Kirsten Elaine Mcgowan v Marie Bernadette Potter

The county court’s jurisdiction to enforce a charging order by sale derives from its equity jurisdiction under County Courts Act 1984 s 23(c). The ancillary powers in Law of Property Act 1925 ss 90 and 91 form part of that jurisdiction and are subject to the same £350,000 limit. Their statutory limits should not be construed as restricting jurisdiction which s 23(c) confers. A court order made without jurisdiction is not automatically a nullity. It must be obeyed unless and until set aside by a competent court.

The proceedings arose from an unpaid judgment debt secured by a charging order over the defendant’s property. The County Court made an order for sale and created a 3,000-year legal term under Law of Property Act 1925 s 90. No appeal was brought against that order.

The defendant later challenged it as ultra vires. The High Court was directed to determine whether the County Court had jurisdiction to make the order and, if not, whether the order was void or voidable and what effect should be given to steps taken under it.

1. The County Court order was validly made. The jurisdiction to order sale in enforcement of a charging order is an inherent jurisdiction, supplemented by ancillary statutory powers.

2. Under s 3(4) of the Charging Orders Act 1979, a charge imposed by a charging order is enforceable in the same courts and manner as an equitable charge. An equitable charge ordinarily gives rise to a remedy of sale rather than foreclosure.

3. Ladup Ltd v Williams & Glyn’s Bank plc confirmed that an equitable chargee’s primary remedies include an order for sale and that the powers under Law of Property Act 1925 s 90 are ancillary to the court’s jurisdiction to order sale. Sections 90 and 91 extend to equitable charges because “mortgage” includes a charge or lien securing money.

4. The wording of County Courts Act 1984 s 23(c) should be construed consistently with the corresponding provision in the County Courts Act 1959. It confers County Court jurisdiction to enforce charges where the amount owing does not exceed the current equity-jurisdiction limit of £350,000.

5. The limits in ss 90(3) and 91(8) of the Law of Property Act 1925 should not be read as imposing a separate £30,000 ceiling on ancillary powers. That construction would conflict with s 23(c), produce no coherent legislative result, and could be bypassed through Trustee Act 1925 ss 47 and 50.

6. The court also rejected the submission that an order made without jurisdiction is automatically a nullity. Applying R (Majera) v Secretary of State for the Home Department, an order must be obeyed unless and until set aside. If the first conclusion had been wrong, the order would have remained binding, with relief potentially involving a declaration and an adjournment to the County Court under County Courts Act 1984 s 40(2).

First-instance determination of preliminary issues in the High Court. The judgment records no appeal against the earlier County Court order.