orakpo [1997] 1 W.L.R. 340. In that case a charging order had been made in 1982 to secure a debt under a judgment given in 1979. The judgment creditor did not seek to......
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