De Zwarte Band and another v Kanhai and another (Trinidad and Tobago)

Registration of a judgment under the Remedies of Creditors Act creates a charge on the debtor’s existing interest in land and on property later acquired. It is not a floating charge that disappears when the debtor later ceases to own the interest.

A subsequent property adjustment order under the Matrimonial Proceedings and Property Act operates prospectively and cannot reduce or defeat an earlier judgment charge. Judgment creditors generally prevail when enforcement is opposed by a non-debtor spouse. Ordinary hardship, loss of the matrimonial home, inability to buy comparable accommodation, and an occupation order based on the assumption that the debtor will redeem the debt do not constitute exceptional circumstances justifying a stay.

Two suppliers obtained judgments against the husband for unpaid business debts and registered them under the Remedies of Creditors Act. The registrations created charges over his interest in the former matrimonial home.

The Family Court later made financial-relief and property orders, including an order permitting the wife to remain in occupation. A sale ordered to enforce the judgment charges was stayed by a single judge of the Court of Appeal, and the full Court of Appeal continued the stay on the basis that the husband’s ultimate interest could not be known until the ancillary-relief proceedings ended.

The judgment creditors appealed to the Privy Council. The central issues were whether the charges attached to the husband’s interest at registration or only to any interest remaining after the property proceedings, and whether exceptional circumstances justified postponing the sale.

Appeal allowed.

1. Procedural objections. The Board treated substance rather than form as decisive. Although the stay had formally been made in the family proceedings, the judges had exercised both civil and family jurisdiction, the judgment creditors had been represented when continuation of the stay was argued, and no prejudice resulted. The procedural objection therefore failed.
2. Effect of registration. Section 5 of the Remedies of Creditors Act looks to property owned when judgment is entered and to property subsequently acquired. It does not create a floating charge which ceases to bind property when the debtor later ceases to be entitled to it. The Board relied on the reasoning in Trinidad Home Developers Ltd v IMH Investments Ltd [2003] UKPC 85, which treated registration as creating security and forming part of the enforcement process.
3. Ancillary relief. Section 26 of the Matrimonial Proceedings and Property Act adjusts property interests prospectively. An order under that provision cannot affect a judgment charge created earlier under section 5 of the Remedies of Creditors Act. The Court of Appeal’s reasons for continuing the stay were therefore based on a misreading of the legislation.
4. Exceptional circumstances. The authorities, including First National Securities Ltd v Hegerty [1985] QB 850, In re Citro (Domenico) (A Bankrupt) and (Carmine) (A Bankrupt) [1991] Ch 142, Lloyds Bank plc v Byrne and Byrne [1993] 1 FLR 369 and Deslauriers v Guardian Asset Management Ltd [2017] UKPC 34, establish that creditors’ interests generally prevail. Substantial postponement requires circumstances exceeding the ordinary consequences of debt and improvidence.
5. The wife’s loss of the home, the effect on the children, her inability to purchase comparable accommodation, and the occupation order did not meet that threshold. The occupation order had been made on the optimistic assumption that the husband would discharge the judgment debts. It could not reverse the priority of the earlier sale orders.
6. Orders. The stay was set aside. The sale orders made on 17 March 2015 remained in force, but the sale timetable had to be rescheduled. The wife was ordered to pay the costs of the appeal.

• Privy Council — [2019] UKPC 48: allowed the appeal, set aside the stay, left the sale orders in force, directed that dates be rescheduled, and ordered the wife to pay the appeal costs.
• Court of Appeal of the Republic of Trinidad and Tobago — 19 September 2016: dismissed the judgment creditors’ applications to discharge the stay granted by a single Justice of Appeal on 11 November 2015.
• High Court and Family Court — 17 March 2015: ordered sale of the property to enforce the judgment charges. On 23 October 2015, the Family Court made financial and property orders, including continued occupation by the wife and children.