Section 24(1) of the Limitation Act 1980 (‘the 1980 act’) provides that an action cannot be brought on any judgment after the expiration of six years from the date on which the judgment became enforceable, unless an extension is granted on application by the judgment creditor. However, there are two forms of enforcement that appear to be immune from this provision – third-party debt orders and charging orders. Recent cases have served to emphasise the efficacy of such procedures for bringing judgment debtors to heel, even many years after judgment was obtained.

Third-party debt ordersIn Westacre Investments Inc v Yugoimport SPDR [2008] EWCA 801 (Comm), [2008] All ER(D) 281 (Apr), Lawtel, 25 April 2008, the Commercial Court considered the longevity of third-party debt orders (formerly known as ‘garnishee’ orders). This case concerned an award against the defendants in Switzerland, registered as a judgment in England in March 1998 and sought to be enforced in Singapore in October 2004. The debtors sought to set the judgment and enforcement aside. The Singapore court directed that a declaration should be sought of the English courts as follows:

‘On the assumption that there was a third party within the jurisdiction of the English court who owed or held money to the credit of the judgment debtors, whether an English court in the exercise of its discretion would have given leave to enforce the English judgment dated 13 March 1998 if the judgment creditors had applied for a third-party debt order on 5 October 2004.'

Mr Justice Tomlinson held that third-party debt orders were subject to no limitations as to time. The civil procedure rule which governs them, part 72, makes absolutely no reference to the time elapsed since the date of judgment. This is in contrast to the rules relating to writs of execution, still governed by the old order 46 of the rules of the Supreme Court. These limit the issue of a warrant of execution, without the need for an application to the court, to six years from the date judgment was entered. As the judge observed, the differences in longevity have existed 'for well over 100 years’.

Thus the lapse of six years since judgment enjoyed no special significance as far as third-party debt orders were concerned. It was just one factor to be taken into account in the overall exercise of discretion. There had never been any practice of declining an interim order on that basis alone.

Charging ordersThese appear not only to be immune from section 24(1) of the 1980 act but also from section 20(1) of the same act, which places a 12-year limitation on enforcement in relation to a charge on land, running from the date on which the right to receive the money under the charge accrued. How can this be?

In the case of Yorkshire Bank Finance Ltd v Mr & Mrs Mulhall [2008] EWCA Civ 1156, [2008] All ER(D) 241 (Oct), Lawtel, 24 October 2008, a judgment having been obtained against Mr and Mrs Mulhall in April 1991, the claimant obtained a charging order absolute against a property owned by Mrs Mulhall on 25 June 1991. In January 2007, Mrs Mulhall sought to set the judgment aside because, among other things, the bank had taken no steps to enforce it since 1991, and that meant that enforcement was no longer possible. The application failed.

The leading case on this topic is Ezekiel v Orakpo [1997] 1 WLR 340, which emphasised that, in seeking to enforce the charging order, the judgment creditor was not seeking to enforce a judgment – he had already done that when he got a charging order. Accordingly, the enforcement of a charging order was not affected by section 20(1) or section 24(1). If the charging order were enforced, all arrears of interest could be recovered, not merely six years’ arrears.

The distinction between Ezekiel and Mulhall was that more than 12 years had passed since the entry of the judgment and the making of the charging order. That made no difference as regards section 24(1) or section 20(1). There was, therefore, no provision in the Limitation Act 1980 which affected the enforcement of the charging order on the part of the bank, despite the lapse of time.

Letting sleeping dogs lieOne can understand that judgment debtors would be reluctant to poke a stick at a long-lying unenforced judgment. However, delay by the debtor in applying to set aside a judgment may only strengthen the judgment already obtained against them.

In Peter Nolan v (1) Stephen Gordon Devonport (Deceased) (2) Gillian Margaret Devonport [2006] EWHC 2025 (QB), [2006] All ER(D) 83 (Aug), Lawtel, 15 August 2006, Mr Nolan obtained a judgment for a considerable sum against Mr and Mrs Devonport in 1995. Shortly afterwards, Mr Devonport became bankrupt and, five years later, he died. The judgment creditor took no immediate steps to enforce the judgment. In 2002 Mr Nolan obtained permission to execute the judgment by way of a charging order. In response, Mrs Devonport threatened to issue an application to set judgment aside, which she did, citing as one of her grounds the delay by the judgment creditor in enforcing the judgment.

Striking out the application to set aside, Judge Grenfell, sitting as a judge of the High Court, had no hesitation in saying that it was entirely a matter for the party who had a judgment in his favour to decide when and how to enforce it. Many judgments remained outstanding and unenforced for years, while the judgment creditor waited for the right moment to enforce.

In these economically straitened times, many creditors with the benefit of a judgment may well feel it best to wait until the judgment debtor is better placed financially before seeking to pounce on available assets which may have not been around when the judgment was originally obtained. It now appears that, in the case of third-party debt orders and charging orders at least, the judgment creditor can be as patient as he wishes, and that can be for a very long time indeed.

District Judge Gerlis sits at Barnet County Court