Brake & Anor v Guy & Ors [2022] EWHC 1746 (Ch)

Charlotte Pope-Williams for the Third Party

HHJ Paul Matthews :

Introduction

• This is my judgment on the further consideration of a third-party debt order (“TPDO”) made on an interim basis by Lewison LJ on 4 April 2022. The order followed the dismissal by the Court of Appeal on 2 March 2022 of an appeal by the claimants/appellants (“the Brakes”) against a decision of my own at the trial of this claim: see [2022] EWCA Civ 235 (appeal); [2021] EWHC 671 (Ch) (trial). Following the appeal, the Court of Appeal ordered that the Brakes pay the costs of the appeal of the defendants/respondents (“the Guy Parties”), and ordered an interim payment on account of £70,000 by 4 PM on 16 March 2022. That sum was not paid on that date, nor, so far as I understand, thereafter.
• Subsequently, the Guy Parties made an application for a TPDO by notice dated 17 March 2022, although the notice was sealed by the Court of Appeal only on 28 March 2022. In the notice the third party was stated to be within England and Wales, and to owe money to one of the Brakes, namely the second claimant Andrew Brake. The third party was identified as “James Hay Partnership”, of an address in Salisbury.
• In support of the application the Guy Parties said this:

“The judgment creditor’s legal representatives have received confirmation by email from Mrs Brake on behalf of the judgment debtor dated 26 September 2021 that James Hay Partnership holds pension … in the name and for the benefit of Mr Andrew Brake …

The judgment creditor’s legal representatives are aware that the judgment debtor is eligible to drawdown the pension and has previously done so in respect of his tax-free allowance, as confirmed by Mrs Brake on 14 March 2022 … The value of the pension following the drawdown of Pension Commencement Lump Sum was £89,522.89 (as at September 2021).”

• As I say, Lewison LJ was invited to and did make the interim TPDO on 4 April 2022. He directed that the further consideration of the application should be at a hearing listed before me, not before 28 April 2022. The interim TPDO was served on the James Hay Partnership by email sent in the afternoon of 4 April 2022, and the application notice for the TPDO and documents in support were also served on the James Hay Partnership by email within half an hour thereafter. Receipt was acknowledged by email, expressly on behalf of the “James Hay Partnership”, by email on the morning of 5 April 2022.

Relevant procedural rules

• Third-party debt orders (formerly known as garnishee orders) are governed by CPR Part 72. CPR rule 72.2 relevantly provides that:

“(1) Upon the application of a judgment creditor, the court may make an order (a ‘final third party debt order’) requiring a third party to pay to the judgment creditor –

(a) the amount of any debt due or accruing due to the judgment debtor from the third party; or

(b) so much of that debt as is sufficient to satisfy the judgment debt and the judgment creditor’s costs of the application.

(2) The court will not make an order under paragraph 1 without first making an order (an ‘interim third party debt order’) as provided by rule 72.4(2).”

• CPR rule 72.6(4) provides that:

“Any third party other than a bank or building society served with an interim third party debt order must notify the court and the judgment creditor in writing within 7 days of being served with the order, if he claims –

(a) not to owe any money to the judgment debtor; or

(b) to owe less than the amount specified in the order.”

• CPR rule 72.8 relevantly provides that:

“(1) If the judgment debtor or the third party objects to the court making a final third party debt order, he must file and serve written evidence stating the grounds for his objections.

[ … ]

(4) Written evidence under paragraphs (1), (2) or (3) must be filed and served on each other party as soon as possible, and in any event not less than 3 days before the hearing.”

Procedural matters

First listed hearing for further consideration

• No notice was filed by the third party under CPR rule 72.6(4) within the seven days of service of the interim order. Consistently with the order of Lewison LJ, on 7 April 2022 I directed that the hearing for further consideration of the application for a TPDO should take place before me at 2 PM on 29 April 2022. Since the expression “days” in the expression “not less than three days” is to be construed as “clear days”, excluding (a) the day on which the period begins and (b) the day on which the hearing takes place (see CPR rule 2.8(2), (3)), that would mean that any evidence under CPR rule 72.8(1) would have to be filed by 25 April 2022. No such evidence was filed by that date.

Second listed hearing for further consideration

• As it happens, the hearing listed for 29 April 2022 did not go ahead. In the light of submissions made to me by the parties, on 27 April 2022 (when I was hearing another aspect of the litigation) I vacated that hearing and relisted it for 10 May 2022, with a time estimate of 30 minutes. At that stage there was no indication that there would be any argument or other submissions made on behalf of the third party, except so far as was necessary to ensure that the third party was not ordered to pay money which it did not have or incur liabilities which it could not discharge. As it was put by Ms Chatten, in-house counsel for the third party, in an email to the court on 26 April 2022,

“James Hay is essentially a neutral third party in this matter, and so does not either support or oppose the third party debt order”.

• On 4 May 2022 and on 5 May 2022 the Guy Parties’ solicitors wrote to Ms Chatten, asking her to confirm that the third party was adopting a neutral position, and that its only concern was not to incur any liability. On 6 May 2022 Ms Chatten replied to these enquiries, stating that:

“James Hay’s position will be set out in a position statement which I understand will be exchanged with the Parties on 9 May 2022. James Hay is neutral on the merits of the underlying disputes to the application. That neutrality is not to say that James Hay is passive in its approach to the Third Party Debt Order application, however, and James Hay must be sure that the application has been brought on the correct footing and that any final order that might be made would be properly enforceable.”

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