Enforcement mcqS Flashcards
Question 1
The claimant has obtained judgment for £147,000 against the defendant. The defendant
disputes that he has the means to pay the judgment debt and points out that he lives in
rented accommodation and has no regular income. The claimant has received information
from a friend that the defendant has significant assets including properties, which he owns
in a nearby town.
Which of the following best describes the action that the claimant should take?
A The claimant should write to the defendant requesting that he provide details of his
income, expenses, assets and liabilities.
B The claimant should instruct an enquiry agent to seek further details about the
defendant’s finances.
C The claimant should apply for an order to obtain information from the defendant
relying upon the court officer to ask standard questions.
D The claimant should apply for an order to obtain information from the defendant and
submit additional questions.
E The claimant should instruct an enquiry agent to seek further details about the
defendant’s finances and then apply to the court for an order to obtain information,
including additional questions.
Answer
Option E is correct. Although the claimant could write to the defendant asking for details of his
finances, given the debtor has already stated he does not have the means to pay, it is unlikely
he will respond properly – hence, option A is wrong. The claimant should consider applying
to the court for an order to obtain information as there are sanctions if the defendant fails
to comply. However, as the defendant appears to be hiding assets, he may not answer the
questions fully or truthfully; thus, although options C and D are correct, they may not be the
most effective approach.
The best way forward is option E because the claimant will be able to find out specific details
about the defendant’s finances, enabling them to tailor questions appropriately when they
apply for an order to obtain information. As the judgment is for a significant sum of money, it
would be worth the claimant taking both steps before proceeding to enforcement. Option B is
not wrong, but is not as complete as option E.
Question 2
A creditor wishes to enforce their judgment against the debtor (a limited company). After
carrying out enquiries, the creditor establishes that the debtor has a number of assets. They
own a factory premises and the plant and machinery, but rent offices nearby. The debtor
has a bank account that is overdrawn, but a significant amount of money is owed by a
customer for a trade debt. An expensive motor car driven by the managing director was
recently purchased by her for her own personal use.
Which of the assets could the creditor enforce against?
A The creditor could enforce against the factory premises, the plant and machinery and
the trade debt.
B The creditor could enforce against the factory premises, the trade debt and the
motor car.
C The creditor could enforce against the plant and machinery, the rented offices and the
overdrawn bank account.
D The creditor could enforce against the plant and machinery, the trade debt and the
motor car.
E The creditor could enforce against the factory premises, the plant and machinery, the
trade debt and the motor car.
Answer
Option A is correct. The debtor owns the factory premises and the plant and machinery
so both of these assets are available for enforcement, as is the trade debt because
these monies are owed to the debtor. However, the debtor only rents the offices, so these
cannot be enforced against and nor can the motor car as it is owned by the managing
director personally. There are no monies in the overdrawn bank account so this asset is not
available to pay the debt either. All of the other answers either include assets that cannot
be enforced against or miss those that can.
Question 3
The judgment debtor, who is self- employed, has the following assets: a house, which she
owns but which is subject to a mortgage equivalent to the value, a warehouse, which she
rents and where she stores valuable stock that she purchased for her business, and a
building society account in which she has £100.
Which asset is likely to prove the most effective for the creditor to enforce against?
A The creditor should apply for a charging order against the house.
B The creditor should apply for a taking control of goods order for the warehouse.
C The creditor should apply for an attachment of earnings order.
D The creditor should apply for a taking control of goods order for the stock.
E The creditor should apply for a third party debt order over the building society account.
Answer
Option D is correct as the stock is described as ‘valuable’. Although the creditor could apply
for a charging order over the house, the facts state that there is no equity in the property
(option A, therefore, is not the best answer). The warehouse is rented so cannot be enforced
against – hence, option B is wrong.
Option C is wrong because the creditor is self- employed and attachment of earnings orders
only apply to those who are employed. Option E is not the best answer as, while a third party
debt order could be obtained over the building society account, the small amount of money
means that it is not the most effective asset to enforce against.
A limited company (‘the Claimant’) supplies bike stands at a cost of £15,000 including VAT to a sole trader (‘the Defendant’) who sells electric bikes. The Defendant is VAT registered. The Defendant fails to pay the amount due.
The Claimant instructs a solicitor who obtains a money judgment in the County Court for the full sum plus interest. The Defendant does not pay the judgment debt within 14 days as ordered by the court.
The Claimant accurately informs the solicitor that the Defendant rents a very expensive apartment, her business is doing well and she also leases an industrial unit where she sells and stores all of her stock. She also pays money monthly into a bank account in the joint names of her and her spouse which has a current balance of £30,000.
What is the best method of enforcing the judgment to recover some or all of the judgment debt?
A. A warrant of control.
B. An attachment of earnings order.
C. A charging order over the apartment.
D. A third party debt order.
E. A writ of control.
E - A writ of control.
8
The claimant in a partnership dispute is trying to enforce an unpaid judgment in the sum of £8,200 against the defendant, his former business partner.
The defendant recently lost his job as a tax adviser and now works in his father’s accountancy practice earning approximately £800 per month. The defendant is the sole owner of his own home with approximately £20,000 of equity in it, but owns no other property. He has £9,000 in a bank account, also in his sole name. He leases a car for £400 a month which would sell for approximately £12,000 on the open market. The claimant wants to force payment of the judgment sum in the near future.
Which one of the following is the most appropriate method of enforcement?
Select one alternative:
Apply for an attachment of earnings order over the money held by the bank.
Apply for a charging order over the defendant’s house.
Apply for a third party debt order over the defendant’s bank account.
Apply for an attachment to earnings order over the defendant’s earnings from his father’s practice.
Apply to take control of the defendant’s car.
Apply for a third party debt order over the defendant’s bank account.
Applying for a third party debt order over the defendant’s bank account is the best advice as it is the most suitable order on these facts. A bank account in credit is a debt due by the bank to its customer. There is enough in the account to meet the judgment debt. Obtaining a third party debt order in respect of that sum would realise the money owed securely and quickly (as it is paid directly to the judgment creditor) and would be fairly straightforward given that the third party is reliable. See generally CPR 72. The other options are wrong or less attractive. Money in the bank is not secured using an attachment of earnings order – this is simply the wrong method. Applying for a charging order is possible, but it unlikely to lead to payment in the near future – it certainly does not force this (payment is not forced until the property is sold). Applying for an attachment of earnings order is possible, but it would take a long time for the judgment sum to be paid, and the court may well refuse to order much to be paid this way. It is not possible to take effective control over the car given that it is only rented by the defendant, not owned.
Bill and Ben have been involved in a breach of contract dispute over money owed by Ben for non-payment of sums due and owing in respect of a consignment of rare collector’s magazines delivered by Bill in accordance with a contract for sale of goods. Ben had argued that the magazines were not originals. However, after a short trial, District Judge Brown found that Ben was at fault and gave judgment for Bill in the amount of £3000, to be paid within 21 days.
Ben has not paid anything. Ben had been ordered to attend court and provide information about his means following an application by Bill. As a result, Bill knows that Ben used to be a lawyer but he recently decided to have a lifestyle change. He is now a self-employed gardener and is trying to set up his own business. He earns approximately £600 per month. Ben owns his own house (valued at approximately £1 million), having paid off his mortgage. He has approximately £5,000 in a sole bank account saved from when he was working as a lawyer. Bill also knows that Ben has a van and tools which he uses for work but no other assets of note.
What would you advise Bill is the MOST APPROPRIATE method of enforcement from the following options?
Bill would be best advised to apply for a third party debt order over Ben’s bank account.
Bill would be best advised to apply for an attachment to earnings order over Ben’s income.
Bill would be best advised to apply for a warrant of control.
Apply for a charging order over Ben’s house.
Bill would be best advised to apply for a third party debt order over Ben’s bank account.
Correct. This is the BEST advice as it is the most suitable order on these facts. A bank account in credit is a debt due by the bank to its customer. Obtaining a third party debt order in respect of that sum would realise the money owed securely (as it is paid directly to the judgment creditor) and would be fairly straightforward given that the third party is reliable. For further information, see CPR Rules 72.1 – 72.3 and the editorial commentary at paragraph 72.0.1 of the White Book. It would not be the best advice to apply for a warrant of control because the assets Ben has are exempt items and we are told he has no other assets of note. A charging order is possible. However, Bill would have to enforce the charge by bringing sale proceedings in order to realise the money, which proceedings can be lengthy and complicated. In addition, the difference between the value of the house and the amount of the judgment debt is vast (debt of £3000 but house value of £1 million) and so the court is unlikely to make any subsequent sale order. An attachment of earnings order cannot be made in respect of self-employed income.
A claimant has obtained judgment against Diana for £250,000 in High Court proceedings. Diana is the sole owner of a house in which there is £400,000 of equity. Diana is about to start a new job in which she earns £120,000 a year. She has two bank accounts in her sole name: the first account is at FirstCredit Bank. It is currently overdrawn. The second account is at HappyMoney Bank and currently has a credit balance of £60,000. As part of her move to the new job, she is soon to sell her house. You have been asked to advise the judgment creditor on enforcement. Which ONE of the following is the BEST ADVICE to give the judgment creditor?
The claimant should apply for a third party debt order over the FirstCredit account.
The claimant should apply for an attachment of earnings order over Diana’s income from her new job.
The claimant should apply for an attachment of earnings order over the funds in the account at HappyMoney Bank.
The claimant should obtain and register a charging order as soon as possible over Diana’s house.
The claimant should obtain and register a charging order as soon as possible over Diana’s house.
This is correct and the best advice. If a charging order can be obtained quickly and registered promptly when the house is sold it will quickly realise a sum sufficient to meet the judgment debt in full. An attachment of earnings order may well result in payments to the claimant by instalment. However, given the amount of the judgment debt, it is likely that it would take a long time for such instalments to satisfy the full judgment debt. In addition, the proceedings would have to be transferred from the High Court to the County Court in order to apply for the attachment of earnings order. Further, an attachment of earnings cannot be made over funds in a bank account, even if the funds are savings from earnings.
A third party debt order is possible but is not the best advice. The judgment creditor could obtain a third party debt order in theory but there are no funds in the FirstCredit account.
