Peter Carnegie v Charles Giessen & Ors Alan Sutherland Mark Elswood & Ors

A foreign-currency judgment debt need not be converted into sterling at a universally prescribed stage of enforcement. Miliangos v George Frank (Textiles) Ltd established a general principle that conversion should occur as close as practicable to payment, subject to the practical requirements of the enforcement method. The detailed application of that principle may be governed by procedural rules and directions. A charging order may therefore be expressed in the foreign currency of the judgment debt. A practice direction requiring the sterling equivalent does not remove the court’s jurisdiction to make an order in another form, particularly where the judgment creditor accepted the order without objection and later sought amendment only after exchange-rate movements became adverse.

The claimant obtained judgment for US$1,431,731.50 against the defendants. Charging orders were subsequently made over properties belonging to two defendants, and the debt was expressed in US dollars. The claimant did not object to that form of order during the enforcement proceedings.

After exchange-rate movements made a sterling conversion more favourable to him, the claimant argued that the orders should be restated in sterling under the slip rule or CPR 3.10. Master Moncaster rejected the application, and the decision was upheld by the Deputy Judge of the Chancery Division in [2004] EWHC 1782 (Ch). The central issue before the Court of Appeal was whether the foreign-currency charging orders were legally impermissible or should be amended.

1. Appeal dismissed. The Master had jurisdiction to make charging orders expressed in the foreign currency of the judgment debt, and the Deputy Judge was correct to uphold the refusal to amend them.
2. Miliangos v George Frank (Textiles) Ltd ([1976] AC 443) established a general principle that conversion should take place as close as practicable to the date of payment, having regard to the realities of enforcement. It did not establish a binding rule applicable in the same way to every enforcement procedure. The House of Lords had left the detailed application of the principle to the courts and the professions.
3. The subsequent practice directions worked out the application of that principle for particular enforcement methods. The 1993 Practice Direction remained effective after the introduction of the Civil Procedure Rules because nothing in the Rules or accompanying practice directions expressly or impliedly revoked or superseded it. Its requirement that evidence supporting a foreign-currency charging-order application state the sterling equivalent, and that the Master then make an order for that equivalent, was a matter of practice rather than a jurisdictional limitation.
4. The Charging Orders Act 1979 did not require a charging order to be expressed in sterling. Section 1(1) referred to securing payment of money due under the judgment, and section 3(4) was consistent with an equitable charge expressed in foreign currency.
5. Ezekiel v Orakpo ([1997] 1 WLR 340) did not assist the claimant. Its description of charging-order enforcement as complete when the charging order is obtained did not determine the appropriate conversion date for foreign-currency enforcement. A and M Records Inc v Darakdjian ([1975] 1 WLR 1610) was distinguishable because the debt here was ascertained in dollars.
6. The Master was entitled to refuse retrospective amendment. The claimant had accepted the dollar form of the orders and sought alteration only after currency fluctuations operated to his disadvantage. There were no grounds for appellate interference. The order was that the appeal be dismissed, with the order agreed in terms lodged with the court.

Lord Justice Dyson and Lord Justice Ward agreed with Lord Justice Carnwath’s judgment.

• Court of Appeal (Civil Division) dismissed the appeal against the Deputy Judge’s order: [2005] EWCA Civ 191.
• Chancery Division, Mr Kevin Garnett QC sitting as Deputy Judge, upheld Master Moncaster’s decisions: [2004] EWHC 1782 (Ch).
• Master Moncaster rejected the claimant’s application to restate the charging orders in sterling and to correct the alleged error.