Amsalem (t/a MRE Building Contractors) v Raivid & Anor

On 9 December 2008 I gave judgment in the substantive trial between these parties. I gave judgment in favour of the claimant in the sum of £193,000 odd plus interest plus costs. So far as costs were concerned, I ordered that there should be an interim payment on account for £100,000. The consequence of that, in the ordinary course of events, is that something just over £300,000 would be payable by the defendants within 14 days unless the court otherwise orders.

At the time that I handed down the judgment, Mr. Butler, on instructions from the defendants, asked, in effect, for the 14 day period, which would ordinarily apply for payment on a money judgment, to be extended. He did that on instructions because he said his clients simply were unable to pay. I refused at that stage to extend the period on the basis that it would be inappropriate, in any event without clear evidence, to consider doing so. So I made the order on judgment that the defendants should have permission to apply. I made it clear that if that application was to be made it would be better made before the expiry of the 14 day period. To be fair to the defendants, they have, in a timely and efficient manner, made that application well within the 14 day period.

They have submitted witness statements which reveal, in financial terms, a very dire and sorry picture. Although Mr. Raivid is still employed as a financial services adviser, his income has gone down, he says in his witness statement, over the last few months given the economic conditions prevailing. Between them the defendants, in their witness statements, make it clear that their net capital worth is virtually nil (and this takes no account of the judgment sums). They have three properties, all of which they say are mortgaged or charged up to the hilt or beyond; there is on two of the properties, in effect, negative equity, and on their house, at which they live, No 23 The Rise, there is unlikely to be any equity. They have attached a detailed breakdown of their expenditure on a monthly basis, which reveals broadly that their expenditure matches or exceeds their income, but that there is nothing spare. Apart from a few relatively minor amounts being held in various accounts, there is little available to satisfy, or even going some way to satisfying, this judgment.

Mr. Butler has told me, on behalf of the defendants, that his clients cannot even really offer to pay anything more than what I suspect would be a wholly nominal sum per month over the next few months. In fact, he has made it clear that he is not in a position, as such, to offer anything on their behalf.

So far as the law and practice is concerned, CPR 40.11 says this:

“A party must comply with a judgment or order for the payment of an amount of money, including costs, within 14 days of the date of the judgment or order unless-

(a)

the judgment or order specifies a different date for compliance, including specific payment by instalments …”

It is clear that the court does have some discretion there to change the normal 14 day period to another one. It could indeed be less, it could be more, and it is clear that the court does have some discretion to order payment by instalments. It may be, for instance, that there are cases where it is appropriate to make payment by instalments.

But one then turns to the provisions in the Rules of the High Court about enforcement of judgments and orders. The introductory notes to CPR Part 70 say this:

“It is a feature of civil justice that the court does not automatically enforce its judgments, nor even decide how they should be enforced. It is up to the judgment creditor”.

In broad terms, that does reflect the law and the practice. Part 70, and those provisions of the Rules of the Supreme Court which were retained by that Part, give a wide variety of different methods to a successful party to litigation for enforcing judgments. That can include the appointment of a Receiver, third party debt orders, charging orders, stop orders, stop notices, and other writs of execution such as a writ of fieri facias. There are provisions to seek to attach earnings as well. So there is a wide variety of recourses open to the successful party to enforce any given judgment. In addition, there is a statutory option available to a judgment creditor to initiate proceedings for bankruptcy or, in the case of a company, liquidation of the debtor.

Parliament has given a successful judgment creditor those rights and it should be an exceptional case, it seems to me, where the court interferes with those rights given by Parliament.

It is clear, however, that when those provisions for alternatives to enforcement are considered, the court, which may be dealing with the different methods of enforcement, is given a discretion. I have considered, for instance, RSC Ord.46, which deals with writs of execution, and those provisions relating to fieri facias writs. In certain circumstances, where there is a realistic prospect of payment being achieved by interim payments, then the court is sometimes prepared to consider making such an order.

I consider that the court, at this stage - that is the court which has given the judgment - can take into account similar factors to those which a court handling enforcement can take into account. I have indicated to Mr. Butler, in argument, that I do have some real sympathy, for the defendants in this sense, that, although they have lost the proceedings, they are ordinary individuals who have been caught up in litigation. The effect of my judgment is that that is a matter of their own making, but nonetheless they were not financially equipped to get involved in substantial litigation such as this proved to be. They are now suffering the consequences.

The problem that this court faces, however, is that there is no realistic prospect, on the figures and on the information that has been put forward, of the defendants being able to pay. They both, frankly, admitted, and accepted that, in effect, the only way that this judgment debt is going to be paid within the foreseeable future is by way of charitable donation or possibly lending, as the case may be, from charitable institutions or people within the Jewish community in this country. Unsurprisingly, they have been unable to secure yet any such offer or undertaking to provide any such financial assistance. In those circumstances, it is difficult for the court (sympathetic though it is) to think of a way in which, if justice is being observed for both parties, it can assist here.

Mr. Higgins, for the claimant, apart from addressing the procedural and legal arguments about such discretion as I have, has referred me to the fact that very shortly before the trial started a Mr. Pearlman, a solicitor, took out a charge on No 23 The Rise. The charge, dated 3 November 2008 which was one day before the trial was due to start albeit it was later adjourned for a week, was registered the day after I handed down judgment in this matter. That charge is in the documentation properly put before me, by the defendants. Pursuant to that charge, Mr. Pearlman has secured a charge to secure all monies owed to the lender (that is Mr. Pearlman) in his own capacity and on behalf of clients for whom he acts as solicitor and/or trustee; the charge shall become exercisable, it says, one month from the date hereof. A letter dated 12 December 2008 from Mr. Pearlman to Mr. Raivid’s solicitors has been properly put before me in which he says:

“At the request of Mr. and Mrs. Raivid, I am writing to confirm that I have taken security in respect of various monies advanced to them to assist them in their recent difficulties. These monies have come partly from close members of their family, partly from welfare funds, partly from my own company and partly from professional advisers such as their former solicitors, surveyors, etc. You will see from the enclosed form of charge that it is an all monies charge not limited in its scope, since it was designed to cover any further advances that would be needed from time to time. The amounts involved are very substantial”.

He then goes on to say that he is about to leave to go abroad and will not, in effect, be able to provide any further detail until the beginning of the New Year. Mr. Higgins says that this is, in effect, very suspicious and it is no coincidence that this charge was made just before the trial started and was registered just after the judgment was handed down.

I am going to make no findings about that. Certainly what Mr. and Mrs. Raivid have done is frankly put all this documentation before the court, so it does not automatically suggest to me that there is anything illegal or dishonest that has been done here. But one thing that is not clear from this is whether or not, as a result of this charge being placed on No 23 The Rise, amongst others, there is in fact any equity left in No 23. Mr. Raivid says in his witness statement that he does not believe there will be. That may or may not be the case. I must leave open the question of whether the charge is one which has been made in good faith, properly and so on.

Therefore, the position is that, unfortunately, the court has no grounds upon which to exercise its discretion here. I would have been prepared seriously to consider extending the 14 day period if there was a realistic prospect that substantial sums could be paid, and could be offered, within the next few weeks and months. But nothing can be offered. Therefore even if I was dealing with this as a judge handling a writ of execution, there would be little which I could do. Therefore I fear that, with some real regret, the law prevents me, on the information available, from acceding to the application made by the defendants in this case. The Court must balance the feeling of regret for the very unfortunate circumstances in which the Raivids find themselves in albeit of their own making and the rights which the judgment creditor, Mr Amsalem, has to seek to enforce his judgment; I do bear in mind that Mt Amsalem is very much out of pocket.

Having said that, I would very much hope that the parties could, and will, talk in a way to resolve this matter without the ultimate sanction of bankruptcy. That is entirely a matter for Mr. Amsalem, as the successful claimant in this case, and I am not making any order that he cannot use any of the options available to him at law. I would very much hope that this matter can be resolved without that ultimate sanction.