Ask the team: Is there a limitation period for enforcing a money judgment?

An Ask the team article on the effect of delay in enforcing a money judgment.  (Free access).

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Question

I have a High Court money judgment obtained over ten years ago. I have not attempted to enforce the judgment previously. However, I would now like to do so. Will this be a problem? Does any limitation period apply for enforcement proceedings?

 

Answer

Enforcement proceedings are not subject to any limitation period. A judgment of the English High Court remains enforceable without a time limit. However, delay in enforcing can have other consequences in that:

  • It may affect whether a judgment can be enforced at all.

  • It may adversely affect the overall sum recoverable.

Limitation Act 1980 and Lowsley v Forbes

Under section 24(1) of the Limitation Act 1980 (1980 Act), "an action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable". This is subject to any extension for part payment or otherwise under Part II of the 1980 Act.

The House of Lords considered the wording of the section in Lowsley v Forbes [1998] UKHL 34 (www.practicallaw.com/6-505-8945), in the context of enforcing by charging order and garnishee proceedings (now third party debt orders).

In their Lordships' opinion, "action" meant a fresh action and did not include proceedings by way of execution. Execution has been held to mean the process for enforcing or giving effect to a judgment of the court. The process is “completed”" when the judgment creditor gets the money or other thing awarded to him by the judgment (Re Overseas Aviation Engineering GB Ltd [1963] Ch 24).

This is in accordance with the court's attitude to enforcement generally, as set out in case law. The starting presumption is that the court should assist the judgment creditor to recover the debt due to it by all or any of the enforcement methods prescribed by the court rules (Roberts Petroleum v Bernard Kenny Ltd [1803] 2 AC 192 and Credit Lyonnais v SK Global Hong Kong Ltd [2003] HKCA 250).

The position established in Lowsley v Forbes was further applied regarding enforcement of a charging order (by application for an order for sale) in Yorkshire Bank Finance Ltd v Mulhall and another [2008] EWCA Civ 1156 (www.practicallaw.com/8-505-8949).

In Yorkshire Bank v Mulhall, it was found that there was no provision in the 1980 Act that affected the enforcement of a charging order, even where more than 12 years had passed since the order was made. An application to enforce a charging order was not an application to enforce the judgment but to enforce the charging order, which had "a life of its own". In reaching its decision, as well as considering section 24, the court also considered section 20(1) of the 1980 Act, which provides that:

"No action shall be brought to recover
(a) any principal sum of money secured by a mortgage or other charge on property (whether real or personal); or
(b) proceeds of the sale of land;
after the expiration of twelve years from the date on which the right to receive the money accrued."

(See further Legal update, Court of Appeal considers the application of the Limitation Act 1980 to the enforcement of charging orders.)

Bankruptcy and winding-up proceedings

In Ridgeway Motors (Isleworth) Ltd v ALTS Ltd [2005] EWCA Civ 92 (www.practicallaw.com/0-505-8953), it was held that the six-year limitation period under section 24 of the 1980 Act did not apply to bankruptcy or winding-up proceedings based on judgment debts.

What effect can delay in enforcing have?

Although limitation is not a problem, delay in enforcing can have other consequences.

Permission: writ of execution

Permission is required to issue a writ of execution on a judgment more than six years old under RSC Order 46, rule 2(1)(a) (see further Practice note, Execution against goods and writs of fieri facias: Is permission to issue a writ of fi fa required? (www.practicallaw.com/1-380-9649)).

Court discretion to grant order for particular method of enforcement

There is no equivalent provision regarding permission for methods of execution other than writs of execution (such as charging orders or third party debt orders), but the court may take into account the delay in enforcing when it exercises its discretion to grant the order.

Case law confirms that if a judgment debtor wants to challenge enforcement on the basis of delay, crucial to the success of that argument is the extent of prejudice to the debtor by reason of the delay, and there must be compelling evidence of prejudice (Westacre Investments Inc v Yugoimport SDPR [2008] EWHC 801; see Legal update, Whether judgment could be enforced by third party debt order after six years).

Interest

Note that in Lowsley v Forbes, recoverable interest on the judgment sum was limited to six years. Section 24(4) of the 1980 Act provides that:

"no arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due."

As a separate matter, interest will still continue to accrue on the sum secured by a charge, until the principal sum is repaid.

 

Other questions

For guidance on when a judgment takes effect, see Practice note, Enforcing a money judgment: an overview: Is judgment debt due and enforceable? (www.practicallaw.com/5-386-5370).

For a consideration of some other issues that commonly arise in the context of enforcement, see Practice note, Enforcing a money judgment: frequently asked questions (www.practicallaw.com/2-422-3147).

 

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