Close Invoice Finance Ltd v Pile & Anor

When enforcing a charging order, the court has a discretion to order sale under CPR 73.10. That discretion must be exercised compatibly with Convention rights and requires a fair balance between the chargee’s entitlement to enforce security and the private and family life, home and possessions of everyone living in the property.

The court may consider the welfare and circumstances of non-debtor occupiers even where the application does not proceed under the Trusts of Land and Appointment of Trustees Act 1996. A sale may therefore be ordered but possession postponed where the evidence shows substantial effects on family members and the chargee faces limited prejudice from delay.

Close Invoice Finance Ltd held a judgment for approximately £319,000 against the defendants and obtained a final charging order over their family home. About £125,000 remained outstanding, together with claimed costs. The property was valued at approximately £390,000 and was occupied by the defendants, their children and an elderly mother.

The claimant applied for an order for sale under CPR 73.10, alternatively under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The defendants ultimately accepted that a sale should be ordered but sought substantial postponement because of illness, family disruption, educational considerations and possible improvement in their financial position. The central issue was the appropriate timing of possession and sale.

1. Order for sale. The claimant was entitled to apply under CPR 73.10(1). Reliance on section 14 of the Trusts of Land and Appointment of Trustees Act 1996 was unnecessary, although the defendants held the property on trust for themselves.
2. Relevant considerations. The discretion under CPR 73.10 must be exercised compatibly with article 8 of the Convention and article 1 of the First Protocol. Enforcement of charging orders serves the public interest in maintaining an effective system for enforcing debt obligations. However, the court must give due respect to the private and family life, home and possessions of all persons living at the property, not merely the judgment debtors. Those interests must be balanced against the chargee’s right not to wait indefinitely or lose an effective means of enforcement.
3. Scope of the discretion. Although section 15 of TOLATA applies where an order is sought under section 14, equivalent considerations may be taken into account under the court’s discretion in CPR 73.10. The judge disagreed with the narrower approach in Pickering v Wells [2002] 2 FLR 798, which treated the welfare or needs of occupiers as irrelevant to enforcement of a charging order.
4. Postponement. The defendants’ employment prospects alone did not justify lengthy delay. Mrs Pile’s cancer treatment, the disruption to the family, and the daughter’s education were relevant. The claimant’s security remained substantially protected by the equity in the property, despite possible interest accrual and market decline. Applying a proportionality assessment, the court ordered sale but postponed possession until the following summer. The order would not take effect if the debt and interest were paid before then.