Max Twivy successfully acted for the Claimant in an application for a final charging order arising out of the enforcement of an adjudication decision and for costs outside the applicable fixed costs regime in Blacknest Gate Ltd v Seymour Realty Ltd  9 WLUK 313 (TCC).
The defendant judgment debtor was a company registered in the British Virgin Islands which had been engaged to complete the development of a property in London. The judgment debt arose from a summary judgment in the TCC dated 3 June 2020 enforcing an adjudication decision. The Defendant had failed to satisfy the judgment debt, and an interim charging order had been made over land owned by the Defendant (the “Property”), which the Claimant applied to make final.
The Court has a discretion as to whether to continue a charging order and it had to look at all the circumstances, including whether any other creditor would be unduly prejudiced by the making of the order. “Undue” prejudice means prejudice over and above the prejudice that other creditors will inevitably suffer when a charging order is granted in favour of one creditor, and requires some “sharp” conduct on behalf of the judgment creditor or some other exceptional circumstances (British Arab Commercial Bank Plc v Ahmad Hamad Algosaibi and Brothers Co  2 C.L.C. 736 applied).
The Defendant and other parties with a known interest in the Property – a mortgagee and tenants – had not filed any objections. The Claimant had received notice that purported Law of Property Act Receivers had been appointed under a purported charge held by a purported (second) mortgagee of the Property. However, that purported charge had not been registered on the Title Register, and the purported Receivers had acknowledged receipt of notice of the instant application without putting forward any objections to the making of a charging order. There was no evidence that any other creditor of the Defendant would be unduly prejudiced. Accordingly, the charging order would be made final.
Where a final charging order is made, fixed costs under CPR Pt 45 are engaged. The court had a discretion to depart from awarding fixed costs, Amber Construction Services Ltd v London Interspace HG Ltd  B.L.R. 74 applied. It was appropriate to depart from fixed costs in the instant case, as: these were not straightforward debt collection proceedings where the use of legal representatives were unnecessary; the Claimant had to serve the Defendant outside the jurisdiction; and the Defendant had failed to engage in any stage of the proceedings and had ignored the application. It would be unjust to limit the claimant to fixed costs, and incurred costs should be awarded. It was not, however, appropriate to award costs on the indemnity basis: the Defendant’s conduct had not been unreasonable to a high degree.
Max Twivy (instructed by Mishcon de Reya LLP) for the Claimant.
24 September 2020