William Dooley
Senior Associate Solicitor
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Date Published:12 Sep 2019 Last Updated:23 Oct 2021

Judgment – Enforcement beyond six years?

Banking & Finance Litigation

We are pleased to say that we have had a very successful day at court recently, where we acted for a consumer client against a major UK financial mortgage provider that was seeking to enforce a judgment debt obtained over 10 years ago. The mortgage provider’s application to enforce the judgment and vary the money order was dismissed and the Court ordered them to pay our
Clients’ costs in full.

The Facts

Our Clients had previously entered into a mortgage agreement in 2007, but due to a very difficult and tragic turn of events, they
were unable to inhabit the family home and failed to maintain their mortgage repayments. The family home was subsequently repossessed and sold at auction, but the full mortgage amount was not recovered by the sale of the property. The first our Clients knew of any shortfall came 10 years after the mortgage provider had secured judgment, when court proceedings were issued by the lender to recover the shortfall.

Enforcement of Judgment after six years

Should a judgment creditor fail to enforce a judgment or court order within 6 years, then, in accordance with CPR 83.2.(3)(a), they require the permission of the Court to take any action against the debtor. However, judgment creditors should be wary that the permission to enforce the execution of a judgment or court order over six years old is not a ‘mere formality’ and sufficient reasons for the delay in enforcement must be given.

The general rule is that execution will not be allowed after six years (Society of Lloyd’s v Longtin [2005] EWHC 2491) and that it is for the judgment debtor to prove that is demonstrably just to extend the six year period (Duer v Frazer [2001] 1 W.L.R 919).

Our Clients’ success

Our Clients successfully argued that no reasons had been provided to justify why the judgment was not enforced within six years, and also successfully argued that:

1.Substantial prejudice would be suffered as a result of the judgment creditors failure to enforce the judgment debt;

2.Our Clients’ circumstances had materially changed from the date of the original judgment and, in the circumstances, it would be unjust to enable the judgment creditor to recover the shortfall on the mortgage account – especially given the majority of the shortfall being sought was made up of interest payments; and

3.Taking into account the plethora of enforcement options available to the judgment creditor (a major UK lender), the sending of generic letters to our Clients requesting payment, to addresses at which they did not live, was not enough to convince the Court that enforcement should be allowed past the six year period.

Consequently, our Clients were able to move on with their lives without the risk of:

a) a charging order being placed on their property;

b) the lender obtaining an attachment of earnings order; or

c) dealing with any third party debt collection agency knocking at their door.

Conclusion

In circumstances where a judgment has been obtained against a debtor, it is advisable to take enforcement action as soon as
possible, unless there is a good reason not to. Enforcement beyond six years is still achievable, if the right legal advice is obtained as early as possible, but creditors should seriously consider the impact of late enforcement. The outcome of our Clients’ case is a clear example that any application to the Court to enforcement a judgment beyond six years is capable of being successfully defended. Therefore, whether you are a creditor or debtor facing similar circumstances to those outlined above, we strongly recommend that you seek independent legal advice as soon as possible, in order to protect your position.

How can Ellis Jones help you?

Our lawyers will be able to assess the merits of any potential claim or application, and will be able to advise you on the options available in a clear, sensitive and pragmatic way, whilst keeping you informed of the likely costs and providing a cost-benefit analysis of the case.

Please contact Solicitor, William Dooley in the Banking and Finance Litigation team based in London on 0203 978 4721 or send an email enquiry to discuss your matter.