David Raymond Brierley v Frank Otuo & Ors

A charge holder may recover reasonable costs and expenses reasonably and properly incurred in enforcing or preserving security from the charged property, including costs of an attempted sale. Those costs do not become a personal liability of the chargor unless expressly agreed or otherwise established. Once the underlying secured debt has been discharged, the charging order and any order for sale founded on it cannot continue to support recovery of sale costs. A later order for sale does not itself create a free-standing personal liability for those costs.

The judgment concerned applications arising from long-running enforcement proceedings between David Brierley and Frank Otuo. Earlier orders had directed the sale of two properties to enforce charging orders securing costs debts. Following a payment of £250,000, the charging orders supporting the sales were held to have been discharged.

The court considered whether sale costs remained recoverable, whether the order for sale of 311 Leigham Court Road could continue, the amount required to obtain a stay pending detailed assessment, and whether the claimant’s undertaking not to sell should be released.

1. The order for sale. The claimant’s entitlement to recover costs and expenses of sale arose from the charging orders, not independently from the Le Poidevin order. A charge holder is entitled to reimburse himself from the charged property for reasonable and properly incurred enforcement costs, including the costs of an attempted sale: Holder v Supperstone [2000] 1 All E.R. 473, following Parker-Tweedale v Dunbar Bank (No.2) [1991] Ch. 26. However, those costs are not personally recoverable from the chargor.
2. The 2012 claim charging orders had been discharged by payment of the underlying debts. The claimant therefore no longer had any entitlement to recover the LCR costs from the property. The 2020 consent order had also removed the claimant’s only security for the OXR costs, so those costs were not recoverable either.
3. The Le Poidevin order did not create a free-standing personal liability for either category of sale costs. Nor did the later 2020 charging orders support a sale, since no order for sale had been made in respect of them. The jurisdictional basis of the sale order having disappeared, the order for sale of 311 Leigham Court Road could not stand.
4. Alternative conclusion. If the claimant had remained entitled to sell, the sale would cease to be justified upon payment of the full claimed costs, or payment of the undisputed amount with the balance paid into court pending detailed assessment. The court declined to require only a sum reflecting the amount it considered likely to be recovered, but indicated that a stay could be granted on payment of £25,000.
5. The court corrected its earlier decision requiring payment of the LCR costs into court as a precondition to relief, applying In re L and another (Children) (Preliminary Finding: Power to Reverse) [2013] UKSC 8. The relevant parts of the Le Poidevin order were stayed, and the undertaking was released as otiose.

This was a first-instance decision dealing with outstanding applications in enforcement proceedings. The court referred to its earlier judgments dated 8 April 2022, reported as [2022] EWHC 688 (ChD), and 28 June 2022, reported as [2022] EWHC 1530 (Ch). Permission to appeal from the June 2022 judgment was refused by Miles J on 20 January 2023.