Ropaigealach v Allied Irish Bank Plc

A charging order is a discretionary method of enforcing a judgment debt. In deciding whether to make it absolute, the court must consider all the circumstances, including the debtor’s personal circumstances and whether other creditors may be unduly prejudiced. The court may take account of events occurring after the charging order nisi. Compliance with an instalment order is relevant and may raise a question whether section 86(1) of the County Courts Act 1984 prevents execution by charging order before default. That jurisdictional issue was arguable but was not finally decided. Permission to appeal was granted on that issue only.

The applicant appealed from orders made in the Cardiff County Court concerning a charging order over his beneficial interest in property. A judgment creditor had obtained a charging order nisi before an instalment order was made, and the charging order was later made absolute although the instalments were being paid.

His Honour Judge Masterman dismissed appeals from the district judges’ orders. The applicant sought permission to appeal out of time and argued that section 86(1) of the County Courts Act 1984 deprived the court of jurisdiction to make the charging order absolute while he was complying with the instalment order. The central issue was whether that contention was arguable and whether the instalment order should have been considered.

1. Permission and extension of time. Time was extended because the application had been made within 28 days and the applicant gave a sufficient explanation for missing the applicable 14-day limit.
2. Charging orders. Under section 1(5) of the Charging Orders Act 1979, the making of a charging order is discretionary. The court must consider all the circumstances, including the debtor’s personal circumstances and likely undue prejudice to other creditors.
3. Instalment orders and jurisdiction. Section 86(1) of the County Courts Act 1984 provides that execution on an instalment order cannot issue before default. In Mercantile Credit Company Limited v Huxtable and others, the court had treated faithful compliance with instalments as a sufficient discretionary reason to refuse a charging order and had expressed the view that a charging order was execution on the instalment order. Whether section 86(1) prevented the charging order being made absolute without default was sufficiently arguable to justify a second appeal.
4. Post-nisi events. Although a charging order absolute takes effect from the date of the order nisi, the court may consider events occurring afterwards before deciding whether to make it absolute. The contrary suggestion in Hailey v Berry had been expressly disapproved by the majority in Burton Finance Ltd v Godfrey. If jurisdiction existed, compliance with the instalment order was nevertheless a matter the court should consider.
5. Permission was granted on ground (B), covering these issues. Permission was refused on grounds (A) and (C), including the challenge to the costs order.

• Cardiff County Court: District judges made the relevant charging and instalment orders. His Honour Judge Masterman dismissed the applicant’s appeals on 18 April 2000.
• Court of Appeal (Civil Division): Permission to appeal out of time was granted on ground (B) only. Permission was refused on grounds (A) and (C).