What to do - enforcement

[efpom]

Claimant issued a claim via MCOL

Defendant – a local authority, did not, in fact, file either a defence or an Acknowledgement of Service and a judgment issued on xx^th October 2023, whereby the Local Authority was Ordered to pay £x,xxx.xx forthwith.

It chose not to pay that sum forthwith, which resulted in an application to the High Court to enforce payment which was made on xx^th November 2023 for a writ of control.

The Local Authority has today sent an email saying that it is sending a cheque for the Judgment amount only “"settling the matters you raised in that claim".”

Obviously, in addition to post judgment interest at 8% p.a [Judgments Debts
(Rate of Interest) Order 1993], the claimant has retained bailiffs to apply for a High Court writ of control.

The question is: What is the claimant to do with this cheque?
a) Send it back to the defendant, with a letter saying something like – "This is not the amount you now owe".
b) Write to the defendant saying something along the lines of “"I will bank this cheques, provided you give a written undertaking that it is to be regarded as a partial payment only”."

The problem is that the bailiff costs are unknown yet & the claimant is concerned that the bailiffs might make the claimant liable for its fees.

What to do?

[R0b]

My immediate thoughts would be to plump for option B but I would not be asking the LA for an undertaking, rather I would be stipulating that the cheque would be accepted as part payment only, on the basis that the LA failed to comply with the judgment order, namely payment forthwith i.e. immediately and so you started enforcement proceedings. Explain the cost of the remaining balance they owe you (presumably the fee for transferring up to the HC) and you should comply with Practice Direction 70A, paragraph 7.1 - but see below my additional points on costs.

For some reason, I foresee some possible hurdles coming your way.

First issue is the notification to the court or the HCEO that you have received part payment of the debt. According to para. 7.1 it says you must immediately notify when the judgment debt has been paid or part paid. The question is for your case, when is payment deemed to have been made? I'm sure there is case law out there but I would take the assumption payment is deemed made when the funds are in your bank account and the cheque has cleared. Up until that point, I don't think there is an obligation to notify since you have not received payment, only a notice of an intention to receive payment. The LA could change its tune during that period and seek to appeal or make some other application, cancel the cheque or when you present the cheque there could be an issue with it.

If or when it comes to notifying the court, I suspect you may need to craft your notice somewhat carefully because if you tell them they have only part-paid the debt, mainly the judgment amount on the claim form, the court staff may see that as payment being fully received and stop the process for the issuing of the writ. I wonder if it might be best to spell it out to them in a way that you still want to the writ to be issued due to payment not being made in full.

Something along the lines of:

the the total judgment debt has been part-paid in the amount of £XXXX.XX however, the debtor has failed to pay the post-judgment interest at 8% per annum in accordance with the Judgments Debts (Rate of Interest) Order 1993. The interest to date amounts to £XXX.XX. The debtor has also failed to pay the court fee for the writ of control in the sum of £XXX.XX and remains outstanding. You therefore require the writ to be issued/enforced.

The above may need adjusting if the writ has been issued before the cheque is received and cleared in your bank account. That also leads me on to another point of costs, which was recently updated in October this year. Part 45 says you are entitled to fixed costs where a writ has been issued (rule 45.23) and then refers you to Table 7 under PD 45 as well as the court fee (rule 45.16(4)). Have you factored this in as well?

Other issues may be that the LA raises the point that it is not obliged to pay the additional costs for enforcement because you didn't allow enough time for them to respond to the order. Therefore any response might rest on whether or not you allowed sufficient time notwithstanding forthwith duty. Again, not sure if there is any case law that might have addressed this point but certainly I know that forthwith means immediately. Sending a cheque which will take a few days to process and issue out to you via post and then for you to go to the bank and present it for payment which takes a further 5 days or however long would be arguable that they have not complied forthwith whereas asking for your bank account details and making payment the same day they received the order would likely be considered forthwith (depending on the time of day it was received).

You could try to make the analogy with a court case I came across just skimming for some answers where the High Court said that a payment of an arbitration award contrary to the payment instructions does not discharge the liability of the debtor (Razcom CI v Barry Callebaut Sourcing AG [2010] EWHC 2598).

No doubt there are other potential issues I've not thought about yet.

[efpom]

Hello R0b,

Many thanks for your erudite comments - much obliged. I am still scratching my head over how to handle this - the cheque has not yet arrived.

[R0b]

Whatever you decide, I think you should probably act sooner than later in terms of your response. I don't think there is any right or wrong way to handle this but there may be advantages/disadvantages of rejecting the cheque entirely or accepting it as part payment.

Do you have any particular concerns for choosing one option over the other?

[efpom]

To answer your question - I am troubled that a misstep at this stage could result in the claimant being faced with an invoice addressed to her by the Bailiff firm for its charges, so I am minded to advise the claimant not to bank the impending cheque, but return it and direct the Local Authority to pay what it now owes directly to the Bailiff firm.

I realise that I am asking for guidance, in circumstances where the advisor(s) are not in possession of the unredacted correspondence. Having said that I am minded to advise the claimant to write something along the following lines:
>>>>>>>
I refer to your email of 4^th December 2023, attaching your letter dd 1^st December 2023.

The court judgment in case ref xxxxxxxx Ordered - You must pay the claimant the total of £x,xxx.xx forthwith

That judgment issued on xx October 2023.

You chose not to pay the claimant forthwith.

In consequence, a month later, to enforce payment the claimant was constrained to retain Bailiffs who applied to the High Court on 27^th November 2023 for a writ of control.

If you now wish to settle the matter, you must contact the above firm, quoting the above case reference.

Turning to other matters you raise, in your response of xxth September 2023 to the Letter before Claim, you made the following statement. "“It was agreed that when you signed the tenancy for zzzz with effect from xx/10/2022, the property did not meet the Council’s Lettings Standard..” "

It follows that because the property did not meet your Lettings Standard, you were not placed to offer a Tenancy to anyone. Therefore no Tenancy Agreement came into existence between you and the claimant.

As no Tenancy Agreement existed, there is no tenancy to terminate. In consequence the paragraphs in your letter immediately following your statement "“Please find enclosed cheque to that full amount [the amount stated in the Order ] settling the matters you raised in that claim”", fall away.


Your response to the Letter before Claim, shorn of its verbiage, admitted the principle of the prospective claim and made no objection to the quantum of the prospective claim but also stated “"However, I would not like such a payment to complicate or compromise any future legal action you may be intending to take".”

That statement was rightly taken to mean that you were not prepared to settle the matter until forced to. The claim therefore issued on xth October 2023 and the matter is now at the enforcement stage.

I enclose the cheque you sent.
>>>>>>>>

[The council is attempting to fix the claimant with liability for the dwelling from 11 Dec 23 - the claimant, who is 73, had to make arrangements to live elsewhere from October 22 to date.]

[des8]

Regarding acceptance of cheque as partial settlement of debt :
Day v McLea (1889) 22 QB 610,
Stour Valley Builders v Stuart [2003] T.C.L.R. 8 (21 December 1992)

Conclusion is that keeping or cashing the cheque is not, necessarily satisfaction of the debt, but it is a question of fact on what terms the cheque was kept/cashed.
So do not delay informing LA the debt is not fully settled


NB should have read whole thread before posting above, but basically cheque recipient should tell LA promptly that the cheque does not clear the debt completely and is only accepted as part payment.

[R0b]

In consequence, a month later, to enforce payment the claimant was constrained to retain Bailiffs who applied to the High Court on 27^th November 2023 for a writ of control.

See nothing wrong with the response but just a comment on the sentence above, I would probably make it clear that further costs have been incurred to which the claimant is rightfully entitled to recover as well as those additional costs entitled to under Table 7 of Part 45. If some costs are not yet known then I would probably also make that clear and maybe suggest they will become clear once the writ has been issued.

Seems like the LA have either sat on it for a month and only just got round to dealing with the judgment or, given the timing of taking enforcement action and where the claimant is at now, it may be that the LA received notification of the transfer to the HC under CPR 83.19(3) which has then prompted them to respond in the way that they have, who knows.

[efpom]

Many thanks R0b & DES8 (Do you both never sleep!)


I think the way to go may be something along the lines as follows:

draw attention to the warning on the face of the Order viz:
"Warning
If you ignore this order your goods may be removed and sold, or other enforcement proceedings may be taken against you. If this happens further costs will be
added..."



>>>>>>>>Insert
You are not entitled to impose the condition that your cheque in the amount on the face of the Order settles the matter it does not. It is a partial payment only.
See: Day v McLea (1889) 22 QB 610 and the Court of Appeal judgment in Stour Valley Builders v Stuart [2003] T.C.L.R. 8 (21 December 1992)

For good order, and to avoid complicating the matter [Council] is exhorted to contact DCBL quoting the above claim number to discover how much it now actually owes and pay that sum to DCBL and do so within 7 days.

If I do not hear from DCBL that this has occurred, I will then bank your cheque, notify the court as required by court rules that you have made a partial payment and enforcement will continue to extract the remainder of the amount due from you.
>>>>>>>
The senior officer of the council has been winging this saga for over a year and it is quite clear from the extensive correspondence has not troubled to ever take legal advice from the outsourced council's legal team.

[efpom]

Update and (hopefully) closure!

Re the contract between the claimant and DCBL cl 9 says:
----
9. If a Client has direct contact with the judgment debtor or the debtor’s representative (for example, a debt adviser), the Client must redirect the person to the Company and notify Direct Collection Bailiffs Limited, Direct House, Greenwood Drive, Manor Park, Runcorn, Cheshire, WA7 1UG of this immediately. This is necessary to maintain clear lines of communication, avoid confusion and ensure action is carried out correctly and appropriately. Furthermore, if a Client receives payment or part-payment direct from or on behalf of the debtor, the Client should notify the Company immediately and forward the payment within 24 hours. This is also to maintain clear lines of communication and to avoid the mutual embarrassment caused by enforcement action on a debt already paid. Failure to comply with this condition may render the Client liable for the Company’s full fees, costs and charges incurred by unnecessary or abortive enforcement action taken in good faith.
----

Given that, the claimant has decided that the safest course is not to bank the cheque because of the risk of it being determined later that by doing so she had, in fact, settled the matter in the judgment sum only.

The claimant therefore wrote as follows - sent earlier this afternoon to the Defendant.

----
3. One of those consequences is that one month after the Order issued – payable
forthwith, (CLAIMANT) was constrained to transfer the matter to the High Court aimed at compelling (DEFENDANT) to comply with it. (DEFENDANT is liable for all of the costs
associated with that.

4. (CLAIMANT)is in no doubt it was (DEFENDANT)’s receipt of the notice pursuant to CPR 83.19(3) of the transfer to the High Court which prompted (DEFENDANT) to try to avoid those consequences by making its offer to (CLAIMANT) to settle, contained in its letter dd 1^st December 2023 attached to its email of 4th December 2023 in the amount of the judgment sum only.

5. That offer is hereby rejected. (DEFENDANT)’s cheque if and when it comes into (CLAIMANT’s) possession will be returned to it as soon as is reasonably practicable thereafter.

6. If (DEFENDANT) now wishes settle the matter it is directed to contact the High Court
Enforcement Officer - Direct Collection Bailiffs Ltd, - DCBL whose registered
office address is; Direct House Greenwood Drive, Manor Park, Runcorn,
Cheshire, WA7 1UG - Tel: 0203 434 0423, quoting reference xxxxxxxxxx
7. In future, (DEFENDANT), is directed to contact DCBL and not (CLAIMANT).
----

DCBL has been notified of that contact.

The claimant is an elderly lady with cognitive and linguistic difficulties - English is her 4th Language, so I have drafted the response, and explained it to her. As it happens, I have some ability in her 2nd language and in this saga I am acting pro bono and rightly so - over 40 years ago now, this lady saved my life.

Everything is paid on this Earth.