56 Fellows Road Limited v ABC Block Management Limited

A judgment debt is not discharged by a third party’s payment unless the third party pays as agent for, or on account of, the debtor. Where an enforcement agent takes personal funds from a non-debtor, the money is not proceeds of the lawful exercise of enforcement power under paragraph 50(1) of Schedule 12 to Tribunals, Courts and Enforcement Act 2007. It must be returned, and later ratification cannot revive the payment after return. Whether payment was authorised is assessed from the circumstances, with contemporaneous documents often providing the best evidence where credibility is not in issue. A later payment under an agreement may be a return, rather than compensation, where the agreement and matching amount support that construction.

ABC obtained a county court judgment against 56FR on a counterclaim and later sought a charging order. District Judge Moses refused the application. Her Honour Judge Baucher allowed ABC’s appeal, finding that Mr Wolanski had paid the enforcement amount personally and that a later payment by DCBL was a return of his money, not satisfaction of 56FR’s debt.

56FR appealed. It argued that Mr Wolanski had paid on the company’s behalf, that payment 1 extinguished the judgment debt, and that payment 2 was separate compensation. ABC maintained that the debt remained unpaid. The central issue was the legal effect of the two payments, assessed against the writ, contemporaneous complaints and correspondence, and the settlement agreement.

Appeal dismissed. Lady Justice Elisabeth Laing gave the leading judgment. Lord Justice Cobb and Lord Justice Newey agreed.

1. The appeal turned on whether payment 1 was made personally or on behalf of 56FR. There had been no trial, and the issue was the inference to be drawn from documents rather than witness credibility. The contemporaneous documents showed that Mr Wolanski consistently treated the payment as personal and unwilling, made in response to intimidation. His chargeback requests and repeated demands that the money should not be passed to ABC were inconsistent with payment on the company’s behalf.
2. A third-party payment discharges a judgment debt only where the third party pays as agent for, or on account of, the debtor. If the payment is returned to the third party, the payment is at an end and a later ratification is too late. It was therefore unnecessary to decide whether the later company minutes evidenced ratification.
3. Under Schedule 12 to the Tribunals, Courts and Enforcement Act 2007, paragraph 50(2) recognises that proceeds may include bank money. However, paragraph 50(1) refers to proceeds from the lawful exercise of enforcement power. On the facts, payment 1 was personal money taken from a non-debtor and was not lawful enforcement proceeds which had to be paid to ABC. DCBL was obliged to return it.
4. The Agreement repeatedly described payment 2 as the return of the money, and payment 2 was for exactly the same amount as payment 1. It was therefore a return, not separate compensation for the enforcement agent’s conduct. The District Judge had wrongly construed the enforcement agent as ABC’s agent and had not considered the full evidence. Her Honour Judge Baucher was right that the judgment debt remained outstanding and that ABC could enforce it by charging order.

1. Court of Appeal (Civil Division) — in [2026] EWCA Civ 401, dismissed 56FR’s appeal and held that the judgment debt remained outstanding.
2. Central London County Court, Her Honour Judge Baucher — allowed ABC’s appeal from the District Judge and restored the basis for enforcement by charging order.
3. Central London County Court, District Judge Moses — refused ABC’s application for a charging order, treating the judgment debt as discharged by payment 1.