England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(MR JUSTICE JACK)

		Royal Courts of Justice Strand London, WC2
		13th December 2002

Friday, 13^th December 2002

1. LORD JUSTICE PETER GIBSON: Order 46 rule 2(1) of the Rules of the Supreme Court, contained as it is in Schedule 1 to the Civil Procedure Rules, continues to be in force. It provides:

"A writ of execution to enforce a judgment or order may not issue without the permission of the court in the following cases, that is to say:-

(a) where 6 years or more have elapsed since the date of the judgment or order..."

From that rule it is plain that the court has a discretion whether or not to give that permission. The primary issue raised on this appeal is as to the circumstances in which it is appropriate for such permission to be given.

2. The background to this dispute is this. The claimant, Miss Dipika Patel, obtained judgment in default against the defendant, Sarbjit Singh, on 8th September 1992 in the sum of £19,649.69. That sum was made up of what are known as clawbacks of commission payments paid by Miss Patel to Mr Singh in respect of insurance contracts which had been procured by Mr Singh but which had then lapsed. On 30th^_ September 1994 a certificate of judgment was issued allowing the judgment to be enforced in the High Court, but even before then, according to Miss Patel, on 15th^_ July 1994, she had obtained a writ of fieri facias. Nothing was recovered. The judgment remained wholly unsatisfied.
3. On 1st May 2002 she applied for permission to issue a writ of execution pursuant to Order 46 rule 2(1)(a). Her application was supported by a witness statement which appears to be dated 29th January 2002, though no date is put against her signature. That date appears from the top right-hand corner of the document. In it she said:

"3 On 15 July 1994 I obtained a Writ of Fieri Facias however, the Defendant had left the United Kingdom and was apparently working in Germany. For that reason I was unable to enforce that Writ.

...

5 No change has taken place by death or otherwise in the parties to the above action since the said judgement was obtained.

6 Execution has not been reissued earlier in respect of the said judgement because as set out above the whereabouts of the said Defendant were unknown and it appeared that any attempt to obtain the satisfaction of the said judgement would have been abortive. The said Defendant's residence is now known to me and I am advised and verily believe that he has means to satisfy the said judgement.

7 My mother (Mrs K.C. Patel) and I have recently had contact with the Defendant at a social function and raised the issue of outstanding judgement. I now exhibit DP1 a copy of a letter received [from] solicitors acting for the Defendant. That letter makes allegations that my mother and I were harassing and making threats against the Defendant, those allegations are strongly denied. However, of significance [to] the present application is the assertion that the Defendant has the financial means to commence legal proceedings. In those circumstances I believe he has the means to satisfy the outstanding judgement."

4. The exhibited letter is dated 22nd October 2001. In it solicitors for Mr Singh complained on his behalf that Miss Patel's mother has "on numerous occasions" harassed and threatened Mr Singh and the solicitors said that they were instructed to commence proceedings for an injunction if Mrs Patel persisted with those actions. The solicitors said that Mr Singh had the financial means to commence legal proceedings for defamation.
5. Miss Patel's application was heard by Master Ungley on 9th May 2002. We have been supplied with a brief note taken by counsel then appearing for Miss Patel of the Master's judgment. Unfortunately the note does not appear to have been shown to, or corrected, by the Master. So far as relevant it reads:

"This is a very stale judgment. The Claimant's explanation that the Defendant was in Germany and so did not enforce is not a sufficient reason when the Claimant did not attempt to track the Defendant down. The Claimant's arguments would enable any judgment creditor to apply to issue a writ of fieri facias when the judgment creditor loses contact with the judgment debtor."

The note then refers to two decisions including National Westminster Bank v Powney [1991] Ch 339, but unfortunately what is recorded by counsel does not make complete sense. The note then continues:

"I accept I have a discretion to be exercised on principles that enable the court to say that there are exceptional circumstances. In Powney there was delay. Once the original writ of fieri facias was issued in 1994 the judgment creditor thought the judgment debtor was not in the jurisdiction and let matters lie. There are not sufficient reasons to issue out of the six years."

The Master when refusing permission to appeal said:

"The judgement was obtained in 1992, a writ of fieri facias was issued in 1994 but not executed because the judgment creditor thought the judgment debtor was in Germany. There was no evidence of any attempts to trace the judgment debtor and accordingly no material to invoke the discretion to extend time."

6. Miss Patel appealed. Her appeal was allowed by Jack J. He noted that Order 46 rule 2(1) does not include any guidance as to how the grant or refusal of permission should be determined. He referred also to Order 46 rule 4(1), which provides that an application for permission to issue a writ of execution need not be served on the defendant unless the court so directs. In this case the court did so direct. He referred to rule 4(2), which requires the application to be supported by a witness statement or affidavit containing a number of specified matters including paragraph (b) "stating, where the case falls within rule 2(1)(a), the reasons for the delay in enforcing the judgment or order".
7. The judge reviewed the authorities. He agreed with what he called the statement of principle set out by Evans-Lombe J in Duer v Frazer [2001] 1 WLR 919 at page 925, paragraph 25, that the court will not extend time beyond six years save where it is demonstrably just to do so. The judge said in paragraph 28 of his judgment:

"I would not interpret that as meaning simply that it must be shown to be just, I would ascribe a stronger meaning to demonstrably than that, such as plainly. I consider that this is necessary to give effect to the judgment of the Court of Appeal in Powney.

As the Master considered that exceptional circumstances must be shown, I conclude that the Master misdirected himself as to the law. It is therefore for me to exercise the court's discretion on the basis of the evidence before me. I regard the claimant's statement as unfortunately brief. That may well not be her personal fault. I think that it is right to understand her position as follows. She took steps to execute the judgment, but she could not find the defendant, who, as she heard, was working in Germany. She then had no further news of him until she met him in the autumn of last year. That is the plain implication of what she does, and does not say, in her statement. It is not contradicted by the defendant who has not relied on any evidence of his own.

Until recently the claimant was acting in person. It is possible that enquiries could have located the defendant wherever he was in Germany. It is also possible that they might not have done so. If he was located, the enforcement of the judgment in Germany would have required the defendant to instruct German lawyers. That could have been an intimidating prospect.

Looking at the defendant's position, the defendant has paid nothing against the judgment; he has done nothing to explain his position to the court; he has not suggested that he has suffered any particular prejudice. I must bear in mind that nearly ten years have passed since the judgment, also that there was a delay of some six months before the application under order 46, rule 2 was issued. I do not think though that the second point carries any real weight.

I regard the question of the proper exercise of the court's discretion in these circumstances as one of difficulty, in the sense that I find the factors are closely balanced. I conclude however that the defendant has demonstrated sufficiently that it is just that she be allowed to take further steps to recover what is due to her."

8. The judge therefore allowed the appeal and granted permission to issue the writ of execution.
9. The appeal by Mr Singh to this court is brought with the permission of Latham LJ. Mr Dermot Woolgar, for Mr Singh, submitted that Jack J was wrong to interfere with the exercise of discretion by the Master. He argued that the Master was right to look for something in the circumstances of the case to take it out of the general rule. He submitted that the court should strive for consistency between the approach in section 24 of the Limitation Act 1980, imposing a limitation period of six years for actions upon a judgment, and Order 46 rule 2(1)(a). He criticised the judge's exercise of discretion on the facts, pointing to the inadequacies in the explanation by Miss Patel of the delay, including her failure to give any explanation at all as to why it took her over six months, when she knew Mr Singh was in England, to seek permission to issue a writ of execution.
10. Mr John Crosfill, for Miss Patel, submitted that the court is given a general discretion, requiring a balancing exercise to be performed, when the court will consider the reasons for the delay and any prejudice to the debtor consequent on the delay, such as a change of position. He pointed out that Order 46 rule 2(1)(a) only applies once the six-year period expires. He relied on the reasoning of Lord Lloyd in Lowsley v Forbes [1999] 1 AC 329 at page 346 A-F that the intention of Parliament in passing the Limitation (Amendment) Act 1980, consolidated into the Limitation Act 1980, was to give effect to the recommendation of the Law Reform Committee in its report on Limitation of Actions (1977 Cmnd. 6923) to alter the then prevailing 12-year period for actions on a judgment to a discretionary regime after six years. He argued that it was artificial if concepts of limitation were reimposed on the exercise of the court's discretion. He further argued that this court could not properly interfere with the judge's exercise of discretion and with the weight which the judge attached to the various factors.
11. Order 46 rule 2(1)(a) has existed as a rule in much the same form for over 125 years. While the limitation period for bringing actions on a judgment has been brought down from 20 years to the present six-year period in section 24(1) of the 1980 Act, the six-year period in Order 46 rule 2 (1)(a) and its predecessors has remained constant, as has the complete absence of any express provisions stating in what circumstances the discretion should be exercised once the six-year period since the judgment has elapsed. As Mr Woolgar has pointed out, the recommendation of the Law Reform Committee has not been fully implemented. Not all forms of execution have been removed from the sphere of limitation, though there is the provision in Order 46 rule 2(1), as we have seen.
12. There are only two reported cases on the exercise of discretion to which we have been referred. First, in Powney, this court was considering whether the county court judge was right in October 1988 to refuse to issue or renew a writ for possession when, by a judgment, the mortgagee had become entitled to possession by the end of 1980 and had obtained a warrant for possession in December 1985 which the county court judge held to have been wrongly issued. Slade LJ, giving the judgment of the court (consisting of himself, Balcombe and Staughton LJJ) at page 361 had pointed to what was called a cardinal principle of procedural law, that is that no party should suffer unnecessarily from delay which is not his fault but rather a fault in the administration of justice. It had taken two years and ten months for the county court to determine an application to set aside a warrant for possession, and this court found it difficult to imagine a stronger case for exercising the court's discretion in favour of the judgment creditor by giving him leave to issue a fresh warrant.
13. The court then reviewed the county court judge's exercise of discretion, and said at page 363 A:

"It is, however, necessary to bear in mind that six years have elapsed since the 1980 order was made. The right to sue upon it as a judgment, for monetary relief, is time barred unless there has been part payment or an appropriate monetary acknowledgement. In many, perhaps most, cases this might be a powerful reason for refusing, as a matter of principle, leave to issue a fresh warrant for possession. That approach is supported by the judgment of Dillon LJ in BP Properties Ltd v Buckler [1987] 2 EGLR 168. But on the particular facts of this case, which we hope are exceptional, it would not be right to refuse leave as a matter of discretion on that ground."

This court went on to give leave.

14. The reference to the facts being exceptional was not expressed to be a condition of giving leave, but was this court's comment on those facts. However, it followed what I take to have been a statement by Slade LJ as to the general rule, that is to say that which applied in many, if not most, cases as a matter of principle, that the passage of six years would be a sufficient ground in itself for refusing permission.
15. It has been pointed out by Mr Woolgar, and is not disputed by Mr Crosfill, that this court's finding of support for that general rule in what Dillon LJ said in the BP case may rest on insecure grounds, because Dillon LJ, himself relying on a statement in the County Court Practice, may not have correctly interpreted what was said in the County Court Practice in force at the relevant time. But it is unnecessary to go into this point. In my judgment it does not undermine Slade's LJ's statement of what I have called the general rule.
16. The second case is Duer v Frazer [2001] 1 WLR 919. In that case the claimant had obtained judgment against the defendant in March 1982 in proceedings in Germany, and the judgment was registered in England four months later. The defendant was discovered by the claimant's inquiry agents to be living on a small Caribbean island, and the agents met the defendant in 1989. But only in 1997 did the defendant discover that the claimant was still seeking to pursue execution on the judgment. The claimant applied in 1999 to the court for permission to issue execution. That permission was granted at a without notice hearing but was subsequently discharged on the defendant's application. On appeal by the claimant, Evans-Lombe J dismissed the appeal. In his judgment he referred both to what Dillon LJ had said in the BP case and to what Slade LJ said in Powney, and at page 925, paragraph 25, Evans-Lombe J said this:

"It seems to me that these two passages from judgments in the Court of Appeal apply to govern the exercise of the discretion to permit the issue of execution after the expiry of six years under RSC Ord 46, r 2, and that they are support for the proposition that the court would not, in general, extend time beyond the six years save where it is demonstrably just to do so. The burden of demonstrating this should, in my judgment, rest on the judgment creditor. Each case must turn on its own facts but, in the absence of very special circumstances such as were present in National Westminster Bank plc v Powney [1991] Ch 339, the court will have regard to such matters as the explanation given by the judgment creditor for not issuing execution during the initial six-year period, or for any delay thereafter in applying to extend that period, and any prejudice which the judgment debtor may have been subject to as a result of such delay including, in particular, any change of position by him as a result which has occurred. The longer the period that has been allowed to lapse since the judgment the more likely it is that the court will find prejudice to the judgment debtor."

17. Evans-Lombe J concluded that the claimant had not made out a case for the exercise of the court's discretion in his favour.
18. In all the cases on the exercise of discretion after the expiry of six years including the present case at both levels below, it has been recognised that something more is needed to justify the exercise of discretion in favour of the judgment creditor who has allowed six years to elapse since judgment. Even Jack J was not content that it should merely be shown that it was just to give permission. He required Mr Evans-Lombe J's adverb, "demonstrably", to be added to the adjective "just" and gave the adverb the synonym, "plainly". That view taken by the judge runs counter to the submission of Mr Crosfill that what the court has to do is conduct a mere balancing exercise which is to be performed without any weighting against the judgment creditor because of the lapse of time.
19. To my mind, it is obvious that the court must start from the position that there has been the six-year passage of time which is now equal to the applicable limitation period if the judgment were sought to be enforced by a fresh action. The policy underlying section 24 must be that the judgment creditor has to get on with enforcing his judgment. Similarly there can be no issue of a writ of execution pursuant to Order 46 rule 2(1)(a) after six years without the court's permission.
20. I accept, as the Lowsley case dictates, that whether a writ of execution will be allowed to be issued is a procedural matter and that the intention was that the court should have a discretion. But it seems to me to be impossible to ignore the fact that, whereas in the six-year period the judgment creditor was entirely free to issue execution on his judgment in any way he chose, that freedom has been removed after the expiry of the period and it is left to the court to decide whether to allow the judgment creditor to proceed with one form of execution, the issuing of a writ of execution.
21. The policy of the rule seems to me to be that ordinarily after six years permission will not be given and that is underlined by the provisions of Order 46 rule 4(2), requiring the judgment creditor to explain his delay. In contrast there is no rule that the judgment debtor is to file evidence to state what prejudice, if any, he has suffered by the delay. In my judgment, therefore, consistently with what this court said in Powney, the court must start from the position that the lapse of six years may, and will ordinarily, in itself justify refusing the judgment creditor permission to issue the writ of execution, unless the judgment creditor can justify the granting of permission by showing that the circumstances of his or her case takes it out of the ordinary. That may be done by showing the presence of something in relation to the judgment creditor's own position, or, as Sir Anthony Evans suggested in the course of the argument, in relation to the judgment debtor's position. Thus the judgment creditor might be able to point, for example, to the fact that for many years the judgment debtor was thought to have no money and so was not worth powder and shot but that, on the judgment creditor winning the lottery or having some other change of financial fortune, it has become worthwhile for the judgment creditor to seek to pursue the judgment debtor.
22. Of course, since the coming into force of the Civil Procedure Rules the exercise of discretion is informed by the overriding objective of enabling the court to deal with cases justly. That goes without saying.
23. For my part, I am suspicious of glosses to the wording of the rules, which contain no express guidance or qualification. If there had been a misdirection in law for the Master to have applied a test of exceptional circumstances, I cannot see why it was not equally a misdirection in law for the judge to have applied the test of what is demonstrably just. But, in truth, what both the Master and the judge were doing was to consider whether there was something in the circumstances of the case which took it out of the general rule.
24. I regard it as unfortunate that the Master's judgment has been so poorly recorded, and for my part I am reluctant that too much weight should be attached to the particular wording which we find in the note of judgment. But when one has regard to the substance of the matter, in my judgment, for the reasons which I have given, Jack J was wrong to find a misdirection of law by the Master in looking for what were called "exceptional circumstances", which I take to mean that he was looking for the presence of something to take the case out of the ordinary rule.
25. However, even if that were wrong, the way the judge dealt with the facts seems to me to be, with all respect to him, open to serious criticism. It was for Miss Patel to justify her delay. I can understand that when she discovered Mr Singh had moved to Germany she regarded that as an obstacle to her proceeding on her writ of execution. The obvious thing for her to have done at that point would have been to go to an English solicitor to obtain help. The solicitor would perhaps have advised her to register her judgment in Germany as a signatory, like this country, to the Brussels Convention, and as to the steps that could be taken to discover Mr Singh's whereabouts in Germany. But, as Mr Crosfill frankly accepted, she appears to have done nothing at all once she discovered that Mr Singh was in Germany. The judge takes account of the fact that until recently Miss Patel was unrepresented, but she does not suggest in her witness statement that she could not afford to go to solicitors. She has had solicitors acting for her from at least as early as January this year. The judge suggested that German lawyers would need to be instructed, and that that could have been an intimidatory prospect. But the logical first step, as I have indicated, was to go to English solicitors, and that she never did. I would add that these days there are firms of English solicitors who have offices in Germany and German partners. Instead it is conceded that Miss Patel did nothing. She does not explain why, and the judge was merely speculating as to difficulties that there might have been for her through Mr Singh having gone to Germany.
26. But the inadequacies of Miss Patel's evidence do not stop there. She says in her witness statement that Mr Singh's residence is now known to her. That is apparently a reference to her knowledge in January of this year. She refers to a recent contact at a social function. She does not expressly link that knowledge with that contact. Nor, it would appear from the letter of 22nd October 2001, could she do so. That letter refers to numerous occasions, including a social function, when Mr Singh was, it is claimed, harassed or threatened by Miss Patel's mother and other members of her family. Nowhere does Miss Patel expressly state when she first knew, or how she knew, that Mr Singh was back in this country. We know that over six months elapsed between the date of the letter and the making of the application which came before the Master, and that delay is wholly unexplained.
27. In my judgment, the judge could not properly treat as insubstantial the failure to comply with the obligation in the rules to explain the delay. In my opinion, the inadequate witness statement of Miss Patel in itself disentitled her from obtaining permission from the Master, as he explained when refusing permission to appeal.
28. For these reasons, I would respectfully differ from the conclusion of the judge. I would allow the appeal, set aside the order of the judge and restore the Master's order.
29. SIR ANTHONY EVANS: I agree.
Order: Appeal allowed with costs.