Chohan v Times Newspapers Ltd

For limitation purposes, a judgment becomes enforceable when it can be enforced in a practical way according to law, whether by an action or otherwise. A supposed right to commence proceedings which would inevitably be struck out as an abuse of process does not make the judgment enforceable.

An order for costs to be taxed becomes enforceable under section 24 of the Limitation Act 1980 only when taxation has quantified and certified the amount payable. Although such an order may carry interest as a judgment debt from its date under the Judgments Act 1838, payment cannot be enforced while the sum remains unascertained.

Three costs orders made in 1993 required Dr Chohan to pay Times Newspapers Ltd's costs, to be taxed if not agreed. Taxation produced a certificate in 1994 under which just over £37,000, including interest, was due. The company served a statutory demand in January 2000 and presented a bankruptcy petition the following month.

Mr Registrar Baister made a bankruptcy order. Mr Anthony Mann QC, sitting as a Deputy Judge of the Chancery Division, dismissed Dr Chohan's appeal. With permission, Dr Chohan appealed to the Court of Appeal.

The sole issue pursued was whether, under section 24 of the Limitation Act 1980, the costs orders became enforceable when pronounced in 1993 or only when the amount payable was certified in 1994.

1. Appeal dismissed unanimously. Aldous LJ delivered the judgment, with which Robert Walker LJ and Jonathan Parker LJ agreed. The costs orders became enforceable for the purposes of section 24 of the Limitation Act 1980 only when the amount payable was certified in 1994. The bankruptcy petition was therefore brought within six years.

2. The word “enforceable” in section 24 means enforceable in a practical way according to law. It is not confined to enforcement by an action on the judgment. Time may begin when the judgment becomes enforceable by an action or by another lawful means. The narrower construction suggested in Berliner Industriebank Aktiengesellschaft v Jost [1971] 1 QB 270 was rejected.

3. An action seeking the same order for payment of costs after taxation would serve no juridical purpose before taxation. It would be struck out as an abuse of process. A supposed right to bring such an abusive action could not make the original order enforceable.

4. Before certification there was no quantified sum whose payment could be enforced. An order for costs to be taxed creates rights, including the right to taxation, but the amount payable must be ascertained before an action can enforce payment. The reasoning in Nichols Advanced Vehicles Systems Inc v Reece, Oliver & Ors [1985] RPC 445 supported the conclusion that no further proceedings could be brought upon an unquantified judgment.

5. Hunt v RM Douglas (Roofing) Ltd [1990] 1 AC 398 did not determine the limitation issue. It established, for section 17 of the Judgments Act 1838, that an order for costs to be taxed carries interest from the date of the order, despite the absence of a sum upon which execution could then be levied. That statutory treatment did not make the unquantified order enforceable under section 24 of the 1980 Act.

6. The debtor was ordered to pay the petitioning creditor's costs of the appeal. Permission to appeal to the House of Lords was refused.

1. Court of Appeal: The appeal was dismissed unanimously: [2001] EWCA Civ 964. The 1994 certification was the relevant starting point under section 24 of the Limitation Act 1980.

2. High Court, Chancery Division: Mr Anthony Mann QC, sitting as a Deputy Judge, dismissed the debtor's appeal and held that the costs orders became enforceable upon quantification and certification.

3. Bankruptcy proceedings: Mr Registrar Baister made a bankruptcy order on Times Newspapers Ltd's petition.