Packman Lucas Ltd.v Mentmore Towers Ltd & Anor

When exercising the discretion to make a charging order or order for sale under CPR r.73.10, the court should consider all relevant circumstances. The size of the judgment debt and its value relative to the charged asset are relevant, but neither creates a fixed rule or presumption. Relevant considerations include the debtor’s conduct, the availability of other enforcement options, the quality of the valuation evidence and any genuinely imminent sale. The court should adopt a relatively conservative minimum sale price to avoid a fire sale, while recognising that a lack of reliable valuation evidence caused by the owner’s conduct cannot be used to defeat enforcement.

Packman Lucas sought orders for sale following unpaid adjudication-enforced judgments and final charging orders over Mentmore Towers and property in Charles Street and Hay Mews. The parties agreed in principle that Mentmore Towers should be sold, but disputed the minimum sale price. The defendants opposed sale of the Charles Street property, principally because the debt was small compared with the property’s value and because a sale was said to be imminent.

The court therefore had to determine the appropriate minimum price for Mentmore Towers and whether, in the circumstances, an immediate order for sale should be made against the Charles Street property.

The application was dealt with in two parts.

1. Mentmore Towers. An order for sale was appropriate by agreement. The minimum price was fixed at £16 million. The court began with the owner’s valuation of £10 million, treated it as the best available starting point, and adjusted it upwards having regard to the property’s size, iconic nature, the passage of time and general improvement in property prices. The order preserved liberty to apply if the figure proved wholly unrealistic.
2. Applicable discretion. Under CPR r.73.10, the court should not impose hard and fast rules linking the size of the debt to the availability of a charging order or order for sale. The size of the debt and its value relative to the asset are relevant factors, but must be weighed with the debtor’s conduct, the absence of other enforcement options and other circumstances. A disparity between debt and asset value does not, by itself, make sale inappropriate.
3. Charles Street property. The evidence of a possible imminent sale was inadequate but materially relevant. Taken together with the disparity between the debt and the property value, it justified giving the debtor one final opportunity to pay the sums due or complete its own sale. The application was adjourned until 11 June 2010. If the proposed sale had fallen through and no other sale was genuinely imminent, an order for sale might then be appropriate.