High Court Rules on Enforceability of Interim Costs Order via Charging Order and Order for Sale
Introduction
In the High Court case of Kamlesh Patel & Ors v Isabelle Michelle Paule Awan & Anor, Master Kaye delivered a judgment concerning the enforcement of an interim costs order by way of a charging order and subsequent order for sale. The claim rested on whether the interim payment, set out in a prior order, was legally ‘due’ and therefore enforceable by sale of the charged property. The case delved into the nuances of enforcing interim payments, as well as the exercise of the court’s discretion in ordering a sale of a property to satisfy a debt.
Key Facts
Claimants, referred to as the Patels, sought an order for sale against the property of Isabelle Michelle Paule Awan, the defendant, based on a prior charging order. The initial charging order was to secure an unpaid interim payment ordered in underlying proceedings where the first defendant was unsuccessful. The Patels argued that the interim payment due under the prior court order was enforceable by selling the defendant’s property, which was the subject of the charging order.
The defendants, Mr. and Mrs. Awan, accepted their breach of the order but contested enforceability claiming the interim payment was not yet ‘due’ as it was contingent on a detailed costs assessment. They also opposed the order for sale on various discretionary factors, including the family’s personal circumstances.
Legal Principles
The court addressed several legal principles:
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Nature of Interim Payments on Account of Costs: The court held that an interim payment on account of costs constitutes a final judicial determination of a sum payable and due, enforceable as any other money judgment under CPR 70.2. The liability to pay such costs arises upon the adverse costs order, and the sum becomes due on the date specified within the order.
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Enforceability of Interim Payments: The judgment clarified that interim payments on account of costs are enforceable through a charging order as per CPR 73 and are not contingent liabilities dependent on the outcome of detailed cost assessments.
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Charging Orders Act 1979: Master Kaye found no inconsistency with section 1 of the Charging Orders Act, concluding that an interim payment order falls within the scope of “any money due” and that a charging order could be used to secure and enforce such payment.
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Discretion in Ordering Sale of Property: The court exercised discretion considering the balance of parties’ interests, as per the principles outlined in Close Invoice Finance Limited v Pile [2008] EWHC 1580. Factors like the property’s potential sale value, the ability of the defendant to make alternative living arrangements, and the delay by the Patels in progressing with the detailed assessment were weighed against the defendant’s breach of payment obligations.
Outcomes
The court ruled that:
- The interim payment order made in underlying proceedings was enforceable by way of a charging order despite it being on account before a detailed costs assessment.
- An order for sale was granted, but with a three-month period allowed for Mrs. Awan to pay the sums due or vacate the property, considering the parties’ interests and circumstances.
Conclusion
Master Kaye’s decision in Kamlesh Patel & Ors v Isabelle Michelle Paule Awan & Anor affirms the enforceable nature of interim payments on account of costs as due sums. It illustrates that such payments are not contingent liabilities, and may be secured and enforced through charging orders. Moreover, the court’s exercise of discretion in ordering the sale of a property underscores the need to balance the claimant’s right to satisfy debts against the defendant’s personal circumstances and equitable considerations. The case represents a clear legal approach to interpreting payment obligations and enforcing court orders within the framework of English Civil Procedure Rules.