Walton & Anor v Allman

Relief from sanctions is discretionary and appellate intervention is justified only where the lower court was wrong, procedurally irregular, or outside the generous ambit of reasonable disagreement. Applying Denton, a serious and significant disclosure failure, without good reason and coupled with repeated non-compliance and delay, justified refusal of relief.

A charging order may secure a judgment debtor’s beneficial interest in land registered in another person’s name if the court is satisfied that some beneficial interest exists. The court need not quantify that interest before making the order final. Quantification may be determined later, particularly on an application for an order for sale.

The appellants appealed from the decision of HHJ Godsmark QC, which refused relief from sanctions and left standing an order dismissing their appeal against a final charging order.

The charging order secured costs owed by Lisa Walton to Shan Allman over Lisa Walton’s alleged beneficial interest in property legally owned by Thomas Walton. The appellants had failed to comply fully with disclosure directions, including directions concerning bank statements and explanations for missing documents.

The appeal concerned both the application of the three-stage test in Denton v TH White Ltd and whether a charging order could be made before the judgment debtor’s beneficial interest had been precisely quantified.

1. Appeal dismissed. The appellate court would interfere with the discretionary refusal of relief from sanctions only if the decision was wrong, affected by serious procedural irregularity, or outside the generous ambit of reasonable disagreement. The approach was consistent with G v G, Phonographic Performance Ltd v AEI Redefusion Music Ltd and Mitchell v News Group Newspapers Ltd (paras [28]-[32]).
2. HHJ Godsmark QC had correctly applied the three stages in Denton v TH White Ltd. The breach was serious and significant because a substantial trial could not proceed on the basis of late and incomplete disclosure. There was no good reason for the default. At the third stage, the court was entitled to give substantial weight to efficient and proportionate litigation, compliance with court orders, the history of breaches, wasted costs, delay, and the absence of assurance that disclosure would be completed (paras [33]-[39], [65]).
3. Under sections 1, 2 and 3(4) of the Charging Orders Act 1979, a charging order may be imposed on any beneficial interest of the judgment debtor in land, including an interest in property registered in the sole name of a third party. The order must identify the asset and the debtor’s interest, but the Act does not require the court to quantify or value that interest at the charging-order stage (paras [44]-[48], [53]-[57]).
4. Jones v Kernott and Oxley v Hiscock concerned declarations under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. Their two-stage approach to identifying and quantifying a beneficial interest did not determine the different question of whether a charging order could be made under the 1979 Act before precise quantification (paras [49]-[55]).
5. It was sufficient that the court was satisfied that the judgment debtor had some beneficial interest in the relevant property. The precise extent could be determined later, commonly on an application for an order for sale. A charging order and an order for sale were separate stages, and the charge could provide valuable security even if an immediate sale was not sought or would not be appropriate (paras [56]-[64]).

1. High Court (Chancery Division) — [2015] EWHC 3325 (Ch): appeal dismissed.
2. Nottingham County Court — HHJ Godsmark QC refused relief from sanctions and left standing the order dismissing the appellants’ appeal.
3. Chesterfield County Court — District Judge Davies made the charging order final over Lisa Walton’s beneficial interest, without quantifying its precise extent.