Myers v Design Inc. (International Ltd)
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr justice Lightman,Mr Justice Lightman |
| Judgment Date | 31 January 2003 |
| Neutral Citation | [2003] EWHC 103 (Ch) |
| Docket Number | Case No: HC03C00131 |
| Court | Chancery Division |
| Date | 31 January 2003 |
[2003] EWHC 103 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Lightman
Case No: HC03C00131
Mr Paul Nicholls (instructed by Berwin Leighton Paisner, Bouverie House, 154 Fleet Street, London EC4A 2JD) for the Claimant
Mr Jonathan Russen (instructed by Reed Smith, Minerva House, 5 Montague Close, London SE1 9BB) for the Defendant
Hearing date: 29 th January 2003
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
I have before me an application by the defendant Design Inc (International) Ltd ("the Defendant") to set aside an order obtained by the claimant Sheila Myers ("the Claimant") suing as the personal representative of the late Cyril and Marjorie Rosenberg ("the Deceased"), that the Defendant should pay into court the debt of £900,000 which the Claimant alleges is owed to her by the Defendant. That order was made by Mr Justice Hart on the 16 th January 2003 and required payment of that sum into court by 4 p.m. on Friday the 24 th January 2003. It was made on the Claimant's application made without notice to the Defendant. On the 23 rd January 2003 the Defendant applied informally (as permitted by the order) to set aside or vary the order. By agreement of the parties Mr Justice Hart extended time for payment until 4 p.m. today the 31 st January 2003. The effective hearing of the Defendant's application to set aside the order came before me on the 29 th January 2003 when I reserved judgment. The short issue of law raised on this application is whether the court had jurisdiction to make such an order under CPR 25.1(1)(l) ("the Rule") which provides that amongst the interim remedies which the court may grant the court may make:
"an order for a specified fund to be paid into court or otherwise secured where there is a dispute over a party's right to the fund".
This turns on the question whether the alleged debt owed by the Defendant to the Claimant constitutes a "specified fund" which the court can under the Rule order to be paid into court or otherwise secured. The Rule replaces and (in the language of Volume 1 of the Autumn 2002 White Book para 25.1.30) "is based on" RSC Order 29 r.2(3). There is apparently no authority providing guidance on the current rule or its predecessor.
The facts of this case are of very little (if any) relevance. In short the Deceased out of the proceeds of sale of a property paid the £900,000 to the Defendant by way of loan. The Defendant has long ago expended that money or at least a very substantial part of it. The Claimant has demanded repayment, and on the face of it the full sum is now immediately repayable. The Claimant commenced these proceedings for repayment. The Defendant has however raised a number of defences to the claim for repayment. Those defences may be tested on an application for summary judgment or at the trial of the action. The Claimant is concerned that, unless steps are taken to prevent it, the Defendant will take steps to render himself judgment proof. If these fears are justified, a course available to the Claimant is an application for an order freezing the Defendant's assets, which is a remedy specifically provided for by CPR 25.1(1)(f)(ii). But instead of seeking a prohibitory order to this effect the Claimant decided to apply for a mandatory order under CPR 25.1.(i)(l) for the Defendant to pay the sum claimed into court.
An application for such relief was made without notice to Hart J on the 16 th January 2003. Hart J was plainly troubled whether the Rule admitted of the grant of the relief, but he decided on the balance of justice that he should grant such relief until a hearing on notice when the issue could be fully argued and decided. The matter has now come before me for argument and determination.
The issue raised is clearly of some practical importance. For if the Claimant is right in her contention that she is entitled to the relief which she claims, that remedy will be available to all creditors. It will achieve the same practical result as a conditional order on an application for summary judgment under CPR 24 and para 5.2 of the supplementing Practice Direction requiring payment of the sum in question into court. It may also have the incidental effect of elevating the creditor into the status of secured creditor.
Whether the Claimant is entitled to invoke CPR 25.1.(i)(l) turns on the question whether on a claim...
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