Gill & Anor v Grovewood Farm Dairies

A county court cannot enforce a charging order where the judgment debt exceeds the statutory limit, unless the parties consent or the High Court transfers the proceedings. Enforcement by sale must proceed under the charging-order procedure, not the ordinary possession procedure. Possession is ancillary to a sale order and should not ordinarily be granted first, particularly without giving the affected parties a proper opportunity to provide evidence on the court’s discretion.

The appellants challenged a possession order made in the Kidderminster County Court to enforce a charging order securing a judgment debt exceeding £30,000. The charging order itself was not challenged. A Deputy District Judge dismissed the challenge, and the appellants appealed. The central issues were whether the county court had jurisdiction to make the possession order and whether possession could be sought separately before an application for sale under the charging-order procedure.

1. Appeal allowed. The possession orders were set aside, possession was restored to the appellants, and the proceedings were transferred to the High Court, Chancery Division.
2. Under section 23(c) of the County Courts Act 1984, the county court’s jurisdiction to enforce a charging order is limited where the judgment sum exceeds £30,000. Enforcement must be commenced in the High Court unless the parties consent or proceedings begun in the High Court are transferred to the county court.
3. The joint ownership of the property did not alter the result because the judgment debtors and legal owners were the same people. The wider issue under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 did not arise for decision.
4. CPR 73.10 and its practice direction confirm that enforcement by sale must use the charging-order procedure. CPR Part 55 should not be used for that purpose.
5. A charging order creates an equitable charge and does not itself carry a power of sale. Possession may be granted only in support of an order for sale, and an order for sale must be made first. The court must exercise its discretion after the affected parties have had a fair opportunity to provide evidence. The charging-order application was therefore adjourned.

Birmingham County Court: Deputy District Judge Caun refused the appellants’ challenge on 6 March 2008. The High Court granted permission to appeal and allowed the appeal, setting aside the possession orders and transferring the proceedings to the High Court, Chancery Division, in Birmingham.