unusual for a debtor to ask for additional time to pay outstanding
finance instalments, or any judgment that might have been obtained
against him. It is a commercial decision for the lender as to
whether, and to what extent, any such accommodation should be made.
The decision in Amsalem v Raivid and Raivid shows that the court
has very limited discretion to get involved where such a request is
made after a judgment has been obtained.
and costs award against the defendants. As a result the sum of just
over £300,000 was due to be paid by the defendants within 14 days
of the judgment.
The defendants applied for the normal 14 day
payment rule to be extended and sought further time to pay by
instalments. The defendants submitted evidence to support their
application.
The evidence clearly showed that their net capital
worth was virtually nil (without taking account of the judgment
obtained against them), that their properties were fully mortgaged
with little or no equity and that their expenditure matched or
exceeded their income. It was clear they had little available to
satisfy or even go some way to satisfying the judgment.
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Under the Civil Procedure Rules (CPR) (Part 70),
the court does not automatically enforce its judgments nor decide
how they should be enforced. It is up to the judgment creditor to
decide how best to enforce its judgment.
However, the court does have discretion under CPR
40.11 to either shorten or extend the 14 day period for payment,
and to order payment by instalments. It will only exercise that
discretion in exceptional cases.
In relation to a request for payment of a judgment
by instalments, the court has to consider whether there is a
realistic prospect that substantial sums could be offered and paid
within a few weeks or months. If there is no such prospect, the
discretion cannot be exercised. In this case, there was no
realistic prospect of full payment and so no grounds upon which to
exercise the discretion.
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By GlobalDataIn the current economic climate, the
reason for making a request to pay any judgment by instalments will
often be the very reason why the court cannot exercise its limited
power to make such an order. Creditors should always bear in mind
the array of methods of enforcement open to them, such as charging
orders, attachment of earnings, third party debt orders, and other
writs of execution.
Where the judgment is over £750, bankruptcy or
winding-up proceedings where the debtor is a company is also a
possibility. Sometimes, the mere threat of either of these steps is
sufficient to ensure that payment in full is made, or an acceptable
accommodation is reached.
Greg
Standing, partner in Wragge & Co LLP’s Finance,
Insolvency, Recoveries and Sales team
